10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

Amendment No. 1

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

For the Quarterly Period ended June 30, 2011

or

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

For transition period from             to             

Commission File Number      0-51331

BANKFINANCIAL CORPORATION

(Exact Name of Registrant as Specified in Charter)

Maryland	75-3199276
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)
15W060 North Frontage Road, Burr Ridge, Illinois	60527
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (800) 894-6900

Not Applicable

(Former name or former address, if changed since last report)

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

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

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

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

Large accelerated filer  ¨            Accelerated filer  x            Non-accelerated filer  ¨            Smaller reporting company  ¨

Indicate the number of shares outstanding of each of the Issuer’s classes of common stock as of the latest practicable date.

21,072,966 shares of Common Stock, par value $0.01 per share, were issued and outstanding as of August 2, 2011.

Explanatory Note

This Amendment No. 1 to Form 10-Q for the quarterly period ended June 30, 2011, is filed solely to furnish Exhibit 101 in accordance with Rule 405(a)(2) of Regulation S-T. No other changes have been made to the Form 10-Q. This Amendment No. 1 does not reflect events that may have occurred subsequent to the original filing date of the Form 10-Q and does not modify or update in any way disclosures made in the Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, these interactive data files on Exhibit 101 are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise are not subject to liability under those sections.

Exhibit
Number	Description
31.1		Certification of F. Morgan Gasior, Chairman of the Board, Chief Executive Officer and President, Pursuant to Rule 13a-14(a) and Rule 15d-14(a). (1)
31.2		Certification of Paul A. Cloutier, Executive Vice President and Chief Financial Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a). (1)
32.1		Certification of F. Morgan Gasior, Chairman of the Board, Chief Executive Officer and President, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)
32.2		Certification of Paul A. Cloutier, Executive Vice President 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. (1)
101.INS		XBRL Instance Document (2)
101.SCH		XBRL Taxonomy Extension Schema (2)
101.CAL		XBRL Taxonomy Extension Calculation Linkbase (2)
101.DEF		XBRL Taxonomy Extension Definition Linkbase (2)
101.LAB		XBRL Taxonomy Extension Label Linkbase (2)
101.PRE		XBRL Taxonomy Extension Presentation Linkbase (2)

⁽¹⁾  Previously filed or furnished with our Quarterly Report on Form 10-Q filed August 4, 2011.

⁽²⁾  Furnished herewith.

SIGNATURES

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

	BANKFINANCIAL CORPORATION
	(Registrant)
Date: August 18, 2011
	/s/     F. MORGAN GASIOR
	F. Morgan Gasior
	Chairman of the Board, Chief Executive Officer and President
	/s/     PAUL A. CLOUTIER
	Paul A. Cloutier
	Executive Vice President and Chief Financial Officer

INDEX TO EXHIBITS

Exhibit
Number	Description
31.1		Certification of F. Morgan Gasior, Chairman of the Board, Chief Executive Officer and President, Pursuant to Rule 13a-14(a) and Rule 15d-14(a). (1)
31.3		Certification of Paul A. Cloutier, Executive Vice President and Chief Financial Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a). (1)
32.3		Certification of F. Morgan Gasior, Chairman of the Board, Chief Executive Officer and President, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)
32.4		Certification of Paul A. Cloutier, Executive Vice President 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. (1)
101.INS		XBRL Instance Document (2)
101.SCH		XBRL Taxonomy Extension Schema (2)
101.CAL		XBRL Taxonomy Extension Calculation Linkbase (2)
101.DEF		XBRL Taxonomy Extension Definition Linkbase (2)
101.LAB		XBRL Taxonomy Extension Label Linkbase (2)
101.PRE		XBRL Taxonomy Extension Presentation Linkbase (2)

⁽¹⁾  Previously filed or furnished with our Quarterly Report on Form 10-Q filed August 4, 2011.

⁽²⁾  Furnished herewith.

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Consolidated Statements Of Financial Condition (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
Consolidated Statements Of Financial Condition
Loans receivable, allowance for loan losses	$ 22,963	$ 22,180
Preferred Stock, par value	$ 0.01	$ 0.01
Preferred Stock, shares authorized	25,000,000	25,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value	$ 0.01	$ 0.01
Common Stock, shares authorized	100,000,000	100,000,000
Common Stock, shares issued	21,072,966	21,072,966

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Consolidated Statements Of Operations (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Interest and dividend income
Loans, including fees	$ 18,155	$ 15,419	$ 32,565	$ 31,476
Securities	768	910	1,590	1,918
Other	77	122	193	202
Total interest income	19,000	16,451	34,348	33,596
Interest expense
Deposits	1,849	3,434	3,749	7,063
Borrowings	61	243	157	543
Total interest expense	1,910	3,677	3,906	7,606
Net interest income	17,090	12,774	30,442	25,990
Provision for loan losses	3,175	2,665	5,599	3,516
Net interest income after provision for loan losses	13,915	10,109	24,843	22,474
Noninterest income
Deposit service charges and fees	691	792	1,303	1,565
Other fee income	413	500	795	934
Insurance commissions and annuities income	155	179	324	314
Gain on sale of loans, net	39	68	58	115
Gain on sale of securities, net		31		31
Loss on disposition of premises and equipment, net	(10)	(17)	(20)	(17)
Loan servicing fees	137	154	269	324
Amortization and impairment of servicing assets	(51)	(78)	(105)	(321)
Earnings on bank owned life insurance	162	92	320	171
Trust income	216	12	292	24
Other	127	79	214	127
Total noninterest income	1,879	1,812	3,450	3,267
Noninterest expense
Compensation and benefits	7,120	6,552	13,720	13,763
Office occupancy and equipment	1,736	1,609	3,604	3,410
Advertising and public relations	260	303	497	519
Information technology	1,091	961	2,039	1,882
Supplies, telephone, and postage	439	406	814	767
Amortization of intangibles	470	399	852	804
Nonperforming asset management	1,279	355	1,734	622
Loss (gain) on sale of other real estate owned	(57)	107	(109)	107
Operations of other real estate owned	912	393	1,417	527
FDIC insurance premiums	186	532	753	1,087
Acquisition expenses	240		1,771
Other	947	753	1,786	1,560
Total noninterest expense	14,623	12,370	28,878	25,048
Income (loss) before income taxes	1,171	(449)	(585)	693
Income tax expense (benefit)	145	(161)	(834)	265
Net Income (loss)	$ 1,026	$ (288)	$ 249	$ 428
Basic income (loss) per common share	$ 0.05	$ (0.01)	$ 0.01	$ 0.02
Diluted income (loss) per common share	$ 0.05	$ (0.01)	$ 0.01	$ 0.02
Weighted average common shares outstanding	19,713,952	19,737,315	19,701,904	19,778,294
Diluted weighted average common shares outstanding	19,715,480	19,737,315	19,703,600	19,791,890

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Document And Entity Information	6 Months Ended
	Jun. 30, 2011	Aug. 02, 2011
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2011
Entity Registrant Name	BankFinancial CORP
Entity Central Index Key	0001303942
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		21,072,966

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Deposits

6 Months Ended

Jun. 30, 2011

Deposits

Deposits

Note 5 – Deposits

Deposits are as follows:

	June 30,         2011			December 31,   2010
Noninterest-bearing demand deposits		$	138,805		$	112,549
Savings deposits			143,880			98,894
Money market accounts			354,897			341,048
Interest-bearing NOW accounts			323,997			302,812
Certificates of deposit			416,752			380,074
		$	1,378,331		$	1,235,377

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Newly Issued But Not Yet Effective Accounting Pronouncements

6 Months Ended

Jun. 30, 2011

Newly Issued But Not Yet Effective Accounting Pronouncements

Newly Issued But Not Yet Effective Accounting Pronouncements

Note 10 – Newly Issued But Not Yet Effective Accounting Pronouncements

FASB ASU 2010-28, "Intangibles – Goodwill and Other (Topic 350), When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts" — ASU 2010-28 affects all entities that have recognized a goodwill asset and have one or more reporting units whose carrying amount for purposes of performing Step 1 of the goodwill impairment test is zero or negative. ASU 2010-28 modifies Step 1 so that for those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with existing guidance, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. For public entities, this guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. The guidance is effective for a public entity's first annual period that ends on or after December 15, 2010. Adoption of ASU 2010-28 is not expected to have a material impact on our consolidated financial statements.

FASB ASU 2011-2 Troubled Debt Restructurings.    In April 2011, the FASB amended existing guidance and clarified when creditors such as banks should classify loan modifications as troubled debt restructurings. Banks will now need to consider all available evidence when evaluating whether a loan modification is a troubled debt restructuring. This new guidance could result in more loan modifications being classified as troubled debt restructurings, which could affect the allowance for loan losses and increase disclosures. This new guidance for identifying and disclosing troubled debt restructurings is effective for interim and annual periods beginning on or after June 15, 2011 and applies retrospectively to troubled debt restructurings occurring after the beginning of the year. The Company is evaluating the impact that the new guidance may have on its financial condition, results of operations and liquidity.

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Condensed Summary Of Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Condensed Summary Of Significant Accounting Policies

Condensed Summary Of Significant Accounting Policies

Note 1 – Condensed Summary of Significant Accounting Policies

Basis of Presentation:    BankFinancial Corporation, a Maryland corporation headquartered in Burr Ridge, Illinois (the "Company"), is the owner of all of the issued and outstanding capital stock of BankFinancial, F.S.B. (the "Bank"). As used in this Quarterly Report on Form 10-Q, the words "Company," "we" and "our" are intended to refer to the Company, the Bank, and the Bank's subsidiaries, with respect to information presented for the three- and six-month periods ended June 30, 2011 and other periods referenced herein.

Principles of Consolidation:    The interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. All significant intercompany accounts and transactions have been eliminated. The results of operations for the three- and six-month periods ended June 30, 2011, are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2011.

Certain information and note disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission.

Nature of Business:    The Company's revenues, operating income, and assets are primarily from the banking industry. All of the Company's banking operations are considered by management to be aggregated in one reportable operating segment for financial reporting purposes. A significant majority of our loan customers are located in the greater Chicago metropolitan area; commercial lessees are located throughout the United States. The loan portfolio is concentrated in loans that are primarily secured by diversified types of real estate collateral.

Use of Estimates:    To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, mortgage servicing rights, deferred tax assets, goodwill, other intangible assets, stock-based compensation, impairment of securities and fair value of financial instruments are particularly subject to change.

Interest-bearing Deposits in Other Financial Institutions:    Interest-bearing deposits in other financial institutions maturing in less than 90 days are carried at cost.

Cash Flows:    Cash and cash equivalents include cash, deposits with other financial institutions maturing in less than 90 days, and daily federal funds sold. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, borrowings, and advance payments by borrowers for taxes and insurance.

Securities:    Debt securities are classified as available-for-sale when they might be sold before maturity. Equity securities with readily determinable fair values are classified as available-for-sale. Securities classified as available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income (loss), net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are based on the amortized cost of the security sold. Declines in the fair value of securities below their cost that are other-than-temporary are reflected as realized losses. In determining if losses are other-than-temporary, management considers: (1) the length of time and extent that fair value has been less than cost or adjusted cost, as applicable, (2) the financial condition and near term prospects of the issuer, and (3) whether the Company has the intent to sell the debt security or it is more likely than not that the Company will be required to sell the debt security before the anticipated recovery.

Federal Home Loan Bank Stock:    The Bank is a member of the Federal Home Loan Bank system. Members are required to own a certain amount of stock based on their level of borrowings and other factors, and may invest in additional amounts. Federal Home Loan Bank of Chicago ("FHLBC") stock is carried at cost and classified as a restricted security. Accounting guidance for FHLBC stock provides that, for impairment testing purposes, the value of long term investments such as our FHLBC common stock is based on the "ultimate recoverability" of the par value of the security without regard to temporary declines in value. Both cash and stock dividends are reported as income.

Loans Held-for-Sale:    Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or estimated fair market value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Mortgage loans held-for-sale are generally sold with servicing rights retained. The carrying value of mortgage loans sold is reduced by the fair value of the servicing right. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

Loans and Loan Income:    Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of the allowance for loan losses, premiums and discounts on loans purchased, and net deferred loan costs. Interest income on loans is recognized in income over the term of the loan based on the amount of principal outstanding.

Premiums and discounts associated with loans purchased are amortized over the contractual term of the loan using the level-yield method.

Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the contractual loan term, adjusted for prepayments. Interest income is discontinued at the time a loan is 90 days past due or when we do not expect to receive full payment of interest or principal. Past due status is based on the contractual terms of the loan.

All interest accrued but not received for loans that have been placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual status. Once a loan is placed on non-accrual status, the borrower must generally demonstrate at least six months of payment performance before the loan is eligible to return to accrual status. The Company may have loans classified as 90 days or more past due and still accruing. Generally, the Company does not utilize this category of loan classification unless: (1) the loan is repaid in full shortly after the period end date; (2) the loan is well-secured and there are no asserted or pending barriers to its collection; or (3) the borrower has remitted all scheduled payments and is otherwise in substantial compliance with the terms of the loan, but the processing of loan payments actually received or the renewal of the loan has not occurred for administrative reasons.

Allowance for Loan Losses:    The Company establishes provisions for loan losses, which are charged to the Company's results of operations to maintain the allowance for loan losses to absorb probable incurred credit losses in the loan portfolio. In determining the level of the allowance for loan losses, the Company considers past and current loss experience, trends in nonaccrual loans, evaluations of real estate collateral, current economic conditions, volume and type of lending, adverse situations that may affect a borrower's ability to repay a loan and the levels of nonperforming and other classified loans. The amount of the allowance is based on estimates and the ultimate losses may vary from the estimates as more information becomes available or events change.

The Company provides for loan losses based on the allowance method. Accordingly, all loan losses are charged to the related allowance and all recoveries are credited to it. Additions to the allowance for loan losses are provided by charges to income based on various factors that, in our judgment, deserve current recognition in estimating probable incurred credit losses. The Company reviews the loan portfolio on an ongoing basis and makes provisions for loan losses on a quarterly basis to maintain the allowance for loan losses in accordance with GAAP. The allowance for loan losses consists of two components:

• specific allowances established for any impaired residential owner or non-owner occupied mortgage, multi-family mortgage, nonresidential real estate, construction and land, commercial, and commercial lease loans for which the recorded investment in the loan exceeds the measured value of the loan; and

• general allowances for loan losses for each loan class based on historical loan loss experience; and adjustments to historical loss experience (general allowances), maintained to cover uncertainties that affect our estimate of probable incurred credit losses for each loan class. If the remaining unamortized discount related to a specific pool of purchased performing loans exceeds the estimated credit losses associated with these loans, no general valuation allowance is recorded against the loans.

The adjustments to historical loss experience are based on our evaluation of several factors, including levels of, and trends in, past due and classified loans; levels of, and trends in, charge-offs and recoveries; trends in volume and terms of loans, including any credit concentrations in the loan portfolio; experience, ability, and depth of lending management and other relevant staff; and national and local economic trends and conditions.

The Company evaluates the allowance for loan losses based upon the combined total of the specific and general components. Generally, when the loan portfolio increases, absent other factors, the allowance for loan loss methodology results in a higher dollar amount of estimated probable incurred credit losses than would be the case without the increase. Conversely, when the loan portfolio decreases, absent other factors, the allowance for loan loss methodology generally results in a lower dollar amount of estimated probable losses than would be the case without the decrease.

The following summarizes the applicable factors evaluated with respect to the general allowance for loan losses for each loan class:

One-to-Four Family Residential Mortgage Loans.    The U.S. Index of Leading Economic Indicators is the national economic factor utilized for residential loans; however, because the Company deems local economic factors more relevant to this loan class, the national economic factor accounts for only a 10% weighting. A composite index of the Chicago Purchasing Managers index and the regional unemployment rate comprises the local economic factor and is assigned a 20% weighting, except for non-owner-occupied loans which are assigned a 50% weighting due to their greater reliance on low-income family tenancies. The Company's historical loss ratio for residential loans is computed using a rolling twelve-quarter average and is assigned a 70% weighting, except for non-owner-occupied loans which are assigned a 40% weighting.

Multi-family Mortgage Loans.    The U.S. Index of Leading Economic Indicators is the national economic factor utilized for multi-family mortgage loans; however, because the Company deems local economic factors more relevant to this class, the national economic factor accounts for only a 10% weighting. A composite index of the Chicago Purchasing Managers index and the regional unemployment rate comprises the local economic factor and is assigned a 30% weighting. The Company's historical loss ratio for this class of loans is computed using a rolling twelve-quarter average and is assigned a 60% weighting.

Wholesale Commercial Loans.    This loan class presently consists of multi-family loans originated outside of the Chicago metropolitan area; however, the collateral for some loans may be located in an area contiguous to the Chicago metropolitan area. The U.S. Index of Leading Economic Indicators is the national economic factor utilized for wholesale commercial loans. Because the Company deems national economic factors more relevant to this class, the national economic factor accounts for a 50% weighting. A composite index of the Chicago Purchasing Managers index and the regional unemployment rate comprises the local economic factor and is only assigned a 10% weighting given the predominant geographic distribution of this loan class outside the Chicago metropolitan area. Because the loans in this class are also among the least seasoned in the Company's overall loan portfolio, the Company's historical loss ratio for this class of loans is computed using a rolling twelve-quarter average and is assigned a 40% weighting.

Non-Residential Real Estate Loans.    The U.S. Index of Leading Economic Indicators is the national economic factor utilized for non-residential real estate loans; however, because the Company deems local economic factors more relevant to this class, the national economic factor accounts for only a 10% weighting. A composite index of the Chicago Purchasing Managers index and the regional unemployment rate comprises the local economic factor and is assigned a 25% weighting due to the diversity of the collateral types within this class. The Company's historical loss ratio for this class of loans is computed using a rolling twelve-quarter average and is assigned a 65% weighting.

Construction, Development and Land Loans.    The U.S. Index of Leading Economic Indicators is the national economic factor utilized for construction, development and land loans; however, because the Company deems local economic factors more relevant to this class, the national economic factor accounts for only a 10% weighting. A composite index of the Chicago Purchasing Managers index and the regional unemployment rate comprises the local economic factor and is assigned a 25% weighting. The Company's historical loss ratio for this class of loans is computed using a rolling twelve-quarter average and is assigned a 65% weighting.

Commercial Loans.    The U.S. Index of Leading Economic Indicators is the national economic factor utilized for commercial loans; however, because the Company deems local economic factors more relevant to this class, the national economic factor accounts for only a 10% weighting. A composite index of the Chicago Purchasing Managers index and the regional unemployment rate comprises the local economic factor and is assigned a 30% weighting for general secured and unsecured loans and 10% for health-care related loans (due to the government-guaranteed status of the underlying eligible collateral). The Company's historical loss ratio for this class of loans is computed using a rolling twelve-quarter average and is thus assigned a weighting between of 60% and 80% depending on the nature of the collateral, if any.

Commercial Leases.    This loan class consists of commercial leases originated outside of the Chicago metropolitan area. The U.S. Index of Leading Economic Indicators is the national economic factor utilized for national commercial leases. Because the Company deems national economic factors more relevant to this class, the national economic factor accounts for between 25% to 75% of the weighting, depending on the credit quality of the lessee; investment grade lessees merit a lower weighting due to their typically globally-based operations compared to a below-investment grade domestic lessee, for which the condition of the U.S. national economy has a considerably greater impact. The Company's historical loss ratio for this class of loans is computed using a rolling twelve-quarter average and is assigned a weighting equal to the reciprocal of the national economic factor weighting assigned.

Consumer Loans.    The U.S. Index of Leading Economic Indicators is the national economic factor utilized for consumer real estate loans; however, because the Company deems local economic factors more relevant to this class, the national economic factor accounts for only a 10% weighting. A composite index of the Chicago Purchasing Managers index and the regional unemployment rate comprises the local economic factor and is assigned a 20% weighting. The Company's historical loss ratio for this class of loans is computed using a rolling twelve-quarter average and is assigned a 70% weighting. Loans secured by deposit accounts held by the Company do not have a material allowance due to the absence of credit risk presented by the collateralization status of this sub-class of consumer loans.

Reclassifications:    Certain reclassifications have been made in the prior year's financial statements to conform to the current period's presentation.

These unaudited consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2010, and all amendments thereto, as supplemented by quarterly and other reports filed with the Securities and Exchange Commission.

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Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2011

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

Note 7 - Other Comprehensive Income (Loss)

Other comprehensive income (loss) components were as follows:

	Three months ended June  30,						Six months ended June  30,
	2011			2010			2011			2010
	(Dollars in thousands)
Unrealized holding gains (losses) on securities, net of tax	$	(88	)	$	(82	)	$	(649	)	$	33
Net gain on sale of securities recognized, net of tax		-			19			-			19
Change in other comprehensive income, net of tax	$	(88	)	$	(101	)	$	(649	)	$	14

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Acquisitions

6 Months Ended

Jun. 30, 2011

Acquisitions

Acquisitions

Note 8 – Acquisitions

The Company completed its acquisition of DG Bancorp, Inc. and its subsidiary Downers Grove National Bank, on March 18, 2011 and results for Downers Grove National Bank have been included in the Company's operations from that date. The Company accounted for the acquisition using the acquisition method. The Company recorded merger and acquisition expenses of $1.5 million for this transaction. The acquisition method also requires an acquirer to recognize the assets acquired and the liabilities assumed at their fair values as of the acquisition date.

The Company expects its acquisition of Downers Grove National Bank to result in several benefits, including increased earnings and higher returns on stockholders' equity, more effective deployment of its excess capital, improved utilization of existing organizational capacities, expanded geographic coverage of the Company's market territory, increased deposit market share and improved convenience for its existing customers due to the addition of two new full-service branch offices.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of the acquisition:

	March 18, 2011
Assets acquired and liabilities assumed:
Cash and due from other financial institutions		$	1,040
Interest-bearing deposits in other financial institutions			60,579
Cash and cash equivalents			61,619
Securities			10,177
Loans receivable			119,239
Other real estate owned			7,210
Stock in Federal Home Loan Bank and Federal Reserve Bank			903
Premises and equipment, net			7,401
Accrued interest receivable			355
Core deposit intangible			2,660
FDIC prepaid expense			774
Income tax receivable			774
Deferred taxes, net			2,662
Other assets			42
Total assets acquired		$	213,816
Deposits		$	212,939
Advance payments by borrowers taxes and insurance			34
Accrued interest payable and other liabilities			843
Total liabilities assumed		$	213,816

The Company is still in the process of determining the acquisition date fair value of assets acquired and liabilities assumed in the Downers Grove National Bank acquisition, and the amounts disclosed above are considered provisional amounts. During the measurement period, the Company will retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new facts and information that existed at the acquisition date. The measurement period will end when the Company receives all of the information it is seeking about such facts and circumstances and the measurement period will not exceed one year from the acquisition date. Preliminary estimates of goodwill or bargain purchase gain were considered immaterial and thus were not recorded during the quarter ended June 30, 2011. Subsequent adjustments to the provisional amounts may be material.

As noted above, the loans acquired in the Downers Grove National Bank transaction had a fair value of $119.2 million. Included in this amount were $15.8 million of purchased loans with evidence of deterioration of credit quality since origination and for which it was probable, at the time of the acquisition, that the Company would be unable to collect all contractually required payments receivable. The Company's evaluation of purchased loans with evidence of credit quality deterioration as of the acquisition date resulted in the recording of a nonaccretable difference of $9.2 million, which is defined as the loan's contractually required payments receivable in excess of the amount of the cash flows that are expected to be collected. The Company considered factors such as payment history, collateral values and accrual status in determining whether there was evidence of deterioration of a purchased loan's credit quality at the acquisition date. As of June 30, 2011, the carrying amount of purchased loans with evidence of loan deterioration at the acquisition date was $15.8 million, and the remaining nonaccretable difference was $9.2 million. The foregoing data represents the Company's provisional estimates as the Company continues to evaluate purchase accounting during the measurement period.

The following table summarizes the unaudited pro forma financial results of operations as if the Company acquired DG Bancorp, Inc. on January 1, 2010:

	Three Months Ended     June 30,					Six Months Ended     June 30,
	2011		2010			2011			2010
Net interest income (1)	$	17,090	$	14,850		$	31,795		$	30,039
Net income loss(1)		1,026		(2,486	)		(1,316	)		(3,581	)
Basic earnings (loss) per common share	$	0.05	$	(0.13	)	$	(0.07	)	$	(0.18	)
Diluted earnings (loss) per common share		0.05		(0.13	)		(0.07	)		(0.18	)

(1)  Results for DG Bancorp, Inc. include net income or loss from operations for the respective periods

The Company completed an acquisition of a portfolio of $152 million of performing Chicago area multi-family loans on March 11, 2011. The multi-family loans in this portfolio were originated by Citibank, N.A. and its predecessor by merger, Citibank, F.S.B. At the time of the acquisition, the portfolio consisted of 466 loans with an average loan balance of $327,000. The loans were purchased at a discount that will be accreted into income on a level-yield basis over the remaining life of the loans. The Company conducted extensive due diligence on this transaction, resulting in the recognition of $398,000 in transaction related expenses in 2011. The Company expects its acquisition of this loan portfolio to result in several benefits, including increased earnings and higher returns on stockholders' equity, more effective deployment of its excess liquidity and capital, improved utilization of existing organizational capacities and new opportunities to develop further business relationships with the borrowers of these loans.

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Fair Values

6 Months Ended

Jun. 30, 2011

Fair Values

Fair Values

Note 6 – Fair Values

US GAAP establishes a hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

• Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets.

• Level 2 - Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3 - Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

A financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The fair values of marketable equity securities available-for-sale are generally determined by quoted prices, in active markets, for each specific security (Level 1 measurement inputs). If Level 1 measurement inputs are not available for a marketable equity security, we determine its fair value based on the quoted price of a similar security traded in an active market (Level 2 measurement inputs). The fair values of debt securities available-for-sale are generally determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities' relationship to other benchmark, quoted securities (Level 2 measurement inputs).

The fair values of loans held for sale are generally determined by quoted prices in active markets that are accessible at the measurement date for similar, unrestricted assets (Level 2 measurement inputs).

Impaired loans are evaluated and valued at the time the loan is identified as impaired or placed into OREO, at the lower of cost or fair value. Fair value is measured based on the value of future expected cash flows and the collateral securing these loans and is classified at a Level 3 in the fair value hierarchy. Collateral may be real estate and/or business assets, including equipment, inventory and/or accounts receivable, and its fair value is generally determined based on real estate appraisals or other independent evaluations by qualified professionals. Appraised and reported values may be discounted based on management's historical knowledge, changes in market conditions from the time of valuation, and/or management's expertise and knowledge of the client and client's business. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors identified above.

Real estate properties acquired in collection of a loan are initially recorded at fair value less cost to sell at acquisition, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Expenses, gains and losses on disposition, and changes in the valuation allowance are reported in noninterest expense as operations of OREO. Fair value is generally based on third party appraisals and internal estimates and is therefore considered a Level 3 valuation.

The fair values of mortgage servicing rights are based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income. The Company is able to compare the valuation model inputs and results to widely available published industry data for reasonableness and is therefore considered a Level 2 valuation.

The following table sets forth the Company's financial assets that were accounted for at fair value and are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

					Fair Value Measurements Using
	Amortized   Cost		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant   Observable   Inputs (Level 2)		Significant   Unobservable   Inputs (Level 3)
June 30, 2011
Securities:
Certificates of deposit	$	22,208	$	22,208	$	-	$	22,208	$	-
Municipal securities		675		675		-		675		-
Equity mutual fund		500		513		513		-		-
Mortgage-backed securities residential		36,997		38,180		-		38,180		-
Collateralized mortgage obligations – residential		33,257		33,919		-		33,919		-
SBA-guaranteed loan participation certificates		50		51		-		51		-
	$	93,687	$	95,546	$	513	$	95,033	$	-
December 31, 2010
Securities:
Certificates of deposit	$	27,766	$	27,766	$	-	$	27,766	$	-
Municipal securities		675		709		-		709		-
Mortgage-backed securities residential		41,034		42,435		-		42,435		-
Collateralized mortgage obligations – residential		48,262		49,732		-		49,732		-
SBA-guaranteed loan participation certificates		103		105		-		105		-
	$	117,840	$	120,747	$	-	$	120,747	$	-

The following table sets forth the Company's assets that were measured at fair value on a non-recurring basis:

			Fair Value Measurements Using
	Fair Value		Quoted Prices   in Active Markets for Identical Assets (Level 1)		Significant   Observable   Inputs (Level 2)		Significant   Unobservable   Inputs (Level 3)
June 30, 2011
Impaired loans
One-to-four family residential real estate loans	$	657	$	-	$	-	$	657
One-to-four family residential real estate loans – non-owner occupied		3,790		-		-		3,790
Multi-family mortgage loans		7,551		-		-		7,551
Nonresidential real estate loans		9,122		-		-		9,122
Construction and land loans		504		-		-		504
Commercial loans		3,333		-		-		3,333
Commercial leases		72		-		-		72
Impaired loans	$	25,029	$	-	$	-	$	25,029
Other real estate owned:
One-to-four family residential real estate	$	5,986	$	-	$	-	$	5,986
Multi-family mortgage		3,987		-		-		3,987
Nonresidential real estate		9,902		-		-		9,902
Land		7,157		-		-		7,157
Other real estate owned	$	27,032	$	-	$	-	$	27,032
December 31, 2010
Impaired loans
One-to-four family residential real estate loans	$	2,778	$	-	$	-	$	2,778
Multi-family mortgage loans		10,417		-		-		10,417
Nonresidential real estate loans		8,773		-		-		8,773
Construction and land loans		5,805		-		-		5,805
Commercial loans		3,212		-		-		3,212
Commercial leases		72		-		-		72
Impaired loans	$	31,057	$	-	$	-	$	31,057
Other real estate owned:
One-to-four family residential real estate	$	3,015	$	-	$	-	$	3,015
Multi-family mortgage		2,486		-		-		2,486
Nonresidential real estate		7,376		-		-		7,376
Land		1,745		-		-		1,745
Other real estate owned	$	14,622	$	-	$	-	$	14,622

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral-dependent loans, had a carrying amount of $46.3 million, with a valuation allowance of $8.6 million at June 30, 2011, compared to a carrying amount of $43.7 million and a valuation allowance of $9.4 million at December 31, 2010, resulting in a decrease in the provision for loan losses of $789,000 for the six months ended June 30, 2011.

OREO and OREO in process, which are carried at lower of cost or fair value less costs to sell, had a carrying value of $27.0 million at June 30, 2011, which included write downs of $478,000 for the six months ended June 30, 2011, compared to $14.6 million at December 31, 2010, which included write downs of $2.4 million for the year ended December 31, 2010.

Mortgage servicing rights, which are carried at lower of cost or fair value, had a carrying amount of $1.3 million at June 30, 2011, of which $965,000 related to fixed rate loans and $334,000 related to adjustable rate loans. A pre-tax recovery of $233,000 on our mortgage servicing rights portfolio was included in net income for the three months ended June 30, 2010, compared to no charge or recovery recorded for the same period in 2011.

The carrying amount and estimated fair value of financial instruments is as follows:

	June 30, 2011						December 31, 2010
	Carrying   Amount			Estimated   Fair Value			Carrying   Amount			Estimated   Fair Value
Financial assets
Cash and cash equivalents	$	114,482		$	114,482		$	220,810		$	220,810
Securities		95,546			95,546			120,747			120,747
Loans held-for-sale		-			-			2,716			2,716
Loans receivable, net of allowance for loan losses		1,291,399			1,298,760			1,050,766			1,065,404
FHLBC stock		16,346			N/A			15,598			N/A
Accrued interest receivable		5,929			5,929			5,390			5,390
Mortgage servicing rights		1,299			1,573			1,349			1,612
Financial liabilities
Non-interest-bearing demand deposits	$	(138,805	)	$	(138,805	)	$	(112,549	)	$	(112,549	)
Savings deposits		(143,880	)		(143,880	)		(98,894	)		(98,894	)
NOW and money market accounts		(678,894	)		(678,894	)		(643,860	)		(643,860	)
Certificates of deposit		(416,752	)		(418,252	)		(380,074	)		(384,103	)
Borrowings		(12,595	)		(12,727	)		(23,749	)		(23,995	)
Accrued interest payable		(294	)		(294	)		(146	)		(146	)

N/A = Not Applicable

For purposes of the above, the following assumptions were used:

Cash and Cash Equivalents: The estimated fair values for cash and cash equivalents are based on their carrying value due to the short-term nature of these assets.

Loans: The estimated fair value for loans has been determined by calculating the present value of future cash flows based on the current rate the Company would charge for similar loans with similar maturities, applied for an estimated time period until the loan is assumed to be repriced or repaid. Any specific loan losses established for impaired loans are deducted from the loan balance. The estimated fair values of loans held-for-sale are based on quoted market prices.

FHLBC Stock: It is not practicable to determine the fair value of Federal Home Loan Bank of Chicago ("FHLBC") stock due to the restrictions placed on its transferability.

Deposit Liabilities:    The estimated fair value for certificates of deposit has been determined by calculating the present value of future cash flows based on estimates of rates the Company would pay on such deposits, applied for the time period until maturity. The estimated fair values of non-interest-bearing demand, NOW, money market, and savings deposits are assumed to approximate their carrying values as management establishes rates on these deposits at a level that approximates the local market area. Additionally, these deposits can be withdrawn on demand.

Borrowings:    The estimated fair values of advances from the FHLBC and notes payable are based on current market rates for similar financing. The estimated fair value of securities sold under agreements to repurchase is assumed to equal its carrying value due to the short-term nature of the liability.

Accrued Interest:    The estimated fair values of accrued interest receivable and payable are assumed to equal their carrying value.

Off-Balance-Sheet Instruments:    Off-balance-sheet items consist principally of unfunded loan commitments, standby letters of credit, and unused lines of credit. The estimated fair values of unfunded loan commitments, standby letters of credit, and unused lines of credit are not material.

While the above estimates are based on management's judgment of the most appropriate factors, as of the balance sheet date, there is no assurance that the estimated fair values would have been realized if the assets were disposed of or the liabilities settled at that date because market values may differ depending on the various circumstances. The estimated fair values would also not apply to subsequent dates.

In addition, other assets and liabilities that are not financial instruments, such as premises and equipment, are not included in the above disclosures.

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Consolidated Statements Of Changes In Stockholders' Equity And Comprehensive Income (Loss) (Parenthetical) (USD $)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Consolidated Statements Of Changes In Stockholders' Equity And Comprehensive Income (Loss) (Parenthetical)
Purchase and retirement of common stock, shares		356,411
Cash dividends declared on common stock, per share	$ 0.14	$ 0.14

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Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2011

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Note 2 – Earnings (loss) per share

Amounts reported in earnings (loss) per share reflect earnings available to common stockholders for the period divided by the weighted average number of shares of common stock outstanding during the period, exclusive of unearned ESOP shares and unvested restricted stock shares. Stock options and restricted stock are regarded as potential common stock and are considered in the diluted earnings per share calculations to the extent that they would have a dilutive effect if converted to common stock.

	Three months ended          June 30,								Six months ended          June 30,
	2011				2010				2011				2010
Net income (loss) available to common shareholders		$	1,026			$	(288	)		$	249			$	428
Average common shares outstanding			21,072,966				21,301,212				21,072,966				21,358,476
Less:
Unearned ESOP shares			(1,350,347	)			(1,457,047	)			(1,362,395	)			(1,472,447	)
Unvested restricted stock shares			(8,667	)			(106,850	)			(8,667	)			(107,735	)
Weighted average common shares outstanding			19,713,952				19,737,315				19,701,904				19,778,294
Basic earnings (loss) per common share		$	0.05			$	(0.01	)		$	0.01			$	0.02
Weighted average common shares outstanding			19,713,952				19,737,315				19,701,904				19,778,294
Net effect of dilutive stock options and unvested restricted stock			1,528				–				1,696				13,596
Weighted average diluted common shares outstanding			19,715,480				19,737,315				19,703,600				19,791,890
Diluted earnings (loss) per common share		$	0.05			$	(0.01	)		$	0.01			$	0.02
Number of anti-dilutive stock options excluded from the diluted earnings (loss) per share calculation			2,202,553				2,320,803				2,202,553				2,320,803
Weighted average exercise price of anti-dilutive stock options		$	16.48			$	16.51			$	16.48			$	16.51

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Securities

6 Months Ended

Jun. 30, 2011

Securities

Securities

Note 3 – Securities

The amortized cost and fair value of securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) are as follows:

	Amortized   Cost			Gross Unrealized Gains			Gross Unrealized Losses				Fair Value
June 30, 2011
Certificates of deposit		$	22,208		$	-		$	-			$	22,208
Municipal securities			675			-			-				675
Equity mutual fund			500			13			-				513
Mortgage-backed securities - residential			36,997			1,247			(64	)			38,180
Collateralized mortgage obligations - residential			33,257			683			(21	)			33,919
SBA-guaranteed loan participation certificates			50			1			-				51
		$	93,687		$	1,944		$	(85	)		$	95,546
December 31, 2010
Certificates of deposit		$	27,766		$	-		$	-			$	27,766
Municipal securities			675			34			-				709
Mortgage-backed securities - residential			41,034			1,427			(26	)			42,435
Collateralized mortgage obligations - residential			48,262			1,477			(7	)			49,732
SBA-guaranteed loan participation certificates			103			2			-				105
		$	117,840		$	2,940		$	(33	)		$	120,747

Mortgage-backed securities and collateralized mortgage obligations reflected in the preceding table were issued by U.S. government-sponsored entities and agencies, Freddie Mac, Fannie Mae and Ginnie Mae, and are obligations which the U.S. government has affirmed its commitment to support. All securities reflected in the preceding table were classified as available-for-sale at June 30, 2011 and December 31, 2010.

The amortized cost and fair values of securities at June 30, 2011 by contractual maturity are shown below. Securities not due at a single maturity date are shown separately. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2011
	Amortized     Cost			Fair Value
Within one year		$	22,368		$	22,368
One to five years			515			515
			22,883			22,883
Equity mutual fund			500			513
Mortgage-backed securities - residential			36,997			38,180
Collateralized mortgage obligations - residential			33,257			33,919
SBA-guaranteed loan participation certificates			50			51
Total		$	93,687		$	95,546

Securities with unrealized losses at June 30, 2011 and December 31, 2010 not recognized in income are as follows:

	Less than 12 Months						12 Months or More						Total
	Fair   Value			Unrealized Loss			Fair   Value			Unrealized Loss			Fair   Value			Unrealized Loss
June 30, 2011
Mortgage-backed securities – residential		$	4,858		$	64		$	-		$	-		$	4,858		$	64
Collateralized mortgage obligations – residential			2,943			21			-			-			2,943			21
Total		$	7,801		$	85		$	-		$	-		$	7,801		$	85
December 31, 2010
Mortgage-backed securities – residential		$	7,546		$	26		$	-		$	-		$	7,546		$	26
Collateralized mortgage obligations – residential			5,102			7			-			-			5,102			7
Total		$	12,648		$	33		$	-		$	-		$	12,648		$	33

The Company evaluates marketable investment securities with significant declines in fair value on a quarterly basis to determine whether they should be considered other-than-temporarily impaired under current accounting guidance, which generally provides that if a marketable security is in an unrealized loss position, whether due to general market conditions or industry or issuer-specific factors, the holder of the securities must assess whether the impairment is other-than-temporary.

Certain residential mortgage-backed securities and residential collateralized mortgage obligations that the Company holds in its investment portfolio remained in an unrealized loss position at June 30, 2011, but the declines in fair value were not considered significant under the Company's impairment testing methodology.

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Loans Receivable

6 Months Ended

Jun. 30, 2011

Loans Receivable

Loans Receivable

Note 4 – Loans Receivable

Loans receivable are as follows:

	June 30,				December 31,
	2011				2010
One-to-four family residential real estate loans		$	291,135			$	256,300
Multi-family mortgage loans			447,162				296,916
Nonresidential real estate loans			328,100				281,987
Construction and land loans			24,339				18,398
Commercial loans			73,622				64,679
Commercial leases			145,858				151,107
Consumer loans			3,109				2,182
Total loans			1,313,325				1,071,569
Net deferred loan origination costs			1,037				1,377
Allowance for loan losses			(22,963	)			(22,180	)
Loans, net		$	1,291,399			$	1,050,766

Allowance for Losses on Loans and Leases

The following table presents the balance in the allowance for loan losses and the loans receivable by portfolio segment and based on impairment method as of June 30, 2011:

	Allowance for loan losses									Loan Balances
	Individually evaluated for impairment			Collectively evaluated for impairment			Total			Individually evaluated for impairment			Purchased impaired loans			Collectively evaluated for impairment			Total
One-to-four family residential real estate loans		$	1,482		$	3,554		$	5,036		$	5,439		$	2,757		$	282,939		$	291,135
Multi-family mortgage loans			2,547			4,041			6,588			13,251			1,778			432,133			447,162
Nonresidential real estate loans			2,162			4,377			6,539			14,097			4,256			309,747			328,100
Construction and land loans			315			565			880			504			9,391			14,444			24,339
Commercial loans			2,045			1,160			3,205			3,886			1,294			68,442			73,622
Commercial leases			72			624			696			72			-			145,786			145,858
Consumer loans			-			19			19			-			-			3,109			3,109
Total		$	8,623		$	14,340		$	22,963		$	37,249		$	19,476		$	1,256,600			1,313,325
Net deferred loan origination costs																					1,037
Allowance for loan losses																					(22,963	)
Loans, net																				$	1,291,399

The following table presents the balance in the allowance for loan losses and the loans receivable by portfolio segment and based on impairment method as of December 31, 2010:

	Allowance for loan losses									Loan Balances
	Individually evaluated for impairment			Collectively evaluated  for impairment			Total			Individually evaluated for impairment			Collectively evaluated  for impairment			Total
One-to-four family residential real estate loans		$	686		$	2,870		$	3,556		$	4,022		$	252,278		$	256,300
Multi-family mortgage loans			3,231			3,801			7,032			13,971			282,945			296,916
Nonresidential real estate loans			1,637			4,077			5,714			12,722			269,265			281,987
Construction and land loans			1,855			606			2,461			6,138			12,260			18,398
Commercial loans			1,931			948			2,879			3,766			60,913			64,679
Commercial leases			72			446			518			72			151,035			151,107
Consumer loans			—			20			20			—			2,182			2,182
Total		$	9,412		$	12,768		$	22,180		$	40,691		$	1,030,878			1,071,569
Net deferred loan origination costs																		1,377
Allowance for loan losses																		(22,180	)
Loans, net																	$	1,050,766

Activity in the allowance for loan losses is as follows:

	Three months ended     June 30,								Six months ended     June 30,
	2011				2010				2011				2010
Beginning balance		$	22,504			$	17,516			$	22,180			$	18,622
Loans charged off
One-to-four family residential real estate loans			(415	)			(340	)			(2,043	)			(1,602	)
Multi-family mortgage loans			(542	)			(290	)			(779	)			(468	)
Nonresidential real estate loans			-				(406	)			-				(408	)
Construction and land loans			(1,771	)			-				(2,149	)			(525	)
Commercial loans			(42	)			(199	)			(42	)			(199	)
Commercial leases			-				-				-				-
Consumer loans			(1	)			(6	)			(17	)			(13	)
			(2,771	)			(1,241	)			(5,030	)			(3,215	)
Recoveries:
One-to-four family residential real estate loans			5				7				7				8
Multi-family mortgage loans			32				2				121				2
Nonresidential real estate loans			5				20				63				36
Construction and land loans			-				-				-				-
Commercial loans			13				-				23				-
Commercial leases			-				-				-				-
Consumer loans			-				-				-				-
Recoveries			55				29				214				46
Net charge-off			(2,716	)			(1,212	)			(4,816	)			(3,169	)
Provision for loan losses			3,175				2,665				5,599				3,516
Ending balance		$	22,963			$	18,969			$	22,963			$	18,969

Impaired Loans

The Company considers a loan to be impaired when it does not expect to receive full payment of interest or principal. The Company evaluates a loan for impairment, for placement on non-accrual status and for classification as a Troubled Debt Restructuring ("TDR") at the same point in time. When the Company identifies a loan as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan's effective interest rate, except when the remaining source of repayment for the loan is the operations or liquidation of the collateral. In such cases, the Company measures the impairment using the current fair value of the collateral, less selling costs when foreclosure is probable, instead of discounted cash flows. If the net realizable value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), the Company recognizes the amount of the impairment by establishing a specific valuation reserve allowance estimate or by a charge-off to the allowance if it can be confirmed that the amount of the impairment is uncollectable.

Non-owner occupied one-to-four family residential real estate loans and certain related owner-occupied residential real estate loans, multi-family real estate loans, nonresidential real estate loans, construction, development and land loans, commercial loans, and commercial leases are individually evaluated for impairment. One-to-four family owner-occupied residential real estate loans in the process of transfer to Other Real Estate Owned ("OREO") may be individually evaluated based on updated appraisals. Large groups of smaller balance homogeneous loans, such as one-to-four-family residential real estate loans and consumer loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

Impaired loans are summarized as follows:

	June 30,     2011			December 31,     2010
Period end impaired loans with allocated allowance for loan losses		$	25,029		$	31,057
Period end impaired loans with no allocated allowance for loan losses			12,220			9,634
Period end troubled debt restructured loans not individually evaluated			9,024			2,975
Total impaired loans		$	46,273		$	43,666

The following table includes the unpaid principal balances and recorded investment for impaired loans with the associated allowance amount, if applicable. In addition, the table includes the average recorded investments in the impaired loans and the related amount of interest recognized for the duration of the impairment within the period reported.

The following table presents loans individually evaluated for impairment by class loans:

							For the three months ended June 30, 2011				For the six months ended June 30, 2011
	Unpaid  Principal  Balance		Recorded  Investment		Allowance  for Loan Losses Allocated		Average  Investment  in Impaired Loans		Interest Income  Recognized		Average  Investment  in Impaired Loans		Interest Income  Recognized
June 30, 2011
With no related allowance recorded:
One-to-four family residential real estate loans	$	-	$	-	$	-	$	66	$	2	$	74	$	2
One-to-four family residential real estate loans - non-owner occupied		992		1,098		-		1,118		59		1,109		75
Multi-family mortgage loans		5,700		5,981		-		3,843		40		4,180		62
Nonresidential real estate loans		4,975		5,095		-		4,169		51		4,703		76
Construction loans		-		-		-		250		-		143		-
Land loans		-		-		-		152		-		76		-
Commercial loans – secured		553		613		-		343		-		405		-
Commercial loans - other		-		-		-		97		5		83		8
		12,220		12,787		-		10,038		157		10,773		223
With an allowance recorded:
One-to-four family residential real estate loans	$	657	$	713	$	93	$	335	$	-	$	597	$	-
One-to-four family residential real estate loans - non-owner occupied		3,790		3,957		1,389		2,815		6		2,936		6
Multi-family mortgage loans		3,146		3,307		1,078		5,815		-		4,968		-
Wholesale commercial lending		4,405		4,676		1,469		4,405		-		4,405		-
Nonresidential real estate loans		9,122		9,358		2,162		8,773		-		8,529		71
Construction loans		121		137		121		3,024		-		2,585		-
Land loans		383		504		194		2,663		-		1,928		-
Commercial loans – secured		3,175		3,467		1,918		3,054		2		3,074		2
Commercial loans – unsecured		158		208		127		158		-		158		-
Non-rated commercial leases		72		77		72		72				72
		25,029		26,404		8,623		31,114		8		29,252		79
Total	$	37,249	$	39,191	$	8,623	$	41,152	$	165	$	40,025	$	302

	Unpaid     Principal     Balance		Recorded   Investment		Allowance   for Loan Losses Allocated		Average Investment  in Impaired  Loans		Interest Income    Recognized
December 31, 2010
With no related allowance recorded:
One-to-four family residential real estate loans - non-owner occupied	$	1,244	$	1,321	$	-	$	3,028	$	69
Multi-family mortgage loans		3,554		3,723		-		8,264		142
Wholesale commercial lending		-		-		-		1,780		-
Nonresidential real estate loans		3,949		4,008		-		4,481		221
Construction loans		333		357		-		1,108		55
Land loans		-		-		-		772		-
Commercial loans – secured		457		478		-		347		10
Commercial loans - other		97		117		-		83		7
Non-rated commercial leases		-		-		-		20		-
		9,634		10,004		-		19,883		504
With an allowance recorded:
One-to-four family residential real estate loans - non-owner occupied	$	2,778	$	2,888	$	686	$	2,075	$	31
Multi-family mortgage loans		6,012		6,362		1,709		4,058		97
Wholesale commercial lending		4,405		4,589		1,522		881		71
Nonresidential real estate loans		8,773		8,837		1,637		6,255		416
Construction loans		2,940		3,244		730		2,447		-
Land loans		2,865		3,339		1,125		2,676		-
Commercial loans – secured		3,054		3,265		1,804		3,783		28
Commercial loans – unsecured		158		202		127		82		-
Non-rated commercial leases		72		77		72		29		4
		31,057		32,803		9,412		22,286		647
Total	$	40,691	$	42,807	$	9,412	$	42,169	$	1,151

Purchased Impaired Loans

As a result of its acquisition of Downers Grove National Bank (see Note 8 – Acquisitions), the Company holds purchased loans for which there was evidence of deterioration of credit quality since origination and for which it was probable that all contractually required payments would not be collected as of the date of the acquisition. The carrying amount of these purchased impaired loans is as follows:

	June 30, 2011
One-to-four family residential real estate loans	$	2,201
Multi-family mortgage loans		1,398
Nonresidential real estate loans		3,369
Construction loans		3,431
Land loans		4,328
Commercial loans – secured and unsecured		1,029
Outstanding balance	$	15,756
Carrying amount, net of allowance	$	15,756
Accretable yield, or income expected to be collected, related to purchased impaired loans is as follows:
Balance at January 1, 2011	$	-
New loans purchased		4,108
Accretion of income		388
Balance at June 30, 2011	$	3,720

There is no allowance for loan losses related to purchased impaired loans due to their having been marked to market at the date of acquisition.

Purchased impaired loans for which it was probable at the date of acquisition that all contractually required payments would not be collected are as follows:

	June 30, 2011
Contractually required payments receivable of loans purchased:
One-to-four family residential real estate loans	$	4,135
Multi-family mortgage loans		3,456
Nonresidential real estate loans		5,515
Construction loans		4,856
Land loans		7,153
Commercial loans		7,156
Consumer		44
	$	32,315
Cash flows expected to be collected at acquisition, subject to adjustment with final purchase price adjustment	$	19,944
Fair value of purchased impaired loans at acquisition	$	15,836

Nonaccrual loans

The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans, excluding purchased impaired loans:

	Nonaccrual   loans		Recorded   Investment		Loans Past   Due Over 90   Days, still accruing
June 30, 2011
One-to-four family residential real estate loans	$	7,485	$	7,917	$	-
One-to-four family residential real estate loans – non owner occupied		5,178		4,621		448
Multi-family mortgage loans		7,955		8,410		739
Wholesale commercial lending		4,405		4,676		-
Nonresidential real estate loans		12,393		12,763		-
Construction loans		121		137		-
Land loans		383		504		-
Commercial loans – secured		3,632		3,959		-
Commercial loans – unsecured		158		208		-
Commercial loans – other		96		119		-
Non-rated commercial leases		72		77		-
Consumer loans		-		-		-
	$	41,878	$	43,391	$	1,187
	Nonaccrual loans		Recorded Investment		Loans Past Due Over 90 Days, still accruing
December 31, 2010
One-to-four family residential real estate loans	$	5,748	$	6,115	$	47
One-to-four family residential real estate loans – non owner occupied		4,311		4,513		496
Multi-family mortgage loans		8,823		9,327		275
Wholesale commercial lending		4,405		4,589		-
Nonresidential real estate loans		12,428		12,575		-
Construction loans		3,274		3,601		-
Land loans		2,865		3,339		-
Commercial loans – secured		3,511		3,743		-
Commercial loans – unsecured		158		202		-
Commercial loans – other		97		118		-
Non-rated commercial leases		72		77		-
Consumer loans		3		3		-
	$	45,695	$	48,202	$	818

Nonaccrual loans and impaired loans are defined differently. Some loans may be included in both categories, and some may only be included in one category. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The Company's reserve for uncollected loan interest was $2.6 million at June 30, 2011 and $2.7 million at December 31, 2010. Except for purchased impaired loans, when a loan is on non-accrual status and the ultimate collectability of the total principal of an impaired loan is in doubt, all payments are applied to principal under the cost recovery method. Alternatively, when a loan is on non-accrual status but there is doubt concerning only the ultimate collectability of interest, contractual interest is credited to interest income only when received, under the cash basis method pursuant to the provisions of FASB ASC 310-10-50-14(A), FASB ASC 310-10-50-15(b), FASB ASC 310-10-50-15(d), FASB ASC 310-10-50-15(e) and FASB ASC 310-10-50-16, as applicable. In all cases, the average balances are calculated based on the month-end balances of the financing receivables within the period reported pursuant to the provisions of FASB ASC 310-10-50-15(b) and FASB ASC 310-10-50-17, as applicable.

Generally, the Company utilizes the "90 days delinquent, still accruing" category of loan classification when: (1) the loan is repaid in full shortly after the period end date; (2) the loan is well secured and there are no asserted or pending legal barriers to its collection; or (3) the borrower has remitted all scheduled payments and is otherwise in substantial compliance with the terms of the loan, but the processing of payments actually received or the renewal of a loan has not occurred for administrative reasons.

Past Due Loans

The following table presents the aging of the recorded investment in past due loans as June 30, 2011 by class of loans, excluding purchased impaired loans:

	30-59 Days     Past Due			60-89 Days     Past Due			90 Days or     Greater Past Due		Total Past     Due		Loans Not     Past Due		Total
One-to-four family residential real estate loans	$	980		$	1,211		$	7,218	$	9,409	$	196,201	$	205,610
One-to-four family residential real estate loans - non-owner occupied		1,730			481			4,577		6,788		77,026		83,814
Multi-family mortgage loans		2,315			7,886			8,861		19,062		357,652		376,714
Wholesale commercial lending		-			-			4,676		4,676		62,926		67,602
Nonresidential real estate loans		7,493			2,358			12,111		21,962		300,838		322,800
Construction loans		831			-			137		968		1,821		2,789
Land loans		2,540			660			504		3,704		10,193		13,897
Commercial loans:
Secured		1,003			371			3,959		5,333		28,752		34,085
Unsecured		418			39			208		665		9,799		10,464
Municipal loans		-			-			-		-		7,007		7,007
Warehouse lines		1,230			-			-		1,230		4,887		6,117
Health care		-			-			-		-		6,518		6,518
Other		-			-			117		117		9,009		9,126
Commercial leases:
Investment rated commercial leases		353			836			-		1,189		90,779		91,968
Below investment grade		-			-			-				4,051		4,051
Non-rated		393			1,004			77		1,474		42,102		43,576
Lease pools		-			-			-		-		7,702		7,702
Consumer loans		6			16			-		22		2,757		2,779
Total	$	19,292	(1)	$	14,862	(1)	$	42,445	$	76,599	$	1,220,020	$	1,296,619

(1)  48% of the combined 30-89 days past due loans have matured and are in the in the process of analysis and renewal.

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

	30-59 Days     Past Due			60-89 Days     Past Due		90 Days or     Greater Past Due		Total Past     Due		Loans Not     Past Due		Total
One-to-four family residential real estate loans - non-owner occupied	$	-		$	-	$	456	$	456	$	2,300	$	2,756
Multi-family mortgage loans		-			-		1,779		1,779		-		1,779
Nonresidential real estate loans		-			214		75		289		3,967		4,256
Construction loans		1,278			-		2,720		3,998		-		3,998
Land loans		2,402			-		2,991		5,393		-		5,393
Commercial loans - secured		-			-		848		848		446		1,294
Total	$	3,680	(1)	$	214	$	8,869	$	12,763	$	6,713	$	19,476

(1)  100% of these loans have matured and are in the in the process of analysis and renewal.

The following table presents the aging of the recorded investment in past due loans as December 31, 2010 by class of loans:

	30-59 Days    Past Due				60-89 Days    Past Due				90 Days or     Greater Past Due			Total Past     Due			Loans Not   Past Due			Total
One-to-four family residential real estate loans		$	1,202			$	202			$	5,890		$	7,294		$	172,438		$	179,732
One-to-four family residential real estate loans - non-owner occupied			3,335				449				5,019			8,803			68,127			76,930
Multi-family mortgage loans			7,174				4,304				9,588			21,066			202,481			223,547
Wholesale commercial lending			1,231				-				4,589			5,820			67,712			73,532
Nonresidential real estate loans			9,270				16,061				3,944			29,275			251,139			280,414
Construction loans			1,267				1,284				3,601			6,152			3,321			9,473
Land loans			-				-				3,339			3,339			6,422			9,761
Commercial loans:
Secured			929				700				3,712			5,341			18,370			23,711
Unsecured			551				178				202			931			6,558			7,489
Municipal loans			-				-				-			-			4,629			4,629
Warehouse lines			-				-				-			-			12,320			12,320
Health care			-				-				-			-			8,089			8,089
Other			7,060				-				118			7,178			1,922			9,100
Commercial leases:
Investment rated commercial leases			2,039				2,312				-			4,351			83,506			87,857
Below investment grade			3				-				-			3			3,725			3,728
Non-rated			3,382				434				76			3,892			47,199			51,091
Lease pools			-				-				-			-			9,791			9,791
Consumer loans			3				-				4			7			2,186			2,193
Total		$	37,446	(1)		$	25,924	(1)		$	40,082		$	103,452		$	969,935		$	1,073,387

(1)  41% of the combined 30-89 days past due loans have matured and are in the in the process of analysis and renewal.

Troubled Debt Restructurings

The Company evaluates loan extensions or modifications in accordance with FASB ASC 310-40 with respect to the classification of the loan as a troubled debt restructuring ("TDR"). In general, if the Company grants a loan extension or modification to a borrower for other than an insignificant period of time that includes a below-market interest rate, principal forgiveness, payment forbearance or other concession intended to minimize the economic loss to the Company, the loan extension or loan modification is classified as a TDR. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal then due and payable, management measures any impairment on the restructured loan in the same manner as for impaired loans as noted above.

The Company had $11.9 million of TDRs at June 30, 2011, compared to $6.5 million at December 31, 2010, with $1.4 million in specific valuation allowances allocated to those loans at June 30, 2011, and $658,000 in specific valuation reserves allocated at December 31, 2010. The Company had no outstanding commitments to borrowers whose loans are classified as TDRs.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans based on credit risk. This analysis includes non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on a monthly basis. The Company uses the following definitions for risk ratings:

Watch List.    Loans classified as Watch List exhibit transitory risk. Loan debt service coverage is somewhat erratic, future coverage is uncertain, liquidity is strained and leverage capacity is considered minimal. Indicators of potential deterioration of repayment sources have resulted in uncertainty or unknown factors concerning credit status.

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

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

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

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered "Pass" rated loans.

As of June 30, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass			Watch List			Special       Mention			Substandard			Doubtful			Total
One-to-four family residential real estate loans		$	198,925		$	-		$	-		$	6,241		$	-		$	205,166
One-to-four family residential real estate loans - non-owner occupied			67,649			5,171			2,122			11,027			-			85,969
Multi-family mortgage loans			344,239			17,188			4,038			10,232			-			375,697
Wholesale commercial lending			65,805			1,351			-			4,309			-			71,465
Nonresidential real estate loans			254,688			32,013			23,944			17,455			-			328,100
Construction loans			1,895			507			237			3,551			-			6,190
Land loans			8,776			3,430			1,102			4,592			249			18,149
Commercial loans:
Secured			25,019			4,501			164			4,878			98			34,660
Unsecured			9,070			563			87			603			58			10,381
Municipal loans			6,925			-			-			-			-			6,925
Warehouse lines			6,079			-			-			-			-			6,079
Health care			5,953			415			143			-			-			6,511
Other			8,970			-			-			96			-			9,066
Commercial leases:															-
Investment rated commercial leases			90,895			36			-			-			-			90,931
Below investment grade			3,648			376			-			-			-			4,024
Non-rated			43,004			161			-			-			72			43,237
Lease pools			7,666			-			-			-			-			7,666
Consumer loans			3,109			-			-			-			-			3,109
Total		$	1,152,315		$	65,712		$	31,837		$	62,984		$	477		$	1,313,325

The Company assigned loans attributable to the acquisition of Downers Grove National Bank to risk classification categories on a provisional basis, including the assignment of the purchased impaired loans resulting from the transaction to the Substandard credit risk classification category. The Company will continue to evaluate purchase accounting during the measurement period.

As of December 31, 2010, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass			Watch List			Special       Mention			Substandard			Doubtful			Total
One-to-four family residential real estate loans		$	174,349		$	-		$	-		$	5,097		$	-		$	179,446
One-to-four family residential real estate loans - non-owner occupied			65,071			6,400			776			4,607			-			76,854
Multi-family mortgage loans			197,427			12,348			4,642			9,501			-			223,918
Wholesale commercial lending			67,304			1,361			-			4,333			-			72,998
Nonresidential real estate loans			225,528			24,997			18,756			12,706			-			281,987
Construction loans			4,576			-			1,252			3,274			-			9,102
Land loans			3,057			3,196			181			2,613			249			9,296
Commercial loans:															-
Secured			17,504			2,186			174			3,401			98			23,363
Unsecured			6,647			595			16			99			58			7,415
Municipal loans			4,540			-			-			-			-			4,540
Warehouse lines			12,274			-			-			-			-			12,274
Health care			7,851			71			149			-			-			8,071
Other			8,629			290			-			97			-			9,016
Commercial leases:															-
Investment rated commercial leases			87,119			-			-			-			-			87,119
Below investment grade			3,148			542			-			-			-			3,690
Non-rated			49,959			569			-			-			72			50,600
Lease pools			9,698			-			-			-			-			9,698
Consumer loans			2,182			-			-			-			-			2,182
Total		$	946,863		$	52,555		$	25,946		$	45,728		$	477		$	1,071,569

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Consolidated Statements Of Changes In Stockholders' Equity And Comprehensive Income (Loss) (USD $) In Thousands	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Unearned Employee Stock Ownership Plan Shares [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Comprehensive Income (Loss) [Member]	Total
Balance at Dec. 31, 2009	$ 214	$ 195,177	$ 81,531	$ (15,169)	$ 1,850		$ 263,603
Comprehensive income:
Net income			428			428	428
Change in other comprehensive income, net of tax effects					14	14	14
Total comprehensive income (loss)						442
Purchase and retirement of common stock (356,411 shares)	(3)	(3,121)					(3,124)
Nonvested stock awards-Stock-based compensation expense		1,071					1,071
Cash dividends declared on common stock ($0.14 per share)			(2,998)				(2,998)
ESOP shares earned		(82)		485			403
Balance at Jun. 30, 2010	211	193,045	78,961	(14,684)	1,864		259,397
Balance at Dec. 31, 2010	211	194,186	71,278	(14,190)	1,800		253,285
Comprehensive income:
Net income			249			249	249
Change in other comprehensive income, net of tax effects					(649)	(649)	(649)
Total comprehensive income (loss)						(400)
Nonvested stock awards-Stock-based compensation expense		32					32
Cash dividends declared on common stock ($0.14 per share)			(2,950)				(2,950)
ESOP shares earned		(74)		485			411
Balance at Jun. 30, 2011	$ 211	$ 194,144	$ 68,577	$ (13,705)	$ 1,151		$ 250,378

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Consolidated Statements Of Cash Flow (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities
Net income	$ 249	$ 428
Adjustments to reconcile to net income to net cash from operating activities
Provision for loan losses	5,599	3,516
ESOP shares earned	411	403
Stock-based compensation expense	32	1,071
Depreciation and amortization	2,216	2,237
Amortization of premiums and discounts on securities and loans	(1,123)	(1)
Amortization of core deposit intangible	852	800
Amortization and impairment of servicing assets	105	321
Net change in net deferred loan origination costs	340	181
Net loss (gain) on sale of other real estate owned	(109)	108
Net gain on sale of loans	(58)	(115)
Net gain on sale of securities		(31)
Net loss disposition of premises and equipment	20	17
Loans originated for sale	(4,880)	(5,854)
Proceeds from sale of loans	7,654	5,757
Net change in:
Deferred income tax	(839)	(183)
Accrued interest receivable	(184)	263
Earnings on bank owned life insurance	(320)	(171)
Other assets	1,421	(581)
Accrued interest payable and other liabilities	(462)	(1,406)
Net cash from operating activities	10,924	6,760
Cash flows from investing activities
Proceeds from maturities	11,802	31
Proceeds from principal repayments	22,616	680
Proceeds from sales of securities	9,677
Purchases of securities	(9,786)	16,785
Loans receivable
Principal payments on loans receivable	339,813	356,273
Purchases of loans	(151,354)	(798)
Originated for investment	(322,517)	(267,744)
Proceeds of redemption of Federal Reserve Bank stock	155
Proceeds from sale of other real estate owned	2,300	1,496
Purchases of premises and equipment, net	(413)	(563)
Cash acquired in acquisition	61,619
Net cash from (used) investing activities	(36,088)	106,160
Cash flows from financing activities
Net change in deposits	(69,985)	19,864
Net change in borrowings	(11,154)	(15,218)
Net change in advance payments by borrowers for taxes and insurance	2,925	(358)
Repurchase and retirement of common stock		(3,124)
Cash dividends paid on common stock	(2,950)	(2,998)
Net cash from financing activities	(81,164)	(1,834)
Net change in cash and cash equivalents	(106,328)	111,086
Beginning cash and cash equivalents	220,810	108,198
Ending cash and cash equivalents	114,482	219,284
Supplemental disclosures of cash flow information:
Interest paid	3,758	7,848
Income taxes paid	3	300
Income taxes refunded		2,529
Loans transferred to real estate owned	7,869	5,218
Supplemental disclosures of noncash investing activities - Acquisition:
Securities	10,177
Loans receivable	119,239
Other real estate owned	7,210
Stock in Federal Home Loan Bank and Federal Reserve Bank	903
Premises and equipment, net	7,401
Accrued interest receivable	355
Core deposit intangible	2,660
FDIC prepaid expense	774
Income tax receivable	774
Deferred taxes, net	2,662
Other assets	42
Total noncash items acquired	152,197
Liabilities assumed:
Deposits	212,939
Advance payments by borrowers taxes and insurance	34
Accrued interest payable and other liabilities	843
Total liabilities assumed	213,816
Cash and cash equivalents acquired	$ 61,619

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2011

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Note 9 – Recent Accounting Pronouncements

FASB ASU 2010-20, "Receivable (Topic 310), Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses" — ASU 2010-20 requires new and enhanced disclosures about the credit quality of an entity's financing receivables and its allowance for credit losses. The new and enhanced disclosure requirements focus on such areas as nonaccrual and past due financing receivables, allowance for credit losses related to financing receivables, impaired loans, credit quality information and modifications. The ASU requires an entity to disaggregate new and existing disclosures based on how it develops its allowance for credit losses and how it manages credit exposures. For public entities, the disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. See Note 4 to these Consolidated Financial Statements for the required disclosures at June 30, 2011.

FASB ASU 2010-29, "Business Combinations (Topic 805), Disclosure of Supplementary Pro Forma Information for Business Combinations" — ASU 2010-29 specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. ASU 2010-29 affects any public entity as defined by Topic 805 that enters into business combinations that are material on an individual or aggregate basis. This guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or after December 15, 2010. See Note 8 – Acquisitions.

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Consolidated Statements Of Financial Condition (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
ASSETS
Cash and due from other financial institutions	$ 14,049	$ 18,097
Interest-bearing deposits in other financial institutions	100,433	202,713
Cash and cash equivalents	114,482	220,810
Securities, at fair value	95,546	120,747
Loans held-for-sale		2,716
Loans receivable, net of allowance for loan losses: June 30, 2011, $22,963 and December 31, 2010, $22,180	1,291,399	1,050,766
Other real estate owned and other real estate owned in process	27,032	14,622
Stock in Federal Home Loan Bank, at cost	16,346	15,598
Premises and equipment, net	38,745	32,495
Accrued interest receivable	5,929	5,390
Goodwill	22,566	22,566
Core deposit intangible	4,508	2,700
Bank owned life insurance	20,901	20,581
FDIC prepaid expense	5,003	4,845
Income tax receivable	1,862	1,749
Deferred taxes, net	13,232	9,333
Other assets	5,337	5,737
Total assets	1,662,888	1,530,655
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits	1,378,331	1,235,377
Borrowings	12,595	23,749
Advance payments by borrowers taxes and insurance	10,284	7,325
Accrued interest payable and other liabilities	11,300	10,919
Total liabilities	1,412,510	1,277,370
Commitments and contingent liabilities
Stockholders' equity:
Preferred Stock, $0.01 par value, 25,000,000 shares authorized, none issued or outstanding
Common Stock, $0.01 par value, 100,000,000 shares authorized; 21,072,966 shares issued at June 30, 2011 and December 31, 2010	211	211
Additional paid-in capital	194,144	194,186
Retained earnings	68,577	71,278
Unearned Employee Stock Ownership Plan shares	(13,705)	(14,190)
Accumulated other comprehensive income	1,151	1,800
Total stockholders' equity	250,378	253,285
Total liabilities and stockholders' equity	$ 1,662,888	$ 1,530,655