Edgar Filing: Standard Financial Corp.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2012

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. 001-34893

Standard Financial Corp.

(Exact name of registrant as specified in its charter)

Maryland

27-3100949

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2640 Monroeville Boulevard, Monroeville, Pennsylvania 15146

(Address of principal executive offices)

412-856-0363

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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

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

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.

Large accelerated filer o		Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company x

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 3,511,173 shares, par value $0.01, at August 1, 2012.

Table of Contents

Standard Financial Corp.

Table of Contents

	Part I — Financial Information

ITEM 1.	Financial Statements (Unaudited)	1-20

	Consolidated Statements of Financial Condition as of June 30, 2012 and September 30, 2011

	Consolidated Statements of Income for the Three and Nine Months Ended June 30, 2012 and 2011

	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended June 30, 2012 and 2011

	Consolidated Statement of Changes in Stockholder’s Equity for the Nine Months Ended June 30, 2012

	Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2012 and 2011

	Notes to Consolidated Statements

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21-28

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	28

ITEM 4.	Controls and Procedures	28

	PART II — Other Information

ITEM 1.	Legal Proceedings	28

ITEM 1A.	Risk Factors	28

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

ITEM 3.	Defaults Upon Senior Securities	29

ITEM 4.	Mine Safety Disclosures	29

ITEM 5.	Other Information	29

ITEM 6.	Exhibits	29

	Signatures	30

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PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

Standard Financial Corp.

Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands)

	June 30,			September 30,
	2012			2011

ASSETS
Cash on hand and due from banks	$	1,891		$	1,869
Interest-earning deposits in other institutions	8,627			10,789
Cash and Cash Equivalents	10,518			12,658

Investment securities available for sale, at fair value	66,194			62,946
Mortgage-backed securities available for sale, at fair value	43,363			42,808
Federal Home Loan Bank stock, at cost	2,780			2,839
Loans receivable, net of allowance for loan losses of $4,338 and $4,521	292,329			285,113
Loans held for sale	419			100
Foreclosed real estate	560			743
Office properties and equipment, at cost, less accumulated depreciation	3,931			3,903
Bank-owned life insurance	10,046			9,778
Goodwill	8,769			8,769
Core deposit intangible	561			687
Prepaid federal deposit insurance	647			846
Accrued interest and other assets	2,586			3,429

TOTAL ASSETS	$	442,703		$	434,619

Liabilities
Deposits:
Demand, regular and club accounts	$	186,543		$	186,235
Certificate accounts	139,151			134,087

Total Deposits	325,694			320,322

Federal Home Loan Bank advances	31,618			28,520
Securities sold under agreements to repurchase	2,199			2,897
Advance deposits by borrowers for taxes and insurance	657			588
Securities purchased not settled	—			993
Accrued interest and other expenses	2,455			2,583

TOTAL LIABILITIES	362,623			355,903

Stockholders’ Equity
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized, none issued	—			—
Common stock, $0.01 par value per share, 40,000,000 shares authorized, 3,410,573 and 3,478,173 shares outstanding, respectively	34			35
Additional paid-in-capital	32,435			33,403
Retained earnings	48,400			46,475
Unearned Employee Stock Ownership Plan (ESOP) shares	(2,682		)	(2,797		)
Accumulated other comprehensive income	1,893			1,600

TOTAL STOCKHOLDERS’ EQUITY	80,080			78,716

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	442,703		$	434,619

See accompanying notes to the consolidated financial statements.

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Standard Financial Corp.

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended June 30,				Nine Months Ended June 30,
	2012		2011		2012		2011
Interest and Dividend Income
Loans, including fees	$	3,617	$	3,918	$	11,121	$	11,856
Mortgage-backed securities	282		350		832		939
Investments:
Taxable	183		219		549		680
Tax-exempt	215		155		607		455
Interest-earning deposits	1		1		4		7
Total Interest and Dividend Income	4,298		4,643		13,113		13,937

Interest Expense
Deposits	896		905		2,738		2,863
Securities sold under agreements to repurchase	1		4		5		13
Federal Home Loan Bank advances	194		283		575		888
Total Interest Expense	1,091		1,192		3,318		3,764

Net Interest Income	3,207		3,451		9,795		10,173
Provision for Loan Losses	300		425		900		1,200

Net Interest Income after Provision for Loan Losses	2,907		3,026		8,895		8,973

Noninterest Income
Service charges	388		401		1,195		1,208
Earnings on bank-owned life insurance	99		100		299		294
Net securities gains	—		—		55		2
Net loan sale gains	85		10		128		70
Annuity and mutual fund fees	38		79		102		149
Other income	5		6		21		26
Total Noninterest Income	615		596		1,800		1,749

Noninterest Expenses
Compensation and employee benefits	1,446		1,383		4,306		4,111
Data processing	103		96		326		285
Premises and occupancy costs	279		259		818		741
Core deposit amortization	42		42		126		126
Automatic teller machine expense	75		82		235		231
Federal deposit insurance	69		80		217		299
Contribution to Standard Charitable Foundation	—		—		—		1,376
Other operating expenses	437		446		1,353		1,271
Total Noninterest Expenses	2,451		2,388		7,381		8,440

Income before Income Tax Expense	1,071		1,234		3,314		2,282

Income Tax Expense
Federal	257		325		791		472
State	50		64		146		119
Total Income Tax Expense	307		389		937		591

Net Income	$	764	$	845	$	2,377	$	1,691
Earnings Per Share:
Basic earnings per common share	$	0.24	$	0.26	$	0.75	$	0.53
Cash dividends paid per common share	$	0.045	$	—	$	0.135	$	—
Weighted average shares outstanding	3,158,685		3,209,516		3,173,589		3,205,889

See accompanying notes to the consolidated financial statements.

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Standard Financial Corp.

Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)

	Three Months Ended June 30,						Nine Months Ended June 30,
	2012			2011			2012			2011

Net Income	$	764		$	845		$	2,377		$	1,691

Other comprehensive income (loss):

Comprehensive gain (loss) on securities available for sale	805			1,331			499			(344		)
Tax effect	(274		)	(453		)	(170		)	117

Reclassification adjustment for gains realized in income	—			—			(55		)	(2		)
Tax effect	—			—			19			1

Total other comprehensive income (loss)	531			878			293			(228		)

Total Comprehensive Income	$	1,295		$	1,723		$	2,670		$	1,463

See accompanying notes to the consolidated financial statements.

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Standard Financial Corp.

Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)

(Dollars in thousands)

													Accumulated
				Additional						Unearned			Other		Total
	Common			Paid-In			Retained			ESOP			Comprehensive		Stockholders’
	Stock			Capital			Earnings			Shares			Income		Equity

Balance, September 30, 2011	$	35		$	33,403		$	46,475		$	(2,797	)	$	1,600	$	78,716

Net income	—			—			2,377			—			—		2,377

Other comprehensive income	—			—			—			—			293		293

Stock repurchases (67,600 shares)	(1		)	(1,022		)	—			—			—		(1,023		)

Cash dividends ($0.135 per share)	—			—			(452		)	—			—		(452		)

Compensation expense on ESOP	—			54			—			115			—		169

Balance, June 30, 2012	$	34		$	32,435		$	48,400		$	(2,682	)	$	1,893	$	80,080

See accompanying notes to the consolidated financial statements.

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Standard Financial Corp.

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

	Nine Months Ended June 30,
	2012			2011
Cash Flows from Operating Activities
Net income	$	2,377		$	1,691
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	316			294
Provision for loan losses	900			1,200
Amortization of core deposit intangible	126			126
Net amortization of premium/discount on securities	231			240
Net gain on securities	(55		)	(2		)
Origination of loans held for sale	(5,166		)	(3,294		)
Proceeds from sale of loans held for sale	4,975			3,701
Gain on sale of loans held for sale	(128		)	(70		)
Compensation expense on ESOP	169			162
Stock contribution to Charitable Foundation	—			1,176
Deferred income taxes	200			(623		)
Decrease (increase) in accrued interest and other assets	372			(163		)
Decrease in prepaid Federal deposit insurance	199			273
Earnings on bank-owned life insurance	(299		)	(294		)
Increase (decrease) in accrued interest payable	13			(40		)
(Decrease) increase in other accrued expenses	(141		)	451
Increase in accrued income taxes payable	120			13
Other, net	105			133
Net Cash Provided by Operating Activities	4,314			4,974
Cash Flows from Investing Activities
Net increase in loans	(8,987		)	(5,137		)
Purchases of investment securities	(24,770		)	(30,911		)
Purchases of mortgage-backed securities	(9,510		)	(27,977		)
Proceeds from maturities/principal repayments/calls of:
Investment securities	14,872			27,559
Mortgage-backed securities	8,769			6,000
Proceeds from sales of investment securities	6,110			504
Redemption of Federal Home Loan Bank stock	277			488
Purchases of Federal Home Loan Bank stock	(218		)	(60		)
Proceeds from sales of foreclosed real estate	981			383
Net purchases of office properties and equipment	(344		)	(452		)
Net Cash Used in Investing Activities	(12,820		)	(29,603		)
Cash Flows from Financing Activities
Net increase (decrease) in demand, regular and club accounts	308			(1,400		)
Net increase in certificate accounts	5,064			711
Net (decrease) increase in securities sold under agreements to repurchase	(698		)	990
Stock proceeds less conversion expenses	—			457
Purchase of ESOP shares	—			(1,168		)
Repayments of Federal Home Loan Bank advances	(4,904		)	(8,633		)
Proceeds from Federal Home Loan Bank advances	8,002			7,752
Net increase in advance deposits by borrowers for taxes and insurance	69			213
Dividends paid	(452		)	—
Stock repurchases	(1,023		)	—
Net Cash Provided (Used) by Financing Activities	6,366			(1,078		)
Net Decrease in Cash and Cash Equivalents	(2,140		)	(25,707		)
Cash and Cash Equivalents - Beginning	12,658			38,988
Cash and Cash Equivalents - Ending	$	10,518		$	13,281
Supplementary Cash Flows Information
Interest paid	$	3,305		$	3,804
Income taxes paid	$	617		$	1,204
Supplementary Schedule of Noncash Investing and Financing Activities
Foreclosed real estate acquired in settlement of loans	$	871		$	130
Issuance of common stock from stock subscription payable	$	—		$	28,759
Issuance of common stock from customer deposit accounts	$	—		$	1,201
Issuance of common stock for ESOP plan	$	—		$	1,782
Securities purchased not settled	$	—		$	1,160

See accompanying notes to the consolidated financial statements.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(1) Consolidation

The accompanying consolidated financial statements include the accounts of Standard Financial Corp. (the “Company”) and its direct and indirect wholly owned subsidiaries, Standard Bank, PaSB (the “Bank”), and Westmoreland Investment Company. All significant intercompany accounts and transactions have been eliminated in consolidation.

(2) Basis of Presentation

The accompanying consolidated financial statements were prepared in accordance with instructions to Form 10-Q, and therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles in the United States. All adjustments (consisting of normal recurring adjustments), which, in the opinion of management are necessary for a fair presentation of the financial statements and to make the financial statements not misleading have been included. These financial statements should be read in conjunction with the audited financial statements and the accompanying notes thereto included in the Company’s Annual Report for the fiscal year ended September 30, 2011. The results for the three and nine month periods ended June 30, 2012 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2012 or any future interim period. Certain amounts in the 2011 financial statements have been reclassified to conform to the 2012 presentation format. These reclassifications had no effect on stockholders’ equity or net income.

(3) Recent Accounting Pronouncements

In December 2011, the FASB issued ASU 2011-10, Property, Plant, and Equipment (Topic 360): Derecognition of in Substance Real Estate-a Scope Clarification. The amendments in this Update affect entities that cease to have a controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt. Under the amendments in this Update, when a parent (reporting entity) ceases to have a controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt, the reporting entity should apply the guidance in Subtopic 360-20 to determine whether it should derecognize the in substance real estate. Generally, a reporting entity would not satisfy the requirements to derecognize the in substance real estate before the legal transfer of the real estate to the lender and the extinguishment of the related nonrecourse indebtedness. That is, even if the reporting entity ceases to have a controlling financial interest under Subtopic 810-10, the reporting entity would continue to include the real estate, debt, and the results of the subsidiary’s operations in its consolidated financial statements until legal title to the real estate is transferred to legally satisfy the debt. The amendments in this Update should be applied on a prospective basis to deconsolidation events occurring after the effective date. Prior periods should not be adjusted even if the reporting entity has continuing involvement with previously derecognized in substance real estate entities. For public entities, the amendments in this Update are effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. For nonpublic entities, the amendments are effective for fiscal years ending after December 15, 2013, and interim and annual periods thereafter. Early adoption is permitted. This ASU is not expected to have a significant impact on the Company’s financial statements.

In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The amendments in this Update affect all entities that have financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement. The requirements amend the disclosure requirements on offsetting in Section 210-20-50. This information will enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments in the scope of this Update. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. This ASU is not expected to have a significant impact on the Company’s financial statements.

In December 2011, the FASB issued ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. In order to defer only those changes in Update 2011-05 that relate to the presentation of reclassification adjustments, the paragraphs in this Update supersede certain pending paragraphs in Update 2011-05. Entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before Update 2011-05. All other requirements in Update 2011-05 are not affected by this Update, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. Nonpublic entities should begin applying these requirements for fiscal years ending after December 15, 2012, and interim and annual periods thereafter. This ASU is not expected to have a significant impact on the Company’s financial statements.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(4) Investment Securities

Investment securities available for sale at June 30, 2012 and at September 30, 2011 are as follows (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
June 30, 2012:
U.S. government and agency obligations due:
Beyond 1 year but within 5 years	$	17,993	$	121	$	—		$	18,114
Beyond 5 years but within 10 years	7,000		41		(1		)	7,040
Corporate bonds due:
Within 1 year	251		6		—			257
Beyond 1 year but within 5 years	7,002		35		(261		)	6,776
Municipal obligations due:
Within 1 year	680		1		—			681
Beyond 1 year but within 5 years	2,543		143		—			2,686
Beyond 5 years but within 10 years	21,935		1,255		(11		)	23,179
Beyond 10 years	5,739		371		—			6,110
Equity securities:
CRA Investment Fund	750		25		—			775
Freddie Mac common stock	10		—		(1		)	9
Other common stocks	485		96		(14		)	567
	$	64,388	$	2,094	$	(288	)	$	66,194

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
September 30, 2011:
U.S. government and agency obligations due:
Beyond 1 year but within 5 years	$	21,493	$	151	$	—		$	21,644
Beyond 5 years but within 10 years	3,000		10		—			3,010
Corporate bonds due:
Beyond 1 year but within 5 years	7,255		9		(198		)	7,066
Municipal obligations due:
Within 1 year	4,172		15		—			4,187
Beyond 1 year but within 5 years	1,270		5		—			1,275
Beyond 5 years but within 10 years	14,255		716		—			14,971
Beyond 10 years	8,898		649		—			9,547
Equity securities:
CRA Investment Fund	750		21		—			771
Freddie Mac common stock	10		—		(2		)	8
Other common stocks	458		36		(27		)	467
	$	61,561	$	1,612	$	(227	)	$	62,946

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(4) Investment Securities (Continued)

During the nine months ended June 30, 2012, gains on sales of investment securities were $55,000 and proceeds from such sales were $6.1 million. During the nine months ended June 30, 2011, gains on sales of investment securities were $2,000 and proceeds from such sales were $ 504,000. During the three months ended June 30, 2012 and 2011, there were no sales of investment securities.

The following table shows the fair value and gross unrealized losses on investment securities and the length of time that the securities have been in a continuous unrealized loss position at June 30, 2012 and at September 30, 2011 (dollars in thousands):

	June 30, 2012
	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses

U.S. government and agency obligations	$	1,999	$	(1	)	$	—	$	—		$	1,999	$	(1	)
Corporate bonds	—		—			5,739		(261		)	5,739		(261		)
Municipal obligations	983		(11		)	—		—			983		(11		)
Equity securities	34		(2		)	77		(13		)	111		(15		)
Total	$	3,016	$	(14	)	$	5,816	$	(274	)	$	8,832	$	(288	)

	September 30, 2011
	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses

Corporate bonds	$	1,925	$	(74	)	$	3,876	$	(124	)	$	5,801	$	(198	)
Equity securities	93		(9		)	60		(20		)	153		(29		)
Total	$	2,018	$	(83	)	$	3,936	$	(144	)	$	5,954	$	(227	)

At June 30, 2012 and September 30, 2011, the Company held 14 and 16 securities, respectively, in an unrealized loss position. The decline in the fair value of these securities resulted primarily from interest rate fluctuations. The Company does not intend to sell these securities nor is it more likely than not that the Company would be required to sell these securities before their anticipated recovery, and the Company believes the collection of the investment and related interest is probable. Based on the above, the Company considers all of the unrealized losses to be temporary impairment losses.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(5) Mortgage-Backed Securities

Mortgage-backed securities available for sale at June 30, 2012 and at September 30, 2011 are as follows (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
June 30, 2012:
Government pass-throughs:
Ginnie Mae	$	16,390	$	247	$	—		$	16,637
Fannie Mae	19,988		591		—			20,579
Freddie Mac	3,482		222		—			3,704
Private pass-throughs	125		—		(1		)	124
Collateralized mortgage obligations	2,317		9		(7		)	2,319

	$	42,302	$	1,069	$	(8	)	$	43,363

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
September 30, 2011:
Government pass-throughs:
Ginnie Mae	$	19,080	$	164	$	(52	)	$	19,192
Fannie Mae	17,358		602		—			17,960
Freddie Mac	4,755		316		—			5,071
Private pass-throughs	131		—		(1		)	130
Collateralized mortgage obligations	446		9		—			455

	$	41,770	$	1,091	$	(53	)	$	42,808

During the three and nine months ended June 30, 2012 and 2011, there were no sales of mortgage-backed securities.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(5) Mortgage-Backed Securities (Continued)

The following table shows the fair value and gross unrealized losses on mortgage-backed securities and the length of time that the securities have been in a continuous unrealized loss position at June 30, 2012 and at September 30, 2011 (dollars in thousands):

	June 30, 2012
	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses

Private pass-throughs	$	—	$	—		$	124	$	(1	)	$	124	$	(1	)
Collateralized mortgage obligations	1,964		(7		)	—		—			1,964		(7		)

Total	$	1,964	$	(7	)	$	124	$	(1	)	$	2,088	$	(8	)

	September 30, 2011
	Less than 12 Months					12 Months or More					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses

Ginnie Mae	$	9,961	$	(52	)	$	—	$	—		$	9,961	$	(52	)
Private pass-throughs	—		—			130		(1		)	130		(1		)

Total	$	9,961	$	(52	)	$	130	$	(1	)	$	10,091	$	(53	)

At June 30, 2012 and September 30, 2011, the Company held 2 and 3 mortgage-backed securities, respectively, in an unrealized loss position. The decline in the fair value of these securities resulted primarily from interest rate fluctuations. The Company does not intend to sell these securities nor is it more likely than not that the Company would be required to sell these securities before its anticipated recovery, and the Company believes the collection of the investment and related interest is probable. Based on the above, the Company considers all of the unrealized losses to be temporary impairment losses.

Mortgage-backed securities with a carrying value of $19.6 million and $25.1 million were pledged to secure repurchase agreements and public fund accounts at June 30, 2012 and at September 30, 2011, respectively.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(6) Loans Receivable and Related Allowance for Loan Losses

The following table summarizes the primary segments of the loan portfolio as of June 30, 2012 and September 30, 2011 (dollars in thousands):

	Real Estate Loans
	One-to-four-family
	Residential		Commercial		Home Equity
	and		Real		Loans and Lines				Other
	Construction		Estate		of Credit		Commercial		Loans		Total
June 30, 2012:
Total loans before allowance for loan losses	$	143,606	$	91,884	$	46,832	$	12,072	$	2,273	$	296,667
Individually evaluated for impairment	$	—	$	2,385	$	—	$	477	$	—	$	2,862
Collectively evaluated for impairment	$	143,606	$	89,499	$	46,832	$	11,595	$	2,273	$	293,805

September 30, 2011:
Total loans before allowance for loan losses	$	141,869	$	88,096	$	45,594	$	11,683	$	2,392	$	289,634
Individually evaluated for impairment	$	—	$	3,101	$	—	$	39	$	—	$	3,140
Collectively evaluated for impairment	$	141,869	$	84,995	$	45,594	$	11,644	$	2,392	$	286,494

The segments of the Bank’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. Real estate loans are disaggregated into three categories which include one-to-four family residential (including residential construction loans), commercial real estate (which are primarily first liens) and home equity loans and lines of credit (which are generally second liens). The commercial loan segment consists of loans made for the purpose of financing the activities of commercial customers. Other loans consist of automobile loans, consumer loans and loans secured by savings accounts. The portfolio segments utilized in the calculation of the allowance for loan losses are disaggregated at the same level that management uses to monitor risk in the portfolio. Therefore the portfolio segments and classes of loans are the same.

Management evaluates individual loans in the commercial and commercial real estate loan segments for possible impairment if the loan is in nonaccrual status or is risk rated Substandard, Doubtful or Loss and is greater than 90 days past due. Loans are considered to be impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in evaluating impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The Company does not separately evaluate individual consumer and residential real estate loans for impairment, unless such loans are part of a larger relationship that is impaired, or are classified as a troubled debt restructuring agreement. Once the determination has been made that a loan is impaired, the determination of whether a specific allocation of the allowance is necessary is measured by comparing the recorded investment in the loan to the fair value of the loan using one of three methods: (a) the present value of expected future cash flows discounted at the loan’s effective interest rate; (b) the loan’s observable market price; or (c) the fair value of the collateral less selling costs. The method is selected on a loan by loan basis, with management primarily utilizing the fair value of collateral method. The evaluation of the need and amount of a specific allocation of the allowance and whether a loan can be removed from impairment status is made on a quarterly basis. The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition. There were no loans considered to be a troubled debt restructuring at June 30, 2012 and at September 30, 2011.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(6) Loans Receivable and Related Allowance for Loan Losses (Continued)

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary at June 30, 2012 and September 30, 2011 (dollars in thousands):

	Impaired Loans With Allowance				Impaired Loans Without Allowance		Total Impaired Loans
									Unpaid
	Recorded		Related		Recorded		Recorded		Principal
	Investment		Allowance		Investment		Investment		Balance
June 30, 2012:
Commercial real estate	$	2,385	$	716	$	—	$	2,385	$	2,385

Commercial	477		143		—		477		477

Total impaired loans	$	2,862	$	859	$	—	$	2,862	$	2,862

September 30, 2011:
Commercial real estate	$	3,101	$	930	$	—	$	3,101	$	3,101

Commercial	39		12		—		39		39

Total impaired loans	$	3,140	$	942	$	—	$	3,140	$	3,140

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated (dollars in thousands):

	Three months ended June 30,				Nine months ended June 30,
	2012		2011		2012		2011
Average investment in impaired loans:
Commercial real estate	$	2,312	$	1,772	$	2,491	$	1,513
Commercial	545		489		435		823

Total impaired loans	$	2,857	$	2,261	$	2,926	$	2,336

Interest income recognized on impaired loans:
Accrual basis	$	—	$	—	$	—	$	—

The loan rating categories utilized by management generally follow bank regulatory definitions. The special mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a substandard classification. Loans in the substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than 90 days past due are considered substandard. Assets classified as doubtful have all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Assets (or portions of assets) classified as loss are those considered uncollectible and of such little value that their continuance as assets is not warranted and are charged off against the loan loss allowance. The pass category includes all loans not considered special mention, substandard, doubtful or loss.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(6) Loans Receivable and Related Allowance for Loan Losses (Continued)

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Bank has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential real estate loans are included in the pass categories unless a specific action, such as delinquency, bankruptcy, repossession, or death occurs to raise awareness of a possible credit event. The Bank’s commercial loan officers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. An annual loan review is performed for all commercial real estate and commercial loans for all commercial relationships greater than $500,000. The Bank engages an external consultant to conduct loan reviews on at least an annual basis. Generally, the external consultant reviews commercial relationships greater than $500,000 and all criticized relationships. Loans in the special mention, substandard or doubtful categories that are collectively evaluated for impairment are given separate consideration in the determination of the loan loss allowance.

The following table presents the classes of the loan portfolio summarized by the aggregate pass and the criticized categories of special mention, substandard and doubtful within the internal risk rating system as of June 30, 2012 and September 30, 2011 (dollars in thousands):

			Special
	Pass		Mention		Substandard		Doubtful		Total
June 30, 2012:
First mortgage loans:
One-to-four-family residential and construction	$	142,538	$	—	$	1,068	$	—	$	143,606
Commercial real estate	85,726		2,734		3,424		—		91,884
Home equity loans and lines of credit	46,642		—		53		137		46,832
Commercial loans	11,595		—		477		—		12,072
Other loans	2,264		—		2		7		2,273
Total	$	288,765	$	2,734	$	5,024	$	144	$	296,667

September 30, 2011:
First mortgage loans:
One-to-four-family residential and construction	$	140,433	$	—	$	1,436	$	—	$	141,869
Commercial real estate	80,860		2,808		4,428		—		88,096
Home equity loans and lines of credit	45,547		—		47		—		45,594
Commercial loans	10,644		—		1,039		—		11,683
Other loans	2,389		—		—		3		2,392

Total	$	279,873	$	2,808	$	6,950	$	3	$	289,634

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(6) Loans Receivable and Related Allowance for Loan Losses (Continued)

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. At June 30, 2012 and September 30, 2011, there were no loans 90 days past due and still accruing. The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of June 30, 2012 and September 30, 2011 (dollars in thousands):

			30-59 Days		60-89 Days		Non-Accrual		Total
	Current		Past Due		Past Due		(90 Days+)		Loans
June 30, 2012:
First mortgage loans:
One-to-four-family residential and construction	$	140,371	$	1,357	$	810	$	1,068	$	143,606
Commercial real estate	89,006		397		96		2,385		91,884
Home equity loans and lines of credit	46,559		69		14		190		46,832
Commercial loans	11,515		80		—		477		12,072
Other loans	2,261		3		2		7		2,273

Total	$	289,712	$	1,906	$	922	$	4,127	$	296,667

September 30, 2011:
First mortgage loans:
One-to-four-family residential and construction	$	137,935	$	1,977	$	521	$	1,436	$	141,869
Commercial real estate	83,641		1,006		348		3,101		88,096
Home equity loans and lines of credit	45,457		68		22		47		45,594
Commercial loans	11,563		—		81		39		11,683
Other loans	2,386		3		—		3		2,392

Total	$	280,982	$	3,054	$	972	$	4,626	$	289,634

An allowance for loan losses (“ALL”) is maintained to absorb losses from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of non-performing loans.

Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate. For general allowances, historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are modified by other qualitative factors. Management tracks the historical net charge-off activity for the loan segments which may be adjusted for qualitative factors. Pass rated credits are segregated from criticized credits for the application of qualitative factors. Loans in the criticized pools, which possess certain qualities or characteristics that may lead to collection and loss issues, are closely monitored by management and subject to additional qualitative factors.

Management has identified a number of additional qualitative factors which it uses to supplement the historical charge-off factor because these factors are likely to cause estimated credit losses associated with the existing loan pools to differ from historical loss experience. The additional factors are evaluated using information obtained from internal, regulatory, and governmental sources such as national and local economic trends and conditions; levels of and trends in delinquency rates and non-accrual loans; trends in volumes and terms of loans; effects of changes in lending policies; value of underlying collateral; and concentrations of credit from a loan type, industry and/or geographic standpoint. Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL. Management utilizes an internally developed spreadsheet to track and apply the various components of the allowance.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

Loans Receivable and Related Allowance for Loan Losses (Continued)

The following tables summarize the primary segments of the ALL, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment. Activity in the allowance is presented for the nine months ended June 30, 2012 and 2011 (dollars in thousands):

	Real Estate Loans
	One-to-four-						Home
	family			Commercial			Equity Loans
	Residential and			Real			and Lines						Other
	Construction			Estate			of Credit			Commercial			Loans			Total
Balance at September 30, 2011	$	682		$	3,024		$	173		$	452		$	190		$	4,521
Charge-offs	(235		)	(233		)	(32		)	(640		)	(9		)	(1,149		)
Recoveries	—			59			—			4			3			66
Provision	200			—			50			650			—			900
Balance at June 30, 2012	$	647		$	2,850		$	191		$	466		$	184		$	4,338

Balance at September 30, 2010	$	609		$	2,460		$	220		$	483		$	217		$	3,989
Charge-offs	(109		)	(476		)	(26		)	(85		)	(36		)	(732		)
Recoveries	12			31			—			26			12			81
Provision	397			679			28			56			40			1,200
Balance at June 30, 2011	$	909		$	2,694		$	222		$	480		$	233		$	4,538

	Real Estate Loans
	One-to-four-				Home
	family		Commercial		Equity Loans
	Residential and		Real		and Lines				Other
	Construction		Estate		of Credit		Commercial		Loans		Total
Evaluated for Impairment:
Individually	$	—	$	716	$	—	$	143	$	—	$	859
Collectively	647		2,134		191		323		184		3,479
Balance at June 30, 2012	$	647	$	2,850	$	191	$	466	$	184	$	4,338

Evaluated for Impairment:
Individually	$	—	$	930	$	—	$	12	$	—	$	942
Collectively	682		2,094		173		440		190		3,579
Balance at September 30, 2011	$	682	$	3,024	$	173	$	452	$	190	$	4,521

The ALL is based on estimates and actual losses will vary from current estimates. Management believes that the granularity of the homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency in the application of assumptions, result in an ALL that is representative of the risk found in the components of the loan portfolio at any given date.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(7) Contribution to Standard Charitable Foundation

The Company made a $1.4 million one-time contribution to Standard Charitable Foundation during the quarter ended December 31, 2010 in connection with its stock conversion. This contribution represented $1.2 million or 3.5% of the stock issued on October 6, 2010 and $200,000 in cash. The after tax impact on net income of this one-time contribution was net expense of $908,000 (net of income tax benefit of $468,000).

(8) Employee Stock Ownership Plan

The Company established a tax qualified Employee Stock Ownership Plan (“ESOP”) for the benefit of its employees in conjunction with the stock conversion on October 6, 2010. Eligible employees begin to participate in the plan after one year of service and become 20% vested in their accounts after two years of service, 40% after three years of service, 60% after four years of service, 80% after five years of service and 100% after six years of service or, if earlier, upon death, disability or attainment of normal retirement age.

In connection with the stock conversion, the purchase of the 278,254 shares of the Company stock by the ESOP was funded by a loan from the Company through the Bank. Unreleased ESOP shares collateralize the loan payable, and the cost of the shares is recorded as a contra-equity account in the stockholders’ equity of the Company. Shares are released as debt payments are made by the ESOP to the loan. The ESOP’s sources of repayment of the loan can include dividends, if any, on the unallocated stock held by the ESOP and discretionary contributions from the Company to the ESOP and earnings thereon.

Compensation is recognized under the shares released method and compensation expense is equal to the fair value of the shares committed to be released and unallocated ESOP shares are excluded from outstanding shares for purposes of computing earnings per share. Compensation expense related to the ESOP of $169,000 and $162,000 was recognized during the nine months ended June 30, 2012 and 2011, respectively.

As of June 30, 2012, the ESOP held a total of 278,254 shares of the Company’s stock, and there were 260,186 unallocated shares. The fair market value of the unallocated ESOP shares was $4.2 million at June 30, 2012.

(9) Fair Value of Assets and Liabilities

Fair Value Hierarchy

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

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

Level 2:		Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that utilize model-based techniques for which all significant assumptions are observable in the market.

Level 3:		Inputs to the valuation methodology are unobservable and significant to the fair value measurement; inputs to the valuation methodology that utilize model-based techniques for which significant assumptions are not observable in the market; or inputs to the valuation methodology that requires significant management judgment or estimation, some of which may be internally developed.

Management maximizes the use of observable inputs and minimizes the use of unobservable inputs when determining fair value measurements. Management reviews and updates the fair value hierarchy classifications of the Company’s assets and liabilities on a quarterly basis.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(9) Fair Value of Assets and Liabilities (Continued)

Assets Measured at Fair Value on a Recurring Basis

Investment and Mortgage-Backed Securities Available for Sale

Fair values of investment and mortgage-backed securities available for sale were primarily measured using information from a third-party pricing service. This service provides pricing information by utilizing evaluated pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data from market research publications. Level 1 securities are comprised of equity securities. As quoted prices were available, unadjusted, for identical securities in active markets, these securities were classified as Level 1 measurements. Level 2 securities were primarily comprised of debt securities issued by government agencies, states and municipalities, corporations, as well as mortgage-backed securities issued by government agencies. Fair values were estimated primarily by obtaining quoted prices for similar assets in active markets or through the use of pricing models. In cases where there may be limited or less transparent information provided by the Company’s third-party pricing service, fair value may be estimated by the use of secondary pricing services or through the use of non-binding third-party broker quotes.

On a quarterly basis, management reviews the pricing information received from the Company’s third-party pricing service. This review process includes a comparison to non-binding third-party broker quotes, as well as a review of market-related conditions impacting the information provided by the Company’s third-party pricing service. Management primarily identifies investment securities which may have traded in illiquid or inactive markets by identifying instances of a significant decrease in the volume or frequency of trades, relative to historical levels, as well as instances of a significant widening of the bid-ask spread in the brokered markets. Securities that are deemed to have been trading in illiquid or inactive markets may require the use of significant unobservable inputs. As of June 30, 2012 and September 30, 2011, management did not make adjustments to prices provided by the third-party pricing service as a result of illiquid or inactive markets. On a quarterly basis, management also reviews a sample of securities priced by the Company’s third-party pricing service to review significant assumptions and valuation methodologies used. Based on this review, management determines whether the current placement of the security in the fair value hierarchy is appropriate or whether transfers may be warranted.

The following table presents the assets measured at fair value on a recurring basis as of June 30, 2012 and September 30, 2011 by level within the fair value hierarchy (dollars in thousands):

	Quoted Prices in		Significant
	Active Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	or Liabilities		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
June 30, 2012:
Investment securities available for sale:
U.S. government and agency obligations	$	—	$	25,154	$	—	$	25,154
Corporate bonds	—		7,033		—		7,033
Municipal obligations	—		32,656		—		32,656
Equity securities	1,351		—		—		1,351
Total investment securities available for sale	1,351		64,843		—		66,194
Mortgage-backed securities available for sale	—		43,363		—		43,363
Total recurring fair value measurements	$	1,351	$	108,206	$	—	$	109,557

September 30, 2011:
Investment securities available for sale:
U.S. government and agency obligations	$	—	$	24,654	$	—	$	24,654
Corporate bonds	—		7,066		—		7,066
Municipal obligations	—		29,980		—		29,980
Equity securities	1,246		—		—		1,246
Total investment securities available for sale	1,246		61,700		—		62,946
Mortgage-backed securities	—		42,808		—		42,808
Total recurring fair value measurements	$	1,246	$	104,508	$	—	$	105,754

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(9) Fair Value of Assets and Liabilities (Continued)

Assets Measured at Fair Value on a Nonrecurring Basis

The following table presents the assets measured at fair value on a nonrecurring basis as of June 30, 2012 and September 30, 2011 by level within the fair value hierarchy (dollars in thousands):

	Quoted Prices in		Significant
	Active Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
	or Liabilities		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
June 30, 2012:
Foreclosed real estate	$	—	$	—	$	560	$	560
Impaired loans	—		—		2,003		2,003
Total nonrecurring fair value measurements	$	—	$	—	$	2,563	$	2,563

September 30, 2011:
Foreclosed real estate	$	—	$	—	$	743	$	743
Impaired loans	—		—		2,198		2,198
Total nonrecurring fair value measurements	$	—	$	—	$	2,941	$	2,941

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Company uses level 3 inputs to determine fair value (dollars in thousands):

	Quantitative Information about Level 3 Fair Value Measurements
			Valuation	Unobservable	Range
June 30, 2012:	Estimate		Techniques	Input	(Weighted Average)
Foreclosed real estate	$	560	Appraisal of	Appraisal adjustments (2)	0% to -40% (-25%)
			collateral (1)	Liquidation expenses (2)	0% to -10% (-5%)

Impaired loans	$	2,003	Fair value of	Appraisal adjustments (2)	0% to -40% (-25%)
			collateral (1), (3)	Liquidation expenses (2)	0% to -10% (-5%)

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

(3) Includes qualitative adjustments by management and estimated liquidation expenses.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(9) Fair Value of Assets and Liabilities (Continued)

Disclosures about Fair Value of Financial Instruments

The assumptions used below are expected to approximate those that market participants would use in valuing the following financial instruments.

Loans Receivable and Loans Held for Sale

The fair value of the Company’s loans was estimated by discounting the expected future cash flows using the current interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans were first segregated by type such as commercial, real estate, and home equity, and were then further segmented into fixed and variable rate and loan quality categories. Expected future cash flows were projected based on contractual cash flows, adjusted for estimated prepayments. The fair value of loans held for sale was estimated based on the price committed to sell the loan in the secondary market.

Certificate Deposit Accounts

The fair values of the Company’s certificate deposit accounts were estimated using discounted cash flow analyses. The discount rates used were based on rates currently offered for deposits with similar remaining maturities. The fair values of the Company’s certificate deposit accounts do not take into consideration the value of the Company’s long-term relationships with depositors, which may have significant value.

Federal Home Loan Bank advances

The fair value of Federal Home Loan Bank advances was calculated using a discounted cash flow approach that applies a comparable FHLB advance rate to the weighted average maturity of the borrowings.

Other Financial Instruments

The carrying amounts reported in the consolidated statements of financial condition approximate fair value for the following financial instruments (Level 1): cash on hand and due from banks, interest-earning deposits in other institutions, Federal Home Loan Bank stock, accrued interest receivable, bank-owned life insurance, demand, regular and club accounts, securities sold under agreements to repurchase and accrued interest payable. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as interest and noninterest-bearing demand and regular and club accounts, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity. For financial liabilities such as the Company’s securities sold under agreements to repurchase which are with commercial deposit customers, the carrying amount is a reasonable estimate of fair value due to the short time nature of the agreement.

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STANDARD FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED)

June 30, 2012

(9) Fair Value of Assets and Liabilities (Continued)

The following table presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of June 30, 2012 and September 30, 2011 (dollars in thousands):

			Fair Value Measurements
			Quoted Prices in		Significant
			Active Markets for		Other		Significant
			Identical Assets		Observable		Unobservable
	Carrying		or Liabilities		Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
June 30, 2012:
Financial Instruments - Assets:
Cash on hand and due from banks	$	1,891	$	1,891	$	—	$	—
Interest-earning deposits in other institutions	8,627		8,627		—		—
Investment securities	66,194		1,351		64,843		—
Mortgage-backed securities	43,363		—		43,363		—
Loans receivable	292,329		—		—		304,076
Loans held for sale	419		434		—		—
Accrued interest receivable	1,350		1,350
Federal Home Loan Bank stock	2,780		2,780		—		—
Bank-owned life insurance	10,046		10,046		—		—
Financial Instruments - Liabilities:
Demand, regular and club accounts	186,543		186,543		—		—
Certificate deposit accounts	139,151		—		—		146,352
Federal Home Loan Bank advances	31,618		—		—		32,176
Securities sold under agreements to repurchase	2,199		2,199		—		—
Accrued interest payable	281		281		—		—

September 30, 2011:
Financial Instruments - Assets:
Cash on hand and due from banks	$	1,869	$	1,869	$	—	$	—
Interest-earning deposits in other institutions	10,789		10,789		—		—
Investment securities	62,946		1,246		61,700		—
Mortgage-backed securities	42,808		—		42,808		—
Loans receivable	285,113		—		—		297,800
Loans held for sale	100		102		—		—
Accrued interest receivable	1,337		1,337
Federal Home Loan Bank stock	2,839		2,839		—		—
Bank-owned life insurance	9,778		9,778		—		—
Financial Instruments - Liabilities:
Demand, regular and club accounts	186,235		186,235		—		—
Certificate deposit accounts	134,087		—		—		140,482
Federal Home Loan Bank advances	28,520		—		—		29,500
Securities sold under agreements to repurchase	2,897		2,897		—		—
Accrued interest payable	268		268		—		—

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides further detail to the financial condition and results of operations of the Company. The section should be read in conjunction with the notes and financial statements presented elsewhere in this report.

The Company’s critical accounting policies involving the significant judgments and assumptions used in the preparation of the Consolidated Financial Statements as of June 30, 2012 have remained unchanged from the disclosures presented in the Company’s Annual Report on Form 10-K for the year ended September 30, 2011 under the section “Management’s Discussion and Analysis of Financial Condition and Results of Operation.”

Forward-looking statements in this report relating to the Company’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with the Company’s most recent annual report filed with the Securities and Exchange Commission on Form 10-K for the year ended September 30, 2011. Investors are cautioned that forward-looking statements include risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements, including without limitation, the effect of regional and national general economic conditions; competition among depository and other financial institutions; inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; our ability to enter new markets successfully and capitalize on growth opportunities; our ability to successfully integrate acquired entities, if any; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board; changes in our organization, compensation and benefit plans; changes in our financial condition or results of operations that reduce capital available to pay dividends; changes in the financial condition or future prospects of issuers of securities that we own. The Company does not assume any duty to update forward-looking statements.

Standard Financial Corp. is a Maryland corporation that provides a wide array of retail and commercial financial products and services to individuals, families and businesses through ten banking offices located in the Pennsylvania counties of Allegheny, Westmoreland and Bedford and Allegany County, Maryland through its wholly-owned subsidiary Standard Bank.

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

General. The Company’s total assets increased $8.1 million, or 1.9%, to $442.7 million at June 30, 2012 from $434.6 million at September 30, 2011. The increase was due primarily to increases in net loans and investment securities. Total liabilities increased $6.7 million, or 1.9%, to $362.6 million at June 30, 2012 from $355.9 million at September 30, 2011. The increase was due primarily to increases in certificate of deposit accounts and Federal Home Loan Bank advances.

Cash and Cash Equivalents. Cash and cash equivalents decreased $2.1 million, or 16.9%, to $10.5 million at June 30, 2012 from $12.7 million at September 30, 2011 due in part to fund increases in loans and investment securities.

Loans. At June 30, 2012, net loans were $292.3 million, or 66.0% of total assets, an increase of $7.2 million from $285.1 million or 65.6% of total assets at September 30, 2011. This increase was primarily due to increases of $4.2 million in the commercial real estate and commercial loan portfolios and $1.7 million in the one- to four-family residential real estate portfolio. We have continued our focus on steadily increasing our commercial real estate loans to better diversify our loan portfolio.

Investment Securities. Investment securities available for sale increased $3.2 million to $66.2 million at June 30, 2012 from $62.9 million at September 30, 2011. Purchases of $24.8 million of investment securities during the nine months ended June 30, 2012 consisted primarily of government agency bonds and tax-exempt municipal securities. The purchases were offset by calls and maturities of government agency bonds and municipal securities totaling $14.9 million and sales of government agency bonds of $6.1 million during the nine months ended June 30, 2012.

Mortgage-Backed Securities. The Company’s mortgage-backed securities available for sale portfolio increased $555,000 to $43.4 million at June 30, 2012 from $42.8 million at September 30, 2011. Purchases of mortgage-backed securities during the nine months ended June 30, 2012 totaled $9.5 million partly offset by repayments of mortgage-backed securities of $8.8 million.

Deposits. We accept deposits primarily from the areas in which our offices are located. We have consistently focused on building broader customer relationships and targeting small business customers to increase our core deposits. We also rely on our enhanced technology and our customer service to attract and retain deposits. We offer a variety of deposit accounts with a range of interest rates and terms. Our deposit accounts consist of savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts and individual retirement accounts. We do not accept brokered deposits. Interest rates, maturity terms, service fees and withdrawal penalties are established on a periodic basis. Deposit rates and terms are based primarily on current operating strategies and market interest rates, liquidity requirements and our deposit growth goals.

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Deposits increased $5.4 million, or 1.7%, to $325.7 million at June 30, 2012 from $320.3 million at September 30, 2011. The increase resulted primarily from a $5.1 million, or 3.8%, increase in certificate of deposit accounts during the nine months ended June 30, 2012. The increase in certificates of deposit resulted from an increase in longer term certificate products some of which provide the customer an option to increase the interest rate on the certificate in the future.

Borrowings. Our borrowings consist of advances from the Federal Home Loan Bank of Pittsburgh and funds borrowed under repurchase agreements. Total borrowings increased $2.4 million, or 7.6%, to $33.8 million at June 30, 2012 from $31.4 million at September 30, 2011. The increase was due primarily to new Federal Home Loan Bank advances totaling $8.0 million partly offset by the repayment of $4.9 million of advances during the nine months ended June 30, 2012.

Stockholders’ Equity. Stockholders’ equity increased $1.4 million to $80.1 million at June 30, 2012 from $78.7 million at September 30, 2011. The increase was due primarily to net income of $2.4 million partly offset by the repurchase of common stock totaling $1.0 million and cash dividends paid totaling $452,000 for the nine months ended June 30, 2012.

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Average Balance and Yields

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments were made, as the effect thereof was not material. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the tables as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

	For the Three Months Ended June 30,
	2012							2011
	Average Outstanding Balance			Interest		Yield/ Rate		Average Outstanding Balance			Interest		Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Loans	$	298,455		$	3,617	4.85	%	$	295,502		$	3,918	5.30	%
Investment and mortgage-backed securities	111,472			680		2.44	%	101,789			724		2.85	%
Interest earning deposits	8,301			1		0.05	%	12,190			1		0.03	%
Total interest-earning assets	418,228			4,298		4.11	%	409,481			4,643		4.54	%
Noninterest-earning assets	27,169							28,278
Total assets	$	445,397						$	437,759
Interest-bearing liabilities:
Savings accounts	$	110,305		46		0.17	%	$	120,291		106		0.35	%
Certificates of deposit	139,824			837		2.39	%	125,470			782		2.49	%
Money market accounts	6,260			1		0.06	%	6,076			3		0.20	%
Demand and NOW accounts	71,224			12		0.07	%	62,154			14		0.09	%
Total deposits	327,613			896		1.09	%	313,991			905		1.15	%
Federal Home Loan Bank advances	32,086			194		2.42	%	38,236			283		2.96	%
Securities sold under agreements to repurchase	2,765			1		0.14	%	5,792			4		0.28	%
Total interest-bearing liabilities	362,464			1,091		1.20	%	358,019			1,192		1.33	%
Noninterest-bearing liabilities	3,280							3,297
Total liabilities	365,744							361,316
Stockholders’ equity	79,653							76,443
Total liabilities and stockholders’ equity	$	445,397						$	437,759

Net interest income				$	3,207						$	3,451
Net interest rate spread (1)						2.91	%						3.20	%
Net interest-earning assets (2)	$	55,764						$	51,462
Net interest margin (3)						3.07	%						3.37	%
Average interest-earning assets to interest- bearing liabilities	115.38		%					114.37		%

(1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest- bearing liabilities.

(2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average total interest-earning assets.

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	For the Nine Months Ended June 30,
	2012							2011
	Average Outstanding Balance			Interest		Yield/ Rate		Average Outstanding Balance			Interest		Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Loans	$	296,041		$	11,121	5.01	%	$	294,674		$	11,856	5.36	%
Investment and mortgage-backed securities	105,660			1,988		2.51	%	97,587			2,074		2.83	%
Interest earning deposits	10,407			4		0.05	%	15,103			7		0.06	%
Total interest-earning assets	412,108			13,113		4.24	%	407,364			13,937		4.56	%
Noninterest-earning assets	28,359							28,555
Total assets	$	440,467						$	435,919
Interest-bearing liabilities:
Savings accounts	$	111,770		155		0.18	%	$	121,415		418		0.46	%
Certificates of deposit	138,691			2,541		2.44	%	124,878			2,391		2.55	%
Money market accounts	6,262			6		0.13	%	6,247			11		0.23	%
Demand and NOW accounts	68,464			36		0.07	%	60,956			43		0.09	%
Total deposits	325,187			2,738		1.12	%	313,496			2,863		1.22	%
Federal Home Loan Bank advances	30,002			575		2.56	%	37,955			888		3.12	%
Securities sold under agreements to repurchase	3,363			5		0.20	%	5,197			13		0.33	%
Total interest-bearing liabilities	358,552			3,318		1.23	%	356,648			3,764		1.41	%
Noninterest-bearing liabilities	2,977							3,763
Total liabilities	361,529							360,411
Stockholders’ equity	78,938							75,508
Total liabilities and stockholders’ equity	$	440,467						$	435,919

Net interest income				$	9,795						$	10,173
Net interest rate spread (1)						3.01	%						3.15	%
Net interest-earning assets (2)	$	53,556						$	50,716
Net interest margin (3)						3.17	%						3.33	%
Average interest-earning assets to interest- bearing liabilities	114.94		%					114.22		%

(1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest- bearing liabilities.

(2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average total interest-earning assets.

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

General. Net income for the quarter ended June 30, 2012 was $764,000 compared to $845,000 for the quarter ended June 30, 2011, a decrease of $81,000, or 9.6%. The decrease was due primarily to a decrease in net interest income of $244,000, or 7.1%, and an increase in noninterest expenses of $63,000, or 2.6%, partially offset by a $125,000, or 29.4%, decrease in the provision for loan losses and lower income tax expense of $82,000, or 21.1%.

Net Interest Income. Net interest income for the quarter ended June 30, 2012 was $3.2 million compared to $3.5 million for the quarter ended June 30, 2011. Our net interest rate spread and net interest margin were 2.91% and 3.07%, respectively for the three months ended June 30, 2012 compared to 3.20% and 3.37% for the same period in the prior year. The decrease in the net interest rate spread and net interest rate margin was the result of the yield on interest-earning assets declining more than the cost of interest-bearing liabilities.

Interest and Dividend Income. Total interest and dividend income of $4.3 million for the three months ended June 30, 2012 decreased by $345,000 compared to the same period in the prior year. The decrease was due to a decrease in the average yield on interest-earning assets, partially offset by an increase in the average balance of interest-earning assets. The average yield on interest-earning assets decreased to 4.11% for the three months ended June 30, 2012 from 4.54% for the same period in the prior year. Average interest-earning assets increased by $8.7 million, or 2.1%, to $418.2 million for the three months ended June 30, 2012 from $409.5 million for the same period in 2011.

Interest income on loans decreased $301,000, or 7.7%, to $3.6 million for the three months ended June 30, 2012 due primarily to a decrease in the average yield on loans. The average yield on loans receivable decreased to 4.85% for the three months ended June 30, 2012 from 5.30% for the same period in the prior year. The decrease in average yield was primarily attributable to our variable rate loans adjusting downward as prime and short-term interest rates remained low as well as the origination of new loans in a generally lower interest rate environment and repayment/refinance of higher rate loans. Average loans receivable increased by $3.0 million, or 1.0%, to $298.5 million for the three months ended June 30, 2012 from $295.5 million for the same period in the prior year.

Interest income on investment and mortgage-backed securities decreased by $44,000, or 6.1%, to $680,000 for the three months ended June 30, 2012 from $724,000 for the same period in the prior year. This decrease was due primarily to a decrease in the average yield earned on investments and mortgage-backed securities to 2.44% for the three months ended June 30, 2012 from 2.85% for the same period in the prior year due to new investments added in a lower interest rate environment and variable rate investments that adjusted downward. This decrease was partially offset by an increase in the average balance of investment and mortgage-backed securities, which increased by $9.7 million, or 9.5%, to $111.5 million for the three months ended June 30, 2012 from $101.8 million for the same period in the prior year.

Interest Expense. Total interest expense decreased by $101,000, or 8.5%, to $1.1 million for the three months ended June 30, 2012 from $1.2 million for the same period in the prior year. This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities to 1.20% for the three months ended June 30, 2012 from 1.33% for the prior year period. Partially offsetting this decrease in interest expense was as an increase in the average balance of interest-bearing liabilities of $4.4 million, or 1.2%, to $362.5 million for the three months ended June 30, 2012 from $358.0 million for the same period in the prior year.

Interest expense on deposits decreased by $9,000, or 1.0%, to $896,000 for the three months ended June 30, 2012 from $905,000 for the same period in the prior year. The average cost of deposits declined from 1.15% for the three months ended June 30, 2011 to 1.09% for the three months ended June 30, 2012. The continued low level of market interest rates enabled us to reduce the rates of interest paid on deposit products. Partially offsetting this decrease in interest expense on deposits was an increase in the average balance of deposits which increased $13.6 million, or 4.3%, to $327.6 million for the three months ended June 30, 2012 from $314.0 million for the same period in 2011.

Interest expense on Federal Home Loan Bank advances decreased $89,000, or 31.4%, to $194,000 for the three months ended June 30, 2012 from $283,000 for the same period in the prior year. The average balance of advances decreased $6.2 million, or 16.1%, to $32.1 million for the three months ended June 30, 2012 compared to the same period in the prior year. In addition, the average cost of advances decreased to 2.42% for the quarter ended June 30, 2012 from 2.96% for the quarter ended June 30, 2011 as higher rate advances matured and were repaid.

Provision for Loan Losses. The provision for loan losses decreased by $125,000 to $300,000 for the three months ended June 30, 2012 from $425,000 for the same period in 2011. Non-performing loans at June 30, 2012 were $4.1 million or 1.39% of total loans, $4.6 million or 1.60% of total loans at September 30, 2011 and $3.2 million or 1.10% of total loans at June 30, 2011. The provision that was recorded was sufficient, in management’s judgment, to bring the allowance for loan losses to a level that reflects the losses inherent in our loan portfolio relative to loan mix, economic conditions and historical loss experience.

Noninterest Income. Noninterest income increased $19,000, or 3.2%, to $615,000 for the three months ended June 30, 2012 from $596,000 for the same period in the prior year due mainly to higher net loan sale gains due to a higher volume of loan sales partly offset by lower annuity and mutual fund fees and service charges due to lower activity or demand.

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Noninterest Expenses. Noninterest expenses increased by $63,000, or 2.6%, to $2.5 million for the three months ended June 30, 2012 compared to the same period in 2011. The increase was due mainly to general cost increases in personnel related expenses.

Income Tax Expense. The Company recorded a provision for income tax of $307,000 for the three months ended June 30, 2012 compared to $389,000 for the three months ended June 30, 2011 due to lower income before taxes. The effective tax rate declined slightly from 28.7% to 31.5% for the three months ended June 30, 2012 and 2011, respectively, due mainly to a higher level of tax exempt income.

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

General. Net income for the nine months ended June 30, 2012 was $2.4 million compared to $1.7 million for the nine months ended June 30, 2011. Net income for the nine months ended June 30, 2011 included a $1.4 million one-time contribution to Standard Charitable Foundation ($908,000 after tax impact). This contribution represented $1.2 million or 3.5% of the stock issued on October 6, 2010 and $200,000 in cash. Excluding the one-time charitable contribution, net income decreased $222,000 for the nine months ended June 30, 2012 compared to the same period in the prior year due primarily to a decrease in net interest income of $378,000, or 3.7%, and an increase in noninterest expenses of $317,000, or 4.5%, partially offset by a lower provision for loan losses of $300,000, or 25%.

Net Interest Income. Net interest income for the nine months ended June 30, 2012 was $9.8 million compared to $10.2 million for the nine months ended June 30, 2011. Our net interest rate spread and net interest margin were 3.01% and 3.17%, respectively for the nine months ended June 30, 2012 compared to 3.15% and 3.33% for the same period in the prior year. The decrease in the net interest rate spread and net interest rate margin was the result of the yield on interest-earning assets declining more than the cost of interest-bearing liabilities.

Interest and Dividend Income. Total interest and dividend income of $13.1 million for the nine months ended June 30, 2012 decreased by $824,000, or 5.9%, compared to the same period in the prior year. The decrease was due to a decrease in the average yield on interest-earning assets, partially offset by an increase in the average balance of interest-earning assets. The average yield on interest-earning assets decreased to 4.24% for the nine months ended June 30, 2012 from 4.56% for the same period in the prior year. Average interest-earning assets increased by $4.7 million, or 1.2%, to $412.1 million for the nine months ended June 30, 2012 from $407.4 million for the same period in 2011.

Interest income on loans decreased $735,000, or 6.2%, to $11.1 million for the nine months ended June 30, 2012 due primarily to a decrease in the average yield on loans. The average yield on loans receivable decreased to 5.01% for the nine months ended June 30, 2012 from 5.36% for the same period in the prior year. The decrease in average yield was primarily attributable to our variable rate loans adjusting downward as prime and short-term interest rates remained low as well as the origination of new loans in a generally lower interest rate environment and repayment/refinance of higher rate loans. Average loans receivable increased by $1.4 million, or 0.5%, to $296.0 million for the nine months ended June 30, 2012 compared to the same period in the prior year.

Interest income on investment and mortgage-backed securities decreased by $86,000, or 4.1%, to $2.0 million for the nine months ended June 30, 2012 from the same period in the prior year. This decrease was due primarily to a decrease in the average yield earned on investments and mortgage-backed securities to 2.51% for the nine months ended June 30, 2012 from 2.83% for the same period in the prior year due to new investments added in a lower interest rate environment and variable rate investments that adjusted downward. This decrease was partially offset by an increase in the average balance of investment and mortgage-backed securities, which increased by $8.1 million, or 8.3%, to $105.7 million for the nine months ended June 30, 2012 from $97.6 million for the same period in the prior year.

Interest Expense. Total interest expense decreased by $446,000, or 11.8%, to $3.3 million for the nine months ended June 30, 2012 from $3.8 million for the same period in the prior year. This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities to 1.23% for the nine months ended June 30, 2012 from 1.41% for the prior year period. Partially offsetting this decrease was an increase in average interest-bearing liabilities of $1.9 million, or 0.5%, to $358.6 million for the nine months ended June 30, 2012 compared to the same period in the prior year.

Interest expense on deposits decreased by $125,000, or 4.4%, to $2.7 million for the nine months ended June 30, 2012 compared to the same period in the prior year. The average cost of deposits declined from 1.22% for the nine months ended June 30, 2011 to 1.12% for the nine months ended June 30, 2012. The continued low level of market interest rates enabled us to reduce the rates of interest paid on deposit products. Partially offsetting this decrease in interest expense on deposits was an increase in the average balance of deposits which increased $11.7 million, or 3.7%, to $325.2 million for the nine months ended June 30, 2012 from $313.5 million for the same period in 2011.

Interest expense on Federal Home Loan Bank advances decreased $313,000 or 35.2%, to $575,000 for the nine months ended June 30, 2012 from $888,000 for the same period in the prior year. The average balance of advances decreased $8.0 million or 21.0% to $30.0 million for the nine months ended June 30, 2012 compared to the same period in the prior year. In addition, the

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average cost of advances decreased to 2.56% for the nine months ended June 30, 2012 from 3.12% for the nine months ended June 30, 2011 as higher rate advances matured and were repaid.

Provision for Loan Losses. The provision for loan losses decreased by $300,000, or 25.0%, to $900,000 for the nine months ended June 30, 2012 from $1.2 million for the same period in 2011. The provision that was recorded was sufficient, in management’s judgment, to bring the allowance for loan losses to a level that reflects the losses inherent in our loan portfolio relative to loan mix, economic conditions and historical loss experience.

Noninterest Income. Noninterest income increased $51,000, or 2.9%, to $1.8 million for the nine months ended June 30, 2012 compared to the same period in the prior year due mainly to higher net loan and securities sale gains due mainly to a higher volume of loan and security sales, partially offset by lower annuity and mutual fund fees due to lower activity or demand.

Noninterest Expenses. Noninterest expenses decreased by $1.1 million to $7.4 million for the nine months ended June 30, 2012 compared to the same period in the prior year. The decrease was due to a $1.4 million one-time contribution to Standard Charitable Foundation during the nine months ended June 30, 2011. Excluding the one-time charitable contribution, noninterest expenses increased $317,000, or 4.5%, due primarily to increases in compensation and employee benefits and other operating expenses as a result of general cost increases and additional staffing in the lending area.

Income Tax Expense. The Company recorded a provision for income tax of $937,000 for the nine months ended June 30, 2012 compared to $591,000 for the nine months ended June 30, 2011. The tax effect of the charitable foundation contribution for the nine months ended June 30, 2011 was a benefit of $468,000. The effective tax rate declined slightly from 29.0% for the nine months ended June 30, 2011, after adjusting for the charitable foundation contribution, to 28.3% for the nine months ended June 30, 2012 due mainly to a higher level of tax exempt income.

Non-Performing and Problem Assets

There were no loans in arrears 90 days or more and still accruing interest at June 30, 2012. Loans in arrears 90 days or more or in process of foreclosure (non-accrual loans) were as follows:

				Percentage
	Number of			of Loans
	Loans	Amount		Receivable
	(Dollars in thousands)

June 30, 2012	24	$	4,127	1.39	%
September 30, 2011	26	4,626		1.60

At June 30, 2012 and September 30, 2011, the Company had impaired loans totaling $2.9 million and $3.1 million, respectively. The largest impaired loan at both dates was a $1.0 million loan representing a 6% interest in a participation loan which was secured by commercial real estate and a mall in West Virginia. Foreclosure on this loan was initiated by the participating banks but a declaration of bankruptcy by the borrower has caused a delay in this process. The second largest impaired loan at both dates was a $700,000 loan which was secured by commercial real estate and a restaurant in Maryland. The borrower on this loan has declared bankruptcy which also delayed foreclosure proceedings.

Liquidity and Capital Resources

Liquidity is the ability to meet current and future financial obligations. Our primary sources of funds consist of deposit inflows, loan repayments, advances from the Federal Home Loan Bank of Pittsburgh, repurchase agreements and maturities, principal repayments and the sale of available-for-sale securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. Our Asset/Liability Management Committee, under the direction of our Chief Financial Officer, is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies. We believe that we have enough sources of liquidity to satisfy our short- and long-term liquidity needs as of June 30, 2012.

At June 30, 2012, we had $15.0 million in loan commitments outstanding of which $13.8 million were for commercial loans and $1.2 million for one- to four-family residential loans. In addition to commitments to originate loans, we had $13.1 million in unused lines of credit to borrowers and $949,000 in undisbursed funds for construction loans in process. Certificates of deposit due within one year of June 30, 2012 totaled $33.0 million, or 10.0% of total deposits. If these deposits do not remain with us, we may be required to seek other sources of funds, including loan and securities sales, repurchase agreements and Federal Home Loan Bank advances.

Current regulatory requirements specify that the Bank and similar institutions must maintain leverage capital equal to 4% of adjusted total assets and risk-based capital equal to 8% of risk-weighted assets. The Federal Deposit Insurance Corporation (“FDIC”)

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may require higher core capital ratios if warranted, and institutions are to maintain capital levels consistent with their risk exposures. The FDIC reserves the right to apply this higher standard to any insured financial institution when considering an institution’s capital adequacy. At June 30, 2012, Standard Bank was in compliance with all regulatory capital requirements with leverage and risk-based capital ratios of 12.75% and 20.33%, respectively, and was considered “well capitalized” under regulatory guidelines.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable to smaller reporting companies.

ITEM 4. Controls and Procedures

The Company’s management evaluated, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. Legal Proceedings

At June 30, 2012, the Company is not involved in any pending legal proceedings other than non-material legal proceedings undertaken in the ordinary course of business.

ITEM 1A. Risk Factors

Not applicable to smaller reporting companies.

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

The following table sets forth information with respect to purchases made by or on behalf of the Company of shares of common stock of the Company during the indicated periods.

				Total Number	Maximum number
				of Shares	of Shares
	Total Number	Average		Purchased as Part	That May Yet Be
	of Shares	Price Paid		of Publicly Announced	Purchased Under the
Period	Purchased	Per Share		Plans or Programs	Plans or Programs (1)
April 1-30, 2012	—	$	—	—	282,000
May 1-31, 2012	—	—		—	282,000
June 1-30, 2012	2,600	16.20		2,600	279,400

Totals	2,600	$	16.20	2,600

(1) On October 20, 2011, the Company announced that the Board of Directors authorized the repurchase of up to 347,000 shares, or approximately 10%, of the Company’s outstanding common stock. The stock repurchase program may be carried out through open market purchases, block trades, negotiated private transactions and pursuant to a plan adopted in accordance with Rule 10b5-1 of the SEC’s rules. The stock will be repurchased on an ongoing basis and will be subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital and the Company’s financial performance.

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ITEM 3. Defaults Upon Senior Securities

Not Applicable

ITEM 4. Mine Safety Disclosures

Not Applicable

ITEM 5. Other Information

(a) Not Applicable

(b) Not Applicable

ITEM 6 Exhibits

3.1		Articles of Incorporation of Standard Financial Corp.*
3.2		Bylaws of Standard Financial Corp.*
4		Form of Common Stock Certificate of Standard Financial Corp.*
10.1		Form of Standard Bank, PaSB Employee Stock Ownership Plan*
10.2		Form of Standard Financial Corp. and Standard Bank, PaSB Three-Year Employment Agreement*
10.3		Form of Standard Financial Corp. and Standard Bank, PaSB Two-Year Employment Agreement*
10.4		Form of Standard Bank, PaSB Change in Control Agreement*
10.5		Form of Phantom Stock Agreement for Officers*
10.6		Form of Phantom Stock Agreement for Directors*
10.7		Chief Financial Officer Performance Based Compensation Plan*
10.8		Chief Commercial Lending Officer Performance Based Compensation Plan*
10.9		Non-Compete Agreement between Standard Bank, PaSB and David C. Mathews*
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-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 Chief Financial Officer pursuant to Rule 13a-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 Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document **
101.SCH		XBRL Taxonomy Extension Schema Document **
101.CAL		XBRL Taxonomy Calculation Linkbase Document **
101 DEF		XBRL Taxonomy Extension Definition Linkbase Document **
101 LAB		XBRL Taxonomy Label Linkbase Document **
101.PRE		XBRL Taxonomy Presentation Linkbase Document **

* Incorporated by reference to the Registration Statement on Form S-1 of Standard Financial Corp. (File No. 333-167579), originally filed with the Securities and Exchange Commission on June 17, 2010, as amended.

** We have attached these documents formatted in XBRL (Extensible Business Reporting Language) as Exhibit 101 to this report. We advise users of this data that pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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SIGNATURES

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

		STANDARD FINANCIAL CORP.

Signatures	Title		Date

/s/ Timothy K. Zimmerman	President, Chief Executive Officerb and Director (Principal Executive Officer)		August 9, 2012
Timothy K. Zimmerman

/s/ Colleen M. Brown	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)		August 9, 2012
Colleen M. Brown