S-1

As filed with the Securities and Exchange Commission on May 12, 2014

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

HV BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Pennsylvania	6712	46-4351868
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

3501 Masons Mill Road, Suite 401

Huntingdon Valley, PA 19006

(267) 280-4000

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Travis J. Thompson, Esq.

President and Chief Executive Officer

HV Bancorp, Inc.

3501 Masons Mill Road, Suite 401

Huntingdon Valley, PA 19006

(267) 280-4000

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

Edward B. Crosland, Jr., Esq.

Peter J. Rivas, Esq.

Jones Walker LLP

499 S. Capitol Street, SW, Suite 600

Washington, D.C. 20003

(202) 203-1000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  ¨

If this Form is filed to register additional shares for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ¨

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

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per share	Proposed maximum aggregate offering price	Amount of registration fee
Common Stock, par value $.01 per share	1,322,500 shares(1)	$10.00(2)	$13,225,000(3)
Common Stock, par value $.01 per share	—  (4)(5)	$6.28(4)(5)	$11,592,058(4)(5)
Total	—  (4)(5)	—	$24,817,058	$3,197

(1) Shares to be offered for sale in the conversion stock offering.

(2) Shares to be sold in the conversion stock offering have a maximum offering price per share of $10.00.

(3) Estimated solely for the purpose of calculating the registration fee.

(4) This registration statement also relates to the common stock of the registrant issuable to holders of capital stock of The Victory Bancorp, Inc. (“Victory Bancorp”) in the proposed merger of Victory Bancorp with and into the registrant. Pursuant to Rule 457(f)(2), the registration fee was computed on the basis of $6.28, the book value per share of the common stock of Victory Bancorp as of March 31, 2014, including shares of common stock which may be issued to holders of convertible preferred stock of Victory Bancorp, and 1,845,869 shares of common stock, the maximum number of Victory Bancorp shares of common stock that may be exchanged for the shares of common stock being registered.

(5) Pursuant to Rule 457(o), the registration fee has been calculated on the basis of the maximum offering price, and the number of shares being registered has been omitted.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

[LOGO]

HV Bancorp, Inc.

(Proposed Holding Company for Huntingdon Valley Bank)

Up to 1,150,000 Shares of Common Stock Offered to the Public

as well as 1,046,804 Shares To Be Issued to The Victory Bancorp, Inc. Shareholders

HV Bancorp, Inc. (“HV Bancorp”) is offering shares of common stock for sale in connection with the conversion of Huntingdon Valley Bank (“HV Bank”) from the mutual to stock form of organization. As part of this conversion, HV Bank will become a wholly owned subsidiary of HV Bancorp. HV Bancorp is offering its shares of common stock for sale on a priority basis in a subscription offering and, if necessary, in a community and/or syndicated community offering.

Immediately after the completion of the offering, HV Bancorp expects to merge with The Victory Bancorp, Inc. (“Victory Bancorp”), the bank holding company for The Victory Bank (“Victory Bank”), a Pennsylvania chartered commercial bank. In the merger, the holders of Victory Bancorp common stock will receive shares of HV Bancorp common stock and, under certain limited circumstances, a combination of HV Bancorp common stock and cash, for each share of Victory Bancorp common stock. Based on the shares outstanding at December 31, 2013, and the terms of the merger agreement with Victory Bancorp, between 800,485 and 1,046,804 shares of HV Bancorp common stock would be issued to Victory Bancorp common shareholders in the merger in exchange for their Victory Bancorp common stock at a ratio of 0.6794 of a share of HV Bancorp for each outstanding share of Victory Bancorp common stock. Victory Bancorp shareholders will receive a separate proxy statement explaining the merger in more detail. Under certain conditions, instead of all stock, up to $1.8 million of cash in addition to shares of HV Bancorp common stock may be paid to holders of Victory Bancorp common stock as consideration in the merger.

Under the Agreement and Plan of Merger, Victory Bancorp shareholders will not own more than 48.5% of HV Bancorp after consummation of the conversion offering and the merger. The 48.5% ownership limitation of former Victory Bancorp shareholders is a regulatory condition to approval of the conversion stock offering and the merger.

If you are or were a member of Huntingdon Valley Bank, you may have priority rights to purchase shares of common stock. If you are not a member of Huntingdon Valley Bank, but are interested in purchasing shares of our common stock, you may have an opportunity to purchase shares of common stock in the community offering after priority orders are filled.

We are offering up to 1,150,000 shares of common stock for sale, subject to certain conditions. We must sell a minimum of 850,000 shares to complete the conversion. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, the independent appraiser determines our market value has increased, we may sell up to 1,322,500 shares without giving you further notice or the opportunity to change or cancel your order.

If the independent valuation at the conclusion of the offering period results in an increase in the maximum of the valuation range to more than $13,225,000 and a corresponding increase in the offering range to more than 1,322,500 shares, or a decrease in the minimum of the valuation range to less than $8,500,000 and a corresponding decrease in the offering range to fewer than 850,000 shares, after consulting with our regulators, we may terminate the plan of conversion and offering, promptly return with interest all funds previously delivered to us to purchase shares of common stock, and cancel deposit account withdrawal authorizations. Alternatively, we may establish a new offering range, extend the offering period and commence a resolicitation of subscribers or take other actions as permitted by our regulators in order to complete the conversion and the offering. In the event that a resolicitation is commenced, we will notify subscribers of the opportunity to maintain, change or cancel their orders for a specified period of time. Any resolicitation following the conclusion of the subscription and community offerings would not exceed 45 days unless further extended by our regulators for periods of up to 90 days. In the event we are unable to complete our conversion offering, we will terminate the merger with Victory Bancorp.

The subscription and community offerings are scheduled to terminate at 12:00 noon, Eastern time, on [offering deadline]. We may extend this termination date without notice to you until [extension date]. Funds received before completion of the offering will be maintained in a segregated account at HV Bank, or, in our discretion, at an independent insured depository institution. All subscriptions received will earn interest at our passbook savings rate, which is currently 0.15% per annum.

The minimum order is 25 shares. Once submitted, orders are irrevocable unless the offering is terminated or extended beyond [extension date]. If we extend the offering beyond [extension date] all subscribers will be notified, and we will give subscribers an opportunity to change, cancel or confirm their stock orders. If you do not respond to this notice or if we terminate the offering because we fail to sell the minimum number of shares, or for any other reason, we will promptly return your funds with interest at our passbook savings rate.

Griffin Financial Group LLC (“Griffin Financial Group”) will act as our placement agent and will use its best efforts to assist us in our selling efforts, but is not required to purchase any of the common stock that is offered for sale. Purchasers will not pay a commission to purchase shares of common stock in the offering. All shares offered for sale are offered at a price of $10.00 per share.

There is currently no market for our common stock. We have applied for the quotation of our common stock on the Nasdaq Capital Market under the symbol “HVBC”. Griffin Financial Group currently intends to become a market maker in the common stock, but it is under no obligations to do so.

We expect current directors and executive officers of HV Bancorp, together with their associates, to subscribe for 120,000 shares in the offering, which equals 10.4% of the shares offered for sale at the maximum of the offering range. Upon consummation of the merger with Victory Bancorp, all directors and officers of HV Bancorp, including current directors and officers of Victory Bancorp who become directors and/or officers of HV Bancorp, together with their associates, are expected to own approximately 282,000 shares of HV Bancorp, or 12.8% of the total outstanding shares at the maximum of the offering range and assuming that no outstanding Victory Bancorp options or warrants held by Victory Bancorp officers and directors are exercised.

Our ability to complete the conversion is subject to certain conditions, including: (i) a minimum of 850,000 shares of common stock must be sold to complete the offering; and (ii) a majority of the eligible votes of the voting members of Huntingdon Valley Bank as of             , 2014 must approve HV Bank’s plan of conversion. Completion of the conversion does not require completion of the merger with Victory Bancorp. Until such time as all conditions are satisfied, all funds submitted to purchase shares will be held in a segregated account at HV Bank, or, in our discretion, at an independent insured depository institution, and will earn interest at our passbook rate, which is currently 0.15%. See “The Conversion and Stock Offering” and “The Merger.”

This investment involves a degree of risk, including the possible loss of principal.

Please read “Risk Factors” beginning on page 20.

OFFERING SUMMARY

Price Per Share: $10.00

	Minimum		Maximum		Adjusted Maximum
Number of shares of common stock offered for sale in conversion(1)		850,000		1,150,000		1,322,500
Gross proceeds from conversion stock offering	$	8,500,000	$	11,500,000	$	13,225,000
Estimated offering expenses, excluding placement agent fees	$	800,000	$	800,000	$	800,000
Estimated placement agent fees(2)	$	173,050	$	260,010	$	314,665
Estimated net proceeds from conversion stock offering	$	7,526,950	$	10,439,990	$	12,110,335
Estimated net proceeds per share from conversion stock offering(2)	$	8.86	$	9.08	$	9.16
Number of shares of common stock to be issued to Victory Bancorp shareholders		800,485		1,046,804		1,046,804
Total shares of common stock to be outstanding		1,650,485		2,196,804		2,369,304

(1) The number of shares offered for sale in this offering does not include the shares to be issued to Victory Bancorp shareholders in connection with the merger.

(2) Griffin Financial Group has received a non-refundable retainer fee of $40,000 and will receive a success fee equal to 1.5% of the aggregate dollar amount of the shares of common stock sold in the subscription and community offerings, excluding shares sold to the employee stock ownership plan, our officers, employees and directors and members of their immediate families, shares sold to shareholders of Victory Bancorp, and shares issued in the merger. In the event a syndicated offering is conducted, we will pay a fee equal to 5.5% of the aggregate dollar amount of shares of common stock sold in the syndicated community offering. For purposes of the above table, the aggregate dollar amount of the shares sold in the subscription and community offerings is assumed to be 50% of the total gross proceeds of the offering.

These securities are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Neither the Securities and Exchange Commission, the Pennsylvania Department of Banking and Securities, the Federal Reserve Board, or the Federal Deposit Insurance Corporation, nor any state securities regulator has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

For assistance, please contact our Stock Information Center at (844) 225-4855.

GRIFFIN FINANCIAL GROUP LLC

The date of this prospectus is [Prospectus Date]

[Map of Pennsylvania counties showing office locations of Huntingdon Valley Bank and separately identifying the branch offices of Victory Bank appears here]

TABLE OF CONTENTS

	Page
SUMMARY		1
THE COMPANIES		1
THE CONVERSION AND OFFERING		1
THE MERGER		15
MARKET AREA		19
REGULATION AND SUPERVISION		19
RISK FACTORS		20
FORWARD-LOOKING STATEMENTS		32
SELECTED FINANCIAL AND OTHER DATA OF HUNTINGDON VALLEY BANK		33
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF VICTORY BANCORP		35
SUMMARY SELECTED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA		37
USE OF PROCEEDS		39
OUR DIVIDEND POLICY		41
MARKET FOR COMMON STOCK OF HV BANCORP		42
CAPITALIZATION		43
ANTICIPATED BENEFITS OF THE CONVERSION AND THE MERGER		43
BUSINESS OF HV BANCORP AND HV BANK		44
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF HV BANK		58
MANAGEMENT OF HV BANCORP AND HV BANK		86
SUBSCRIPTIONS BY DIRECTORS AND EXECUTIVE OFFICERS		96
BUSINESS OF VICTORY BANCORP AND VICTORY BANK		97
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF VICTORY BANCORP		102
MANAGEMENT OF VICTORY BANCORP AND VICTORY BANK		119
REGULATION AND SUPERVISION		127
THE CONVERSION AND STOCK OFFERING		137
THE MERGER		154
REGULATORY CAPITAL COMPLIANCE		173
PRO FORMA UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS GIVING EFFECT TO THE CONVERSION AND MERGER		174
RESTRICTIONS ON ACQUISITION OF HV BANCORP AND HV BANK		201
DESCRIPTION OF HV BANCORP CAPITAL STOCK		203
DESCRIPTION OF VICTORY BANCORP CAPITAL STOCK		204
TRANSFER AGENT AND REGISTRAR		210
REGISTRATION REQUIREMENTS		210
LEGAL AND TAX OPINIONS		211
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES		211
EXPERTS		212
WHERE YOU CAN FIND MORE INFORMATION		212
Index to Financial Statements of Huntingdon Valley Bank		F-1
Index to Consolidated Financial Statements of Victory Bancorp		F-1

(i)

SUMMARY

This summary highlights material information from this document and may not contain all the information that is important to you. To understand the conversion, the stock offering and the merger fully, you should read this entire prospectus carefully, including the consolidated _.financial statements and the notes to the consolidated financial statements for both HV Bank and Victory Bancorp. For assistance, please call our Stock Information Center (toll free) at (844) 225-4855. References in this prospectus to “we, “us” and “our” refer to HV Bancorp and HV Bank, the commercial bank subsidiary of HV Bancorp upon consummation of the conversion offering and the merger, unless the context requires otherwise.

THE COMPANIES

HV Bancorp, Inc.

Huntingdon Valley Bank

3501 Masons Mill Road, Suite 401

Huntingdon Valley, PA 19006

(267) 280-4000

Huntingdon Valley Bank (“HV Bank”), is a Pennsylvania mutual savings bank organized in 1871. HV Bank operates from four full-service locations and two limited service locations in Montgomery, Bucks and Philadelphia counties, Pennsylvania. We offer a variety of deposit and loan products to individuals and small businesses, most of which are located in our primary market. At December 31, 2013, HV Bank had total assets of $163.4 million, deposits of $140.6 million and total equity of $10.3 million. In connection with this offering, HV Bank is converting from the mutual to stock form of organization and simultaneously from a Pennsylvania-chartered savings bank to a Pennsylvania-chartered commercial bank.

On December 12, 2013, HV Bank formed HV Bancorp, Inc. (“HV Bancorp”), as a new Pennsylvania corporation to be the holding company of HV Bank upon completion of its conversion from the mutual to stock form of organization. HV Bancorp has had no operations to date. This stock offering is being made by HV Bancorp. Upon completion of the conversion and stock offering, HV Bancorp will own all of HV Bank’s capital stock and will direct, plan and coordinate HV Bank’s business activities.

Our executive offices are located 3501 Masons Mill Road, Suite 401, Huntingdon Valley, Pennsylvania 19006. Our telephone number at this address is (267) 280-4000. Our website address is www.huntingdonvalleybank.com. Information on our website should not be considered a part of this prospectus.

THE CONVERSION AND OFFERING

Description of the Conversion (page     )

Currently, we are a Pennsylvania-chartered mutual savings bank with no shareholders.

Pursuant to the terms of its plan of conversion, HV Bank will convert from a Pennsylvania-chartered mutual savings bank to a Pennsylvania-chartered stock commercial bank that operates as a wholly owned subsidiary of HV Bancorp, a Pennsylvania stock corporation. As a part of the conversion, HV Bancorp is offering for sale in a subscription offering, and, possibly, a community offering and a syndicated community offering, shares of common stock of HV Bancorp.

Upon completion of the offering, HV Bancorp will own 100% of the outstanding shares of common stock of HV Bank, and all of the common stock of HV Bancorp will be owned by purchasers in the offering. We have called a special meeting of our members for             , 2014, to consider and vote on our plan of conversion.

The following diagram depicts our corporate structure after the conversion and offering:

Reasons for the Conversion and the Offering (page     )

Our primary reasons for the conversion and the offering are to:

• facilitate the merger with Victory Bancorp;

• raise capital to support the future growth of HV Bank by hiring experienced bankers with extensive market relationships and by successful implementations of electronic delivery channels;

• enhance profitability and earnings by investing and leveraging the offering proceeds, primarily through the acquisition of Victory Bancorp and also through traditional funding and commercial banking activities; and

• attract and retain highly qualified officers, other employees and directors through, in part, the use of equity compensation plans, and to enhance our current compensation programs.

In addition, in the stock holding company structure, we will have greater flexibility in structuring mergers and acquisitions. Potential sellers often want a stock component for at least part of the acquisition consideration. Our new stock holding company structure will enable us to offer stock or cash consideration, or a combination thereof, and will therefore enhance our ability to compete with other bidders when acquisition opportunities arise. Other than the merger with Victory Bancorp, we have no current arrangements or agreements to acquire other banks, thrifts, financial service companies or branch offices.

The offering will afford our directors, officers and employees the opportunity to become shareholders, which we believe to be an effective performance incentive and an effective means of attracting and retaining qualified personnel. The offering also will provide our customers and local community members with an opportunity to acquire our common stock.

Purchase Price (page    )

The purchase price is $10.00 per share. You will not pay a commission to buy any shares in the offering.

2

Number of Shares to be Sold (page    )

We are offering for sale between 850,000 and 1,150,000 shares of HV Bancorp common stock in this offering. The amount of capital being raised is based on an independent appraisal of HV Bancorp. Terms of this offering are generally required by applicable conversion regulations. With regulatory approval, we may increase the number of shares to be issued by 15%, to 1,322,500 shares, without giving you further notice or the opportunity to change or cancel your order. In considering whether to increase the offering size, the Pennsylvania Department of Banking and Securities (the “Department of Banking”) and the Federal Deposit Insurance Corporation (the “FDIC”) will consider the level of subscriptions, the views of our independent appraiser, our financial condition and results of operations and changes in market conditions.

How We Determined the Offering Range and the $10.00 Per Share Purchase Price (page    )

We decided to offer between 850,000 and 1,150,000 shares, which is our offering range, based on an independent appraisal of our pro forma market value prepared by Feldman Financial Advisors, Inc., or Feldman Financial, an appraisal firm experienced in appraisals of financial institutions. Feldman Financial estimates that as of April 15, 2014, our pro forma market value was between $16,504,850 and $21,968,040, with a midpoint of $19,417,480. Our pro forma market value includes:

• the total number of shares that will be sold in the offering; and

• the total number of shares that will be issued to Victory Bancorp shareholders in connection with the merger. See “The Merger—Consideration to be Received in the Merger” on page     for a discussion of HV Bancorp shares to be issued to holders of Victory Bancorp common stock.

In preparing its appraisal, Feldman Financial considered the information in this prospectus, including our financial statements, as well as the impact of the merger with Victory Bancorp. Feldman Financial also considered the following factors, among others:

• our historical, present and projected operating results and financial condition and the economic and demographic characteristics of our market area;

• a comparative evaluation of the operating and financial statistics of HV Bank with those of other similarly situated, publicly traded thrift holding companies;

• the effect of the capital raised in the offering on our net worth and earnings potential;

• the trading market for securities of comparable institutions and general conditions in the market for such securities;

• the aggregate size of the offering of common stock;

• our proposed dividend policy; and

• the effect of implementing our stock-based incentive plans.

Upon completion of the offering, Feldman Financial, after taking into account factors similar to those involved in its initial appraisal, will determine its estimate of our pro forma market value as of the close of the offering. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, Feldman Financial determines that our pro forma market value has increased, we may sell up to 1,322,500 shares in the offering. If we sell 1,322,500 shares in the offering and issue 1,046,804 shares in the merger, the total pro forma market value may be increased to $23,693,040 without any further notice to you.

Based upon our pro forma market value, and taking into consideration the number of shares that must be issued to Victory Bancorp shareholders pursuant to the merger agreement, the Board of Trustees determined how many shares would be issued in the offering. The issuance of HV Bancorp shares to Victory Bancorp shareholders in the merger decreases the percentage that shares issued in the conversion offering will represent of the total outstanding shares of HV Bancorp. For a more detailed discussion of how many shares will be issued in connection with the offering and the merger, see “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger.”

3

Two measures that some investors use to analyze investment in a stock are the ratio of the offering price to the issuer’s “tangible book value” and the ratio of the offering price to the issuer’s annual core earnings. Feldman Financial considered these ratios in preparing its appraisal, among other factors. Tangible book value is the same as total equity, less preferred stock and intangibles. Annual core earnings, for purposes of the appraisal, are net earnings after taxes, excluding the after-tax portion of income from nonrecurring items. Feldman Financial’s appraisal also incorporates an analysis of a peer group of publicly traded thrift holding companies that Feldman Financial considered to be comparable to us.

The following table presents a summary of selected pricing ratios for the peer group companies and for HV Bancorp that Feldman Financial used in its appraisal. The ratios for HV Bancorp are based on pro forma core earnings for the 12 months ended December 31, 2013, including the merger with Victory Bancorp and pro forma book value and pro forma tangible book value as of December 31, 2013, also including the merger with Victory Bancorp. The ratios for the peer group are based on estimated core earnings for the 12 months ended December 31, 2013 and book value and tangible book value as of December 31, 2013. See “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger” on page     for a description of assumptions and adjustments included in the amounts presented for HV Bancorp.

	Price to Core Earnings Multiple			Price to Book Value Ratio			Price to Tangible Book Value Ratio
HV Bancorp (pro forma):
Minimum			*		68.8	%		71.3	%
Midpoint			*		73.1	%		75.5	%
Maximum			*		76.3	%		79.0	%
Adjusted Maximum			*		78.2	%		80.8	%
Savings bank and thrift peer group companies as of April 15, 2014:
Average		28.5x			89.2	%		90.3	%
Median		29.2x			87.8	%		90.2	%

* Not meaningful.

Compared to the average pricing ratios of the peer group at the maximum of the offering range, our stock would be priced at a discount of 14.5% to the peer group on a price-to-book basis and a discount of 12.5% to the peer group on a price-to-tangible book basis. This means that, at the maximum of the offering range, a share of our common stock would be more expensive than the peer group based on a core earnings per share basis and less expensive than the peer group based on a book value per share basis and a tangible book value per share basis.

Our trustees reviewed Feldman Financial’s appraisal report, including the methodology and the assumptions used, and determined that the valuation range was reasonable and adequate. The purchase price of $10.00 per share was determined by our trustees, taking into account, among other factors, the requirement under stock conversion regulations that the common stock be offered in a manner that will achieve the widest distribution of the stock.

The independent appraisal does not indicate market value. You should not assume or expect that the valuation described above means that our common stock will trade at or above the $10.00 purchase price after the offering.

Possible Change in the Offering Range (page    )

Feldman Financial will update its appraisal before we complete the offering. If, as a result of demand for the shares, regulatory considerations, or changes in market conditions, Feldman Financial determines that our pro forma market value has increased, we may sell up to 1,322,500 shares in the offering without further notice to you. In addition, under certain circumstances, the number of shares issued to Victory Bancorp

4

shareholders could be increased to 1,046,804 shares. If our pro forma market value, including shares issued to Victory Bancorp, at that time is either below $16.5 million or above $23.7 million, then, after consulting with the Department of Banking and the FDIC, we may:

• terminate the stock offering and promptly return all funds (with interest paid on funds received in the offering);

• set a new offering range and give all subscribers the opportunity to confirm, modify or rescind their purchase orders for shares of HV Bancorp’s common stock; or

• take such other actions as may be permitted by the Department of Banking, the FDIC and the Securities and Exchange Commission.

Possible Termination of the Offering (page     )

We must sell a minimum of 850,000 shares to complete the offering. If we terminate the offering because we fail to sell the minimum number of shares or for any other reason, we will promptly return your funds with interest at our passbook savings rate and we will cancel deposit account withdrawal authorizations.

Conditions to Completing the Conversion and the Offering (page     )

We are conducting the offering under the terms of our plan of conversion from mutual to stock form of organization. We cannot complete the offering unless we sell at least the minimum number of shares offered and we receive member approval as well as the final approval of the Department of Banking and the FDIC to complete the offering and a letter of non-objection to complete the offering from the FDIC. Consummation of the conversion of HV Bank to the stock form of organization is also subject to prior approval by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) of HV Bancorp as the bank holding company for HV Bank.

After-Market Stock Price Performance

The following table presents stock price performance information for all standard mutual-to-stock conversions completed between January 1, 2012 and April 15, 2014. These companies did not constitute the group of ten comparable public companies that Feldman Financial used in its appraisal analysis.

5

Mutual-to-Stock Conversion Offerings with Closing Dates

between January 1, 2012 and April 15, 2014

Company	Appreciation from Initial Trading Date
	Conversion Date	1 day			1 week			1 month			Through April 15, 2014
Quarry City Savings & Loan Association	07/26/13		7.5			2.0			0.5			3.5
Sunnyside Bancorp, Inc.	07/16/13		5.0			4.5			0.1			(4.0	)
Westbury Bancorp, Inc.	04/10/13		35.2			35.1			33.3			43.0
Meetinghouse Bancorp, Inc.	11/20/12		12.5			27.5			20.0			20.0
Hamilton Bancorp, Inc.	10/10/12		19.0			17.0			12.5			40.0
Madison County Financial, Inc.	10/04/12		48.9			46.1			45.1			81.0
HomeTrust Bancshares, Inc.	07/11/12		17.0			20.0			24.5			59.3
FS Bancorp, Inc.	07/10/12		0.1			0.7			2.1			63.7
Wellesley Bancorp, Inc.	01/26/12		20.0			20.9			22.9			92.5
West End Indiana Bancshares, Inc.	01/11/12		12.6			12.5			20.0			75.0
Edgewater Bancorp, Inc.	01/17/14		0.0			2.5			2.5			4.0
Coastway Bancorp, Inc.	01/15/14		9.2			8.5			1.9			2.0
Average			15.6	%		16.4	%		15.4	%		40.0	%
Median			12.6	%		14.8	%		16.3	%		41.5	%

This table is not intended to be indicative of how our stock may perform. Furthermore, this table presents only short-term price performance with respect to several companies that only recently completed their initial public offerings and may not be indicative of the longer-term stock price performance of these companies.

Stock price appreciation is affected by many factors, including, but not limited to: general market and economic conditions; the interest rate environment; the amount of proceeds a company raises in its offering; and numerous factors relating to the specific company, including the experience and ability of management, historical and anticipated operating results, the nature and quality of a company’s assets, and a company’s market area. The companies listed in the table above may not be similar to HV Bancorp, the pricing ratios for their stock offerings were in some cases different from the pricing ratios for HV Bancorp’s common stock and the market conditions in which these offerings were completed were, in some cases, different from current market conditions, and none of these companies effected a merger concurrently with the conversion. Any or all of these differences may cause our stock to perform differently from these other offerings.

Feldman Financial advised the Board of Trustees that the appraisal was prepared in conformance with the regulatory appraisal methodology. That methodology requires a valuation based on an analysis of the trading prices of comparable public companies whose stocks have traded for at least one year prior to the valuation date, and as a result of this analysis, Feldman Financial determined that our pro forma price-to-core earnings ratios were not meaningful for comparative valuation purposes, and our pro forma price-to-book and price-to-tangible book ratios were lower than the peer group companies. See “—How We Determined the Offering Range and the $10.00 Per Share Purchase Price.”

Our Board of Trustees carefully reviewed the information provided to it by Feldman Financial through the appraisal process, but did not make any determination regarding whether prior standard mutual-to-stock conversions have been undervalued, nor did the Board draw any conclusions regarding how the historical data reflected above may affect HV Bancorp’s appraisal. Instead, we engaged Feldman Financial to help us understand the regulatory process as it applies to the appraisal and to advise the Board of Directors as to how much capital HV Bancorp would be required to raise under the regulatory appraisal guidelines.

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There can be no assurance that our stock price will not trade below $10.00 per share, as has been the case for some mutual-to-stock conversions. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the section entitled “Risk Factors” beginning on page [—].

How We Will Use the Proceeds of this Offering (page     )

The following table summarizes how we will use the proceeds of the conversion stock offering, based on the sale of shares at the minimum, midpoint and maximum of the offering range.

(Dollars in thousands)	Minimum 850,000 Shares at $10.00 per Share			Midpoint 1,000,000 Shares at $10.00 per Share			Maximum 1,150,000 Shares at $10.00 per Share
Gross offering proceeds	$	8,500		$	10,000		$	11,500
Less: offering expenses(1)		(973	)		(1,016	)		(1,060	)
Net offering proceeds	$	7,527		$	8,984		$	10,440
Less:
Proceeds contributed to HV Bank	$	(3,764	)		(4,492	)		(5,220	)
Proceeds used for loan to employee stock ownership plan		(990	)		(1,165	)		(1,318	)
Cash needed to pay cash portion of merger consideration, if any		(1,798	)		(385	)		—
Proceeds remaining for HV Bancorp	$	975		$	2,942		$	3,902

⁽¹⁾  For more information, see “The Conversion and Stock Offering—Marketing and Distribution; Compensation.”

Initially, HV Bancorp intends to invest the proceeds not used to acquire Victory Bancorp and not contributed to HV Bank in short-term liquid investments. In the future, HV Bancorp may use the portion of the proceeds that it retains to, among other things, invest in securities, pay cash dividends on common or preferred stock, pay interest on debt or repurchase shares of common stock, subject to regulatory restrictions. Initially, HV Bank intends to use the proceeds it receives for investment in short-term liquid investments. In the future, HV Bank will seek to use the portion of the proceeds that it receives to fund new loans, open new branches, invest in securities and expand its business activities. HV Bancorp and HV Bank may also use the proceeds of the offering to diversify their businesses and acquire other companies, although we have no specific plans to do so at this time.

Benefits of the Offering to Management and Potential Dilution to Shareholders Following the Conversion (pages      to    )

We intend to adopt the benefit plans described below. HV Bancorp will recognize compensation expense related to an employee stock ownership plan and one or more stock-based benefit plans. The actual expense will depend on the market value of HV Bancorp’s common stock and, with respect to the employee stock ownership plan, will fluctuate in response to changes in the trading price of HV Bancorp’s common stock, increasing if the trading price increases. As indicated under “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger,” based upon assumptions set forth therein, the annual pre-tax expense related to the employee stock ownership plan and the stock-based benefit plans would be $53,000 and $322,000, respectively, assuming shares are sold in the offering at the maximum of the offering range and the shares have a value of $10.00 per share. See “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger,” for a detailed analysis of the expenses of each of these plans.

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Employee Stock Ownership Plan. We intend to establish an employee stock ownership plan (the “ESOP”) that will purchase up to an amount of shares equal to 6.0% of the total shares of common stock issued in the stock offering, including shares issued to Victory Bancorp’s shareholders in the merger, or up to 131,808 shares of common stock, assuming we sell the maximum of the shares proposed to be sold. This ESOP is a tax-qualified retirement plan for the benefit of all our employees. Purchases by the ESOP will be included in determining whether the required minimum number of shares has been sold in the offering. The plan will use the proceeds from a 25-year loan from HV Bancorp to purchase these shares. As the loan is repaid and shares are released from collateral, the shares will be allocated to the accounts of employee participants. Allocations will be based on a participant’s individual compensation as a percentage of total plan compensation. Non-employee directors are not eligible to participate in the ESOP. Assuming the ESOP purchases 131,808 shares in the offering, we will recognize additional pre-tax compensation expense of $1.3 million over a 25-year period, assuming the shares of common stock have a fair market value of $10.00 per share for the full 25-year period. If, in the future, the shares of common stock have a fair market value greater or less than $10.00, the compensation expense will increase or decrease accordingly. Purchases by the ESOP may be reduced if necessary to ensure that HV Bancorp’s Tier I capital ratio after the conversion and the merger equals or exceeds 9.0%. See “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger” for an illustration of the effects of the ESOP.

Future Stock-Based Benefit Plans. In addition to shares purchased by the ESOP, we intend to grant stock options and stock awards under one or more stock-based benefit plans that we intend to implement no sooner than six months after the completion of the conversion. Shareholder approval of these plans will be required. If adopted within 12 months following the completion of the conversion, the stock-based benefit plans will reserve a number of shares equal to not more than 4.0% of the shares issued in the stock offering, including shares issued in the merger to Victory Bancorp’s shareholders, or up to 87,872 shares of common stock at the maximum of the offering range, for restricted stock awards to employees and directors, at no cost to the recipients. In addition, if adopted within 12 months following the completion of the conversion, the stock-based benefit plans will reserve a number of shares equal to not more than 10.0% of the shares of common stock issued in the stock offering, including shares issued to Victory Bancorp’s shareholders in the merger, or up to 219,680 shares of common stock at the maximum of the offering range, for issuance upon the exercise of stock options that maybe granted to employees and directors. If the stock-based benefit plans are adopted after one year from the date of the completion of the conversion, the 4.0% and 10.0% limitations described above will no longer apply. We have not yet determined whether we will present these plans for shareholder approval within 12 months following the completion of the conversion or whether we will present these plans for shareholder approval more than 12 months following the completion of the conversion.

If restricted stock awards up to 4.0% of the shares of common stock issued in the offering, including shares issued to Victory Bancorp’s shareholders in the merger, are awarded under the stock-based benefit plans and come from authorized but unissued shares of common stock, shareholders would experience dilution of up to approximately 3.85% in their ownership interest in HV Bancorp. If 10.0% of the shares of common stock issued in the offering, including shares issued to Victory Bancorp’s shareholders in the merger, are issued upon the exercise of stock options granted under the stock-based benefit plans come from authorized but unissued shares of common stock, shareholders would experience dilution of their ownership interest in HV Bancorp of approximately 9.09%. Awards made under these plans would be subject to vesting over a period of years.

The following table summarizes the number of shares of common stock and aggregate dollar value of grants (valuing each share granted at the offering price of $10.00 that are available under the stock-based benefit plans if such plans are adopted within one year following the completion of the conversion and the offering. The table shows the dilution to shareholders if all these shares are issued from authorized but unissued shares, instead of shares purchased in the open market. The table also sets forth the number of shares of common stock to be acquired by the employee stock ownership plan for allocation to all employees. A portion of the stock grants shown in the table below may be made to non-management employees.

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	Number of Shares to be Granted or Purchased										Total Estimated Value(1)
	At Minimum of Offering Range		At Maximum of Offering Range		As a Percentage of Common Stock Outstanding(2)			Dilution Resulting From Issuance of Additional Shares			At Minimum of Offering Range		At Maximum of Offering Range
	(Dollars in thousands)
ESOP		99,029		131,808		6.0	%		—		$	990	$	1,318
Restricted stock awards		66,019		87,872		4.0	%		3.8	%		660		879
Stock options		165,049		219,680		10.0	%		9.1	%		550		732
Total		330,097		439,360		20.0	%		12.3	%	$	2,200	$	2,929

(1) The actual value of restricted stock grants will be determined based on their fair value as of the date grants are made. For purposes of this table, fair value is assumed to be the same as the offering price of $10.00 per share. The fair value of stock options has been estimated at $3.33 per option using the Black-Scholes option pricing model with the following assumptions: a grant-date share price and option exercise price of $10.00; dividend yield of 0%; an expected option life of 10 years; a risk free interest rate of 3.04%; and a volatility rate of 15.82% based on an index of publicly traded thrift institutions. The actual expense of the stock option plan will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately adopted, which may or may not be Black-Scholes.

(2) Including shares issued to Victory Bancorp shareholders in the merger. The stock-based benefit plans may award a greater number of options and shares, respectively, if the plans are adopted more than one year after the completion of the conversion.

The value of the shares of restricted common stock will be based on the price per share of our common stock at the time those shares are granted, which, subject to shareholder approval, cannot occur until at least six months after the completion of the conversion. The following table presents the total value of all shares of restricted common stock to be available for award and issuance under the stock-based benefit plan, assuming the stock-based benefit plan award shares of common stock equal to 4.0% of the outstanding shares after completion of the conversion and merger, including shares issued in the merger, and the shares for the plans are purchased or issued in a range of market prices from $8.00 per share to $14.00 per share.

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		Value of
Share price		66,019 Shares Awarded at Minimum of Range		77,670 Shares Awarded at Midpoint of Range		87,872 Shares Awarded at Maximum Of Range		94,772 Shares Awarded at 15% Above Maximum of Range
		(In thousands)
$	8.00	$	528	$	621	$	703	$	758
$	10.00	$	660	$	777	$	879	$	948
$	12.00	$	792	$	932	$	1,054	$	1,137
$	14.00	$	924	$	1,087	$	1,230	$	1,327

The grant-date fair value of the options granted under the stock-based benefit plans will be based, in part, on the price per share of our common stock at the time the options are granted, which, subject to shareholder approval, cannot occur until at least six months after the completion of the conversion. The value will also depend on the various assumptions utilized in the option-pricing model ultimately adopted. The following table presents the total estimated value of the options to be available for grant under the stock-based benefit plans, assuming the stock-based benefit plans award options equal to 10.0% of the outstanding shares of common stock, assuming the range of market prices for the shares are $8.00 per share to $14.00 per share at the time of the grant.

				Value of
Exercise Price		Option Value		165,049 Options Granted at Minimum of Range		194,175 Options Granted at Midpoint of Range		219,680 Options Granted at Maximum of Range		236,930 Options Granted at 15% Above Maximum of Range
				(In thousands)
$	8.00	$	2.66	$	440	$	517	$	584	$	630
$	10.00	$	3.33	$	550	$	647	$	732	$	789
$	12.00	$	4.00	$	660	$	777	$	879	$	948
$	14.00	$	4.66	$	769	$	905	$	1,024	$	1,104

The tables presented above are provided for informational purposes only. There can be no assurance that our stock price will not trade below $10.00 per share. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the section entitled “Risk Factors.”

Employment Agreements. Pursuant to the merger agreement with Victory Bancorp, we will enter into employment agreements with each of Travis J. Thompson, President and Chief Executive Officer of HV Bank, and Joseph W. Major, President and Chief Executive Officer of Victory Bancorp. Mr. Thompson will become Chairman of HV Bancorp and Executive Chairman of HV Bank. Mr. Major will become President and Chief Executive Officer of HV Bancorp and President and Chief Executive Officer of HV Bank upon consummation of the merger. We will also enter into employment agreements with Joseph C. O’Neill, Jr., Chief Financial Officer of HV Bancorp and HV Bank, Robert H. Schultz, Chief Financial Officer and Chief Operating Officer of Victory Bancorp and Victory Bank, Eric B. Offner, Executive Vice President and Chief Credit Officer of Victory Bancorp and Victory Bank, and Richard L. Graver, Chief Banking Officer of Victory Bancorp and Victory Bank and a change of control agreement with Saul S. Rivkin, Vice President and Chief Retail Officer of Victory Bank. Upon consummation of the merger, Mr. O’Neill will become Chief Financial Officer of HV Bancorp and HV Bank, Mr. Schultz will become Chief Operating Officer of HV Bank, Mr. Offner will become Chief Credit Officer of HV Bank, and Mr. Graver will become Chief Lending Officer of HV Bank.

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The Offering Will Not be Taxable to Persons Receiving Subscription Rights (page     )

As a general matter, the offering will not be a taxable transaction for purposes of federal or state income taxes to persons who receive or exercise subscription rights. We have received an opinion from our counsel, Jones Walker LLP, that for federal income tax purposes:

• it is more likely than not that the members of HV Bank will not realize any income upon the issuance or exercise of the subscription rights; and

• it is more likely than not that the tax basis to the purchasers in the offering will be the amount paid for our common stock, and that the holding period for shares of common stock will begin on the date of completion of the offering.

Persons Who Can Order Stock in the Offering (page     )

We have granted rights to subscribe for shares of HV Bancorp common stock in a “subscription offering” to the following persons in the following order of priority:

• Persons with $50 or more on deposit at HV Bank as of the close of business on September 30, 2012.

• Our employee stock ownership plan.

• Persons with $50 or more on deposit at HV Bank as of the close of business on             , 2014, who are not eligible to subscribe for shares under category 1 above.

• HV Bank’s members as of             , 2014, who were not eligible to subscribe for shares under categories 1 and 3, including borrowers of HV Bank as of July 1, 2003, who continue to be borrowers as of             , 2014.

If we receive subscriptions for more shares than are to be sold in this offering, we may be unable to fill or may only partially fill your order. Shares will be allocated in order of the priorities described above under a formula outlined in the plan of conversion. See “The Conversion and Stock Offering—Subscription Offering and Subscription Rights” for a description of the allocation priorities and procedures.

We may offer shares not sold in the subscription offering to the general public in a community offering that can begin concurrently with, during or immediately following the subscription offering. Orders received in the community offering will be subordinate to subscription offering orders. Natural persons who are residents of Montgomery, Bucks and Philadelphia counties, Pennsylvania will have first preference to purchase shares in the community offering. Shares of common stock not purchased in the subscription offering or the community offering may be offered for sale through a syndicated community offering managed by Griffin Financial Group. We have the right to accept or reject, in whole or in part, in our sole discretion, orders we receive in the community offering and syndicated community offering. If your order is rejected in part, you cannot cancel the remainder of your order.

Subscription Rights are Not Transferable (page     )

You are not allowed to transfer your subscription rights to purchase shares in the subscription offering, and we will act to ensure that you do not do so. Adding or deleting a name, or otherwise altering the form of deposit ownership of any qualifying account, will result in the loss of your subscription rights. You will be required to certify that you are purchasing shares solely for your own account and that you have no agreement or understanding with another person to sell or transfer subscription rights or the shares that you purchase. We will not accept any stock orders that we believe involve the transfer of subscription rights. Eligible members who enter into agreements to allow ineligible investors to participate in the subscription offering may be violating federal and state law and may be subject to civil enforcement actions or criminal prosecution.

How to Purchase Common Stock (page     )

You may submit your stock order form in one of three ways: by mail, using the order reply envelope provided; by overnight courier to the address indicated on the stock order form; or by taking the stock order form

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and payment to our Stock Information Center, located at 607 Washington Street, Reading, Pennsylvania 19603. Stock order forms may not be hand-delivered to our banking offices. Our banking offices will not have offering materials on hand. Once submitted, your order is irrevocable. We are not required to accept copies or facsimiles of stock order forms.

In the subscription offering and the community offering, you may pay for your shares by:

• personal check, bank check or money order made payable directly to HV Bancorp (third-party checks of any type will not be accepted); or

• authorizing us to withdraw money from your HV Bank deposit account(s) other than accounts with check writing privileges, or individual retirement accounts (“IRAs”). To use funds from accounts with check writing privileges, please submit a check. To use IRA funds, please see the next section.

HV Bank is not permitted to knowingly lend funds (including funds drawn on a HV Bank line of credit) to anyone for the purpose of purchasing shares of common stock in the offering. Also, payment may not be made by cash or wire transfer.

Checks and money orders will be immediately cashed, so the funds must be available within the account when we receive your stock order form and personal check. Do not overdraw your account. The funds will be deposited by us into an escrow account at an insured depository institution. We will pay interest at HV Bank’s passbook savings rate from the date those funds are processed until completion or termination of the offering. Withdrawals from certificates of deposit at HV Bank for the purpose of purchasing common stock in the offering may be made without incurring an early withdrawal penalty. All funds authorized for withdrawal from deposit accounts with HV Bank must be available within the deposit accounts at the time the stock order form is received. A hold will be placed on the amount of funds designated on your stock order form. Those funds will be unavailable to you during the offering; however, the funds will not be withdrawn from the accounts until the offering is completed and will continue to earn interest at the applicable contractual deposit account rate until the completion of the offering. If, upon a withdrawal from a certificate account, the balance falls below the minimum balance requirement, the remaining funds will earn interest at the applicable contractual deposit account rate.

No extension of the offering period may last longer than 90 days. All extensions may not last beyond             , 2014.

Although we will make reasonable attempts to provide a prospectus and offering materials to holders of subscription rights, the subscription offering and all subscription rights will expire at          p.m., Eastern time, on             , 2014, whether or not we have been able to locate each person entitled to subscription rights.

Using IRA Funds to Purchase Shares in the Offering (page     )

You may be able to subscribe for shares of common stock using funds in your individual retirement account(s), or IRA. If you wish to use some or all of the funds in your HV Bank IRA, the applicable funds must first be transferred to a self-directed account maintained by a trustee or custodian, such as a brokerage firm. A fee may be payable to the new trustee. If you do not have such an account, you will need to establish one and transfer your HV Bank IRA funds before placing your stock order. Our Stock Information Center can give you guidance in this regard. Because processing this type of order takes additional time, we recommend that you contact our Stock Information Center promptly, preferably at least two weeks before the [offering deadline] offering deadline. We cannot guarantee that you will be able to use your individual retirement account funds held at HV Bank or elsewhere to purchase shares of common stock in the offering. Whether you may use retirement funds for the purchase of shares in the stock offering will depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.

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Purchase Limitations (page     )

The minimum number of shares of common stock that may be purchased is 25. Generally, no individual, or individual exercising subscription rights through a single qualifying deposit account held jointly, may purchase more than 57,500 shares, or $575,000 of common stock at the maximum of the offering range. If any of the following persons purchases shares of common stock, their purchases, when combined with your purchases, cannot exceed 57,500 shares, or $575,000, in all categories of the offering, combined:

• your parents, spouse, sisters, brothers, children or anyone married to one of the foregoing persons;

• most companies, trusts or other entities in which you are a trustee, have a substantial interest or hold a senior management position; or

• other persons who may be your associates or persons acting in concert with you.

See the detailed descriptions of “acting in concert” and “associate” in “The Conversion and Stock Offering—Limitations on Purchases of Shares.”

Unless we determine otherwise, persons having the same address and persons exercising subscription rights through qualifying deposit accounts registered to the same address will be subject to this overall purchase limitation. We have the right to determine, in our sole discretion, whether prospective purchasers are “associates” or “acting in concert.”

Subject to regulatory approval, we may increase or decrease the individual purchase limitations at any time. Our tax-qualified employee benefit plans, including our employee stock ownership plan, are authorized to purchase up to 6% of the shares issued in the offering, including shares issued in the merger, without regard to these purchase limitations.

Deadline for Ordering Stock (page     )

The subscription offering will end at 12:00 noon, Eastern time, on [offering deadline]. If you intend to purchase shares, a properly completed and signed original stock order form, together with full payment for the shares of common stock, must be received by us (not postmarked) no later than this time. We expect that the community offering will terminate at the same time. We may extend the offering without notice to you until             , 2014. If regulatory approval of an extension beyond that date is granted, we will notify all subscribers of the extension and of the duration of any extension that has been granted. In such event, subscribers will have the right to confirm, modify or rescind their purchase orders. However, if you do not respond to this notice, we will promptly return your funds with interest at our passbook rate or cancel your deposit account withdrawal authorization. No single subsequent extension may be for more than 90 days. If we are unable to sell at least 850,000 shares or intend to sell more than 1,322,500 shares (in each case not taking into account shares to be issued in the merger), we will promptly set a new offering range and all subscribers will be notified and given the opportunity to confirm, change or cancel their orders, as described above.

Purchases and Stock Elections by Directors and Executive Officers (page     )

We expect that our trustees and executive officers, together with their associates, will subscribe for approximately 120,000, shares, which equals 12% of the shares offered for sale at the midpoint of the offering range. Our directors and executive officers will pay the same $10.00 per share price as everyone else who purchases shares in the offering. Like all of our depositors, our directors and executive officers have subscription rights based on their deposits and, in the event of an oversubscription, their orders will be subject to the allocation provisions set forth in our plan of conversion. Purchases by our directors and executive officers will count towards the minimum number of shares we must sell to close the offering. In addition, Victory Bancorp officers and directors would receive a maximum of approximately 162,000 shares of HV Bancorp common stock in the merger, which equals 7.4% of the total shares of HV Bancorp that would be outstanding following the conversion stock offering and the merger, at the midpoint of the offering range.

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Market for HV Bancorp’s Common Stock (page     )

We have applied for approval to list our common stock on the Nasdaq Capital Market under the symbol “HVBC”. Griffin Financial Group currently intends to become a market maker in the common stock, but it is under no obligation to do so. We cannot assure you if any other market maker will be obtained or that an active and liquid trading market for our common stock will develop, or, if developed, will be maintained.

HV Bancorp’s Dividend Policy (page     )

We will consider a policy of paying regular cash dividends to our common shareholders. We have not determined whether we will pay dividends on the common stock. After the offering, dividends on HV Bancorp’s preferred stock must be paid before HV Bancorp can pay dividends on its common stock. Our ability to pay dividends will depend on a number of factors, including capital requirements, regulatory limitations and our operating results and financial condition. Initially, our ability to pay dividends will be limited to the net proceeds of the offering retained by HV Bancorp and earnings from the investment of such proceeds. At the maximum of the offering range, HV Bancorp will retain approximately $3.9 million of the net proceeds. Additionally, funds could be contributed from HV Bank through dividends; however, the ability of HV Bank to dividend funds to HV Bancorp is subject to regulatory and statutory limitations described in more detail in “Our Dividend Policy.”

Delivery of Stock Certificates (page     )

Certificates representing shares of common stock issued in the subscription and community offerings will be mailed by regular mail by our transfer agent as soon as practicable following completion of the conversion and offering. Certificates will be mailed to purchasers at the registration address provided by them on the order form. All shares of common stock sold in the syndicated community offering will be in book entry form and paper stock certificates will not be issued. Until certificates for common stock are available and delivered to purchasers, purchasers may not be able to sell their shares, even though trading of the common stock will have commenced. Your ability to sell the shares of common stock before your receipt of the stock certificate will depend on arrangements you may make with your brokerage firm.

Delivery of Prospectus (page     )

To ensure that each purchaser receives a prospectus at least 48 hours before the expiration date of the offering in accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, as amended, no prospectus will be mailed any later than five days prior to the expiration date or hand delivered any later than two days prior to the expiration date. Execution of a stock order form will confirm receipt of delivery in accordance with Rule 15c2-8. Stock order forms will be distributed only with a prospectus.

Stock Information Center (page     )

If you have any questions regarding the offering, please call the Stock Information Center (toll free) at (844) 225-4855. You may also visit the Stock Information Center, which is located at 607 Washington Street, Reading, Pennsylvania 19603. The Stock Information Center is open Monday through Friday, except for bank holidays, from 10:00 a.m. to 4:00 p.m., Eastern time.

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THE MERGER

General (page     )

On December 12, 2013, we entered into an Agreement and Plan of Merger pursuant to which HV Bancorp will merge with Victory Bancorp, a Pennsylvania corporation. Victory Bancorp is the sole shareholder of Victory Bank, a Pennsylvania-chartered commercial bank headquartered in Limerick, Pennsylvania, with total consolidated assets of $141.2 million as of December 31, 2013. In connection with the acquisition, Victory Bank will merge with and into HV Bank, with HV Bank as the resulting entity. Upon consummation of the merger, HV Bank will change its corporate title to “Victory Bank.”

Consideration to be Received (page     )

In connection with the merger, Victory Bancorp’s shareholders will either receive the right to exchange each share of Victory Bancorp common stock for 0.6794 of a share of HV Bancorp common stock or, under certain limited circumstances described below, the right to receive a combination of HV Bancorp common stock and cash. In addition, Victory Bancorp Series E convertible preferred stock shareholders will be given the opportunity to convert their shares of Series E convertible preferred stock, as follows:

• exchange their shares of Series E convertible preferred stock for Victory Bancorp subordinated debt, that will be assumed by HV Bancorp upon consummation of the merger; or

• if permitted by the terms of Series E convertible preferred stock and any necessary regulatory approvals, be redeemed by Victory Bancorp for cash at par on or prior to the closing date of the merger; or

• if not exchanged for Victory Bancorp subordinated debt, redeemed for cash by Victory Bancorp or converted pursuant to their terms into Victory Bancorp common stock immediately prior to the merger date, the Series E convertible preferred stock will be converted into, as provided in and subject to the limitations set forth in the Merger Agreement, and Victory Bancorp’s articles of incorporation, the right to receive one share of HV Bancorp Series A preferred stock having similar terms.

Victory Bancorp Series F preferred stock that was issued to the U.S. Treasury under the Small Business Lending Fund program will be exchanged for HV Bancorp Series B preferred stock having similar terms.

In the event that the aggregate amount of HV Bancorp common stock, when added to the aggregate number of shares of HV Bancorp common stock to be purchased by Victory Bancorp shareholders in the conversion offering, including the conversion of Series E convertible preferred stock, would result in Victory Bancorp shareholders owning an amount of HV Bancorp common stock in excess of 48.5% on a pro forma basis, then HV Bancorp will pay to Victory Bancorp shareholders an amount of HV Bancorp common stock and cash, on a pro rata basis, sufficient to reduce the aggregate ownership of Victory Bancorp shareholders below the ownership limitation.

The merger agreement was the result of arm’s-length negotiations between the managements and Boards of Directors of the parties, with the assistance and advice of their respective financial advisors and legal counsel. Consummation of the merger is subject to satisfaction of a number of conditions, including:

• receipt of all required regulatory approvals;

• completion of HV Bank’s conversion to stock form as a Pennsylvania-chartered commercial bank and simultaneous holding company formation; and

• approval of the merger by Victory Bancorp’s shareholders.

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In addition, prior to the merger each outstanding option to purchase Victory Bancorp common stock will be cancelled for no consideration and outstanding warrants to purchase Victory Bancorp common stock will be settled in cash at the estimated fair value of $0.54 per share.

Pro Forma Presentation

The aggregate purchase price for Victory Bancorp will vary based upon the number shares of Victory Bancorp Series E convertible preferred stock that are ultimately:

• exchanged for Victory Bancorp subordinated debt;

• redeemed by Victory Bancorp for cash;

• converted pursuant to their terms into Victory Bancorp common stock immediately prior to the merger date; or

• converted into, as provided in and subject to the limitations set forth in the Merger Agreement, the right to receive one share of HV Bancorp Series A convertible preferred stock having similar terms.

The ultimate disposition of the Victory Bancorp Series E convertible preferred stock will have an impact on HV Bancorp’s and HV Bank’s pro forma financial condition and ratios. In addition, conversion of Series E convertible preferred stock into Victory Bancorp common stock will increase the aggregate purchase price of Victory Bancorp, which could impact the cash/stock consideration in the merger given the aggregate limit of 48.5% stock ownership by former Victory Bancorp shareholders, and require a portion of the merger consideration to be paid in cash under certain circumstances. These factors will ultimately impact HV Bancorp’s equity ratios and pro forma market pricing ratios. HV Bank’s equity and regulatory capital ratios will be similarly impacted.

In order to limit the amount of cash that could be required to be paid as merger consideration, holders of Victory Bancorp Series E convertible preferred stock who are Victory Bancorp directors and senior management have executed agreements that could require them to exchange Series E convertible preferred stock for Victory Bancorp subordinated debt in order to meet certain thresholds. Pursuant to these agreements, a minimum of 19% of the Series E convertible preferred stock will be exchanged for Victory Bancorp subordinated debt if the HV Bancorp conversion stock offering is completed at the midpoint of the valuation range or below.

Pursuant to commitments of the directors and senior officers of Victory Bancorp who are holders of the Series E convertible preferred stock, and for purposes of pro forma presentations in this prospectus, 81% of the Series E convertible preferred stock is assumed to be exchanged for Victory Bancorp common stock if the offering closes at the minimum or midpoint of the offering range, and the remaining 19% of the Series E convertible preferred stock is assumed to be converted to Victory Bancorp subordinated debt. If the offering closes at the maximum, or maximum, as adjusted, of the offering range, the pro forma presentations included in this prospectus assume that 100% of the Series E convertible preferred stock will be converted to Victory Bancorp common stock. This pro forma presentation provides for compliance with the limitation that Victory Bancorp shareholders not own more than a maximum of 48.5% of the pro forma outstanding shares. For purposes of the pro forma presentations, no other purchases of HV Bancorp common stock by existing Victory Bancorp shareholders are assumed to occur as part of the conversion stock offering. See “The Merger—Consideration to be Received in the Merger.”

Whether holders of Victory Bancorp Series E convertible preferred stock elect to convert their preferred shares to Victory Bancorp common stock, exchange their preferred shares for Victory Bancorp subordinated debt, or redeem their preferred shares for cash may affect the number of shares of HV Bancorp common stock to be issued in the merger and the amount of cash to be paid in the merger. In addition, the number of shares sold in the conversion stock offering will affect the number of shares of HV Bancorp common stock and the amount of cash to be issued and paid in the merger. We, therefore, cannot predict the consideration Victory Bancorp shareholders will receive, the number of shares of HV Bancorp capital stock that we may issue, nor the amount of cash that we may pay.

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Each Share of Victory Bancorp Common Stock Will be Exchanged for 0.6794 of a Share of HV Bancorp Common Stock (page     )

In connection with the merger, holders of Victory Bancorp common stock will receive either shares of HV Bancorp common stock or, under certain limited circumstances, a combination of HV Bancorp common stock and cash.

Treatment of Victory Bancorp Series E Convertible Preferred Stock (page     )

Holders of shares of Victory Series E convertible preferred stock will receive cash, subordinated debt, or shares of HV Bancorp common or preferred stock.

Prior to consummation of the merger, Victory Bancorp will effect an exchange offer to holders of Victory Bancorp Series E convertible preferred stock, to be effective upon the closing of the merger, whereby Victory Bancorp will offer each holder of Series E convertible preferred stock the right to exchange shares of their preferred stock for an equal amount of Victory Bancorp 8.5% subordinated debt with a seven-year term, callable and redeemable after 5 years. Any shares of Series E convertible preferred stock that are not exchanged for Victory Bancorp subordinated debt will be redeemed by Victory Bancorp immediately prior to the closing date, to the extent a redemption is permitted by the terms of Series E convertible preferred stock. Each share of Series E convertible preferred stock that is not exchanged in the exchange offer, redeemed by Victory Bancorp or converted pursuant to its terms into Victory Bancorp common stock immediately prior to the effective time, will become and be converted into, as provided in and subject to the limitations set forth in the merger agreement, the right to receive one share of HV Bancorp preferred stock subject to the same designations, preferences and rights relating to the shares of such Victory Bancorp preferred stock and the qualifications, limitations and restrictions thereof.

Victory Bancorp subordinated debt issued by Victory Bancorp in connection with the exchange for Series E convertible preferred stock will be assumed by HV Bancorp upon consummation of the merger.

Offering Closes at the Minimum or Midpoint of the Offering Range. Pursuant to commitments of holders of the Series E convertible preferred stock who are Victory Bancorp directors and senior management, the terms of the Merger Agreement, and for purposes of pro forma presentation in this prospectus, 81% of the Series E convertible preferred stock is assumed to be exchanged for Victory Bancorp common stock if the offering closes at the minimum or midpoint of the offering range, and the remaining 19% of the Series E convertible preferred stock is assumed to be converted into newly issued Victory Bancorp subordinated debt, which will be assumed by HV Bancorp in the merger. Under these assumptions, the aggregate deal cost of the merger will be $9.8 million. Assuming a closing at the minimum of the offering range, $1.8 million of cash will be used to fund the potential cash portion of the merger consideration, 800,485 shares of HV Bancorp common stock will be issued to Victory Bancorp shareholders in the merger, and Victory Bancorp shareholders will own a maximum of 48.5% of the total shares of HV Bancorp common stock outstanding. Assuming a closing at the midpoint of the offering range, up to $385,000 of cash will be used to fund the potential cash portion of the merger consideration, a minimum of 941,748 shares of HV Bancorp common stock will be issued to Victory Bancorp shareholders in the merger, and Victory Bancorp shareholders will own a maximum of 48.5% of the total shares of HV Bancorp common stock outstanding.

Offering Closes at or above the Maximum of the Offering Range. Pursuant to the terms of the Merger Agreement, and for purposes of pro forma presentation in this Prospectus, 100% of the Series E convertible preferred stock shares are assumed to be exchanged for Victory Bancorp common stock if the conversion stock offering closes at or above the maximum of the offering range. Under these assumptions, the aggregate deal cost of the merger will be $10.5 million, and no cash will be used to fund the potential cash portion of the merger consideration and 1,046,804 shares of HV Bancorp common stock will be issued to Victory Bancorp shareholders in the merger. Assuming a close of the offering at the maximum of the offering range, Victory Bancorp shareholders will own approximately 47.7% of the total shares of HV Bancorp common stock outstanding. Assuming a close of the conversion stock offering at the maximum, as adjusted, of the offering range, Victory Bancorp shareholders will own approximately 44.2% of the total shares of HV Bancorp common stock outstanding.

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For purposes of the pro forma presentation, no other purchases of HV Bancorp common stock by existing Victory Bancorp shareholders are assumed to occur as part of the conversion offering. See “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger.”

Options and Warrants to Purchase Victory Bancorp Common Stock

Outstanding warrants to purchase Victory Bancorp common stock at $10.00 per share will be settled in cash at the estimated fair value, which is $0.54 per warrant, or $54,000 in the aggregate. Options to purchase Victory Bancorp common stock that were issued under the Victory Bancorp Stock Incentive Plan will be cancelled prior to the merger.

Conditions to Completing the Merger (page     )

We cannot complete the merger unless we receive the non-objection of the Department of Banking and the FDIC. We cannot complete the merger if the conversion is not approved; therefore, we cannot complete the merger without Department of Banking, FDIC and HV Bank member approval of the conversion and stock offering, as well as Federal Reserve Board approval of our holding company application. We have made the necessary filings with these regulators but have not received the requisite approvals and non-objections.

In addition, we cannot complete the merger unless Victory Bancorp’s shareholders approve the merger agreement and we complete the conversion and stock offering. Victory Bancorp’s shareholders will vote on the merger at a meeting to be held on             , 2014. Each director of Victory Bancorp has signed an agreement to vote his or her shares of Victory Bancorp common stock in favor of the merger. In the aggregate, Victory Bancorp directors and executive officers currently own 192,833 shares of common stock, or 18.8% of the outstanding Victory Bancorp common stock.

Our Operations after the Merger (page     )

In connection with the merger, six current directors of Victory Bancorp have agreed to join the boards of directors of each of HV Bancorp and HV Bank upon the completion of the merger. Pursuant to the merger agreement with Victory Bancorp, we have also entered into employment agreements with Travis J. Thompson, the chief executive officer and president of HV Bank and HV Bancorp, and Joseph W. Major, the chief executive officer and president of Victory Bancorp and Victory Bank, effective upon completion of the merger, to become executive officers of the combined institution. In addition, HV Bancorp and HV Bank will enter into employment agreements with Joseph C. O’Neil, Jr., Charles Hutt, Mary Ann Murtha, each an executive officer of HV Bank, to become executive officers of HV Bancorp and HV Bank upon consummation of the merger between Victory Bancorp and HV Bancorp. HV Bancorp and HV Bank will also enter into employment agreements with Robert Schultz, Richard L. Graver and Eric B. Offner, executive officers of Victory Bank, to become executive officers of HV Bancorp and HV Bank, and a change in control agreement with Saul S. Rivkin, Vice President and Chief Retail Officer of Victory Bank, effective as of the date of the merger between Victory Bancorp and HV Bancorp.

Our Business Strategy after the Conversion and the Merger (page     )

Our business strategy after the conversion and merger is to continue to operate and grow a profitable commercial bank. As a result of the merger, HV Bancorp will be a larger, more diversified bank holding company with a management and operating strategy that will draw from both business strategies currently being used at HV Bank and Victory Bank. HV Bank believes that the proposed merger offers unique operating and strategic benefits. The following highlights some of the key points of our operating strategy for the combined enterprise:

• pursuing loan portfolio expansion and diversification with an emphasis on credit risk management to increase our portfolio of commercial and other loans and products that provide higher returns than residential mortgage loans;

• maintaining asset quality through conservative underwriting standards and diligent collection efforts;

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• serving small-and middle-management commercial and retail customers, with a significant focus on electronic delivery platforms and technology;

• continuing to originate residential mortgage loans which are primarily sold in the secondary mortgage market;

• building profitable businesses and consumer relationships by providing superior customer service with an emphasis on increasing transaction deposit account and deposit balances; and

• increasing our non-interest income.

MARKET AREA

We are headquartered in Huntingdon Valley, Pennsylvania. We operate four full-service and two limited service branch offices in Montgomery, Bucks and Philadelphia counties in Pennsylvania as well as a loan production office located in Warminster, Pennsylvania. Victory Bank operates an office in Montgomery County as well as a loan processing office in Wyomissing, Berks County, Pennsylvania.

We currently consider our market area to include the Pennsylvania counties of Montgomery, Bucks and Philadelphia. The merger with Victory Bancorp is expected to significantly enhance our competitive capability. Victory Bank serves the entire southeastern Pennsylvania market with a combination of courier services and high-technology delivery strategies. Victory Bank’s distribution capability will be expanded across the current market areas of both institutions.

This market’s economy is very diverse and includes a high density of commercial enterprise led by the health services, personnel services and business services industries. Based on 2013 data reported by SNL Financial, Montgomery and Bucks counties were ranked the 57^th and 63^rd wealthiest counties in the United States in terms of median household income, respectively, out of 3,143 total counties.

REGULATION AND SUPERVISION

Upon completion of the conversion stock offering and issuance of stock by HV Bancorp, HV Bancorp will be subject to regulation, supervision and examination by the Board of Governors of the Federal Reserve System. HV Bank is and, as a Pennsylvania chartered commercial bank, will remain subject to regulation by the Department of Banking and the FDIC.

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RISK FACTORS

You should consider carefully the following risk factors before purchasing HV Bancorp common stock.

Risks Related to Our Business

Changes in interest rates may negatively affect our financial performance.

The majority of our assets and liabilities are monetary in nature and subject us to significant risk from changes in interest rates. Fluctuations in interest rates are not predictable or controllable. Like most financial institutions, changes in interest rates can impact our net interest income, which is the difference between interest earned from interest-earning assets, such as loans and investment securities, and interest paid on interest-bearing liabilities, which consist of deposits and borrowings. In addition, interest rate changes can impact the valuation of our assets and liabilities. We have experienced, and expect that we will periodically continue to experience, “gaps” in the interest rate sensitivities of our assets and liabilities, meaning that either our interest-bearing liabilities will be more sensitive to changes in market interest rates than our interest-earning assets, or vice versa. In either event, if market interest rates should move contrary to our position, this “gap” will negatively impact our earnings. Many factors impact interest rates, including governmental monetary policies, inflation, recession, changes in unemployment, the money supply, and international disorder and instability in domestic and foreign financial markets.

Based on our analysis of the interest rate sensitivity of our assets at December 31, 2013, an increase in the general level of interest rates may negatively affect the net value of our portfolio equity. An increase in interest rates may also, among other things, reduce the demand for loans and our ability to originate loans. A decrease in the general level of interest rates may affect us through, among other things, increased prepayments on our loan and mortgage-backed securities portfolios. Accordingly, changes in the level of market interest rates affect our net yield on interest-earning assets, loan origination volume, loan and mortgage-backed securities portfolios, and our overall financial results. Although our asset liability management strategy seeks to control our risk from changes in market interest rates, it may not be able to prevent changes in interest rates from having a material adverse effect on our results of operations and financial condition.

We have derived a significant portion of our income from secondary mortgage market activities, a volatile source of income, and we may incur losses or charges with respect to these activities which would negatively affect our earnings.

HV Bank’s profitability depends in substantial part on the volume of loan originations and the related fees received from our mortgage originations and sales into the secondary market. Our net interest margin, gain on sale of loans and our volume of mortgage originations will depend on many factors that are partly or entirely outside our control, including competition, federal economic, monetary and fiscal policies, and global and domestic economic conditions generally. Historically, net interest margin and the mortgage origination volumes for HV Bank and for other financial institutions have widened and narrowed in response to these and other factors. Also, our volume of mortgage originations will also depend on the mortgage qualification standards imposed by the government sponsored entities. If their standards are tightened, our origination volume could be reduced. Our goal has been to structure our asset and liability management strategies to maximize the benefit of changes in market interest rates on our net interest margin and revenues related to mortgage origination volume.

Historically low interest rates may adversely affect our net interest income and profitability.

In recent years it has been the policy of the Board of Governors of the Federal Reserve System, or Federal Reserve Board, to maintain interest rates at historically low levels through its targeted federal funds rate and the purchase of mortgage-backed securities. As a result, market rates on the loans we have originated and the yields on securities we have purchased have been at lower levels. As a general matter, our ability to manage our risk from changes in market interest rates is limited, and interest rate management techniques are not exact. The Federal Reserve Board has indicated its intention to maintain low interest rates for the next several years. Accordingly, our net interest income (the difference between interest income earned on assets and interest expense paid on liabilities) may continue at lower levels, which would have an adverse effect on our profitability.

Changes in our asset quality could adversely affect our results of operations and current financial condition.

Asset quality measures the performance of a borrower in repaying a loan, with interest, on time. In recent years, we have benefited from relatively stable asset quality. Still, there are elements of our loan portfolio that inherently present greater credit risk, such as home equity lines of credit and commercial real estate loans. Each of these portfolio risk elements, where potentially material in the context of our overall loan portfolio, are discussed in greater detail within “Business of HV Bancorp and HV Bank—Lending Activities” beginning on page [—]. While we believe that we manage asset quality through prudent underwriting practices and collection operations, it is possible that our asset quality could deteriorate, depending upon economic conditions and other factors.

A return of recessionary conditions could result in increases in our level of non-performing loans and/or reduce demand for our products and services, which could have an adverse effect on our results of operations.

Although the U.S. economy has emerged from the severe recession that occurred in 2008 and 2009, economic growth has been slow and uneven, and unemployment levels remain high. Recovery by many businesses has been impaired by lower consumer spending. A return to prolonged deteriorating economic conditions could significantly affect the markets in which we do business, the value of our loans and investments, and our ongoing

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operations, costs and profitability. Further declines in real estate values and sales volumes and continued elevated unemployment levels may result in higher than expected loan delinquencies, increases in our non-performing and criticized classified assets and a decline in demand for our products and services. These events may cause us to incur losses and may adversely affect our financial condition and results of operations. For a discussion of HV Bank’s accounting for impaired loans and troubled debt restructurings, see Note 1 to HV Bank’s financial statements.

A downturn in the local economy or a decline in real estate values would reduce our profits.

A majority of our loans, including our commercial real estate and commercial business loans upon consummation of the merger with Victory Bank, are secured by real estate or made to businesses in our local market area. As a result of this concentration, a down turn in the local economy could cause significant increases in nonperforming loans, which would reduce our profits. In recent years, there has been a moderate increase in real estate values in our market area. As a result of relatively stable real estate values in recent years, our loans have been well collateralized. A decline in real estate values could cause some of our mortgage loans to become inadequately collateralized, which would expose us to a greater risk of loss. Additionally, a decline in real estate values could adversely affect our portfolio of commercial real estate loans and could result in a decline in the origination of such loans. For a discussion of our market areas, see “Business of HV Bancorp and HV Bank—Market Area” and “—Competition.”

Strong competition within our market area could reduce our profits and slow growth.

We face intense competition in making loans, attracting deposits and hiring and retaining experienced employees. Price competition for loans and deposits may result in our charging lower interest rates on loans and paying higher interest rates on deposits, which reduces our net interest income. Price competition for loans and deposits also may result in our being unable to originate and fund as many loans as we are able in a prudent manner. Competition also makes it more difficult and costly to attract and retain qualified employees. At June 30, 2013, which is the most recent date for which data is available from the FDIC, we held less than 1% of the deposits in Montgomery County and less than 1% of the deposits in Bucks County, Pennsylvania. Our acquisition of Victory Bank will increase our market share, but we will still be subject to intense competition. Victory Bank held 0.5% of the deposits in Montgomery County at June 30, 2013. Our profitability depends upon our continued ability to compete successfully in our market area. For more information about our market area and the competition we face, see “Business of HV Bancorp and HV Bank—Market Area” and “— Competition.”

We will depend on our management team to implement our business strategy and execute successful operations, and we could be harmed by the loss of their services.

Upon completion of the stock offering and the merger, we will be dependent upon the services of the members of our senior management team who direct our strategy and operations. Members of our senior management team, as well as commercial lending specialists who possess expertise in our markets and key business relationships, could be difficult to replace. Loss of these persons, or our inability to hire additional qualified personnel, could impact our ability to implement our business strategy and could have a material adverse effect on our results of operations and our ability to complete in our markets.

Government responses to economic conditions may adversely affect our operations, financial condition and earnings.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), among other things, has changed and will continue to change the bank regulatory framework, created an independent Consumer Financial Protection Bureau that has assumed the consumer protection responsibilities of the various federal banking agencies, and established more stringent capital standards for banks and bank holding companies. The legislation will also result in new regulations affecting the lending, funding, trading and investment activities of banks and bank holding companies. The Consumer Financial Protection Bureau has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions such as HV Bank and Victory Bank, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. Banks and savings institutions with $10.0 billion or less in assets will continue to be examined by their applicable bank regulators. The new legislation also gives state attorneys general the ability to enforce applicable federal consumer protection laws. The

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Dodd-Frank Act also requires the federal banking agencies to promulgate rules requiring mortgage lenders to retain a portion of the credit risk related to securitization loans. Bank regulatory agencies also have been responding aggressively to concerns and adverse trends identified in examinations. Ongoing uncertainty and adverse developments in the financial services industry and the domestic and international credit markets, and the effect of new legislation and regulatory actions in response to these conditions, may adversely affect our operations by restricting our business activities, including our ability to originate or sell loans, modify loan terms, or foreclose on property securing loans.

Additionally, in early July 2013, the Federal Reserve Board approved revisions to their capital adequacy guidelines and prompt corrective action rules that implement the revised standards of the Basel Committee on Banking Supervision, commonly called Basel III, and address relevant provisions of the Dodd-Frank Act. Basel III and the regulations of the federal banking agencies require bank holding companies and banks to undertake significant activities to demonstrate compliance with the new and higher capital standards. Compliance with these rules will impose additional costs on us and the higher capital ratios may negatively affect our return on equity.

These measures are likely to increase our costs of doing business and increase our costs related to regulatory compliance, and may have a significant adverse effect on our activities, financial performance and operating flexibility. In addition, these risks could affect the performance and value of our loan and investment securities portfolios, which also would negatively affect our financial performance.

We operate in a highly regulated environment and we may be affected adversely by changes in laws and regulations.

Upon consummation of the conversion, the offering and the merger, HV Bank will become a Pennsylvania chartered commercial bank, subject to extensive regulation, supervision and examination by the FDIC, as insurer of its deposits, and by the Department of Banking as its primary regulator. Upon completion of the conversion, HV Bancorp will be a bank holding company and will be subject to regulation and supervision by the Federal Reserve Board. Such regulation and supervision govern the activities in which HV Bank and HV Bancorp may engage and are intended primarily for the protection of the insurance fund and our depositors and borrowers rather than for holders of HV Bancorp common stock. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the ability to impose restrictions on our operations, designate problem assets and determine the level of our allowance for loan losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may increase our costs of operations and have a material impact on our operations.

There may be changes in accounting policies or accounting standards.

HV Bank’s accounting policies are fundamental to understanding its financial results and condition. Some of these policies require the use of estimates and assumptions that may affect the value of HV Bank’s assets or liabilities and financial results. Certain accounting policies involve significant judgments and assumptions by us that have a material impact on the carrying values of certain assets and liabilities. We consider these accounting policies to be critical accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Actual results could differ from these judgments and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations.

From time to time the Financial Accounting Standards Board and the SEC change the financial accounting and reporting standards that govern the form and content of HV Bank’s external financial statements. Recently, FASB has proposed new accounting standards related to fair value accounting and accounting for leases that could materially change HV Bank’s financial statements in the future. In addition, accounting standard setters and those who interpret the accounting standards (such as the FASB, SEC, banking regulators and HV Bank’s independent registered auditors) may change or even reverse their previous interpretations or positions on how these standards should be applied. Changes in financial accounting and reporting standards and changes in current interpretations may be beyond HV Bank’s control, can be hard to predict and could materially impact how HV Bank reports its financial results and condition. In certain cases, HV Bank could be required to apply a new or revised standard retroactively or apply an existing standard differently (also retroactively) which may result in it restating prior period financial statements in material amounts.

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We face risks related to our operational, technological and organizational infrastructure.

Our ability to grow and compete is dependent on our ability to build or acquire the necessary operational and technological infrastructure and to manage the cost of that infrastructure as we expand. In our case, operational risk can manifest itself in many ways, such as errors related to failed or inadequate processes, faulty or disabled computer systems, fraud by employees or outside persons and exposure to external events. As discussed below, we are dependent on our operational infrastructure to help manage these risks. In addition, we are heavily dependent on the strength and capability of our technology systems which we use both to interface with our customers and to manage our internal financial and other systems. Our ability to develop and deliver new products that meet the needs of our existing customers and attract new ones depends on the functionality of our technology systems. Additionally, our ability to run our business in compliance with applicable laws and regulations is dependent on these infrastructures.

We continuously monitor our operational and technological capabilities and make modifications and improvements when we believe it will be cost effective to do so. In some instances, we may build and maintain these capabilities itself. We also outsource some of these functions to third parties. These third parties may experience errors or disruptions that could adversely impact us and over which we may have limited control. We also face risk from the integration of new infrastructure platforms and/or new third party providers of such platforms into our existing businesses.

We face the risk that the design of our controls and procedures, including those to mitigate the risk of fraud by employees or outsiders, may prove to be inadequate or are circumvented, thereby causing delays in detection of errors or inaccuracies in data and information. Management will regularly review and update our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations and financial condition.

In January 2014, we became aware of an unauthorized withdrawal by a HV Bank non-officer employee of funds from a customer’s accounts. The transactions involved only the accounts of one customer. Based on our preliminary investigation, we believe that our maximum exposure is $332,000, which was recorded in the quarter ended March 31, 2014. We maintain insurance coverage for this type of risk with a deductible of $50,000, and we currently expect that this claim will constitute a covered loss. In the event the claim is not covered, we may incur a loss up to our maximum exposure. Management has evaluated the impact of this incident on our current internal controls and procedures and has implemented changes to address the issues raised by this event. For additional information, see note 15 (“Subsequent Events”) of the notes to HV Bank’s financial statements.

The loss of key personnel could negatively affect our operations.

Our performance is largely dependent on the talents and efforts of highly skilled individuals. There is intense competition in the financial services industry for qualified employees. In addition, we face increasing competition with businesses outside the financial services industry for the most highly skilled individuals. Our banking operations could be adversely affected if we were unable to attract new employees and retain and motivate our existing employees.

Loss of, or failure to adequately safeguard, confidential or proprietary information may adversely affect our operations, net income or reputation.

We regularly collect, process, transmit and store significant amounts of confidential information regarding its customers, employees and others. This information is necessary for the conduct of our business activities, including the ongoing maintenance of deposit, loan, and other account relationships for our customers, and receiving instructions and affecting transactions for those customers and other users of our products and services. In addition to confidential information regarding our customers, employees and others, we compile, process, transmit and store proprietary, non-public information concerning our business, operations, plans and strategies. In some cases, this confidential or proprietary information is collected, compiled, processed, transmitted or stored by third parties on our behalf.

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Information security risks have generally increased in recent years because of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cyber-attacks. A failure or breach of our operational information security systems, or those of our third-party service providers, as a result of cyber-attacks or information security breaches or due to employee error, malfeasance or other disruptions could adversely affect our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and/or cause losses. As a result, cyber security and the continued development and enhancement of the controls and processes designed to protect our systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority for us.

If this confidential or proprietary information were to be mishandled, misused or lost, we could be exposed to significant regulatory consequences, reputational damage, civil litigation and financial loss. Mishandling, misuse or loss of this confidential or proprietary information could occur, for example, if the confidential or proprietary information were erroneously provided to parties who are not permitted to have the information, either by fault of our systems or employees, or the systems or employees of third parties which have collected, compiled, processed, transmitted or stored the information on our behalf, where the information is intercepted or otherwise inappropriately taken by third parties or where there is a failure or breach of the network, communications or information systems which are used to collect, compile, process, transmit or store the information.

Although we employ a variety of physical, procedural and technological safeguards to protect this confidential and proprietary information from mishandling, misuse or loss, these safeguards do not provide absolute assurance that mishandling, misuse or loss of the information will not occur, or that if mishandling, misuse or loss of the information did occur those events would be promptly detected and addressed. Additionally, as information security risks and cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any information security vulnerabilities.

Reputational risk and social factors may impact our results.

Our ability to originate and maintain accounts is highly dependent upon consumer and other external perceptions of our business practices and/or our financial health. Adverse perceptions regarding our business practices and/or our financial health could damage our reputation in both the customer and funding markets, leading to difficulties in generating and maintaining accounts as well as in financing them. Adverse developments with respect to the consumer or other external perceptions regarding the practices of our competitors, or our industry as a whole, may also adversely impact our reputation. In addition, adverse reputational impacts on third parties with whom we have important relationships may also adversely impact our reputation. Adverse impacts on our reputation, or the reputation of our industry, may also result in greater regulatory and/or legislative scrutiny, which may lead to laws or regulations that may change or constrain the manner in which we engage with our customers and the products we offer. Adverse reputational impacts or events may also increase our litigation risk. We carefully monitor internal and external developments for areas of potential reputational risk and have established governance structures to assist in evaluating such risks in our business practices and decisions.

Risks Related to This Offering

The future price of the shares of our common stock may be less than the purchase price in the stock offering.

We cannot assure you that if you purchase shares of common stock in the stock offering you will later be able to sell them at or above the purchase price. The aggregate value of our common stock is being determined by an independent, third-party appraisal, pursuant to state and federal banking regulations and subject to review and non-objection by the FDIC and the Department of Banking, as part of their review and approval of our application to convert to stock form and to conduct the stock offering. The appraisal is not intended, and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of our common stock. In recent years, the final independent valuation as approved by the FDIC and the Department of Banking typically has been at the adjusted maximum of the offering range as long as total subscriptions exceed the adjusted maximum of the offering range. However, the adjusted maximum of the offering range is approximately 32% higher than the fair market value of a company’s stock at the midpoint of the range as determined by the independent appraisal. Accordingly, our aggregate pro forma market value as reflected in the final independent appraisal may exceed the actual market value of our shares of common stock after the completion of the offering, which may result in our stock trading below the initial offering price of $10.00 per share.

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Our stock-based benefit plans will increase our costs, which will reduce our income, and our directors, officers and employees are eligible to participate in these stock-based benefits plans.

We have established an ESOP in connection with the conversion and stock offering, and we intend to implement one or more stock-based benefit plans that will provide for grants of stock options and shares of our common stock. During 2014, we expect that we will recognize an additional annual expense associated with the ESOP. In addition, we expect an additional annual expense associated with the grant of shares of common stock and stock options under our stock-based benefit plans.

We anticipate that our ESOP will borrow funds from HV Bancorp to purchase in the stock offering 6.0% of our outstanding shares of common stock (including shares issued in the merger). Only employees, including our officers, are eligible to participate in the ESOP. The cost of acquiring the shares of common stock for the ESOP will be between $990,000 at the minimum of the offering range and $1.4 million at the adjusted maximum of the offering range. We will record an annual ESOP expense in an amount equal to the fair value of shares of common stock committed to be released to employees as a result of repayment of the loan. As a result, if our common stock appreciates in value over time, compensation expense relating to the ESOP also will increase, which will reduce our income.

We also intend to adopt one or more stock-based benefit plans after the stock offering that would award participants shares of our common stock (at no cost to them) and/or options to purchase shares of our common stock. Our directors, officers and employees would be eligible to receive awards under the stock-based benefit plans. The number of shares of restricted stock to be awarded or stock options to be granted under any initial stock-based benefit plan may not exceed 4.0%% and 10.0%%, respectively, of our total outstanding shares, including shares issued in the merger, if these plans are adopted within one year of the completion of the conversion. Assuming the market price of the common stock is $10.00 per share; the options are granted with an exercise price of $10.00 per share; the dividend yield on the stock is 0%; the expected option life is 10 years; the risk free interest rate is 3.04% (based on the 10-year Treasury rate) and the volatility rate on the shares of common stock is 15.82% (based on an index of publicly traded thrift institutions), the estimated grant-date fair value of the options utilizing a Black-Scholes option pricing analysis is $3.33 per option granted. Assuming this value is amortized over a five-year vesting period, the corresponding annual expense (pre-tax) associated with the stock options would be approximately $158,000 at the maximum, as adjusted, of the offering range. In addition, assuming that all shares of restricted stock are awarded at a price of $10.00 per share, and that the awards vest over a five-year period, the corresponding annual expense (pre-tax) associated with shares awarded under the stock-based incentive plan would be approximately $190,000 at the maximum, as adjusted, of the offering range. However, if we grant shares of stock or options in excess of these amounts, such grants would increase our costs further, which will reduce our income.

The implementation of stock-based benefit plans may dilute your ownership interest.

We intend to adopt one or more stock-based benefit plans following completion of the conversion and stock offering. The stock-based benefit plans will be funded through either open market purchases of common stock or from the issuance of authorized but unissued shares of common stock. Shareholders would experience a reduction in ownership interest totaling approximately 12% in the event newly issued shares are used to fund stock options or awards of common stock under the plans in an amount equal to 4% and 10%, respectively, of our total outstanding shares, including shares issued in the merger. We may grant options and award shares of common stock under stock-based benefit plans in excess of 10.0% and 4.0%, respectively, of our total outstanding shares if the stock-based benefit plans are adopted more than one year following completion of the conversion and stock offering.

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We intend to enter into employment agreements and a change in control agreement with certain of our officers, which may increase our compensation costs upon the occurrence of certain events or increase the cost of acquiring us.

On the closing date of the conversion offering and the merger, we intend to enter into employment agreements with each of Travis J. Thompson, Joseph C. O’Neill, Jr., Charles Hutt, Mary Ann Murtha, Joseph M. Major, Robert H. Schultz, Eric B. Offner and Richard L. Graver and a change in control agreement with Saul S. Rivkin. In the event of termination of employment other than for cause, or in the event of certain types of termination following a change in control, as set forth in the employment agreements, and assuming the agreements were in effect, the agreements will provide for cash benefits that would cost us up to $2.8 million in the aggregate based on information as of December 31, 2013. These amounts may be reduced, if necessary, to an amount that would not qualify the payments to be deemed an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended. In addition, even if we are not permitted by our regulators to enter into the new employment or change in control agreements, we are currently party to employment agreements that provide for cash severance benefits that would cost up to $1.9 million, based on information as of December 31, 2013, in the event of certain terminations. For additional information see “Management of HV Bancorp and HV Bank—Executive Officer Compensation” and “Management of Victory Bancorp and Victory Bank—Executive Officer Compensation.”

We have broad discretion in using the proceeds of the stock offering. Our failure to effectively deploy the net proceeds of the offering may have an adverse effect on our financial performance and the value of our common stock.

We intend to invest between $3.8 million and $5.2 million of the net proceeds of the offering (or $6.1 million at the adjusted maximum of the offering range) in HV Bank. Under certain circumstances, a portion of the net proceeds retained at HV Bancorp will be used to fund the cash portion of the acquisition. We may use the remaining net proceeds to invest in short-term investments, repurchase shares of common stock, redeem outstanding preferred stock, pay dividends, finance the acquisition of financial institutions, or for other general corporate purposes. We also expect to use a portion of the net proceeds we retain to fund a loan for the purchase of shares of common stock in the offering by the employee stock ownership plan. HV Bank may use the net proceeds it receives to fund new loans, enhance existing products and services, invest in securities, expand its banking franchise by acquiring new branches or by acquiring other financial institutions or other financial services companies, or for other general corporate purposes. However, with the exception of the loan to the employee stock ownership plan, we have not allocated specific amounts of the net proceeds for any of these purposes, and we will have significant flexibility in determining the amount of the net proceeds we apply to different uses and the timing of such applications. Also, certain of these uses, such as acquiring other financial institutions, paying dividends and repurchasing common stock, may require regulatory approval. We have not established a timetable for investing the net proceeds, and, accordingly, we may not invest the net proceeds at the time that is most beneficial to HV Bancorp, HV Bank or our shareholders. For additional information see “Use of Proceeds.”

Our stock value may be affected negatively by federal regulations restricting takeovers.

Federal regulations provide that for a period of three years following the date of the completion of the conversion and stock offering, no person, acting alone, together with associates, or in a group of persons acting in concert, will directly or indirectly offer to acquire or acquire ownership of more than 10.0% of our common stock without prior regulatory approval. This restriction may make it more difficult for third parties to acquire our company and therefore may adversely affect our stock price. See “Restrictions on Acquisition of HV Bancorp and HV Bank” for a discussion of applicable Federal Reserve Board regulations regarding acquisitions.

Certain provisions of our articles of incorporation and bylaws could discourage hostile acquisitions of control of HV Bancorp, which could negatively affect our stock value.

Certain provisions in our articles of incorporation and bylaws may discourage attempts to acquire HV Bancorp, pursue a proxy contest for control of HV Bancorp, assume control of HV Bancorp by a holder of a large block of common stock, and remove HV Bancorp’s management, all of which shareholders might think are in their best interests. These provisions include:

• the election of directors to staggered terms of three years;

• provisions requiring advance notice of shareholder proposals and director nominations;

• a limitation on the right to vote more than 10% of the outstanding shares of common stock;

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• a prohibition on cumulative voting;

• a requirement that the calling of a special meeting by shareholders requires the request of a majority of all votes entitled to be cast at the special meeting;

• a requirement that directors may only be removed for cause and by a majority of the votes entitled to be cast;

• the Board of Directors’ ability to cause HV Bancorp to issue preferred stock; and

• the requirement of the vote of 80% of the votes entitled to be cast in order to amend certain provisions of the articles of incorporation, including those set forth above.

For further information, see “Restrictions on Acquisition on HV Bancorp and HV Bank.”

We will need to implement additional finance and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements, which will increase our operating expenses.

Upon completion of the conversion and stock offering, we will become a public reporting company. Federal securities laws and regulations require that we file annual, quarterly and current reports with the Securities and Exchange Commission and that we maintain effective disclosure controls and procedures and internal controls over financial reporting. We expect that the obligations of being a public company, including substantial public reporting requirements, will require significant expenditures and place additional demands on our management team. These obligations will increase our operating expenses and could divert management’s attention from our operations. In addition, compliance with the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the Securities and Exchange Commission will require us to certify as to the adequacy of our internal controls and procedures, which may require us to upgrade our accounting systems, which would also increase our operating costs.

Stock-based benefit plans adopted more than one year following the conversion may exceed regulatory restrictions on the size of the plans adopted prior to that date, which would increase our costs.

If we adopt one or more stock-based benefit plans within one year following the completion of the conversion, then we may award shares of common stock or grant stock options under our stock-based benefit plans for up to 4.0% and 10.0%, respectively, of our total outstanding shares (including shares issued in the merger). The amount of stock awards and stock options available for grant under the stock-based benefit plans may be greater than 4.0% and 10.0%, respectively, of our outstanding shares, provided the stock-based benefit plans are adopted more than one year following completion of the conversion. Stock-based benefit plans that provide for awards in excess of these amounts would increase our costs beyond the amounts as disclosed elsewhere in this prospectus.

The shares of restricted stock granted under any stock-based benefit plan will be expensed by us over their vesting period at the fair market value of the shares on the date they are awarded. If the shares of restricted stock to be granted under the plan are repurchased in the open market (rather than issued directly from authorized but unissued shares by HV Bancorp) and cost the same as the purchase price in the stock offering, the reduction to shareholders’ equity due to the plan would be between $660,000 at the minimum of the offering range and $948,000 at the adjusted maximum of the offering range. To the extent we repurchase shares of common stock in the open market to fund the grants of shares under the plan, and the price of such shares exceeds the offering price of $10.00 per share, the reduction to shareholders’ equity would exceed the range described above. Conversely, to the extent the price of such shares is below the offering price of $10.00 per share, the reduction to shareholders’ equity would be less than the range described above.

Public companies must expense the grant-date fair value of stock options. In addition, public companies must revalue their estimated compensation costs at each subsequent reporting period and may be required to recognize additional compensation expense at these dates. When we record an expense for the grant of stock options and other stock awards, using the fair value method as described in the applicable accounting rules, we will incur significant compensation and benefits expense.

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Our return on equity initially may be low compared to other publicly traded financial institutions. A low return on equity may negatively affect the trading price of our common stock.

Net income divided by average equity, known as “return on equity,” is a ratio used by many investors to compare the performance of a financial institution with its peers. Although we expect that our net income will increase following the offering and the merger, we expect that our return on equity will be reduced as a result of the additional capital that we will raise in the offering. Additionally, our return on equity will be adversely affected if we are not able to achieve expected operating efficiencies following completion of the merger. This goal could take a number of years to achieve, and we cannot assure you that it will be attained. For example, our pro forma core return on equity for the 12 months ended December 31, 2013 was 0.83%, assuming the sale of shares at the maximum of the offering range and giving effect to the merger. In comparison, the peer group used by Feldman Financial in its appraisal had an average core return on equity of 2.57% for the 12 months ended December 31, 2013. Over time, we intend to use the net proceeds from the offering to increase earnings per share and book value per share, without assuming undue risk, with the goal of achieving a return on equity that is competitive with other publicly traded companies. Consequently, you should not expect a competitive return on equity in the near future. Failure to achieve a competitive return on equity might make an investment in our common stock unattractive to some investors and might cause our common stock to trade at lower prices than comparable companies with higher returns on equity. See “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger” for an illustration of the financial impact of this offering.

A significant percentage of our common stock will be held by directors and officers of HV Bancorp and our ESOP.

We expect our current directors and executive officers, together with their associates, to subscribe for approximately 120,000 shares. In addition, we intend to establish an employee stock ownership plan that may purchase up to 6% of the shares issued in the offering and the merger, which would total 131,808 shares at the maximum of the offering range. Additionally, current directors and officers of Victory Bancorp who will become directors and officers of HV Bancorp following the merger, own 159,333 shares of Victory Bancorp common stock in the aggregate, and will own an additional 3,798 shares of common stock upon the conversion of their shares of Victory Bancorp Series E convertible preferred stock, which would entitle them to exchange their Victory Bancorp common stock for up to approximately 14,821 shares of HV Bancorp common stock in connection with the merger. As a result, a total of up to approximately 413,000 shares, or 18.8% of our shares at the maximum of the offering range, may be held by our officers and directors and ESOP immediately following the offering and merger. Additional shares will be held by management if we implement one or more stock-based benefit plans following completion of the conversion and offering.

There may be a limited market for our common stock, which may adversely affect our stock price.

We have applied to have our shares of common stock listed on the Nasdaq Capital Market under the symbol “HVBC.” Griffin Financial Group, LLC currently intends to become a market maker in our common stock, but is under no obligation to do so. There is no way of determining at this time whether other market makers will be obtained or that an active and liquid trading market for the shares of common stock will develop or, if developed, will be maintained.

The price of our common stock may not be as favorable as other common stocks sold in mutual to stock conversions.

As a result of our simultaneous acquisition of Victory Bancorp in connection with the conversion and stock offering, the price to pro forma tangible shareholders’ equity at which the shares are being sold in the offering may be in excess of the ratio of the price to pro forma shareholders’ equity of common stock sold in other mutual-to-stock conversions that do not also involve acquisitions of other financial institutions.

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Risks Related to the Merger

There is a possibility that HV Bank will be unable to effectively integrate Victory Bank with its operations.

The future growth of HV Bank and HV Bancorp will depend, in part, on the success of the merger of Victory Bancorp with HV Bancorp. The success of the merger will, in turn, depend on a number of factors, including HV Bank’s ability to:

• retain and integrate key Victory Bank personnel into the operations of HV Bank;

• control the incremental non-interest expense from the merger in order to improve overall operating efficiencies;

• limit the outflow of deposits from Victory Bank; and

• integrate Victory Bank into the current operations of HV Bank.

We could potentially recognize goodwill impairment charges after the merger.

Our merger with Victory Bancorp will be accounted for using the purchase method of accounting. In accordance with applicable accounting principles, HV Bancorp estimates that, as a result of the merger and based on the pro forma assumptions contained in the prospectus, assuming a closing of the offering at the minimum or midpoint of the offering range, total intangible assets of $834,000, including goodwill totaling $140,000, will be recorded under Accounting Standards Codification 805. Assuming a closing of the offering at or above the maximum of the offering range, total intangible assets of $942,000 including $308,000 of goodwill will be recorded. As a result, at the minimum of the offering range, goodwill will equal approximately 0.51% of the $27.4 million of pro forma consolidated total shareholders’ equity at December 31, 2013. At the adjusted maximum of the offering range, goodwill will equal approximately 0.91% of the $33.7 million of pro forma consolidated total shareholders’ equity at December 31, 2013.

Pursuant to the provisions of FASB Accounting Standards Codifications Topic 805, Business Combinations, HV Bancorp will annually review the fair value of its investment in Victory Bank to determine that such fair value equals or exceeds the carrying value of its investment, including goodwill. If the fair value of our investment in Victory Bank does not equal or exceed its carrying value, we will be required to record goodwill impairment charges which may adversely affect our future earnings. The fair value of a banking franchise can fluctuate downward based on a number of factors that are beyond management’s control, e.g., adverse trends in interest rates and increased loan losses. There can be no assurance that our banking franchise value will not decline after consummation of the conversion and the merger, thereby necessitating goodwill impairment charges to operations.

Subscribers who purchase shares in the offering will experience dilution of their investment as a result of the issuance of the merger shares.

Based on the pro forma assumptions disclosed in this prospectus, the acquisition of Victory Bancorp will result in our recording goodwill and other intangible assets of $834,000 assuming a closing of the conversion stock offering at the minimum or midpoint of the offering range, and goodwill and other intangible assets of approximately $942,000 assuming a closing of the offering at or above the maximum of the offering range. As a result, subscribers in the offering will experience per share dilution in tangible equity ranging from $0.51 per share at the minimum of the offering range to $0.42 per share at the adjusted maximum of the offering range.

Upon completion of the merger, each issued and outstanding share of Victory Bancorp common stock will be converted into the right to receive 0.6794 of a share of HV Bancorp common stock and cash in lieu of fractional shares, subject to ownership limitations and proration procedures set forth in the Merger Agreement. At the minimum and midpoint of the offering range, the issuance of the shares in the merger would dilute the ownership interests of purchasers in the offering by 48.5%. At the maximum and adjusted maximum of the offering range, the issuance of shares in the merger would dilute the ownership interests of purchasers in the offering by approximately 47.7% and 44.2%, respectively.

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The credit quality of Victory’s loans may be worse than HV Bank expects, which would require HV Bank to increase its allowance for loan losses and negatively affect HV Bank’s earnings.

In the merger, HV Bank will acquire loans at their fair value from Victory Bank, a majority of which have been made to small business or middle-market commercial clients who may have a heightened vulnerability to economic conditions. Also, all of Victory Bank’s loans have been originated since 2008, and a portion of the loans may not have experienced sufficient seasoning to determine the potential for future losses to be incurred. As part of its due diligence, HV Bank reviewed a sample of these loans in various categories. The fair value adjustment includes a discount applied to Victory Bank’s loans as part of the merger of approximately $1.6 million to reflect the credit risk of the loan portfolio. Although HV Bank believes the loans that it will acquire are of acceptable credit quality, no assurance can be given as to the future performance of these loans. If the credit quality of these loans deteriorates more than HV Bank expects, we may have delinquency or charge-off levels above Victory Bank’s historical experience. This would require HV Bank to increase its allowance for loan losses and could affect HV Bank’s earnings in future periods in a material and adverse manner.

After the merger with Victory Bancorp we intend to operate a full-service commercial and consumer banking business which is expected to necessitate an increased allowance for loan losses.

Victory Bank’s focus is on small- and middle-market commercial and retail customers. Victory Bank originates commercial loans, commercial mortgage loans, consumer loans and construction loans. A key component of our business strategy is to pursue loan diversification and increase our yields utilizing the Victory Bank loan origination platform, with a focus on credit risk management. The proposed increase in those types of loans significantly increases our exposure to the risks inherent in these types of loans and may result in higher losses in our loan portfolio and increases in our allowance for loan losses.

We may not be able to successfully manage our growth or implement our growth strategies after the merger, which may adversely affect our results of operations and financial condition.

A key aspect of our business strategy is our anticipated growth after the stock offering and the merger. Our ability to grow will depend, in part, upon our ability to use the net proceeds from the stock offering, attract additional deposits and identify additional loan and investment opportunities. Our ability to manage our future growth successfully also will depend on whether we can maintain adequate capital levels, cost controls and credit risk controls, including asset quality.

As we implement our business strategy, we expect to incur increased personnel, occupancy and other operating expenses. We generally must absorb those higher expenses while we continue to generate new deposits, and there is generally a longer lead time involved in redeploying new deposits into attractively priced loans and other higher yielding earning assets. Thus, even if we efficiently execute our business growth strategy our earnings may be depressed in the near term.

Our belief that cost savings and revenue enhancements are achievable is a forward-looking statement that is inherently uncertain. Our actual cost savings and revenue enhancements, if any, cannot be quantified at this time. Any actual cost savings or revenue enhancements will depend on future expense levels and operating results, the timing of certain events and general industry, regulatory and business conditions. Many of these events will be beyond our control.

Our plan to diversify and expand our loan portfolio to increase commercial real estate, construction lending and consumer lending activities will expose us to increased lending risks.

Our business plan adopted in connection with the conversation and merger transactions contemplates an expansion of our lending activities to include commercial real estate, construction and, to a lesser extent, commercial and consumer lending. We anticipate that a majority of the growth in our loan portfolio during the period covered by our business plan will be attributable to these new lending activities. Accordingly, we estimate that a majority of the proceeds of the offering not used to fund the potential cash portion of the merger consideration will ultimately be used for the expansion of our commercial real estate, construction and consumer lending activities.

Commercial real estate loans are considered to have greater credit risk than one-to four-family residential loans because the repayment of such loans typically depends on the successful operations and income stream of the borrower’s business and the real estate securing the loan as collateral, which can be significantly affected by economic conditions. In addition, these loans generally carry larger balances to single borrowers or related groups

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of borrowers than one-to four-family owner occupied residential mortgage loans. Accordingly, an adverse development with respect to one loan or one credit relationship can expose us to greater risk of loss compared to an adverse development with respect to a single one-to four-family residential mortgage loan. Construction financing generally involves greater credit risk than long-term financing on improved, owner-occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions. If the estimate of construction cost proves to be inaccurate, we may be required to advance additional funds beyond the amount originally committed in order to protect the value of the property. Moreover, if the estimated value of the completed project proves to be inaccurate, the borrower may hold a property with a value that is insufficient to assure full repayment. Construction loans also expose us to the risk that improvements will not be completed on time in accordance with specifications and projected costs. In these cases, we face the risk that collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. Particularly with respect to home equity loans secured by second mortgages, decreases in real estate values could adversely affect the value of the property serving as collateral for our loans. Thus, the recovery on such property could be insufficient to compensate us for the value of these loans.

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FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which can be identified by the use of such words as estimate, project, believe, intend, anticipate, plan, seek, expect and similar expressions. These forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;

• statements regarding our business plans and prospects and growth and operating strategies;

• statements regarding the asset quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

These forward-looking statements are subject to significant risks, assumptions and uncertainties, including, among other things, the following important factors that could affect the actual outcome of future events:

• significantly increased competition among depository and other financial institutions;

• inflation and changes in market interest rates that reduce our net interest margin or reduce the fair value of financial instruments;

• general economic conditions, either nationally or in our market area, that are worse than expected;

• adverse changes in the securities markets;

• legislative or regulatory changes that adversely affect our business;

• our ability to successfully integrate Victory Bank;

• loss of key personnel in the merger with Victory Bank;

• our ability to enter new markets successfully and take advantage of growth opportunities, and the possible short-term dilutive effect of potential acquisitions or de novo branches, if any;

• changes in management’s estimate of the adequacy of the allowance for loan and lease losses;

• effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board;

• costs and effects of litigation and unexpected or adverse outcomes in such litigations;

• changes in consumer spending, borrowing and savings habits;

• changes in accounting policies and practices, as may be adopted by bank regulatory agencies and the Financial Accounting Standards Board;

• inability of third-party providers to perform their obligations to us; and

• changes in our organization, compensation and benefit plans.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. We discuss these and other uncertainties in “Risk Factors.”

We do not assume any duty to update any forward-looking statements after the date of this prospectus.

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SELECTED FINANCIAL AND OTHER DATA OF HUNTINGDON VALLEY BANK

The following tables set forth selected historical financial and other data of Huntingdon Valley Bank for the periods and at the dates indicated. The information at June 30, 2013 and 2012 and for the years ended June 30, 2013 and 2012 is derived in part from, and should be read together with, the audited financial statements and notes thereto of Huntingdon Valley Bank beginning at page [—] of this prospectus. The selected historical financial and other data at December 31, 2013 and for the six months ended December 31, 2013 and 2012 was not audited, but in the opinion of management, represents all adjustments necessary for a fair presentation. All of these adjustments are normal and recurring. The results of operations for the six months ended December 31, 2013 are not necessarily indicative of the results of operations that may be expected for the entire year or any other period.

	At December 31,		At June 30,
	2013		2013		2012
	(Unaudited)
	(In thousands)
Selected Financial Condition Data:
Total assets	$	163,423	$	153,373	$	155,914
Cash and cash equivalents		22,898		7,073		11,011
Investment securities		51,259		51,807		49,110
Loans receivable, net		75,789		74,572		69,614
Loans held for sale		3,745		9,293		16,393
Deposits		140,631		133,540		133,717
Borrowed funds		7,000		3,000		3,000
Securities sold under agreements to repurchase		3,759		4,031		5,204
Total equity		10,261		10,566		11,627

	Six Months Ended December 31,					Years Ended June 30,
	2013			2012		2013			2012
	(Unaudited)
	(In thousands)
Selected Operating Data:
Total interest income	$	2,545		$	2,569	$	4,994		$	5,545
Total interest expense		435			521		982			1,211
Net interest income		2,110			2,048		4,012			4,334
(Credit) Provision for loan losses		(31	)		80		120			178
Net interest income after provision for loan losses		2,141			1,968		3,892			4,156
Total other income		1,202			1,493		2,700			2,749
Total operating expenses		3,252			3,220		6,511			6,103
Income before income taxes		91			241		81			802
Income tax (benefit)/expense		36			72		(42	)		(110	)
Net income	$	55		$	169	$	123		$	912

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	At or for the Six Months Ended December 31,			At or for the Years Ended June 30,
	2013			2013			2012
	(Unaudited)
Selected Financial Ratios and Other Data:
Performance Ratios:
Return on assets (ratio of net income to average total assets)		0.1	%		0.1	%		0.6	%
Return on equity (ratio of net income to average equity)		1.0	%		1.1	%		8.4	%
Interest rate spread(1)		2.8	%		2.7	%		3.0	%
Net interest margin(2)		2.8	%		2.7	%		3.0	%
Efficiency ratio(3)		98.2	%		97.0	%		86.2	%
Non-interest expense to average total assets		4.1	%		4.2	%		4.0	%
Average interest-earning assets to average interest-bearing liabilities		112.7	%		109.0	%		109.2	%
Loans to deposits		53.9	%		62.8	%		64.3	%
Asset Quality Ratios:
Non-performing assets to total assets(4)		1.6	%		2.4	%		2.7	%
Non-performing loans to total loans		2.7	%		1.9	%		3.5	%
Allowance for loan losses to non-performing loans		24.1	%		40.2	%		19.4	%
Allowance for loan losses to total loans		0.6	%		0.8	%		0.7	%
Net charge-offs as a percentage of average loans outstanding		0.1	%		0.0	%		0.4	%
Capital Ratios:
Average equity to average assets		6.6	%		7.4	%		7.1	%
Equity to total assets at end of period		6.3	%		6.9	%		7.5	%
Total capital to risk-weighted assets		12.8	%		12.9	%		13.9	%
Tier 1 capital to risk-weighted assets		12.3	%		12.3	%		13.3	%
Tier 1 capital to average assets		6.9	%		7.2	%		7.5	%
Other Data:
Number of full service retail offices		4			5			5
Number of employees		63			62			61

(1) Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

(2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period.

(3) The efficiency ratio represents non-interest expense divided by the sum of net-interest income and non-interest income.

(4) Non-performing assets consist of non-performing loans and real estate owned.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF VICTORY BANCORP

The summary consolidated financial information presented below is derived in part from Victory Bancorp’s consolidated financial statements. The following is only a summary and you should read it in conjunction with the consolidated financial statements and notes appearing elsewhere in this prospectus. The information at December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012 is derived in part from the audited consolidated financial statements.

	At December 31,
	2013		2012
	(In thousands)
Selected Financial Condition Data:
Total assets	$	141,319	$	127,296
Cash and cash equivalents		2,389		5,577
Investment securities		1,901		4,885
Loans receivable, net		129,337		109,158
Deposits		120,126		112,338
Borrowed funds		7,665		2,000
Total shareholders’ equity	$	12,958	$	12,552

	For the Years Ended December 31,
	2013			2012
	(In thousands)
Selected Operating Data:
Total interest income	$	6,839		$	5,707
Total interest expense		1,030			1,074
Net interest income		5,809			4,633
Provision for loan losses		348			472
Net interest income after provision for loan losses		5,461			4,161
Total non-interest income		969			369
Total non-interest expenses		5,247			4,057
Income before income taxes		1,183			473
Income tax (expense)/benefit		(473	)(1)		1,060	(1)
Net income		710			1,533
Preferred stock dividends		218			217
Net income available to common shareholders	$	492		$	1,316

(1) In 2012, Victory Bancorp reduced its Federal Income Tax valuation allowance to $0 as a result of management’s estimate of net operating loss carryforwards more likely than not to be utilized. This is a non-recurring event. See Note 10 to Victory Bancorp’s Consolidated Financial Statements for additional information on Federal Income Taxes.

35

	At or for the Years Ended December 31,
	2013			2012
Selected Financial Ratios and Other Data:
Performance Ratios:
Return on assets (ratio of net income to average total assets)		0.5	%		1.3	%
Return on equity (ratio of net income to average equity)		5.6	%		13.4	%
Interest rate spread(1)		4.4	%		4.0	%
Net interest margin(2)		4.5	%		4.2	%
Efficiency ratio(3)		77.4	%		81.1	%
Non-interest expense to average total assets		3.9	%		3.5	%
Average interest-earning assets to average interest-bearing liabilities		121.1	%		119.9	%
Loans to deposits		109.4	%		98.3	%
Asset Quality Ratios:
Non-performing assets to total assets(4)		0.4	%		1.3	%
Non-performing loans to total loans		0.4	%		1.5	%
Allowance for loan losses to non-performing loans		334.0	%		79.7	%
Allowance for loan losses to total loans		1.3	%		1.2	%
Net chargeoffs as a percentage of average loans outstanding		—	%		0.2	%
Capital Ratios:
Average equity to average assets		9.4	%		9.8	%
Equity to total assets at end of period		9.2	%		9.9	%
Total capital to risk-weighted assets		10.2	%		10.3	%
Tier 1 capital to risk-weighted assets		9.0	%		9.1	%
Tier 1 capital to average assets		8.2	%		8.5	%
Other Data:
Number of full service offices		1			1
Number of employees		30			27

(1) Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

(2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period.

(3) The efficiency ratio represents total non-interest expense divided by the sum of net-interest and non-interest income.

(4) Non-performing assets consist of non-performing loans.

36

SUMMARY SELECTED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

The following table shows selected unaudited financial information on a pro forma condensed consolidated basis giving effect to the stock offering and the merger, assuming the offering is completed at the maximum, as adjusted of the offering range based on the assumptions set forth below and under “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger” beginning on page[—] of this prospectus. The pro forma unaudited condensed consolidated financial data gives effect to the merger (i) using the purchase method of accounting, as required by accounting principles generally accepted in the United States of America; and (ii) as if the merger had become effective at the end of the periods presented, in the case of balance sheet information, and at the beginning of the periods presented, in the case of income statement information.

The pro forma unaudited statements are provided for informational purposes only. The pro forma financial information presented is based on management’s assumptions and is not necessarily indicative of the actual results that would have been achieved had the conversion and the merger been consummated on December 31, 2013 or June 30, 2013, or at the beginning of the periods presented, and is not indicative of future results. The pro forma unaudited financial statements should be read in conjunction with the consolidated financial statements and the notes thereto of HV Bank and Victory Bancorp contained elsewhere in this document.

The shareholders’ equity represents the combined book value of the common shareholders’ ownership of HV Bancorp and Victory Bancorp computed in accordance with accounting principles generally accepted in the United States. This amount is not intended to represent fair market value nor does it represent amounts, if any, that would be available for distribution to shareholders in the event of liquidation.

The unaudited pro forma net income and common shareholders’ equity derived from the above assumptions are qualified by the statements set forth under this caption and should not be considered indicative of the market value of HV Bancorp common stock or the actual results of operations of HV Bancorp or Victory Bancorp for any period. Such pro forma data may be materially affected by the actual proceeds from the sale of shares of HV Bancorp in the conversion, the actual expenses incurred in connection with the conversion and the merger, and conversion or exchange of the Series E convertible preferred stock. See “Use of Proceeds.”

You should read this summary pro forma information in conjunction with the information under “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger” beginning on page [—] of this prospectus.

	At or For Six Months Ended December 31, 2013		At or For Year Ended June 30, 2013
Pro Forma Combined Financial Condition Data
Total assets	$	315,503	$	299,821
Cash and cash equivalents		34,666		18,817
Investment securities available-for-sale		48,140		51,671
Investment securities held-to-maturity		5,020		4,432
Loans receivable, net		206,412		196,443
Intangible assets		1,002		1,263
Deposits		261,020		254,167
Borrowings		18,402		8,762
Shareholders’ equity		33,739		34,044

37

	At or For Six Months Ended December 31, 2013			At or For Year Ended June 30, 2013
Pro Forma Combined Operating Data
Interest income	$	5,880		$	10,710
Interest expense		(858	)		(1,898	)
Net interest income		5,022			8,812
Provision for loan losses		(102	)		(608	)
Net interest income after provision for loan losses		4,920			8,204
Non-interest income		1,610			3,408
Non-interest expense		(5,943	)		(11,423	)
Income before income taxes		587			189
Income tax (expense) benefit		(273	)		1,137
Net income	$	314		$	1,326
Preferred stock dividends		(18	)		(32	)
Net income available to common shareholders	$	296		$	1,294

38

USE OF PROCEEDS

The following table shows how we intend to use the net proceeds of the offering. The actual net proceeds will depend on the number of shares of common stock sold in the offering, any cash consideration paid in the merger, and the expenses incurred in connection with the offering and the merger. Payments for shares made through withdrawals from deposit accounts at HV Bank will reduce HV Bank’s deposits and will not result in the receipt of new funds for investment. See “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger” for the assumptions used to arrive at these amounts.

	Minimum of Offering Range						Midpoint of Offering Range						Maximum of Offering Range						Maximum, as adjusted, of Offering Range
	850,000 Shares at $10.00 Per Share			Percent of Net Proceeds			1,000,000 Shares at $10.00 Per Share			Percent of Net Proceeds			1,150,000 Shares at $10.00 Per Share			Percent of Net Proceeds			1,322,500 Shares at $10.00 Per Share			Percent of Net Proceeds
	(Dollars in thousands)
Gross offering proceeds	$	8,500					$	10,000					$	11,500					$	13,225
Less: offering expenses		(973	)					(1,016	)					(1,060	)					(1,115	)
Net offering proceeds	$	7,527			100.00	%	$	8,984			100.00	%	$	10,440			100.00	%	$	12,110			100.0	%
Less:
Proceeds contributed to HV Bank	$	(3,764	)		(50.00	)%	$	(4,492	)		(50.00	)%	$	(5,220	)		(50.0	)%	$	(6,055	)		(50.0	)%
Loan to employee stock ownership plan		(990	)		(13.15	)%		(1,165	)		(12.97	)%	$	(1,318	)		(12.62	)%		(1,422	)		(11.74	)%
Cash portion of merger consideration, if any		(1,798	)		(23.90	)%		(385	)		(4.28	)%		—			—	%		—			—	%
Proceeds remaining for HV Bancorp	$	975			12.95	%	$	2,942			32.75	%	$	3,902			37.38	%	$	4,633			38.26	%

39

The net offering proceeds may vary because total expenses relating to the offering may be more or less than our estimates. For example, our expenses would increase if a syndicated community offering were used to sell shares of common stock not purchased in the subscription offering and any community offering. Payments for shares made through withdrawals from existing deposit accounts will not result in the receipt of new funds for investment but will result in a reduction of HV Bank’s deposits.

Initially, HV Bancorp intends to invest the net offering proceeds not used to acquire Victory Bancorp in short-term liquid investments.

We are undertaking the offering at this time in order to increase our capital and have the capital resources available to expand our business. For further information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations of HV Bank—Business Strategy after the Conversion and the Merger.” The offering proceeds will increase our capital resources and the amount of funds available to us for lending and investment purposes and provide cash to undertake the merger. The proceeds will also give us greater flexibility to expand our branch network and expand the products and services we offer to our customers.

There has been no determination as to any allocation of the proceeds other than as described above. Possible uses of the net proceeds include:

• to finance the purchase of shares of common stock in the offering by the employee stock ownership plan;

• to invest in securities;

• to downstream funds to HV Bank;

• to repurchase its shares of capital stock, subject to regulatory restrictions;

• to pay dividends to our shareholders;

• to finance possible acquisitions of other financial institutions or branches and other financial services businesses, although there are no specific plans to do so at this time; and

• for general corporate purposes.

Under current FDIC regulations, we may not repurchase shares of our common stock during the first year following the offering, except when extraordinary circumstances exist and with prior regulatory approval. The loan that will be used to fund the purchases by the employee stock ownership plan will accrue interest.

HV Bank intends to invest the proceeds it receives from the offering initially in short-term, liquid investments. Over time, HV Bank may use the proceeds that it receives from the stock offering as follows:

• to fund new loans, with an emphasis on commercial loans;

• for general corporate purposes;

• to support new products and services;

• to expand its retail banking franchise by establishing de novo branches, by acquiring existing branches, or by acquiring other financial institutions or other financial services companies, although we have no specific plans to do so at this time other than the acquisition of Victory Bancorp; and

• to invest in securities.

The use of the proceeds outlined above may change, based on changes in interest rates, equity markets, laws and regulations affecting the financial services industry, our relative position in the financial services industry, the attractiveness of potential acquisitions to expand our operations, and overall market conditions. We expect our return on equity to decrease as compared to our performance in recent years until we are able to utilize effectively the additional capital raised in the stock offering. Until we can increase our net interest income and non-interest income, we expect our return on equity to remain below the industry average, which may negatively affect the value of our common stock. See “Risk Factors—Risks Related to This Offering.”

Except as described above and except for the merger with Victory Bancorp, neither HV Bancorp nor HV Bank has any specific plans, arrangements or understandings for the investment of the proceeds of this offering, and has not allocated a specific portion of the proceeds to any particular use. For a discussion of our business reasons for undertaking the offering, see “The Conversion and Stock Offering—Reasons for the Conversion and Offering.”

40

OUR DIVIDEND POLICY

Following the offering, our Board of Directors will consider a policy of paying regular cash dividends on our common stock. We cannot guarantee that we will pay dividends or that, if paid, we will not reduce or eliminate dividends in the future. The Board of Directors may declare and pay periodic special cash dividends in addition to, or in lieu of, regular cash dividends. In determining whether to declare or pay any dividends, whether regular or special, the Board of Directors will take into account our financial condition and results of operations, tax considerations, capital requirements, industry standards and economic conditions. Interest payments on HV Bancorp subordinated debt securities will rank senior to dividend payments on all of our capital stock.

Any HV Bancorp preferred stock will have priority over our common stock with respect to dividends and distribution of assets, but will rank junior to all our outstanding indebtedness for borrowed money. The regulatory restrictions that affect the payment of dividends by HV Bank to us discussed below will also be considered. We cannot guarantee that we will pay dividends or that, if paid, we will not reduce or eliminate dividends in the future.

HV Bancorp will be subject to Federal Reserve Board regulations and Pennsylvania law relating to its ability to pay dividends to its shareholders. HV Bancorp will not be subject to FDIC or Department of Banking regulatory restrictions on the payment of dividends. However, our ability to pay dividends may depend, in part, upon dividends we receive from HV Bank because we initially will have no source of income other than dividends from HV Bank, earnings from the investment of the net proceeds from the offering that we retain, and interest payments received on our loan to the employee stock ownership plan. We expect that HV Bancorp will retain approximately $3.9 million from the net proceeds raised in the offering at the maximum of the offering range based upon our estimate of offering and merger-related expenses and other assumptions described in “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger.”

Pennsylvania and federal banking regulations limit dividends and other distributions from HV Bank to us. In addition, HV Bancorp may not make a distribution that would constitute a return of capital during the three-year term of the business plan submitted in connection with the offering. No insured depository institution may make a capital distribution if it is undercapitalized, or if, after making the distribution, the institution would be undercapitalized.

The Pennsylvania Banking Code provides that cash dividends may be declared and paid by a bank only out of accumulated net earnings and that, prior to the declaration of any dividend, if the surplus of the bank is less than the amount of its capital, the bank shall, until surplus is equal to such amount, transfer to surplus an amount which is at least 10% of its net earnings for the period since the end of the last fiscal year or for any shorter period since the declaration of a dividend. If the surplus of the bank is less than 50% of the amount of capital, no dividend may be declared or paid without the prior approval of the Department of Banking until such surplus is equal to 50% of the bank’s capital. A bank may invest the surplus funds in the same manner as deposits, subject to certain exceptions.

The Department of Banking has the authority to prohibit the payment of cash dividends by a bank when it determines such payment to be an unsafe or unsound banking practice under the then existing circumstances.

The Federal Deposit Insurance Act generally prohibits all payments of dividends by any bank that is in default of any assessment of the FDIC.

The Federal Reserve Board and the FDIC have formal and informal policies which provide that insured banks and bank holding companies should generally pay dividends only out of current operating earnings, with some exceptions. The federal banking laws further limit the ability of banks to pay dividends if they are not classified as well capitalized or adequately capitalized. Federal banking regulators also have the authority to prohibit banks and bank holding companies from paying a dividend if the regulators deem the payment to be an unsafe or unsound practice.

For additional information, see “Regulation and Supervision.”

41

MARKET FOR COMMON STOCK OF HV BANCORP

We have not previously issued common stock and there is currently no established market for the common stock. We have applied for approval to list our shares of common stock on the Nasdaq Capital Market under the symbol “HVBC.” Griffin Financial Group intends to become a market maker in our common stock following the offering, but it is under no obligation to do so. We cannot assure you that other market makers will be obtained or that an active and liquid trading market for the common stock will develop or, if developed, will be maintained.

The development of a public market having the desirable characteristics of depth, liquidity and orderliness depends on the existence of a sufficient number of willing buyers and sellers, the presence of which is not within our control or that of any market maker. The number of active buyers and sellers of our common stock at any particular time may be limited, which may have an adverse effect on the price at which our common stock can be sold. There can be no assurance that persons purchasing common stock in the offering will be able to sell their shares at or above the $10.00 price per share in the offering. Purchasers of our common stock should have a long-term investment intent and should recognize that there may be a limited trading market in the common stock.

CAPITALIZATION

The following tables present the historical capitalization of HV Bank and Victory Bancorp at December 31, 2013 and the pro forma consolidated capitalization of HV Bancorp after giving effect to the offering proceeds and the merger (referred to as “pro forma” information). The tables depict adjustments to capitalization resulting first from the offering, then from the merger only, and then depict HV Bancorp’s capitalization following the offering and merger at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range. The pro forma capitalization gives effect to the assumptions list under “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger”, based on the sale of the number of shares of common stock indicated in each table. At the minimum and midpoint, the tables assume that 81% of Victory Bancorp Series E convertible preferred stock converts to Victory Bancorp common stock and 19% of Victory Bancorp Series E convertible preferred stock exchanges for Victory Bancorp subordinated debt. At the maximum and maximum, as adjusted, the tables assume that 100% of Victory Bancorp Series E convertible preferred stock converts to Victory Bancorp common stock. These tables do not reflect the issuance of additional shares as a result of the exercise of options granted under the proposed stock-based incentive plans. A change in the number of shares to be issued in the offering may materially affect pro forma capitalization. We are offering our common stock on a best efforts basis. We must sell a minimum of 850,000 shares of common stock to compete the offering.

	HV Bank Historical			Offering Adjustments 850,000 at Minimum of Offering Range(1)			HV Bank HV Bancorp, Inc. Post Offering			Victory Bancorp Historical			Minimum Merger Adjustments			Pro Forma Capitalization Based Upon the Sale of 850,000 Shares at $10.00 per share(2)
	(In thousands)
Deposits(3)	$	140,631		$	—		$	140,631		$	120,126		$	263		$	261,020
Borrowings		10,759			—			10,759			7,665			(22	)		18,402
Subordinated debt		—			—			—			—			497			497
Total deposits and borrowed funds	$	151,390		$	—		$	151,390		$	127,791		$	738		$	279,919
Stockholders’ equity:
Preferred stock:	$	—		$	—		$	—		$	6,047		$	(2,616	)	$	3,431
Common stock(4)		—			8			8			1,025			(1,017	)		16
Additional paid-in capital		—			7,520			7,520			9,221			(1,224	)		15,516
Retained earnings		11,502			—			11,502			(3,356	)		3,195			11,341
Accumulated other comprehensive income		(1,241	)		—			(1,241	)		21			(21	)		(1,241	)
Less: common stock acquired by employee stock ownership plan(5)		—			(990	)		(990	)		—			—			(990	)
Less: common stock acquired by stock-based incentive plan(6)		—			(660	)		(660	)		—			—			(660	)
Total stockholders' equity	$	10,261		$	5,877		$	16,138		$	12,958		$	(1,683	)	$	27,413
Tangible stockholders’ equity	$	10,261			—		$	16,138		$	12,958			—		$	26,579
Common stockholders’ equity	$	10,261			—		$	16,138		$	6,911			—		$	23,982
Tangible common stockholders’ equity	$	10,261			—		$	16,138		$	6,911			—		$	23,148
Total stockholders’ equity as a percentage of pro forma total assets		6.28	%		—			9.53	%		9.17	%		—			8.85	%
Tangible stockholders’ equity as a percentage of pro forma tangible assets		6.28	%		—			9.53	%		9.17	%		—			8.61	%
Tangible common stockholders’ equity as a percentage of pro forma tangible assets		6.28	%		—			9.53	%		4.89	%		—			7.50	%
Pro forma shares outstanding:
Shares offered for sale in the conversion		—			850,000			850,000			—			—			850,000
Shares issued to shareholders of Victory Bancorp		—			—			—			—			800,485			800,485
Total shares outstanding		—			850,000			850,000			—			800,485			1,650,485
(see footnotes following tables)

	HV Bank Historical			Offering Adjustments 1,000,000 at Midpoint of Offering Range(1)			HV Bank HV Bancorp, Inc. Post Offering			Victory Bancorp Historical			Midpoint Merger Adjustments			Pro Forma Capitalization Based Upon the Sale of 1,000,000 Shares at $10.00 per share(2)
	(In thousands)
Deposits(3)	$	140,631		$	—		$	140,631		$	120,126		$	263		$	261,020
Borrowings		10,759			—			10,759			7,665			(22	)		18,402
Subordinated debt		—			—			—			—			497			497
Total deposits and borrowed funds	$	151,390		$	—		$	151,390		$	127,791		$	738		$	279,919
Stockholders’ equity:
Preferred stock:	$	—		$	—		$	—		$	6,047		$	(2,616	)	$	3,431
Common stock(4)		—			10			10			1,025			(1,016	)		19
Additional paid-in capital		—			8,974			8,974			9,221			187.06			18,382
Retained earnings		11,502			—			11,502			(3,356	)		3,195			11,341
Accumulated other comprehensive income		(1,241	)		—			(1,241	)		21			(21	)		(1,241	)
Less: common stock acquired by employee stock ownership plan(5)		—			(1,165	)		(1,165	)		—			—			(1,165	)
Less: common stock acquired by stock-based incentive plan(6)		—			(777	)		(777	)		—			—			(777	)
Total stockholders’ equity	$	10,261		$	7,042		$	17,303		$	12,958		$	(271	)	$	29,990
Tangible stockholders’ equity	$	10,261			—		$	17,303		$	12,958			—		$	29,156
Common stockholders’ equity	$	10,261			—		$	17,303		$	6,911			—		$	26,559
Tangible common stockholders’ equity	$	10,261			—		$	17,303		$	6,911			—		$	25,725
Total stockholders’ equity as a percentage of pro forma total assets		6.28	%		—			10.15	%		9.17	%		—			9.60	%
Tangible stockholders’ equity as a percentage of pro forma tangible assets		6.28	%		—			10.15	%		9.17	%		—			9.36	%
Tangible common stockholders’ equity as a percentage of pro forma tangible assets		6.28	%		—			10.15	%		4.89	%		—			8.26	%
Pro forma shares outstanding:
Shares offered for sale in the conversion		—			1,000,000			1,000,000			—			—			1,000,000
Shares issued to shareholders of Victory Bancorp		—			—			—			—			941,748			941,748
Total shares outstanding		—			1,000,000			1,000,000			—			941,748			1,941,748
(see footnotes following tables)

	HV Bank Historical			Offering Adjustments 1,150,000 at Maximum of Offering Range(1)			HV Bank HV Bancorp, Inc. Post Offering			Victory Bancorp Historical			Maximum Merger Adjustments			Pro Forma Capitalization Based Upon the Sale of 1,150,000 Shares at $10.00 per share(2)
	(In thousands)
Deposits(3)	$	140,631		$	—		$	140,631		$	120,126		$	263		$	261,020
Borrowings		10,759			—			10,759			7,665			(22	)		18,402
Subordinated debt		—			—			—			—			—			—
Total deposits and borrowed funds	$	151,390		$	—		$	151,390		$	127,791		$	241		$	279,422
Stockholders’ equity:
Preferred stock:	$	—		$	—		$	—		$	6,047		$	(2,616	)	$	3,431
Common stock(4)		—			12			12			1,025			(1,015	)		22
Additional paid-in capital		—			10,429			10,429			9,221			1,236.57			20,886
Retained earnings		11,502			—			11,502			(3,356	)		3,195			11,341
Accumulated other comprehensive income		(1,241	)		—			(1,241	)		21			(21	)		(1,241	)
Less: common stock acquired by employee stock ownership plan(5)		—			(1,318	)		(1,318	)		—			—			(1,318	)
Less: common stock acquired by stock-based incentive plan(6)		—			(879	)		(879	)		—			—			(879	)
Total stockholders’ equity	$	10,261		$	8,243		$	18,504		$	12,958		$	780		$	32,242
Tangible stockholders’ equity	$	10,261			—		$	18,504		$	12,958			—		$	31,240
Common stockholders’ equity	$	10,261			—		$	18,504		$	6,911			—		$	28,811
Tangible common stockholders’ equity	$	10,261			—		$	18,504		$	6,911			—		$	27,809
Total stockholders’ equity as a percentage of pro forma total assets		6.28	%		—			10.78	%		9.17	%		—			10.25	%
Tangible stockholders’ equity as a percentage of pro forma tangible assets		6.28	%		—			10.78	%		9.17	%		—			9.96	%
Tangible common stockholders' equity as a percentage of pro forma tangible assets		6.28	%		—			10.78	%		4.89	%		—			8.87	%
Pro forma shares outstanding:
Shares offered for sale in the conversion		—			1,150,000			1,150,000			—			—			1,150,000
Shares issued to shareholders of Victory Bancorp		—			—			—			—			1,046,804			1,046,804
Total shares outstanding		—			1,150,000			1,150,000			—			1,046,804			2,196,804
(see footnotes following tables)

	HV Bank Historical			Offering Adjustments 1,322,500 at Maximum, as Adjusted, of the Offering Range(1)			HV Bank HV Bancorp, Inc. Post Offering			Victory Bancorp Historical			Maximum, as Adjusted, Merger Adjustments			Pro Forma Capitalization Based Upon the Sale of 1,322,500 Shares at $10.00 per share(2)
	(In thousands)
Deposits(3)	$	140,631		$	—		$	140,631		$	120,126		$	263		$	261,020
Borrowings		10,759			—			10,759			7,665			(22	)		18,402
Subordinated debt		—			—			—			—			—			—
Total deposits and borrowed funds	$	151,390		$	—		$	151,390		$	127,791		$	241		$	279,422
Stockholders’ equity:
Preferred stock:	$	—		$	—		$	—		$	6,047		$	(2,616	)	$	3,431
Common stock(4)		—			13			13			1,025			(1,015	)		24
Additional paid-in capital		—			12,097			12,097			9,221			1,236.57			22,554
Retained earnings		11,502			—			11,502			(3,356	)		3,195			11,341
Accumulated other comprehensive income		(1,241	)		—			(1,241	)		21			(21	)		(1,241	)
Less: common stock acquired by employee stock ownership plan(5)		—			(1,422	)		(1,422	)		—			—			(1,422	)
Less: common stock acquired by stock-based incentive plan(6)		—			(948	)		(948	)		—			—			(948	)
Total stockholders’ equity	$	10,261		$	9,740		$	20,001		$	12,958		$	780		$	33,739
Tangible stockholders’ equity	$	10,261			—		$	20,001		$	12,958			—		$	32,737
Common stockholders’ equity	$	10,261			—		$	20,001		$	6,911			—		$	30,308
Tangible common stockholders’ equity	$	10,261			—		$	20,001		$	6,911			—		$	29,306
Total stockholders’ equity as a percentage of pro forma total assets		6.28	%		—			11.55	%		9.17	%		—			10.68	%
Tangible stockholders’ equity as a percentage of pro forma tangible assets		6.28	%		—			11.55	%		9.17	%		—			10.39	%
Tangible common stockholders’ equity as a percentage of pro forma tangible assets		6.28	%		—			11.55	%		4.89	%		—			9.30	%
Pro forma shares outstanding:
Shares offered for sale in the conversion		—			1,322,500			1,322,500			—			—			1,322,500
Shares issued to shareholders of Victory Bancorp		—			—			—			—			1,046,804			1,046,804
Total shares outstanding		—			1,322,500			1,322,500			—			1,046,804			2,369,304

1. For a discussion of the assumptions used in calculating the expenses of the offering, see “Pro Forma Data”. Shares issued and outstanding at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range are shown in each table above.

2. Reflects the issuance of merger shares to Victory Bancorp shareholders in the merger, at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range as shown in each table above.

3. Does not reflect withdrawals from deposit accounts for the purchase of common stock in the offering. Withdrawals to purchase common stock will reduce pro forma deposits by the amounts of the withdrawals.

4. Reflects total shares issued, including shares sold in the offering and shares issued in the merger.

5. Assumes that 6.0% of the shares of common stock issued in the stock offering and the merger will be acquired by the employee stock ownership plan in the offering with funds borrowed from HV Bancorp. Under accounting principles generally accepted in the United States, the amount of common stock to be purchased by the employee stock ownership plan represents unearned compensation and is, accordingly, reflected as reduction of capital. As shares are released to plan participants’ accounts, a compensation expense will be charged, along with a related tax benefit, and a reduction in the charge against capital will occur in the amount of the compensation expense recognized. Since the funds are borrowed from HBV Bancorp, the borrowing will be eliminated in consolidation and no liability, interest income or interest expense will be reflected in the consolidated financial statements of HBV Bancorp. See “Management of HV Bancorp–Tax-Qualified Benefit Plans-Employee Stock Ownership Plan and Trust.”

6. Assumes the purchase in the open market, at $10.00 per share, for restricted stock awards under the proposed stock-based incentive plan, of a number of shares equal to 4.0% of the outstanding shares of common stock (including shares to be issued in the merger). The shares are reflected as a reduction of shareholders’ equity. We may award shares of common stock under one or more stock-based benefit plans in excess of 4.0% of our total outstanding shares if the stock-based benefit plans are adopted more than one year following the stock offering. Accordingly, we may increase the awards beyond the amounts reflected in this table . See “Risk Factors—Risks Related to This Offering,” “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger” and “Management of HV Bancorp-Stock Benefit Plans-Stock-Based Benefit Plans.”

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ANTICIPATED BENEFITS OF THE CONVERSION AND THE MERGER

The boards of directors of both HV Bancorp and Victory Bancorp have determined that a merger of their two subsidiary banking institutions will provide a number of beneficial changes to the structure, operations and future potential of the combined institutions.

The proposed conversion and merger are being pursued by the parties for the following principal strategic reasons:

• The conversion will raise an estimated $9.0 million of new common equity (net of expenses, at the midpoint of the offering range) to immediately increase the equity base of HV Bank, enable balance sheet growth and increase lending capabilities through a higher loans-to-one borrower limit;

• The merger consideration will consist of newly issued stock of HV Bancorp;

• Except for funds used to repurchase outstanding preferred stock for cash, Victory Bancorp’s equity will be retained by HV Bancorp;

• The lending functions of each institution are complementary—HV Bank’s residential lending/mortgage banking operations and Victory Bancorp’s small business commercial banking function, which includes small business deposit and lending. Victory Bancorp’s small business lending includes Small Business Administration (“SBA”) lending programs. HV Bank’s and Victory Bancorp’s lending programs will continue post-merger and are expected to be expanded across HV Bank and into new markets not currently serviced by either institution;

• The senior management members of each institution are complementary—the residential lending, branch operations, finance and other management strength of HV Bank will be combined with the commercial lending/commercial deposit management strength of Victory Bancorp to create a management team filling all functional areas;

• HV Bank’s interest rate risk exposure from its fixed rate residential loan portfolio and investment portfolio can be mitigated through the addition of the new equity from the conversion, and from Victory Bancorp’s commercial loan portfolio and investment portfolio, which have shorter-term repricing characteristics than HV Bank’s portfolio;

• HV Bank will incorporate Victory Bancorp’s enhanced electronic delivery systems and technology to increase profitability through greater productivity and cost control, and to offer new and better products and services;

• Victory Bancorp’s strong credit risk metrics are expected to improve given the loan portfolio diversification and fair value adjustments implemented as part of merger accounting;

• Proceeds from the conversion stock offering and consummation of the merger are expected to enable HV Bank to introduce new business banking deposit products that can be marketed across its customer base and expanded market area;

• The market area coverage of the branch office network will be expanded given Victory Bancorp’s office location in northwestern Montgomery County, Pennsylvania and provide HV Bank an expanded area for residential mortgage operations; and

• The merger is expected to create a larger operating platform for the combined institutions and enable operating synergies.

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BUSINESS OF HV BANCORP AND HV BANK

In this section, references to “we,” “us” and “our” refer to HV Bancorp and/or HV Bank, as applicable.

Huntingdon Valley Bank (“HV Bank”) was organized under the laws of the Commonwealth of Pennsylvania in 1871. We have offices in Montgomery, Bucks and Philadelphia counties, Pennsylvania. We are a community-oriented mutual savings institution offering a variety of financial products and services to meet the needs of the communities it serves. We deliver personalized service and respond promptly to customer needs and inquiries. We believe that our community orientation is attractive to our customers and distinguishes us from larger banks that operate in our market area. Our principal business consists of attracting retail deposits from the general public in the areas surrounding our main office and investing those deposits, together with funds generated from operations, primarily in one-to four-family residential mortgage loans and, to a lesser extent, commercial real estate loans. We will hold our loans for long-term purposes if we deem appropriate, but we primarily sell our loans in the secondary market. We also invest in various investment securities. Our revenue is derived principally from interest on loans and investments. Our primary sources of funds are deposits, and principal and interest payments on loans and securities.

HV Bank was founded in 1871 as a loan and building association with the name “Huntingdon Valley Perpetual Savings and Building Association.” Five years later, the name of the association was changed to “Huntingdon Valley Building & Loan Association.” In 1951, the association converted to a federal thrift charter and changed its name to “Huntingdon Valley Federal Savings & Loan Association” and became federally insured. In 1997, the savings bank changed its name to “Huntingdon Valley Federal Savings Bank” under its federal charter. In January 2000, we changed our corporate name to “Huntingdon Valley Bank.” The change in corporate title signified HV Bank’s desire to broaden and expand its services and strengthen its community presence. On July 1, 2003, Huntingdon Valley Bank converted from a federally chartered mutual savings bank to a Pennsylvania chartered mutual savings bank.

Subject to approval by our members and in accordance with the Plan of Conversion adopted by our Board of Trustees, HV Bank will convert from a Pennsylvania chartered mutual savings bank to a Pennsylvania chartered commercial stock bank and become a wholly owned subsidiary of HV Bancorp, a Pennsylvania corporation and bank holding company in formation. HV Bancorp was recently formed and has no operations. Accordingly, the reported results for the six months ended December 31, 2013 and year ended June 30, 2013, relate solely to the operations of HV Bank.

HV Bank is regulated by the Department of Banking and the FDIC and its deposits are insured up to applicable legal limits by the FDIC under the Deposit Insurance Fund. HV Bank is a member of the Federal Home Loan Bank System. Upon consummation of the conversion, HV Bancorp will become a registered bank holding company regulated by the Federal Reserve Board.

At December 31, 2013, we had $163.4 million in total assets, $10.3 million in total equity, $75.8 million in net loans and $140.6 million in deposits.

Market Area

We are headquartered in Huntingdon Valley, Pennsylvania, which is located in the northeast suburban area of metropolitan Philadelphia. We primarily serve communities located in Montgomery, Bucks and Philadelphia counties in Pennsylvania from our four full service bank branch offices, two limited service offices, one loan production office and one administrative office.

Our markets are demographically attractive, close to the business and financial district of Center City Philadelphia, and within commuting distance of Northern New Jersey and New York City. Philadelphia, Montgomery and Bucks Counties comprise the 1^st, 3^rd and 4^th largest counties in Pennsylvania, respectively, in terms of population. In terms of median household income and median disposable income, Montgomery and Bucks Counties rank 2^nd and 3^rd in Pennsylvania in each category. The median value of owner occupied homes in Bucks County is nearly double the statewide median value, and home values in Bucks and Montgomery County counties rank 2^nd and 3^rd respectively of all the counties in Pennsylvania.

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The region’s economy is heavily based on education, health and social services, which constitute the most prominent employment sector, comprising approximately 21% of total employment. Trade, transportation, and utilities is the second largest employment sector in the Philadelphia economy, which approximates 18% of total employment, followed by professional and business services (approximating 16% of employment) and government (approximating 13% of total employment). Growth sectors of the local economy include the life science and healthcare industries, whose expansion has been fostered by the presence of major research universities locally and a highly educated technically proficient workforce.

The Philadelphia metropolitan area is a leading region for the life sciences sector, including the areas of biotech, pharmaceuticals, devices, diagnostics, and healthcare. The region is home to nearly 1,200 life science establishments including global pharmaceutical leaders, medical device and diagnostics, biotech and contract research organizations. Greater Philadelphia has more than 197 hospitals and more than 15 major health systems, four children’s hospitals and six medical schools. In addition, the region is home to major teaching hospitals and is a nationally leading location for clinical trials.

The city of Philadelphia is home to many Fortune 500 companies, including cable television and internet provider Comcast; insurance companies CIGNA and Lincoln Financial Group; energy company Sunoco; food services company Aramark; paper and packaging company Crown Holdings Incorporated; diversified producer Rohm and Haas Company; the pharmaceutical company Glaxo SmithKline; the helicopter division of Boeing Co.; and automotive parts retailer Pep Boys. The city is also home to many universities and colleges.

Montgomery County includes highly urbanized centers, villages and rural farmland and comprises 487 square miles in suburban Philadelphia. Montgomery County has been subject to large-scale consolidation of local community banks over the last several years primarily by larger, out-of-state financial institutions. According to US Census Bureau statistics, Montgomery County had strong population growth from 2000 to 2010 with an increase of 6.6%, which is almost double that of the Pennsylvania growth rate of 3.4%. As of 2010, homeownership in the county of 73.8% was slightly above the state average of 70.6%, but the median value of an owner-occupied home was 82.5% higher than that of the state average at $297,900 compared to $163,200 in 2010. Similarly, the median household income of Montgomery County in 2010 was approximately $78,400, or 51.6% higher than the state average of $51,700. Montgomery County has a high density of commercial enterprises, led by the health services, personal services and business services industries. In 2008 it was named the 9th Best Place to Raise a Family by Forbes.

Bucks County is the fourth largest county in the Commonwealth of Pennsylvania with a population estimated at 625,000 according to 2010 US Census Bureau data. Bucks County comprises 604 square miles in suburban Philadelphia and is home to over 6% of Pennsylvania’s non-farm businesses. As of 2010, homeownership in the county was 78.2%, which is above the state average of 70.6%, and the median value of an owner-occupied home was 91.4% higher than that of the state wide median.

Competition

We face significant competition for the attraction of deposits and origination of loans. Our most direct competition for deposits has historically come from the several financial institutions operating in our market area and, to a lesser extent, from other financial service companies such as brokerage firms, credit unions and insurance companies. We also face competition for investors’ funds from money market funds, mutual funds and other corporate and governmental securities. Banks owned by large bank holding companies such as PNC Financial Services Group, Inc., Wells Fargo & Company, TD Bank, Santander and Citizens Financial Group, Inc. also operate in our market area. These institutions are significantly larger than us and, therefore, have significantly greater resources.

Our competition for loans comes primarily from financial institutions in our market area and, to a lesser extent, from other financial service providers such as mortgage companies and mortgage brokers. Competition for loans also comes from the increasing number of non-depository financial service companies entering the mortgage market such as insurance companies, securities companies and specialty finance companies.

We expect competition to remain intense in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. Technological advances, for

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example, have lowered the barriers to market entry, allowed banks and other lenders to expand their geographic reach by providing services over the Internet and made it possible for non-depository institutions to offer products and services that traditionally have been provided by banks. Changes in federal law permit affiliation among banks, securities firms and insurance companies, which promotes a competitive environment in the financial services industry. Competition for deposits and the origination of loans could limit our future growth.

Lending Activities.

Residential Mortgage Loans. Our principal lending activity is the origination of residential mortgage loans. To a lesser extent, we also originate home equity loans and home equity lines of credit, or HELOC’s, as well as loans secured by commercial real estate and other properties.

We do not offer “interest only” loans, where the borrower pays interest for an initial period after which the loan converts to a fully amortizing loan, nor do we offer “Option ARM” or negative amortization loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan. We also do not make loans that are known as “sub-prime” or “Alt-A” loans.

For the six months ended December 31, 2013, approximately 85% of the one-to four-family residential mortgage loans were originated for home purchases, and 15% were for refinancings. For the year ended June 30, 2013, approximately 80% of the one-to four-family residential mortgage loans were originated for home purchases, and 20% were refinancings.

A portion of our residential mortgage loan portfolio consists of first mortgage loans secured by one-to four-family non-owner occupied residential properties in our market area. These loans are generated through our existing customer base and referrals, real estate brokers, real estate investors and other marketing efforts. As of December 31, 2013, approximately 6% of the total mortgage loan portfolio consisted of this type of mortgage loan.

When underwriting residential real estate loans, we review and verify each loan applicant’s employment, income and credit history and, if applicable, our experience with the borrower. Our policy is to obtain credit reports and financial statements on all borrowers and guarantors, and to verify references. Properties securing real estate loans are appraised by board-approved independent appraisers. Appraisals are subsequently reviewed by our loan underwriting department.

Many areas of the United States have experienced increases in foreclosures. Management believes that foreclosures in our market area have also increased, but not to the same extent as in more severely impacted areas of the United States. At December 31, 2013, we had loans totaling $394,000 on one residential owner-occupied property in foreclosure. Management believes this is due mainly to our conservative lending strategies, including our non-participation in “interest only,” “Option ARM,” “sub-prime” or “Alt-A” loans.

Home Equity Second Mortgage Loans and HELOC’s. Our home equity loans and our HELOC’s are secured by second mortgages on owner occupied one-to four-family residences. The maximum loan-to-value of these loans generally is 80%. At December 31, 2013, home equity loans and HELOC’s secured by second mortgages totaled $8.1 million, or 10.7% of total loans. Home equity loans consist of fixed-rate loans with terms up to a maximum of 20 years. At December 31, 2013, home equity loans totaled $2.5 million. HELOC’s are adjustable monthly and tied to the prime rate. At December 31, 2013, HELOC’s totaled $5.6 million.

A home equity loan and a HELOC can be used for a variety of purposes. The underwriting standards for the second mortgage include a title review, the recordation of a junior lien, a determination of the applicant’s ability to satisfy existing debt obligations and payments on the proposed loan, and the value of the collateral securing the loan.

Commercial Real Estate Lending. Our loan policies permit the origination of loans secured by commercial real estate, including multi-family dwellings. The current portfolio of these loans at December 31, 2013, totaled $12.4 million, or 16.3%, of total loans. The current loan-to-value of these loans generally does not exceed 80%, and generally these loans include personal guarantees.

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Loans secured by commercial real estate generally have larger loan balances and more credit risk than one-to four-family mortgage loans. The increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the impact of local and general economic conditions on the borrower’s ability to repay the loan, and the increased difficulty of evaluating and monitoring these types of loans. If the cash flows from the property are reduced, the borrower’s ability to repay the loan may be impaired. However, commercial real estate loans generally have higher interest rates than loans secured by one-to four-family real estate.

Construction Loans. On a limited basis, we originate residential construction loans to individuals for the construction and permanent financing of their personal residences. Construction loans to individuals are made on the same general terms as our one-to four-family mortgage loans, but provide for the payment of interest only during the construction phase, which is usually six months. At the end of the construction phase, the loan converts to a permanent mortgage loan. Prior to making a commitment to fund a construction loan, we require an appraisal of the property by an independent appraiser. We also review and inspect each project prior to disbursement of funds during the term of the construction loan. Loan proceeds are disbursed after inspection of the project based on percentage of completion.

At December 31, 2013, there were no construction loans outstanding. When market conditions improve, we anticipate an expansion of our construction and land development loan activity. We limit speculative construction activity, as well as the speculative purchase of building lots. The maximum loan-to-value of these originations generally is 80%, and all these loans include personal guarantees.

Construction financing generally involves greater credit risk than long-term financing on improved, owner-occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions. If the estimate of construction cost proves to be inaccurate, we may be required to advance additional funds beyond the amount originally committed in order to protect the value of the property. Moreover, if the estimated value of the completed project proves to be inaccurate, the borrower may hold a property with a value that is insufficient to assure full repayment. Construction loans also expose us to the risks that improvements will not be completed on time in accordance with specifications and projected costs and that repayment will depend on the successful operation or sale of the properties. In addition, many of these borrowers have more than one outstanding loan, so an adverse development with respect to one loan or credit relationship can expose us to significantly greater risk of non-payment and loss.

Other Commercial Loans. Commercial business loans are made to borrowers that demonstrate the ability to repay the debt through corporate cash flows. A majority of our commercial business loans are secured by assignment of corporate assets and include personal guarantees of the business owners. At December 31, 2013, other commercial loans totaled $787,000, approximately 1.0% of total loans. Underwriting standards for commercial business loans include a review of the applicant’s tax returns, financial statements, credit history and an assessment of the applicant’s ability to meet existing obligations and payments on the proposed loan based on cash flows generated by the applicant’s business.

Commercial business loans generally have higher interest rates and shorter terms than one-to-four family residential loans, but they also may involve higher average balances, increased difficulty of loan monitoring and a higher risk of default since their repayment generally depends on the successful operation of the borrower’s business. We typically require a principal of the company obtaining a commercial business loan to personally sign the note as a co-borrower or guarantor.

Our proposed combination with Victory Bank will allow us to increase our portfolio of commercial and other loans that provide higher returns than residential mortgage loans.

Loan Originations, Purchases and Sales. Loan originations are obtained through a variety of sources, including referrals from existing customers and real estate brokers.

We sell most of our originated loans into the secondary market. Generally, these loans are sold to third parties with servicing released. Loans originated for sale in the secondary market are originated under purchase commitments from the investors so as to mitigate any pipeline risk.

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The following table shows our loan origination, sale and principal repayment activity during the periods indicated.

	Six Months Ended December 31,						Years Ended June 30,
	2013			2012			2013			2012
	(In thousands)
Total loans at beginning of period(1)	$	84,446		$	86,481		$	86,481		$	84,036
Loans originated or purchased:
Consumer:
Residential mortgage(2)		40,458			54,551			103,523			149,118
Home equity & HELOC’s		281			384			656			630
Other consumer		70			38			66			51
Commercial:
Commercial real estate		1,059			516			1,494			109
Other commercial		—			—			172			—
Construction-residential		131			—			265			828
Total loans originated	$	41,999		$	55,489		$	106,176		$	150,736
Loans/participations purchased		—			—		$	676		$	—
Loans sold/principal repayments:
Loans sold		41,450			55,673		$	97,134		$	131,763
Principal repayments		4,845			5,602			9,443			14,549
Transferred to real estate owned or charged-off		131			13			958			1,979
Total deductions	$	46,426		$	61,288		$	108,211		$	148,291
Net loan activity	$	(4,427	)	$	(5,799	)	$	(2,035	)	$	2,445
Total loans at end of period(1)	$	80,019		$	80,682		$	84,446		$	86,481

(1) Includes loans classified as held for sale; excludes unearned discounts, origination and commitment fees. Excludes undisbursed portion of construction loans.

(2) Includes $35.9 million, $46.8 million, $90.0 million and $142.5 million of loans originated for sale

Loan Approval Procedures and Authority. Our lending activities are subject to written, non-discriminatory underwriting standards and loan origination procedures established by our Board of Trustees. The loan approval process is intended to assess the borrower’s ability to repay the loan and value of the property that will secure the loan. To assess the borrower’s ability to repay, we review the borrower’s employment and credit history and information on the historical and projected income and expenses of the borrower. Loans originated for sale in the secondary market and loans originated for investment are subject to the same underwriting procedures.

Our loan approval authority for commercial loans is summarized below:

• No one individual has authority to approve a loan of any type or amount.

• A minimum of two signatures is required on all loans not approved by the Loan Committee or Board of Trustees. Dual signature signing authority is restricted to total credit exposure up to and including $250,000.

• Loan Committee approval is required for all loans in excess of $250,000, up to and including $750,000.

• Board of Trustees approval is required for all loans in excess of $750,000, up to and including our legal lending limit, which as of December 31, 2013, was $1.7 million.

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For residential loans our loan approval authority is summarized below:

• Three officers may approve any loan, including “jumbo” loans (currently, loans between $417,000 and $650,000), construction loans and conventional loans.

• The Executive Committee may approve loans in excess of $650,000, up to and including $900,000.

• The Board of Trustees must approve loans in excess of $900,000.

Our policies and loan approval limits are established by the Board of Trustees. Upon receipt of a loan application from a prospective borrower, a credit report, tax returns and verifications are ordered or requested to confirm specific information relating to the loan applicant’s employment, income and credit standing. We require appraisals by independent, licensed, third-party appraisers of all real property secured loans. All appraisers are approved by the Board of Trustees annually. All loans are processed at our lending office.

Loans to One Borrower. Generally, HV Bank may not make a loan or extend credit to a single or related group of borrowers in excess of 15% of unimpaired capital and surplus. An additional amount may be loaned, equal to 10% of unimpaired capital and surplus, if the loan is secured by readily marketable collateral, which generally does not include real estate. At December 31, 2013, HV Bank’s regulatory limit on loans to one borrower was $1.7 million. At that date, our largest lending relationship with a single borrower was $1.5 million.

Asset Quality

General. When a loan is 15 days past due, we send the borrower a late notice. We generally also contact the borrower by phone if the delinquency is not corrected promptly after the notice has been sent. When the loan is 30 days past due, we mail the borrower a letter reminding the borrower of the delinquency, and attempt to contact the borrower personally to determine the reason for the delinquency in order to ensure that the borrower understands the terms of the loan and the importance of making payments on or before the due date. If necessary, subsequent delinquency notices are issued and the account will be monitored on a regular basis thereafter. By the 90^th day of delinquency, we will send the borrower a final demand for payment and may recommend foreclosure. Loans are charged off when we believe that the recovery of principal is improbable. A summary report of all loans 30 days or more past due is provided to the Board of Trustees each month.

Nonperforming and Classified Assets. Loans are automatically placed on non-accrual status when payment of principal or interest is more than 90 days delinquent. Loans are also placed on non-accrual status if collection of principal or interest in full is in doubt or if the loan has been restructured. When loans are placed on non-accrual status, unpaid accrued interest is fully reversed, and further income is recognized only to the extent received. The loan may be returned to accrual status if unpaid principal and interest are repaid so that the loan is less than 90 days delinquent.

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We account for impaired loans under generally accepted accounting principles. An impaired loan generally is one for which it is probable, based on current information, that the lender will not collect all the amounts due under the contractual terms of the loan. Loans are individually evaluated for impairment. When we classify a problem asset as impaired, we provide a specific allowance for that portion of the asset that is deemed uncollectible.

Loans may be periodically modified to make concessions to help a borrower remain current on the loan and to avoid foreclosure. Generally, we do not forgive principal or interest on loan or modify the interest rate on loans that are below market rates. At December 31, 2013, we had two loans in the amount of $448,000 that were restructured and considered troubled debt restructurings, or TDRs. As of June 30, 2013, HV Bank had identified two loans as TDRs totaling $434,000. As of these dates, no TDRs were included in non-accrual loans.

Non-Performing Assets

The table below sets forth the amounts and categories of HV Bank’s non-performing assets at the dates indicated.

	At December 31,			At June 30,
	2013			2013			2012
	(Dollars in thousands)
Non-accrual loans:
Consumer:
Residential mortgage	$	957		$	564		$	623
Home equity and HELOC’s		379			198			222
Other consumer		—			—			—
Commercial:
Commercial real estate		679			683			1,600
Other commercial		—			—			—
Construction – residential		—			—			—
Total non-accrual loans	$	2,015		$	1,445		$	2,445
Loans delinquent 90 days or more and still accruing interest	$	—		$	—		$	—
Real estate owned	$	566	(1)		2,199			1,824
Total non-performing assets(2)	$	2,581		$	3,644		$	4,269
Ratios:
Total non-performing loans to total loans, net		2.7	%		1.9	%		3.5	%
Total non-performing assets to total assets		1.6	%		2.4	%		2.7	%

(1) See “— Delinquent Loans—Real Estate Owned.”

(2) There were no TDRs included in non-accrual loans for the above periods.

For the six months ended December 31, 2013, and for the years ended June 30, 2013 and June 30, 2012, the amount of additional interest income that would have been recognized on non-accrual loans if such loans had continued to perform in accordance with their contractual terms was $19,000, $78,000 and $52,000, respectively. Interest income of $14,000 was recognized on these loans for the six months ended December 31, 2013. Interest income of $87,000 was recognized on these loans for the year ended June 30, 2013. Interest income of $107,000 was recognized on these loans for the year ended June 30, 2012.

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At December 31, 2013, our non-accrual loans consisted of 10 loan relationships, with an aggregate outstanding balance of $2.0 million on such date. The largest relationship totaled $349,000, secured by residential real estate.

Classification of Assets. Our policies, consistent with regulatory guidelines, provide for the classification of loans and other assets that are considered to be of lesser quality as substandard, doubtful, or loss assets. An asset is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard assets include those assets characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. 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. Assets that do not expose us to risk sufficient to warrant classification in one of the aforementioned categories, but which possess potential weaknesses that deserve close attention, are required to be designated as special mention.

The allowance for loan losses is the amount estimated by management as necessary to absorb credit losses incurred in the loan portfolio that are both probable and reasonably estimable at the balance sheet date. When we classify a problem asset as loss, we provide a specific allowance for that portion of the asset that is uncollectible or charge of this amount. Determinations as to the classification of assets and the amount of loss allowances are subject to review by our principal federal regulator, the FDIC, which can require that we establish additional loss allowances. We regularly review our asset portfolio to determine whether any assets require classification in accordance with applicable regulations.

On the basis of management’s review of its assets, HV Bank had classified or held as special mention the following assets as of the date indicated:

	At December 31,		At June 30,
	2013		2013		2012
	(In thousands)
Special mention	$	835	$	826	$	1,079
Substandard		2,498		1,941		2,622
Doubtful		—		—		—
Loss		—		—		—
Total classified and special mention assets	$	3,333	$	2,767	$	3,701

See notes 1 and 3 of notes to financial statements of HV Bank for additional information regarding our classified assets at December 31, 2013 and at June 30, 2013 and 2012.

Other than as disclosed in this prospectus, there are no other loans as to which management currently has serious doubts about the ability of borrowers to comply with present loan repayment terms.

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Delinquent Loans

The following table sets forth certain information with respect to HV Bank’s loan portfolio delinquencies by type and amount at the dates indicated.

	Loans Delinquent For
	30-59 Days				60-89 Days				90 Days and Over				Total
	Number		Amount		Number		Amount		Number		Amount		Number		Amount
	(Dollars in thousands)
At December 31, 2013
Consumer:
Residential mortgage		3	$	254	$	—	$	—		7	$	957		10	$	1,211
Home equity and HELOC’s		1		12		—		—		4		379		5		391
Other consumer		1		8		—		—		—		—		1		8
Commercial:
Commercial real estate		—		—		—		—		3		529		3		529
Other commercial		1		150		—		—		—		—		1		150
Construction – residential		—		—		—		—		—		—		—		—
Total		6	$	424		—	$	—		14	$	1,865		20	$	2,289
At June 30, 2013
Consumer:
Residential mortgage		5	$	583		1	$	53		4	$	564		10	$	1,200
Home equity and HELOC’s		2		124		2		78		2		198		6		400
Other consumer		1		2				—		—		—		1		2
Commercial:
Commercial real estate		—		—		—		—		4		683		4		683
Other commercial		—		—		—		—		—		—		—		—
Construction – residential		—		—		—		—		—		—		—		—
Total		8	$	709		3	$	131		10	$	1,445		21	$	2,285
At June 30, 2012
Consumer:
Residential mortgage		4	$	528		2	$	145		4	$	623		10	$	1,296
Home equity and HELOC’s		1		69		—		—		3		222		4		291
Other consumer		1		42		—		—		—		—		1		42
Commercial:
Commercial real estate		1		102		—		—		5		1,343		6		1,445
Other commercial		—		—		—		—		—		—		—		—
Construction residential		—		—		—		—		—		—		—		—
Total		7	$	741		2	$	145		12	$	2,188		21	$	3,074

Real Estate Owned. Real estate acquired by us as a result of foreclosure or by deed in lieu of foreclosure is classified as foreclosed real estate until sold. When property is acquired it is recorded at the lower of cost or estimated fair market value at the date of foreclosure, establishing a new cost basis. Estimated fair value generally represents the sale price a buyer would be willing to pay on the basis of current market conditions, including normal terms from other financial institutions, less the estimated costs to sell the property. Holding costs and declines in estimated fair market value result in charges to expense after acquisition. At December 31, 2013, we had $566,000 in foreclosed real estate. This compares to $2.2 million and $1.8 million as of June 30, 2013 and June 30, 2012, respectively. In October 2013, the Bank sold a property which had been the collateral for its share of a $1.5 million participation loan. Subsequent to foreclosure, the property was written down to fair market value. The Bank received its share of proceeds from the sale of the property, totaling $1.3 million, and recognized a $4,000 gain on sale.

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Allowance for Loan Losses

The allowance for loan losses is established through a provision for loan losses. We maintain the allowance at a level believed, to the best of management’s knowledge, to cover all known and inherent losses in the portfolio that are both probable and reasonable to estimate at each reporting date. Management reviews the allowance for loan losses on no less than a quarterly basis in order to identify those inherent losses and to assess the overall collection probability for the loan portfolio. The evaluation process includes, among other things, an analysis of delinquency trends, non-performing loan trends, the level of charge-offs and recoveries, prior loss experience, total loans outstanding, the volume of loan originations, the type, size and geographic concentration of the loans, the value of collateral securing the loan, the borrower’s ability to repay and repayment performance, the number of loans requiring heightened management oversight, local economic conditions and industry experience. Such risk factors are periodically reviewed by management and revised as deemed appropriate. The establishment of the allowance for loan losses is significantly affected by management’s judgment and uncertainties, and there is likelihood that different amounts would be reported under different conditions or assumptions. The Department of Banking and the FDIC, as an integral part of their examination processes, periodically review the allowance for loan losses. These regulators may require us to make additional provisions for estimated loan losses based upon judgments different from those of management.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These significant factors may include changes in lending policies and procedures, changes in existing general economic and business conditions affecting our primary lending areas, credit quality trends, collateral value, loan volumes and concentrations, seasoning of the loan portfolio, recent loss experience in particular segments of the portfolio, duration of the current business cycle and bank regulatory examination results. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

We will continue to monitor and modify our allowance for loan losses as conditions dictate. No assurances can be given that the level of allowance for loan losses will cover all of the inherent losses on the loans or that future adjustments to the allowance for loan losses will not be necessary if economic and other conditions differ substantially from the economic and other conditions used by management to determine the current level of the allowance for loan losses.

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Analysis of Loan Loss Experience. The following table sets forth activity in HV Bank’s allowance for loan losses for the periods indicated.

	At or For the Six Months Ended December 31,						At or For the Years Ended June 30,
	2013			2012			2013			2012
	(Dollars in thousands)
Balance at beginning of period	$	581		$	474		$	474		$	628
Charge-offs:
Consumer:
Residential mortgage		62			—			—			12
Home equity and HELOC’s		—			—			—			—
Other consumer		3			1			1			3
Commercial:
Commercial real estate		—			12			12			362
Other commercial		—			—			—			—
Construction – residential		—			—			—			—
Unallocated reserve		—			—			—			—
Total charge-offs	$	65		$	13		$	13		$	377
Recoveries:
Consumer:
Residential mortgage	$	—		$	—		$	—		$	—
Home equity and HELOC’s		—			—			—			—
Other consumer		—			—			—			1
Commercial:
Commercial real estate		—			—			—			44
Other commercial		—			—			—			—
Construction – residential		—			—			—			—
Unallocated reserve		—			—			—			—
Total recoveries	$	—		$	—		$	—		$	45
Net (charge-offs) recoveries	$	(65	)	$	(13	)	$	(13	)	$	(332	)
(Credit) Provision for loan losses		(31	)		80			120			178
Balance at end of year	$	485		$	541		$	581		$	474
Ratios:
Net charge-offs to average loans outstanding		0.1	%		0.0	%		0.0	%		0.4	%
Allowance for loan losses to non-performing loans at end of period		24.1	%		21.8	%		40.2	%		19.4	%
Allowance for loan losses to total loans at end of period		0.6	%		0.7	%		0.8	%		0.7	%

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Allocation of Allowance for Loan Losses

The following table sets forth the allowance for loan losses allocated by loan category, the total loan balances by category and the percent of loans in each category to total loans at the dates indicated. The allowance for loan losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.

	December 31, 2013
	Allowance for Loan Losses		Loan Balances by Category		Percent of Loans in Each Category to Total Loans
	(Dollars in thousands)
Consumer loans:
Residential mortgage	$	181	$	54,906		72.0	%
Home equity and HELOC’s		19		8,143		10.7	%
Other consumer		—		42		—	%
Commercial loans:
Commercial real estate		273		12,433		16.3	%
Other commercial		12		787		1.0	%
Construction – residential		—		—		—	%
Unallocated reserves		—		—		—	%
Total loans	$	485	$	76,311		100.0	%

	June 30, 2013							June 30, 2012
	Allowance for Loan Losses		Loan Balances by Category		Percent of Loans in Each Category to Total Loans			Allowance for Loan Losses		Loan Balances by Category		Percent of Loans in Each Category5 to Total Loans
	(Dollars in thousands)
Consumer loans:
Residential mortgage	$	246	$	53,375		71.0	%	$	162	$	45,412		64.4	%
Home equity and HELOC’s		21		9,053		12.1	%		24		10,535		14.9	%
Other consumer		—		72		—	%		—		126		0.2	%
Commercial loans:
Commercial real estate		283		11,954		15.9	%		284		12,824		18.2	%
Other commercial		13		775		1.0	%		3		188		0.2	%
Construction – residential		—		—		—	%		1		1,500		2.1	%
Unallocated reserves		18							—
Total loans	$	581	$	75,229		100.0	%	$	474	$	70.585		100.0	%

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Investment Activities

General. Our current investment policy authorizes us to invest in debt securities issued by the United States Government, agencies of the United States Government or United States Government-sponsored enterprises. The policy also permits investments in mortgage-backed securities, including pass-through securities, issued and guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae, as well as investments in federal funds and deposits in other insured institutions. In addition, management is authorized to invest in investment grade state and municipal obligations, commercial paper and corporate debt obligations within regulatory parameters. We do not engage in any hedging activities or trading activities, nor do we purchase any high-risk mortgage derivative products, corporate junk bonds, and certain types of structured notes.

Our investment objectives are to maintain high asset quality, to provide and maintain liquidity, to establish an acceptable level of interest rate and credit risk, to provide an alternate source of low-risk investments when demand for loans is weak and to generate a favorable return. The Board of Trustees has the overall responsibility for the investment portfolio, including approval of our investment policy. The Board of Trustees is also responsible for implementation of the investment policy and monitoring investment performance. The Board of Trustees reviews the status of the investment portfolio on a quarterly basis, or more frequently if warranted.

Generally accepted accounting principles require that, at the time of purchase, we designate a security as held-to-maturity, available-for-sale, or trading, depending on our ability and intent to hold such security. Securities available for sale are reported at fair value, while securities held to maturity are reported at amortized cost. We do not maintain a trading portfolio. Establishing a trading portfolio would require specific authorization by the Board of Trustees.

At December 31, 2013, the held to maturity portfolio, which is carried at amortized cost, totaled $5.0 million, or 3.0%, of total assets and the available-for-sale portfolio, which is carried at fair value, totaled $46.2 million, or 28.3%, of total assets.

United States Governmental Securities. We maintain these investments, to the extent appropriate, for liquidity purposes, for zero risk weighting for capital purposes and as collateral for borrowings. At December 31, 2013, United States government securities consisted of fixed-rate Small Business Administration (“SBA”) Participation Certificates.

Corporate Notes. At time of purchase, HV Bank invests in investment grade corporate bonds, both fixed and floating rate instruments.

Collateralized Mortgage Obligations. HV Bank invests in fixed rate collateralized mortgage obligations (“CMOs”) issued by Ginnie Mae, Freddie Mac or Fannie Mae. A CMO is a type of mortgage-backed security that creates separate pools of pass-through rates for different classes of bondholders with varying maturities, called tranches. The repayments from the pool of pass-through securities are used to retire the bonds in the order specified by the bonds’ prospectus.

Ginnie Mae is a government agency within the Department of Housing and Urban Development which is intended to help finance government-assisted housing programs. Ginnie Mae securities are backed by loans insured by the Federal Housing Administration, or guaranteed by the Veterans Administration. The timely payment of principal and interest on Ginnie Mae securities is guaranteed by Ginnie Mae and backed by the full faith and credit of the U.S. Government. Freddie Mac is a private corporation chartered by the U.S. Government. Freddie Mac issues participation certificates backed principally by conventional mortgage loans. Freddie Mac guarantees the timely payment of interest and the ultimate return of principal on participation certificates. Fannie Mae is a private corporation chartered by the U.S. Congress with a mandate to establish a secondary market for mortgage loans. Fannie Mae guarantees the timely payment of principal and interest on Fannie Mae securities. In September 2008, the Federal Housing Finance Agency placed Freddie Mac and Fannie Mae into conservatorship. The U.S. Treasury has implemented a set of financing agreements to ensure that Freddie Mac and Fannie Mae meet their obligations to holders of bonds that they have issued or guaranteed.

Mortgage-Backed Securities. We invest in mortgage-backed securities insured or guaranteed by Ginnie Mae, Freddie Mac or Fannie Mae. We have not purchased privately-issued mortgage-backed securities. We invest in mortgage-backed securities to achieve positive interest rate spreads with minimal administrative expense, and to lower our credit risk as a result of the guarantees provided by Ginnie Mae, Freddie Mac or Fannie Mae.

Investments in mortgage-backed securities involve a risk that actual payments will be greater or less than the prepayment rate estimated at the time of purchase, which may require adjustments to the amortization of any premium

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or acceleration of any discount relating to such interests, thereby affecting the net yield on our securities. We periodically review current prepayment speeds to determine whether prepayment estimates require modification that could cause amortization or accretion adjustments. There is also reinvestment risk associated with the cash flows from such securities or in the event such securities are redeemed by the issuer. In addition, the market value of such securities may be adversely affected by changes in interest rates.

Municipal Securities. At time of purchase, HV Bank invests in investment grade bonds issued primarily by municipalities in the Bucks, Montgomery and Philadelphia Counties and are at fixed rates.

Bank Certificates of Deposit. HV Bank invests in certificates of deposit issued by geographically dispersed financial institutions that are insured by the FDIC.

Deposit Activities and Other Sources of Funds

General. Deposits traditionally have been the primary source of funds for our lending and investment activities. In addition to deposits, we derive funds primarily from principal and interest payments on loans. Loan repayments are a relatively stable source of funds, while deposit inflows and outflows are significantly influenced by general interest rates, money market conditions and competition. Borrowings may also be used on a short-term basis to compensate for reductions in the availability of funds from other sources and may be used on a longer-term basis for general business purposes.

Deposits. We generate deposits primarily from within our market area. We rely on our competitive pricing and customer service to attract and retain deposits.

We offer a variety of deposit accounts with a range of interest rates and terms. Deposit accounts consist of savings accounts, certificates of deposit and NOW accounts. Deposits are generated primarily from within our market area.

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, interest rates paid by competitors and deposit growth goals.

At December 31, 2013, we had a total of $47.5 million in certificates of deposit, of which $21.1 million, or 44.3%, had remaining maturities of one year or less. Based on historical experience and its current pricing strategy, management believes we will retain a large portion of these accounts upon maturity.

Borrowings

We may obtain advances from the Federal Home Loan Bank of Pittsburgh upon the security of the common stock we own in that bank and provide sufficient qualifying collateral to secure the advance. These advances are made pursuant to several credit programs, each of which has its own interest rate and range of maturities. Federal Home Loan Bank advances are generally available to meet seasonal and other withdrawals of deposit accounts and to permit increased lending.

Securities Sold Under Agreements to Repurchase

HV Bank has entered into overnight repurchase agreements, which are collateralized by mortgage-backed securities and collateralized mortgage obligations, with a carrying value, including accrued interest, of $3.8 million, $4.0 million and $5.2 million at December 31, 2013 (unaudited) and June 30, 2013 and 2012, respectively. The fair value of the underlying collateral was $10.7 million, $7.5 million and $6.0 million at December 31, 2013 (unaudited) and June 30, 2013 and 2012, respectively.

The maximum balance of repurchase agreements outstanding at any month-end during the year was $6.0 million, $5.9 million and $7.6 million for the six months ended December 31, 2013, and the years ended June 30, 2013 and 2012, respectively. The average balance outstanding for the three months ended December 31, 2013, was $2.9 million, and for the years ended June 30, 2013 and 2012 was $4.2 million and $4.7 million, respectively. The weighted average interest rate of the repurchase agreements was 0.14%, 0.10% and 0.11% at December 31, 2013 (unaudited) and June 30, 2013 and 2012, respectively.

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Properties

We conduct our executive administrative operations from our office located at 3501 Masons Mill Road, Suite 401, Huntingdon Valley, Pennsylvania. In addition, HV Bank has four full service bank branch offices, two limited service offices and an administrative office located in Montgomery, Bucks and Philadelphia Counties, Pennsylvania. HV Bank closed its Jamison branch located at 2190 York Road, Jamison, Pennsylvania on November 29, 2013. HV Bank also has a loan production office in Warminster, Pennsylvania. The net book value of the premises, land and equipment of HV Bank was $1.8 million at December 31, 2013.

No Subsidiary

HV Bank has no subsidiaries.

Legal Proceedings

Periodically, there have been various claims and lawsuits against HV Bank, such as claims to enforce liens and contracts, condemnation proceedings on properties in which HV Bank holds security interests, claims involving the making and servicing of real property loans and other issues incident to its business. At December 31, 2013, HV Bank was not a party to any pending legal proceedings that it believes would have a material adverse effect on its financial condition, results of operations or cash flows.

Expense and Tax Allocation

HV Bank will enter into an agreement with HV Bancorp to provide it with certain administrative support services, whereby HV Bank will be compensated at not less than the fair market value of the services provided. In addition, HV Bank and HV Bancorp will enter into an agreement to establish a method for allocating and for reimbursing the payment of their consolidated tax liability.

Personnel

As of December 31, 2013, HV Bank had 60 full-time employees and three part-time employees, none of whom is represented by a collective bargaining unit. Management believes that HV Bank has a good working relationship with its employees.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF HV BANK

The objective of this section is to help potential investors understand our results of operations and financial condition. You should read this discussion in conjunction with the financial statements and notes to the financial statements that appear at the end of this prospectus. In this section, references to “we,” “us” and “our” refer to HV Bank.

Overview

Income. Our primary source of income is net interest income. Net interest income is the difference between interest income, which is the income that we earn on our loans and investments, and interest expense, which is the interest that we pay on our deposits and borrowings. Changes in levels of market interest rates affect our net interest income. The spread between the interest we earn on loans and investments and the interest we pay on deposits and borrowings affect our net interest income.

A secondary source of income is other non-interest income, which is revenue that we receive from providing other products and services. A significant source of non-interest income relates to gains recognized from the sale of residential mortgage loans originated and intended for sale in the secondary market. Additionally, we recognize non-interest income from service charges on deposit and loan accounts as well as sales of securities.

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Lending Activities. At December 31, 2013, one-to four-family residential mortgage loans totaled $54.9 million, or 71.9% of the total loan portfolio. While we have traditionally originated and serviced the bulk of our residential lending for our own portfolio, in the past several years, due to concerns of interest rate risk in a historically low interest rate environment, we have sold a significant portion of our loans and loan servicing to third party investors. For the six months ended December 31, 2013, total originations of loans held for sale totaled $35.9 million, with gains on sale of loans totaling $803,000 for the same period. This compares to $46.8 million in total originations of loans held for sale with gains on sale of loans totaling $930,000 for the six months ended December 31, 2012. For the fiscal years ended June 30, 2013 and 2012, total originations of loans held for sale were $90.0 million and $142.5 million, respectively. Gains on sale of loans totaled $1.7 million and $1.8 million for the fiscal years ended June 30, 2013 and 2012, respectively.

At December 31, 2013, home equity loans and HELOC’s totaled $8.1 million, or 10.7%, of the total loan portfolio; and commercial real estate loans totaled $12.4 million, or 16.3% of the total loan portfolio. At December 31, 2013, other commercial loans totaled $0.8 million or 1.0% of net loans.

Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for probable losses inherent in the loan portfolio. We evaluate the need to establish allowances against losses on loans on a quarterly basis. When additional allowances are necessary, a provision for loan losses is charged to earnings.

Operating Expenses. The non-interest expenses we incur in operating our business consist of salaries and employee benefits expenses, occupancy expenses, FDIC premiums, data processing, real estate owned, professional services and other miscellaneous expenses, such as advertising, insurance and printing expense.

Our largest non-interest expense is salaries and employee benefits, which consist primarily of salaries and wages paid to our employees, payroll taxes, and expenses for health insurance, and other employee benefits. Following the conversion and stock offering, we will recognize additional employee compensation expenses from the employee stock ownership plan and any additional stock-based benefit plans that we adopt. For an illustration of expenses associated with the employee stock ownership plan and other stock-based benefit plans, see “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger.”

Anticipated Increase in Non-Interest Expense

Following the completion of the conversion and stock offering, we anticipate that our non-interest expense will increase as a result of the increased costs associated with operating as a public company after the conversion and the merger. These additional expenses will consist primarily of legal and accounting fees, expenses of shareholder communications and meetings, and increased compensation expenses associated with our employee stock ownership plan and any additional stock-based benefit plans that are approved by our shareholders.

Critical Accounting Policies

In the preparation of our consolidated financial statements, we have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States (“GAAP”). Our significant accounting policies are described in the notes to our financial statements, beginning on page of this prospectus.

Certain accounting policies involve significant judgments and assumptions by us that have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies to be critical accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Actual results could differ from these judgments and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations.

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Allowance for Loan Losses. The allowance for loan losses is the amount estimated by management as necessary to cover losses inherent in the loan portfolio at the balance sheet date. The allowance is established through the provision for loan losses, which is charged to income. Determining the amount of the allowance for loan losses necessarily involves a high degree of judgment.

The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely.

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on HV Bank’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class including commercial loans not considered impaired, as well as smaller balance homogeneous loans, such as residential mortgage, home equity, and HELOC consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors.

These qualitative risk factors include:

• Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.

• National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans.

• Nature and volume of the portfolio and terms of loans.

• Volume and severity of past due, classified and nonaccrual loans as well as and other loan modifications.

• Existence and effect of any concentrations of credit and changes in the level of such concentrations.

• Effect of external factors, such as competition and legal and regulatory requirements.

Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, the FDIC and the Department of Banking, as an integral part of their examination process, periodically review our allowance for loan losses. These agencies may require us to recognize adjustments to the allowance based on judgments about information available to them at the time of their examination. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings.

See Note 1 of the notes to the financial statements of HV Bank included in this prospectus.

Deferred Tax Assets. We make estimates and judgments to calculate some of our tax liabilities and determine the recoverability of some of our deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenue and expenses. We also estimate a reserve for deferred tax assets if, based on the available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. These estimates and judgments are inherently subjective. Historically, our estimates and judgments to calculate our deferred tax accounts have not required significant revision.

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In evaluating our ability to recover deferred tax assets, we consider all available positive and negative evidence, including our past operating results and our forecast of future taxable income. In determining future taxable income, we make assumptions for the amount of taxable income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies, these assumptions require us to make judgments about future taxable income and are consistent with the plans and estimates we use to manage our business. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets. An increase in the valuation allowance would result in additional income tax expense in the period and could have a significant impact on our future earnings.

Realization of a deferred tax asset requires us to exercise significant judgment and is inherently uncertain because it requires the prediction of future occurrences. Valuation allowances are provided to reduce deferred tax assets to an amount that is more likely than not to be realized. In evaluating the need for a valuation allowance, we must estimate our taxable income in future years and the impact of tax planning strategies, If we were to determine that we would not be able to realize a portion of our net deferred tax asset in the future for which there is no valuation allowance, an adjustment to the net deferred tax asset would be charged to earnings in the period such determination was made. Conversely, if we were to make a determination that it is more likely than not that the deferred tax assets for which we had established a valuation allowance would be realized, the related valuation allowance would be reduced and a benefit to earnings would be recorded.

See Note 1 of the notes to the financial statements of HV Bank included in this prospectus.

Investment Securities. Securities are evaluated on a quarterly basis, and more frequently when market conditions warrant such an evaluation, to determine whether declines in their value are other-than-temporary. To determine whether a loss in value is other-than-temporary, management utilizes criteria such as reasons underlying the decline, the magnitude and duration of the decline and whether or not management intends to sell or expects that it is more likely than not it will be required to sell the security prior to an anticipated recovery of fair value. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value for a debt security is determined to be other-than-temporary, the other-than-temporary impairment is separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit losses) and (b) the amount of the total other-than-temporary impairment related to other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to other factors is recognized in other comprehensive income (loss).

Real Estate Owned. Assets acquired through foreclosure consist of other real estate owned and financial assets acquired from debtors. Other real estate owned is carried at the lower of cost or fair value, less estimated selling costs. The fair value of other real estate owned is determined using current market appraisals obtained from approved independent appraisers, agreements of sale, and comparable market analysis from real estate brokers, where applicable. Changes in the fair value of assets acquired through foreclosure at future reporting dates or at the time of disposition will result in an adjustment to real estate owned and expense or sale of real estate owned, or net gain (loss) on sale of assets acquired through foreclosure, respectively.

Fair Value Measurements. We use fair value measurements to record fair value adjustments to certain assets to determine fair value disclosures. Investment and mortgage-backed securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, HV Bank may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans, real estate owned and certain other assets. These nonrecurring fair value adjustments typically involve application of lower-of-cost-or-market accounting or write-downs of individual assets.

Under FASB ASC Topic 820, Fair Value Measurements, HV Bank groups its assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:

• Level 1—Valuation is based upon quoted prices for identical instruments traded in active markets.

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• Level 2—Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3—Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Bank’s own estimates of assumptions that market participants would use in pricing the asset.

Under FASB ASC Topic 820, HV Bank bases its fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy in FASB ASC Topic 820.

Fair value measurements for assets where there exists limited or no observable market data and, therefore, are based primarily upon HV Bank’s or other third-party’s estimates, are often calculated based on the characteristics of the asset, the economic and competitive environment and other such factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, that could significantly affect the results of current or future valuations.

Business Strategy after the Conversion and the Merger

Our business strategy after the conversion and merger is to continue to operate and grow a profitable commercial bank. As a result of the merger, HV Bank will be a larger, more diversified bank with a management and operating strategy that will draw from both business strategies currently being used at HV Bank and Victory Bank. HV Bank believes that the proposed merger offers unique operating and strategic benefits. The following highlights some of the key points of our operating strategy for the combined enterprise:

• pursuing loan portfolio expansion and diversification with an emphasis on credit risk management to increase our portfolio of commercial and other loans that provide higher returns than residential mortgage loans;

• maintaining asset quality through conservative underwriting standards and diligent collection efforts;

• serving small-and middle-market commercial and retail customers, with a significant focus on electronic delivery platforms and technology;

• continuing to originate residential mortgage loans which are primarily sold in the secondary mortgage market;

• building profitable business and consumer relationships by providing superior customer service with an emphasis on increasing transaction deposit account and deposit balances; and

• increasing our non-interest income.

Pursuing loan portfolio expansion and diversification with an emphasis on credit risk management to increase our portfolio of commercial and other loans that provide higher returns than residential mortgage loans.

We have a diversified loan portfolio which includes commercial real estate and commercial business loans. At December 31, 2013, we had $13.2 million of commercial real estate and commercial business loans representing 17.3% of total loans. Commercial loans help diversify our loan portfolio and help improve the interest rate sensitivity of our assets. The merger with Victory Bancorp will significantly increase our commercial loan portfolio and origination capability. With the additional capital raised in the conversion stock offering, we intend to continue to pursue commercial lending opportunities. Our maximum loan to-one borrower limit will increase from $1.7 million at December 31, 2013 to $3.7 million following completion of the conversion (assuming the midpoint of the offering range) and merger, although we do not expect to have any lending relationships that would reach this limit.

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Maintaining asset quality through conservative underwriting standards and diligent collection efforts.

We believe that maintaining high asset quality is a key to long-term financial success. We have sought to grow and diversify our loan portfolio utilizing underwriting standards that we believe are conservative. We diligently monitor collection efforts. At December 31, 2013, our non-accrual loans were 2.6% of our total loan portfolio. Although we intend to continue our efforts to originate commercial real estate and commercial business loans after the conversion and merger, we intend to maintain our philosophy of managing loan exposures through our prudent approach to lending.

Serving small-and middle-market commercial and retail customers, with a significant focus on electronic delivery platforms and services.

We expect to utilize technology to increase profitability through greater productivity and cost control, and to provide new and better products and services. We expect to leverage Victory Bank’s middle market commercial relationships and through strategic hiring of established commercial managers. We will seek to leverage the technological delivery platform employed by Victory Bank, including the use of remote deposit capture to enhance customers’ banking experience.

After the merger with Victory Bancorp and the conversion stock offering, we intend to operate and grow the combined enterprise into a commercial bank serving small businesses and professional practices, with a significant focus on electronic delivery of our services, while continuing to emphasize residential real estate lending. We will utilize technology to increase productivity and provide new and better products and services. We will also analyze the profitability of these new technologies, products and services, and allocate our resources to those areas we believe offer the greatest future potential, including cost control.

Continuing to originate residential mortgage loans which are primarily sold in the secondary mortgage market.

We will continue to provide products and services that meet the needs of our residential lending customers in our primary market area. We offer both fixed-rate and adjustable-rate loans, with a variety of terms to meet our customers’ needs, which we primarily sell into the secondary mortgage market.

Building profitable business and consumer relationships by providing superior customer service with an emphasis on increasing transaction deposit account and deposit balances.

We are a full-service financial services bank offering our customers a broad range of loan and deposit products. We will continue to seek to increase the commercial real estate and commercial business loans we originate and anticipate serving a greater percentage of the small businesses as we expand in our market area. We offer a broad array of services, including internet banking, mobile banking, account related text messaging, remote check capture, ACH processing, and merchant credit card processing, which enables our customers to pay bills on-line, among other conveniences.

We provide, and will continue to emphasize, superior customer service as a means to attract and retain customers. We deliver personalized service and respond with flexibility to customer needs. We believe that our community orientation is attractive to our customers and distinguishes us from the large institutions that operate in our area but are headquartered elsewhere.

We believe a solid banking relationship is best expressed in the form of the primary transaction account. For consumers, this is the household checking account from which they pay their bills. For businesses, it is one or more operating accounts and related cash management services. The primary transaction account provides us with a low-cost source of funds and enables us to build relationships with our customers. We intend to focus our resources on growing profitable business and consumer relationships by emphasizing the primary transaction account. The primary transaction account becomes linked to automated payment links in the form of direct debits and direct deposits and, coupled with superior customer service, tend to create a relationship between the bank and the customer. We believe that many opportunities remain to deliver what our customers want in the form of service and convenience and intend to continue to promote our transaction accounts, particularly when we originate loans for our customers.

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Our merger with Victory Bancorp is expected to allow us to expand our commercial, residential, construction and commercial loans and related deposits. Commercial mortgage, construction and commercial business loans, and related deposits, generally have higher fees associated with them than residential mortgages. Victory Bank originates Small Business Administration loans, and sells the guaranteed portion of such loans at a premium.

Comparison of Financial Condition at December 31, 2013 and June 30, 2013

Total Assets. Total assets increased by $10.0 million, or 6.5%, to $163.4 million at December 31, 2013, from $153.4 million at June 30, 2013. The increase was primarily a result of an increase in cash and cash equivalents of $15.8 million funded by an increase in deposit liabilities of $7.1 million and additional advances from the Federal Home Loan Bank of $4.0 million. The increase in cash and cash equivalents was offset by a $5.5 million decrease in loans held for sale.

Cash and Cash Equivalents. Cash and cash equivalents increased to $22.9 million at December 31, 2013, from $7.1 million at June 30, 2013. This represented an increase of $15.8 million.

Investment Securities. The investment activities of HV Bank consist primarily of investments in U.S. Government agency securities, municipal and corporate bonds and notes, and mortgage-backed securities. HV Bank makes investments in order to maintain the levels of liquid assets required by regulatory authorities and manage cash flow, diversify its assets, obtain yield and to satisfy certain requirements for favorable tax treatment. The principal objective of the investment policy is to earn as high a rate of return as possible, but to consider also financial or credit risk, liquidity risk and interest rate risk. Typically investments include federally sponsored agency mortgage pass-through and federally sponsored agency and mortgage-related securities. Investment and aggregate investment limitations and credit quality parameters of each class of investment are prescribed in HV Bank’s investment policy. HV Bank performs analyses on mortgage-related securities prior to purchase and on an ongoing basis to determine the impact on earnings and market value under various interest rate and prepayment conditions.

Investment securities decreased by $540,000, or 1.0%, from $51.8 million at June 30, 2013, to $51.3 million at December 31, 2013. The increase was due to purchases of investment securities available for sale of $2.5 million, partially offset by maturities of $2.4 million and proceeds from sales of $347,000. Purchases of securities held to maturity were $596,000 during the six months ended December 31, 2013. At December 31, 2013 our held to maturity portion of the portfolio, at amortized cost, was $5.0 million, and our available-for-sale portion of the portfolio, at fair value, was $46.2 million.

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The following table sets forth the amortized cost and fair values of HV Bank’s investment securities portfolio at the dates indicated.

	At December 31,				At June 30,
	2013				2013				2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Securities available-for-sale:
U.S. Governmental securities	$	7,102	$	6,962	$	6,221	$	6,122	$	7,334	$	7,469
Corporate notes		9,591		9,058		9,597		9,118		6,281		6,235
Collaterized mortgage		17,575		16,829		19,267		18,842		22,561		22,741
Obligations-agency residential mortgage-backed securities-		9,251		8,744		8,966		8,651		10,184		10,409
Municipal securities		4,075		3,896		4,069		3,887		1,379		1,400
Bank CDs		749		750		749		755		250		250
Total securities available-for-sale	$	48,343	$	46,239	$	48,869	$	47,375	$	47,989	$	48,504
Securities held to maturity:
Municipal securities	$	5,020	$	4,905	$	4,432	$	4,310	$	606	$	606
Total securities held to maturity	$	5,020	$	4,905	$	4,432	$	4,310	$	606	$	606

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The stated maturities and weighted average yields of the investment securities portfolio at December 31, 2013 and June 30, 2013, are summarized in the following tables. Maturities are based on the final contractual payment dates and do not reflect the impact of prepayments or early redemptions that may occur. No tax-equivalent adjustments have been made to the yields in the following table.

	At December 31, 2013
	Due in one year or less					Due from one year to five years					Due from five years through ten years					Due after ten years					Total
	Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Fair Value		Weighted Average Yield
Securities Held to Maturity:
Municipal securities	$	253		0.50	%	$	1,620		1.52	%	$	2,551		1.39	%	$	596		3.98	%	$	5,020	$	4,905		1.69	%
Total securities held to maturity	$	253		0.50	%	$	1,620		1.52	%	$	2,551		1.39	%	$	596		3.98	%	$	5,020	$	4,905		1.68	%
Securities Available for sale:
U.S. governmental securities	$	—		—		$	—		—	%	$	500		2.08	%	$	6,602		2.51	%	$	7,102	$	6,962		2.48	%
Corporate notes		1,002		1.37	%		497		1.78	%		6,579		2.58	%		1,514		2.80	%		9,591		9,058		2.45	%
Collateralized mortgage obligations-agency residential		—		—			—		—	%		—		—	%		17,575		2.01	%		17,575		16,829		2.01	%
Mortgage-backed securities-agency residential		—		—			4		3.55	%		19		4.81	%		9,228		2.22	%		9,251		8,744		2.23	%
Municipal securities		—		—			1,731		1.75	%		2,093		2.94	%		251		2.65	%		4,075		3,896		2.42	%
Bank CDs		—		—			250		1.55	%		499		1.72	%		—		—	%		749		750		1.67	%
Total securities available for sale	$	1,002		1.37	%	$	2,482		1.74	%	$	9,689		2.59	%	$	35,170		2.20	%		48,343	$	46,239		2.24	%
Total Investment securities	$	1,255		1.19	%	$	4,102		1.65	%	$	12,240		2.34	%	$	35,766		2.23	%	$	53,363	$	51,144		2.19	%

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	At June 30, 2013
	Due in one year or less					Due from one year to five years					Due from five years through ten years					Due after ten years					Total
	Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Weighted Average Yield			Amortized Cost		Fair Value		Weighted Average Yield
Securities Held to Maturity:
Municipal securities	$	—		—	%	$	1,261		1.42	%	$	3,170		1.37	%	$	—		—	%	$	4,431	$	4,310		1.36	%
Total securities held to maturity	$	—		—	%	$	1,261		1.42	%	$	3,170		1.37	%	$	—		—	%	$	4,431	$	4,310		1.36	%
Securities Available for sale:
U.S. governmental securities	$	—		—	%	$	—		—	%	$	506		2.08	%	$	5,715		2.39	%	$	6,221	$	6,122		2.36	%
Corporate notes		—		—	%		1,500		1.50	%		6,554		2.45	%		1,543		3.36	%		9,597		9,118		2.45	%
Collateralized mortgage obligations-agency residential		—		—	%		—		—	%		—		—	%		19,267		2.02	%		19,267		18,842		2.02	%
Mortgage-backed securities-agency residential		—		—	%		6		3.55	%		18		4.74	%		8,942		2.21	%		8,966		8,651		2.22	%
Municipal securities		—		—	%		1,446		1.73	%		2,371		2.47	%		252		2.65	%		4,069		3,887		2.22	%
Bank CDs		—		—	%		250		1.55	%		—		—	%		499		2.85	%		749		755		2.42	%
Total securities available for sale	$	—		—	%	$	3,202		1.61	%	$	9,449		2.44	%	$	36,218		2.20	%		48,869	$	47,735		2.21	%
Total Investment securities	$	—		—	%	$	4,463		1.55	%	$	12,619		2.17	%	$	36,218		2.20	%	$	53,300	$	51,685		2.14	%

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Loans, Net. Total net loans increased from $74.6 million at June 30, 2013, to $75.8 million at December 31, 2013. This represented an increase of $1.2 million, or 1.6%. The residential mortgages increased $1.5 million, or 2.8%, to $54.9 million at December 31, 2013, from $53.4 million at June 30, 2013. Commercial real estate loans increased $479,000, or 3.3%, to $12.4 million at December 31, 2013, from $12.0 million at June 30, 2013. These increases were partially offset by a $1.0 million decrease in home equity loans and home equity lines of credit, or 11.0%, from $9.1 million at June 30, 2013 to $8.1 million at December 31, 2013.

The following table sets forth the composition of the loan portfolio by type of loan at the dates indicated.

	At December 31,						At June 30,
	2013						2013						2012
	Amount			Percent			Amount			Percent			Amount			Percent
	(Dollars in thousands)
Consumer:
Residential mortgage	$	54,906			71.95	%	$	53,375			70.95	%	$	45,412			64.34	%
Home equity and HELOC’s(1)		8,143			10.67			9,053			12.03			10,535			14.92
Other consumer		42			0.06			72			0.10			126			0.18
Commercial:
Commercial real estate		12,433			16.29			11,954			15.89			12,824			18.17
Other commercial		787			1.03			775			1.03			188			0.27
Construction – residential		—			—			—			—			1,500			2.13
Total loans(2)	$	76,311		$	100.0	%	$	75,229			100.0	%	$	70,585			100.0	%
Unearned discounts, origination and commitment fees		(37	)					(76	)					(161	)
Undisbursed portion of construction loan		—						—						(336	)
Allowance for loan losses		(485	)					(581	)					(474	)
Total loans, net	$	75,789					$	74,572					$	69,614

(1) Includes home equity loans secured by second mortgages and home equity lines of credit secured by second mortgages.

(2) Does not include loans classified as held for sale. At December 31, 2013, loans held for sale totaled $3.7 million.

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The following table sets forth maturity information at June 30, 2013, regarding the dollar amount of loan principal repayments becoming due during the periods indicated. The table does not reflect scheduled principal payments, unscheduled prepayments, or the ability of certain loans to reprice prior to maturity dates. Demand loans and loans having no stated repayment schedule are reported as being due in one year or less.

	At June 30, 2013
	Residential Mortgage		Home Equity and HELOC’s		Commercial Real Estate		Other Commercial		Construction- Residential		Total
	(In thousands)
Amounts due after June 30, 2013 in:
One year or less	$	20	$	291	$	—	$	305	$	33	$	649
After one year through two years		16		89		—		—		21		126
After two years through three years		61		92		235		—		15		403
After three years through five years		1,437		432		3,144		—		3		5,016
After five years through ten years		2,824		953		1,490		102		—		5,369
After ten years through fifteen years		6,176		1,044		170		305		—		7,695
After fifteen years		42,841		6,152		6,915		63		—		55,971
Total	$	53,375	$	9,053	$	11,954	$	775	$	72	$	75,229

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The following table sets forth the dollar amount of all fixed- and adjustable-rate loans at June 30, 2013, that are contractually due after June 30, 2014.

	Due after June 30, 2014
	Fixed Rate		Adjustable Rate		Total
	(In thousands)
Consumer:
Residential mortgage	$	53,118	$	237	$	53,355
Home equity and HELOC’s		2,836		5,926		8,762
Other consumer		39		—		39
Commercial:
Commercial real estate		11,346		608		111,954
Other commercial		102		368		470
	$	67,442	$	7,138	$	74,580

Borrowings. Total borrowings at December 31, 2013, were $7.0 million, an increase of $4.0 million, or 133.3%, from $3.0 million at June 30, 2013. The increase solely was due to an increase in Federal Home Loan Bank advances. The balance of borrowed funds will fluctuate depending on, among other things, our ability to attract deposits, the relative pricing of advances compared to deposits, and our liquidity needs. Also, securities sold under agreements to repurchase decreased slightly by $272,000, or 5.0%, from $4.0 million at June 30, 2013, to $3.8 million at December 31, 2013.

The following table shows certain information regarding Federal Home Loan Bank advances at or for the dates indicated:

	At or For the Six Months Ended December 31,						At or For the Year Ended June 30,
	2013			2012			2013			2012
							(Dollars in thousands)
Average balance outstanding	$	6,429		$	3,000		$	3,000		$	3,000
Maximum outstanding at any month-end during the period		7,000			3,000			3,000			3,000
Balance outstanding at the end of the period		7,000			3,000			3,000			3,000
Average interest rate during the period		0.90	%		1.53	%		1.33	%		1.90	%
Weighted average interest rate at end of period		0.72	%		0.93	%		1.33	%		1.90	%

Deposits. Our primary source of funds is retail deposit accounts held by individuals and businesses in our market area. Deposits increased from $133.5 million at June 30, 2013, to $140.6 million at December 31, 2013. The increase of $7.1 million, or 5.3%, in total deposits was primarily the result of an increase in transactional deposit accounts of $6.0 million, or 6.9%, from $87.1 million at June 30, 2013 to $93.1 million at December 31, 2013. Non-interest bearing transaction accounts increased $105,000 or 2.9% from 3.5 million as of June 30, 2013 to $3.6 million as of December 31, 2013. Interest bearing demand deposits increased 9.9%, or $2.6 million, from $26.4 million as of June 30, 2013 to $29.0 million as of December 31, 2013. Savings deposits increased $11.1 million or 58.4%, from $19.0 million as of June 30, 2013 to $30.1 million as of December 31, 2013. Certificates of deposit increased from $46.4 million at June 30, 2013, to $47.6 million at December 31, 2013. This represented a decrease of $1.2 million, or 2.6%, from June 30, 2013, to December 31, 2013.

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The following table sets forth the balance of HV Bank’s time deposits by type of deposit, as of the dates indicated.

	At December 31,					At June 30,
	2013					2013					2012
	Amount		%			Amount		%			Amount		%
	(Dollars in thousands)
Certificates of deposit:
0.15% - 0.99%	$	16,626		11.9	%	$	13,457		10.1	%		9,699		7.3	%
1.00% - 1.99%		22,217		15.5			23,429		17.5			26,296		19.7
2.00% - 2.99%		8,233		6.0			8,288		6.2			10,078		7.5
3.00% - 3.99%		478		0.4			1,252		0.9			3,322		2.5
4.00% - 4.34%		—		—			—		—			20		—
Total certificate accounts		47,554		33.8			46,426		34.7			49,415		37.0
NOW accounts – interest bearing		28,975		20.6			26,390		19.8			24,512		18.3
NOW accounts – non-interest bearing		3,587		2.6			3,482		2.6			3,336		2.5
Money market deposit account		25,366		18.0			32,747		24.5			34,363		25.7
Passbook and statement savings		30,077		21.4			18,959		14.2			16,640		12.4
Checking accounts		5,072		3.6			5,536		4.2			5,451		4.1
Total transaction accounts		93,077		66.2			87,114		65.3			84,302		63.0
Total deposits	$	140,631		100.0	%	$	133,540		100.0	%	$	133,717		100.0	%

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The following table shows the average balance by each type of deposit and the average rate paid on each type of deposit for the periods indicated.

	At December 31,							At June 30,
	2013							2013							2012
	Average Balance		Interest Expense		Average Rate Paid			Average Balance		Interest Expense		Average Rate Paid			Average Balance		Interest Expense		Average Rate Paid
NOW accounts-interest bearing	$	21,857	$	22		0.20	%	$	26,745	$	51		0.19	%	$	23,001	$	61		0.27	%
NOW accounts-non-interest bearing		5,608		—		—			3,465		—		—			3,608		—		—
Money Market deposit accounts		29,556		35		0.24	%		32,672		82		0.24	%		33,856		149		0.44	%
Passbook and statement accounts		24,115		29		0.24	%		18,577		40		0.22	%		15,599		47		0.30	%
Checking accounts		8,608		—		—			5,117		—		—			4,998		—		—
Certificates of deposit		46,657		318		1.36	%		48,834		765		1.58	%		49,457		891		1.80	%
Total deposits	$	136,401	$	404		0.59	%	$	135,410	$	938		0.69	%	$	130,519	$	1.148		0.88	%

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The following table sets forth the amount and maturities of certificates of deposits at December 31, 2013.

	Less Than One Year		Over One Year to Two Years		Over Two Years to Three Years		Over Three Years		Total		Percentage of Total Certificate Accounts
	(Dollars in thousands)
Interest Rate:
0.15% - 0.99%	$	9,048	$	6,663	$	915	$	—	$	16,626		35.0	%
1.00% - 1.99%		7,810		4,234		4,428		5,745		22,217		46.7	%
2.00% - 2.99%		4,048		2,025		1,470		690		8,233		17.3	%
3.00% - 3.99%		165		61		252		—		478		1.0	%
Total	$	21,071	$	12,983	$	7,065	$	6,435	$	47,554		100.00	%

The following table sets forth the amount and maturities of certificates of deposits at June 30, 2013.

	Less Than One Year		Over One Year to Two Years		Over Two Years to Three Years		Over Three Years		Total		Percentage of Total Certificate Accounts
	(Dollars in thousands)
Interest Rate:
0.15% - 0.99%	$	9,004	$	3,424	$	1,029		—	$	13,457		28.99	%
1.00% - 1.99%		12,867		1,807		4,160		4,593		23,427		50.46
2.00% - 2.99%		3,808		1,594		1,088		1,797		8,287		17.85
3.00% - 3.99%		904		86		72		193		1,255		2.70
Total	$	26,583	$	6,911	$	6,349	$	6,583	$	46,426		100.0	%

As of December 31, 2013, the aggregate amount of outstanding certificates of deposit in amounts greater than or equal to $100,000 was approximately $22,621. The following table sets forth the maturities and amounts of these certificates as of December 31, 2013.

	At December 31, 2013
	(In thousands)
	Amount		Weighted Average Rate
Three months or less	$	7,969		1.53	%
Over three months through six months		2,598		1.70	%
Over six months through one year		607		.064	%
Over one year		11,447		1.34	%
Total	$	22,621		1.43	%

73

As of June 30, 2013, the aggregate amount of outstanding certificates of deposit in amounts greater than or equal to $100,000 was approximately $20,516,000.

The following table sets forth the maturity of these certificates as of June 30, 2013.

	At June 30, 2013
	(In thousands)
	Amount		Weighted Average Rate
Three months or less	$	3,340		1.39	%
Over three months through six months		1,350		1.28	%
Over six months through one year		9,357		1.67	%
Over one year		6,469		1.65	%
Total	$	20,516		1.59	%

The following table sets forth deposit activities for the periods indicated.

	Six Months Ended December 31,				Years Ended June 30,
	2013		2012		2013			2012
	(In thousands)
Beginning balance	$	133,540	$	133,717	$	133,717		$	124,186
Net deposits (withdrawals) before interest credited		6,687		3,579		(1,115	)		8,383
Interest credited		404		496		938			1,148
Net (decrease) increase in deposits		7,091		4,075		(177	)		9,531
Ending balance	$	140,631	$	137,792	$	133,540		$	133,717

Total Equity. Total equity was $10.3 million, or 6.3% of total assets at December 31, 2013, compared to $10.6 million, or 6.9% of total assets, at June 30, 2013. The primary reason for the $305,000, or 2.8%, decrease in equity was the change in accumulated other comprehensive loss (which increased by $360,000 from a loss of $881,000 at June 30, 2013, to a loss of $1.2 million at December 31, 2013. The change in accumulated other comprehensive income was primarily due to the effects of interest rate fluctuations on our available-for-sale securities portfolio. The accumulated other comprehensive loss was partially offset by $55,000 in net income reported during the six months ended December 31, 2013.

Comparison of Financial Condition at June 30, 2013 and June 30, 2012

Total Assets. Total assets decreased by $2.5 million, or 1.6%, to $153.4 million at June 30, 2013, from $155.9 million at June 30, 2012. The decrease was the result of a decrease in cash and cash equivalents of $3.9 million and a decrease in loans held for sale of $7.1 million. This was partially offset by an increase in loans receivable of $5.0 million and an increase in investment securities of $2.7 million.

Cash and Cash Equivalents. Cash and cash equivalents decreased by $3.9 million, or 35.8%, to $7.1 million at June 30, 2013, from $11.1 million at June 30, 2012. This decrease was the result of a redeployment of cash into investments in loans and investment securities.

74

Investment Securities. Investment securities increased $2.7 million, or 5.5%, to $51.8 million at June 30, 2013, from $49.1 million at June 30, 2012. The increase was the result of purchases of securities of $45.6 million, partially offset by proceeds from sales of securities and security maturities/calls of $32.3 million and $8.1 million, respectively.

Loans, Net. Total net loans increased from $69.6 million at June 30, 2012, to $74.6 million at June 30, 2013. This represented an increase of $5.0 million, or 7.1%. The increase in the loan portfolio was primarily attributable to an increase of $8.0 million, or 17.5%, in the residential mortgages and a decrease in of $870,000, or 6.8% in secured commercial real estate loans. The construction-residential loans decreased from $1.5 million at June 30, 2012 to $0 at June 30, 2013.

Borrowings. Borrowed funds, which were exclusively Federal Home Loan Bank advances, were $3.0 million at each of June 30, 2013 and June 30, 2012.

Deposits. Deposits decreased from $133.7 million at June 30, 2012, to $133.5 million at June 30, 2013. Transactional deposits increased by $231,000, or 2.6%, from $8.8 million at June 30, 2012, to $9.0 million at June 30, 2013. Interest-bearing demand deposits increased from $24.5 million at June 30, 2012, to $26.4 million at June 30, 2013. This was an increase of $1.9 million, or 7.7%. Savings deposits experienced an increase of $2.3 million, or 13.9%, from $16.6 million at June 30, 2012, to $19.0 million at June 30, 2013. Certificates of deposit decreased from $49.4 million at June 30, 2012, to $46.4 million at June 30, 2013. This represented a decrease of $3.0 million, or 6.0%.

Total Equity. Total equity was $10.6 million or 6.9% of total assets at June 30, 2013, compared to $11.6 million or 7.5% of total assets, at June 30, 2012. The primary reason for the $1.0, or 9.1 %, decrease in equity was the accumulated other comprehensive loss which increased by $1.2 from a gain of $303,000 at June 30, 2012 to a loss of $881,000 at June 30, 2013. This loss was offset by net income for the year ended June 30, 2013 of $123,000. The change in accumulated other comprehensive income was primarily due to the effects of interest rate fluctuations on our available-for-sale securities portfolio.

Comparison of Operating Results for the Six Months Ended December 31, 2013 and December 31, 2012

Overview. Net income decreased by $114,000, or 67.5%, to $55,000 for the six months ended December 31, 2013, from $169,000 for the six months ended December 31, 2012. Net interest income increased $62,000, or 3.0%, to $2.1 million for the six months ended December 31, 2013, from $2.0 million for the six months ended December 31, 2012. Provision for loan losses decreased by $111,000, or 138.1%, due to a credit of $31,000 for the six months ended December 31, 2013, from $80,000 for the six months ended December 31, 2012. Non-interest income decreased by $281,000, or 19.0%, from $1.5 million for the six months ended December 31, 2012 to $1.2 million for the six months ended December 31, 2013 due to a decrease in mortgage loan originations primarily as a result of increases in market rates of interest. Non-interest expense increased by $43,000 or 1.3%, from $3,204,000 for the six months ended December 31, 2012, to $3,247,000 for the six months ended December 31, 2013. Income tax expense decreased $36,000, or 50.0%, from $72,000 for the six months ended December 31, 2012 to $36,000 for the six months ended December 31, 2013.

Net Interest Income. Net interest income increased by $62,000, or 3.0%, to $2.1 million for the six months ended December 31, 2013, from $2.0 million for the six months ended December 31, 2012. The increase primarily resulted from the increase in the net interest margin driven by a drop in the average cost of interest bearing liabilities, which dropped from 0.81% for the six months ended December 31, 2012 to 0.66% for the six months ending December 31, 2013. As a result, the net margin increased from 2.79% for the six months ended December 31, 2012 to 2.83% for the six months ended December 31, 2013.

Interest on loans decreased from $2.03 million for the six months ended December 31, 2012 to $1.96 million for the six months ended December 31, 2013, a decrease of $70,000. This was primarily the result of the yield on loans decreasing 25 basis points from 5.08% for the six months ended December 31, 2012 to 4.83% for the six months ended December 31, 2013. This decrease was partially offset by an increase in average loan balances from $80.0 million for the year ended December 31, 2012 to $81.1 million for the year ended December 31, 2013.

75

Interest and dividend income on investment securities, bank stock and interest-bearing deposits increased from $539,000 for the six months ended December 31, 2012 to $585,000 for the six months ended December 31, 2013. The increase in interest and dividend income was mainly the result of an increase in the yield on investment securities from 1.95% to 2.14%. Partially offsetting this increase was a decrease in average investment security balances, which decreased from $52.9 million as of December 31, 2012, to $52.3 million as of December 31, 2013.

The cost of interest bearing liabilities for the six months ended December 31, 2013 was 0.66%, a decrease from 0.81% for the six months ended December 31, 2012, or 15 basis points, and is primarily due to decreases in interest rates. Interest expense paid on deposits for the six months ended December 31, 2013 was $404,000, compared to $496,000 during the same period in 2012.

For the six months ended December 31, 2013, the average yield on interest-earning assets was 3.41%, compared to 3.50% for the six months ended December 31, 2012. The average cost of interest-bearing liabilities was 0.66% for the six month ended December 31, 2013, compared to 0.81% for the six months ended December 31, 2012. The average balance of interest-earnings assets increased by $2.5 million to $149.4 million for the six months ended December 31, 2013, compared to $146.8 million for the six months ended December 31, 2012. The average balance of interest-bearing liabilities increased by $3.7 million to $132.5 million for the six months ended December 31, 2013, from $128.8 million for the six months ended December 31, 2012.

The average interest rate spread was 2.75% for the six months ended December 31, 2013, compared to 2.69% for the six months ended December 31, 2012. The average net interest margin was 2.83% for the six months ended December 31, 2013, compared to 2.79% for the six months ended December 31, 2012.

76

The following table sets forth average balances, average yields and costs, and certain other information for the six months ended December 31, 2013 and 2012. All average balances are based on daily averages, unless otherwise noted. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

	Six Months Ended December 31,
	2013								2012
	Average Outstanding Balance			Interest Income Expense		Yield/ Rate			Average Outstanding Balance			Interest Income Expense		Yield/ Rate
	(Dollars in thousands)
Interest earning assets
Loans(1)	$	81,092		$	1,961		4.83	%	$	79,950		$	2,030		5.08	%
Cash and cash equivalents		15,164			22		0.29	%		13,233			22		0.33	%
Investment securities		52,262			557		2.14	%		52,947			516		1.95	%
Restricted investment in bank stock		846			5		1.18	%		695			1		0.29	%
Total interest earning assets	$	149,364		$	2,545		3.41	%	$	146,825		$	2,569		3.50	%
Non interest earning assets	$	9,057							$	9,563
Total assets	$	158,421		$	2,545		3.21	%	$	156,388		$	2,569		3.29	%
Interest bearing Liabilities
NOW accounts	$	21,857		$	22		0.20	%	$	21,094		$	26		0.25	%
Money market deposit accounts		29,556			35		0.24	%		33,141			47		0.28	%
Passbook and statement savings accounts		24,115			29		0.24	%		17,790			22		0.25	%
Certificates of deposit		46,657			318		1.36	%		49,279			401		1.63	%
Securities sold under agreements to repurchase		3,893			2		0.10	%		4,543			2		0.09	%
Advances from the Federal Home Loan Bank		6,429			29		0.90	%		3,000			23		1.53	%
Total interest bearing liabilities	$	132,507		$	435		0.66	%	$	128,847		$	521		0.81	%
Total non-interest bearing liabilities	$	15,437							$	15,685
Total liabilities	$	147,944							$	144,532
Total equity	$	10,477							$	11,856
Total liabilities and net worth	$	158,421							$	156,388
Net interest income(2)				$	2,110							$	2,048
Net interest rate spread							2.75	%							2.69	%
Net interest earning assets	$	149,364							$	146,825
Net interest margin(3)							2.83	%							2.79	%
Average of interest earning assets to interest bearing liabilities		112.72	%							113.95	%

(1) Average loan balances include loans held for sale and nonaccrual loans. Calculated net of deferred fees and discounts, loans in process and allowance for loan losses.

(2) Yields are based on the historical cost balances of the related assets and do not give effect to changes in fair value that are included as a component of equity. Yields on tax exempt obligations have not been computed on a tax equivalent basis.

(3) Equals net interest income divided by average earning assets.

77

The following table presents the dollar amount of changes in interest income and interest expense for the major categories of our interest-earning assets and interest-bearing liabilities. Information is provided for each category of interest-earning assets and interest-bearing liabilities with respect to (1) changes in volume, which is the change in volume multiplied by prior year rate, and (2) changes in rate, which is the change in rate multiplied by prior year volume. The combined effect of changes in both rate and volume has been allocated proportionately to the change due to volume and the change due to rate.

	Six Months Ended December 31, 2013 vs. 2012									Years Ended June 30, 2013 vs. 2012
	Increase (Decrease) Due to						Total Increase			Increase (Decrease) Due to						Total Increase
	Volume			Rate			(Decrease)			Volume			Rate			(Decrease)
	(In thousands)
Interest-earning assets:
Loans	$	40		$	(109	)	$	(69	)	$	(105	)	$	(346	)	$	(451	)
Federal funds sold and interest-bearing deposits in other banks		(2	)		2			—			(6	)		12			6
Investment securities		(12	)		52			40			365			(472	)		(107	)
Restricted investment in bank stock		—			5			5			—			1			1
Total interest-earning assets	$	26		$	(50	)	$	(24	)	$	254		$	(805	)	$	(551	)
Interest-bearing liabilities:
NOW accounts	$	2		$	(6	)	$	(4	)	$	14		$	(24	)	$	(10	)
Money Market deposit accounts		—			(12	)		(12	)		(5	)		(62	)		(67	)
Passbook and statement savings accounts		20			(13	)		7			14			(21	)		(7	)
Certificates of deposit		(10	)		(73	)		(83	)		(11	)		(115	)		(126	)
Securities sold under agreements to repurchase		(1	)		1			—			—			(2	)		(2	)
Advances from the Federal Home Loan Bank		19			(13	)		6			—			(17	)		(17	)
Total interest bearing liabilities	$	30		$	(116	)	$	(86	)	$	12		$	(241	)	$	(229	)
Increase/(decrease) in net interest income	$	(4	)	$	66		$	62		$	156		$	(478	)	$	(322	)

78

Provision for Loan Losses. HV Bank establishes a provision for loan losses, which is charged to operations, in order to maintain the allowance for loan losses at a level HV Bank considers necessary to absorb credit losses incurred in the loan portfolio that are both probable and reasonably estimated at the balance sheet date. In determining the level of the allowance for loan losses, HV Bank considers past and current loss experience, 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 non-performing loans. The amount of the allowance is based on estimates and actual losses may vary from such estimates, as more information becomes available or economic conditions change. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as circumstances change as more information becomes available. The allowance for loan losses is assessed on a monthly basis and provisions are made for loan losses as required in order to maintain the allowance.

Provision for loan losses decreased by $111,000, or 138.8%, to a credit of $31,000 for the six months ended December 31, 2013, from $80,000 for the six months ended December 31, 2012. The primary factor that contributed to the decrease in the provision for loan losses was due to specific loan loss provisions recorded on impaired loans totaling $72,000 for the six months ended December 31, 2012. Non-accrual loans decreased from $2.5 million as of December 31, 2012, to $2.0 million as of December 31, 2013, a decrease of $462,000, or 20.0%. The decline in non-accrual loans occurred primarily as a result of resolution of non-accrual loans through the foreclosure process, which totaled $1.0 million. HV Bank recorded net charge-offs of $65,000 and $13,000 for the six months ended December 31, 2013 and December 31, 2012, respectively.

An analysis of changes in the allowance for loan losses is presented under “Business of HV Bancorp and HV Bank-Allowance for Loan Losses.”

Non-Interest Income. Non-interest income was $1.2 million for the six months ended December 31, 2013, which was a decrease of $281,000, or 19.0%, from $1.5 million for the six months ended December 31, 2012. Service charges and fees decreased by $11,000, or 9.2%, from $119,000 for the six months ended December 31, 2012, to $108,000 for the six months ended December 31, 2013. Gains on sale of loans increased by $72,000 from $930,000 for the six months ended December 31, 2012 to $1,002,000 for the six months ended December 31, 2013. Gains on sales of investment securities decreased from $334,000 for the six months ended December 31, 2012, to a loss of $2,000 for the six months ended December 31, 2013, as sales of investment securities were $347,000 for the six months ended December 31, 2013 compared to sales of $15.3 million for the six months ended December 31, 2012.

Non-Interest Expense. Non-interest expenses increased by $43,000, or 1.3%, to $3.2 million for the six months ended December 31, 2013, from $3.2 million for the six months ended December 31, 2012. Salaries and employment expenses decreased by $48,000, or 3.1%, to $1,514,000 million for the six months ended December 31, 2013, from $1.6 million for the six months ended December 31, 2012, primarily the result of decreased bonus and loan officer commission expense related to reduced sales volume in the mortgage operation. Occupancy expenses decreased by $47,000, or 9%, from $522,000 for the six months ended December 31, 2012, to $475,000 for the six months ended December 31, 2013, primarily due to a decrease in rental expense. Data processing related operations expenses were $236,000 and $248,000 for the six months ended December 31, 2013 and 2012, respectively. Real estate owned expense increased by $29,000, or 19.2%, from $151,000 in the six months ended December 31, 2012, to $180,000 for the six months ended December 31, 2013, as a result of the preparing a real estate owned property for settlement. Professional expenses increased $113,000, or 65.3%, from $173,000 for the six months ended December 31, 2012, to $286,000 for the six months ended December 31, 2013 due to $120,000 in expenses associated with the merger transaction with The Victory Bank. Other operating expenses increased by $5,000, or 1.0%, from $480,000 for the six months ended December 31, 2012, to $485,000 for the six months ended December 31, 2013.

Income Taxes. Income tax expense decreased $36,000 or 50.0%, to a $36,000 for the six months ended December 31, 2013, from $72,000 for the six months ended December 31, 2012. This decrease in tax expense was primarily due to the change in income before income taxes, which decreased from $241,000 for the six months ended December 31, 2012 to $91,000 for the six months ended December 31, 2013. The overall effective tax rate increased as a result of an increase in deferred tax expense associated with non-deductible items, primarily merger related expenses incurred in the six months ended December 31, 2013.

79

Comparison of Operating Results for the Years Ended June 30, 2013 and 2012

Overview. Net income decreased by $789,000, or 86.5%, to $123,000 for the year ended June 30, 2013, from $912,000 for the year ended June 30, 2012. Net interest income decreased $322,000, or 7.4%, to $4.0 million for the year ended June 30, 2013, from $4.3 million for the year ended June 30, 2012. Provision for loan losses decreased by $58,000, or 32.6%, to $120,000 for the year ended June 30, 2013, from $178,000 for the year ended June 30, 2012. Other income decreased by $49,000, or 1.8%, from $2. 7 million for the year ended June 30, 2012 to $2.7 million for the year ended June 30, 2013. Operating expenses increased by $408,000, or 6.7%, from $6.1 million for the year ended June 30, 2012, to $6.5 million for the year ended June 30, 2013. Income taxes (benefit) decreased $(68,000), or 61.8%, from $(110,000) for the year ended June 30, 2012 to $(42,000) for the year ended June 30, 2013.

Net Interest Income. Net interest income decreased by $322,000, or 7.4%, to $4.0 million for the year ended June 30, 2013, from $4.3 million for the year ended June 30, 2012. The increase primarily resulted from the decrease in the net interest margin, which decreased from 3.06% for the year ended June 30, 2012 to 2.74% for the year ended June 30, 2013, a decrease of 32 basis points.

Interest on loans decreased from $4.4 million for the year ended June 30, 2012 to $3.9 million for the year ended June 30, 2013, a decrease of $451,000. This was primarily the result of the yield on loans decreasing 33 basis points from 5.29% for the year ended June 30, 2012 to 4.96% for the year ended June 30, 2013. The average loan balances also decreased from $83.0 million as of June 30, 2012 to $79.6 million as of June 30, 2013.

Interest and dividend income on investment securities, bank stock and interest-bearing deposits decreased from $1.1 million for the year ended June 30, 2012 to $1.0 million for the year ended June 30, 2013. The decrease in interest and dividend income was mainly the result of a decrease in the yield on investment securities decreasing from 2.78% to 1.88%. This is primarily due to the sale of $32.4 million of available for sale securities, which resulted in a $592,000 gain on sale of investments for the year ended June 30, 2013.

The cost of interest bearing liabilities for the year ended June 30, 2013 was 0.68%, a decrease from 0.86% for the year ended June 30, 2012, or 18 basis points. Interest expense paid on deposits for the year ended June 30, 2013 was $938,000 compared to $1.1 million during the same period in 2012. The decrease in interest expense was primarily driven by the general reduction in rates across the deposit products of the bank, reflecting local current market conditions.

For the year ended June 30, 2013, the average yield on interest-earning assets was 3.42%, compared to 3.92% for the year ended June 30, 2012. The average cost of interest-bearing liabilities was 0.73% for the year ended June 30, 2013, compared to 0.93% for the year ended June 30, 2012. The average balance of interest-earnings assets increased by $4.6 million to $146.2 million for the year ended June 30, 2013, compared to $141.5 million for the year ended June 30, 2012. The average balance of interest-bearing liabilities increased by $4.4 million to $134.0 million for the year ended June 30, 2013, from $129.6 million for the year ended June 30, 2012.

The average interest rate spread was 2.74% for the year ended June 30, 2013, compared to 3.06% for the year ended June 30, 2012. The average net interest margin was 2.68% for the year ended June 30, 2013, compared to 2.98% for the year ended June 30, 2012.

80

The following table sets forth average balances, average yields and costs, and certain other information for the years ended June 30, 2013 and 2012. All average balances are based on daily averages, unless otherwise noted. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

	Years Ended June 30,
	2013								2012
	Average Outstanding Balance			Interest Income Expense		Yield/ Rate			Average Outstanding Balance			Interest Income Expense		Yield/ Rate
	(Dollars in thousands)
Interest earning assets
Loans(1)	$	79,550		$	3,946		4.96	%	$	83,025		$	4,397		5.29	%
Cash and cash equivalents		12,472			43		0.34	%		17,167			37		0.21	%
Investment securities		53,378			1,003		1.88	%		40,536			1,110		2.78	%
Restricted investment in bank stock		760			2		0.30	%		818			1		0.08	%
Total interest earning assets	$	146,161		$	4,994		3.42	%	$	141,545		$	5,545		3.92	%
Non interest earning assets	$	9,538							$	9,967
Total assets	$	155,699		$	4,994		3.21	%	$	151,513		$	5,545		3.66	%
Interest bearing Liabilities
Now accounts	$	26,745		$	50		0.19	%	$	23,001		$	61		0.27	%
Money market deposit accounts		32,672			82		0.24	%		33,856			149		0.43	%
Passbook and statement savings accounts		18,577			40		0.22	%		15,999			47		0.30	%
Certificates of deposit		48,834			765		1.58	%		49,457			891		1.81	%
Securities sold under agreements to repurchase		4,219			4		0.10	%		4,718			6		0.12	%
Advances from the Federal Home Loan Bank		3,000			40		1.33	%		3,000			57		1.90	%
Total interest bearing liabilities	$	134,047		$	982		0.73	%	$	129,630		$	1,211		0.93	%
Total non-interest bearing liabilities	$	10,008		$	—		—	%	$	10,831		$	—		—	%
Total liabilities	$	144,055		$	982		0.68	%	$	140,461		$	1,211		0.86	%
Total equity	$	11,644		$	—				$	11,052
Total liabilities and net worth	$	155,699		$					$	151,513
Net interest income(2)				$	4,012							$	4,334
Net interest rate spread							2.68	%							2.98	%
Net interest earning assets	$	146,161							$	141,545
Net interest margin(3)							2.74	%							3.06	%
Average of interest earning assets to interest bearing liabilities		109.04	%							109.19	%

(1) Average loan balances include loans held for sale and nonaccrual loans. Calculated net of deferred fees and discounts, loans in process and allowance for loan losses.

(2) Yields are based on the historical cost balances of the related assets and do not give effect to changes in fair value that are included as a component of equity. Yields on tax exempt obligations have not been computed on a tax equivalent basis.

(3) Equals net interest income divided by average earning assets.

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Provision for Loan Losses. The provision for loan losses decreased $58,000, or 32.6%, to $120,000 for the year ended June 30, 2013, from $178,000 for the year ended June 30, 2012. The decrease in provision for loan losses was attributed to the reversal of a specific reserve on one credit due to performing status. In addition, there was a decrease in non-accrual loans from $2.2 million as of June 30, 2012, to $1.4 million as of June 30, 2013, a decrease of $742,000 or 33.9%. HV Bank recorded net charge-offs of $12,000 and $332,000 for the years ended June 30, 2013 and June 30, 2012, respectively.

Non-Interest Income. Non-interest income was $2.7 million for the year ended June 30, 2013, which was a decrease of $49,000, or 1.8% from $2.7 million for the year ended June 30, 2012. Gain on sale of loans decreased $88,000 from $1.8 million for the year ended June 30, 2012 to $1.7 million. This decrease is due to the lower volumes of loan originations and sales related to loans designated as held for sale.

Non-Interest Expense. Non-interest expense increased by $408,000, or 6.7% to $6.5 million for the year ended June 30, 2013, from $6.1 million for the year ended June 30, 2012. Salaries and employment expenses increased by $456,000, or 16.6%, to $3.2 million for the year ended June 30, 2013, from $2.8 million for the year ended June 30, 2012. The increase in salaries and employment expenses was primarily the result of increased loan officer’s commissions. Occupancy expenses decreased by $108,000, or 9.5% from $1.1 million for the year ended June 30, 2012, to $1.0 million for the year ended June 30, 2013, primarily due to a decrease in depreciation expense. FDIC insurance premiums increased by $22,000, or 16.1%, from $137,000 for the year ended June 30, 2012, to $159,000 for the year ended June 30, 2013. Data processing related operations expenses increased by $60,000, or 10.5%, from $573,000 for the year ended June 30, 2012, to $633,000 for the year ended June 30, 2013. This increase was due to enhancements (such as mobile banking) to our technology systems. Real estate owned expense decreased $302,000, or 43.9%, from $688,000 for the year ended June 30, 2012, to $386,000 in the year ended June 30, 2013, as a result of the resolution of a number of properties acquired through foreclosures. Professional expenses increased $112,000, or 38.4%, from $292,000 for the year ended June 30, 2012, to $404,000 for the year ended June 30, 2013 due to increased compliance costs and fees as well as professional fees incurred in the resolution of foreclosures. Other operating expenses increased by $168,000, or 31.8%, from $528,000 for the year ended June 30, 2012, to $696,000 for the year ended June 30, 2013. This was primarily the result of an increased marketing expenses and advertising costs.

Income Taxes. The total income tax benefit decreased $68,000, or 61.8%, to $(42,000) for the year ended June 30, 2013, from $(110,000) for the year ended June 30, 2012. This decrease was primarily due to the change in valuation allowance on the deferred tax asset of $335,000. Tax expense was further reduced due to an increase in nontaxable investment securities.

Risk Management

Overview. Substantially all of HV Bank’s interest rate risk is derived from our lending, deposit taking and investment activities. This risk could result in reduced net income, loss in fair value of assets and/or increases in fair value of liabilities due to changes in interest rates. Our principal financial objective is to achieve long-term profitability, while mitigating our exposure to fluctuating market interest rates.

Interest Rate Risk Management. Because the net present value of the majority of our assets and liabilities are sensitive to changes in interest rates, our most significant form of market risk is interest rate risk. We are vulnerable to an increase in interest rates to the extent that our interest-bearing liabilities mature or reprice more quickly than our interest-earning assets. As a result, a principal part of our business strategy is to manage interest rate risk and limit the exposure of our net interest income to changes in market interest rates. The Board of Trustees of HV Bank is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Trustees.

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We have emphasized the origination of fixed-rate mortgage loans in our portfolio in order to maximize our net interest income and control credit risk. We accept increased exposure to interest rate fluctuations as a result of our investment in such loans. In a period of rising interest rates, our net interest rate spread and net interest income may be negatively affected. We have sought to manage and mitigate our exposure to interest rate risks in the following ways:

• We maintain adequate levels of short-term liquid assets, totaling $22.9 million in cash and cash equivalents at December 31, 2013;

• We lengthen the weighted average maturity of our liabilities through retail deposit pricing strategies and the use of Federal Home Loan Bank advances;

• We invest in shorter-to medium-term securities and in securities with adjustable-rate features, providing for increased interest rates prior to maturity according to a predetermined schedule; and

• We maintain adequate levels of capital.

In the future, we intend to take additional steps to reduce interest rate risk, including investing cash flows from investment securities in higher yielding assets such as commercial loans and lines of credit, which will afford the ability to option to reprice the asset in the shorter term.

Net Portfolio Analysis. The table below sets forth, as of December 31, 2013, the estimated changes in HV Bank’s net portfolio value, or NPV, that would result from the designated instantaneous changes in the U.S. Treasury yield curve. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results.

			Estimated Increase (Decrease) in NPV						NPV as a Percentage of Present Value of Assets(3)
Change in Interest Rates (basis points)(1)	Estimated NPV(2)		Amount			Percent			NPV Ratio(4)			Change in Basis Points
	(Dollars in thousands)
+300	$	6,670	$	(8,407	)		-56	%		4.3	%		-470
+200		8,910		(6,167	)		-41	%		5.6	%		-340
+100		11,711		(3,366	)		-22	%		7.2	%		-180
0		15,077		—			0	%		9.0	%		—
-100		17,323		2,246			15	%		10.2	%		120.0

(Footnotes on following page)

(1) Assumes an instantaneous uniform change in interest rates at all maturities.

(2) NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.

(3) Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

(4) NPV Ratio represents NPV divided by the present value of assets.

The table above indicates that at December 31, 2013, in the event of a 200 basis point increase in interest rates, Huntingdon Valley Bank would experience a 41% decrease in net portfolio value. In the event of a 100 basis point decrease in interest rates, HV Bank would experience a 22% increase in net portfolio value. Under this analysis, at December 31, 2013, the net portfolio value of HV Bank was $15.1 million, which was $4.8 million, or 46.6% above HV Bank’s equity of $10.3 million at December 31, 2013.

Certain shortcomings are inherent in the methodologies used in determining interest rate risk through changes in net portfolio value. Modeling changes in net portfolio value require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this

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regard, the net portfolio value tables presented assume that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assume that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the net portfolio value tables provide an indication of Huntingdon Valley Bank’s interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on Huntingdon Valley Bank’s net interest income and will differ from actual results.

Liquidity Management. Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments and maturities of securities. In addition, we have the ability to borrow funds from the discount window of the Federal Reserve Bank of Philadelphia, a borrowing arrangement with the Federal Home Loan Bank of Pittsburgh, and a credit facility with Atlantic Community Banker’s Bank, a correspondent bank. 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.

The Board of Trustees 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 December 31, 2013.

We monitor and adjust our investments in liquid assets based upon our assessment of: (1) expected loan demand; (2) expected deposit flows; (3) yields available on interest-earning deposits and securities; and (4) the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest-earning deposits and short-and intermediate-term securities.

Our most liquid assets are cash and cash equivalents, which include federal funds sold and interest-bearing deposits in other banks. The level of these assets is dependent on our operating, financing, lending and investing activities during any given period. At December 31, 2013, cash and cash equivalents totaled $22.9 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $46.2 million at December 31, 2013.

At December 31, 2013, we had $4.8 million in mortgage loan commitments outstanding. In addition, at that date, we had $7.5 million unused home equity lines of credit to borrowers. Certificates of deposit due within one year of December 31, 2013, totaled $21.1 million, or 15.0%, of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other deposits and Federal Home Loan Bank advances. Depending on market conditions, we may be required to pay higher rates on such deposits or borrowings than we currently pay. We believe, however, based on past experience that a significant portion of such deposits will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

Investing and Financing Activities. Our primary investing activities are originating loans and investing in securities. During the six months ended December 31, 2013, and the year ended June 30, 2013, we had net increases of $1.2 million and $6.0 million, respectively, of loans. During the six months ended December 31, 2013, and the year ended June 30, 2013, we purchased $3.1 million and $45.6 million of investment securities, respectively.

Financing activities consist primarily of activity in deposit accounts. We experienced a net increase in total deposits of $7.0 million for the six months ended December 31, 2013, and a net decrease of $177,000 for the year ended June 30, 2013. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors, and by other factors.

Under terms of its collateral agreement with the Federal Home Loan Bank (“FHLB”), HV Bank maintains otherwise unencumbered qualifying assets (principally qualifying 1-4 family residential mortgage loans and U.S. government agency, and mortgage-backed securities) in the amount of at least as much as its advances from the FHLB. HV Bank’s FHLB stock is also pledged to secure these advances.

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As of December 31, 2013, the Bank had four outstanding advances for $7.0 million with a weighted average interest rate of 0.72% with various maturities through 2017.

As of June 30, 2013, advances from the FHLB were $3.0 million at 0.93%, maturing September 26, 2017.

As of June 30, 2012, advances from the FHLB had contractual maturities of $1.5 million maturing March 31, 2014 at 2.14% and $1.5 million maturing July 1, 2013 at 1.60%

HV Bank has short-term and long-term credit facilities with the FHLB with a maximum borrowing capacity of approximately $69.7 million. The maximum borrowing capacity changes as a function of HV Bank’s qualifying collateral assets and the amount of funds received may be reduced by additional required purchases of FHLB stock. No amounts were outstanding under these facilities as of December 31, 2013 and as of June 30, 2013 and 2012.

HV Bank also has available lines of credit of $3.0 million with Atlantic Community Banker’s Bank (“ACBB”) and a line equal to 95% of fair value of collateral held by the Federal Reserve Bank of Philadelphia, which was $5.8 million as of June 30, 2013 and $4.6 million as of December 31, 2013. HV Bank did not borrow against its credit lines with ACBB and the Federal Reserve Bank of Philadelphia for the six months ended December 31, 2013. HV Bank borrowed and repaid $1.0 million from ACBB on a short-term basis during fiscal year 2013. HV Bank also borrowed and repaid $1.0 million from the Federal Reserve Bank, on a short-term basis during fiscal year 2013. HV Bank did not draw on these available lines of credit during fiscal year 2012.

Capital Management. Huntingdon Valley Bank is subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At December 31, 2013, Huntingdon Valley Bank exceeded all regulatory capital requirements and was considered “well capitalized” under regulatory guidelines. See “Supervision and Regulation—Federal Banking Regulation—Capital Requirements” and Note 8 of the Notes to the Financial Statements.

Off-Balance Sheet Arrangements

In the normal course of our operations, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to the loans we make. For additional information, see Note 12 of the notes to the financial statements of Huntingdon Valley Bank.

For the six months ended December 31, 2013, and the years ended June 30, 2013 and 2012, we did not engage in any off balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows.

Recent Accounting Pronouncements

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry-forward, a Similar Tax Loss, or a Tax Credit Carry-forward Exists (“ASU 2013-11”). Currently there is diversity in practice in the presentation of unrecognized tax benefits. The aim of ASU 2013-11 is to provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carry-forward, similar tax loss, or tax credit carry-forward exists. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry-forward, a similar tax loss, or a tax credit carry-forward, except for circumstances outlined in ASU 2013-11. For public companies ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013.

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Early adoption is permitted. The adoption of ASU 2013-04 is not expected to have a significant impact on HV Bank’s financial statements.

In January 2014, the FASB issued ASU 2014-04, “Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure”. The objective of the amendments in this ASU is to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property should be recognized. The amendments in this ASU clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. For entities other than public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. An entity can elect to adopt the amendments in this ASU using a modified retrospective transition method or a prospective transition method. Under the modified retrospective transition method, an entity should apply the amendments in this ASU by means of a cumulative-effect adjustment to residential consumer mortgage loans and foreclosed residential real estate properties existing as of the beginning of the annual period for which the amendments are effective. Assets reclassified from real estate to loans as a result of adopting the amendments in this ASU should be measured at the carrying value of the real estate at the date of adoption. Assets reclassified from loans to real estate as a result of adopting the amendments in this ASU should be measured at the lower of the net amount of loan receivable or the real estate’s fair value less costs to sell at the time of adoption. For prospective transition, an entity should apply the amendments in this ASU to all instances of an entity receiving physical possession of residential real estate property collateralized by consumer mortgage loans that occur after the date of adoption. Early adoption is permitted. The adoption of ASU 2014-04 is not expected to have a significant impact on the Bank’s financial statements.

See Note 14 of the notes to the financial statements of Huntingdon Valley Bank.

Impact of Inflation and Changing Prices

Our financial statements and related notes have been prepared in accordance with GAAP. U.S. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration of changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than the effects of inflation.

MANAGEMENT OF HV BANCORP AND HV BANK

Management Structure of HV Bancorp and HV Bank

The directors of HV Bancorp are the same persons who are the trustees of HV Bank. In addition, each executive officer of HV Bancorp is also an executive officer of HV Bank. We expect that our holding company and its subsidiary bank will continue to have common executive officers until the merger unless there is a business reason to establish separate management structures. To date, trustees and executive officers and trustees have been compensated for their services by HV Bank. In the future, directors and executive officers may receive additional compensation for their services to HV Bancorp.

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Executive Officers of HV Bancorp and HV Bank

The following table sets forth information regarding the executive officers of HV Bancorp and HV Bank.

Name	Age(1)	Position
Travis J. Thompson	41	President, Chief Executive Officer and Chairman of the Board of HV Bancorp; President, Chief Executive Officer and Trustee of HV Bank
Joseph C. O’Neill, Jr.	55	Senior Vice President, Chief Financial Officer and Treasurer of HV Bancorp; Senior Vice President, Chief Financial Officer and Chief Operating Officer of HV Bank
Charles S. Hutt	55	Senior Vice President and Chief Credit Officer of HV Bank
Mary Ann Murtha	50	Senior Vice President and Chief Retail Officer of HV Bank

(1) As of December 31, 2013.

The executive officers of HV Bancorp and HV Bank are elected annually.

Directors of HV Bancorp and Trustees of HV Bank

HV Bancorp and HV Bank each currently has six directors and trustees. An additional director and trustee will be elected by the Boards prior to the merger. Trustees and directors serve three-year staggered terms so that approximately one-third of the directors and trustees are elected at each annual meeting. After the conversion and the merger, directors of the subsidiary bank will be elected by HV Bancorp as its sole shareholder.

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The following table states the directors’ and trustees’ names, their ages, the years when they began serving as trustees of HV Bank and when their current terms expire:

Name	Position(s) Held	Age(1)	Trustee Since	Current Term Expires
Carl Hj. Asplundh, Jr.	Director and Trustee	78	1985	2015
Donald A. Gordon	Director and Trustee	70	1996	2015
Joseph F. Kelly	Director and Trustee	53	2012	2016
Joseph F. Spanier	Director and Trustee	67	1998	2016
Scott W. Froggatt	Director of HV Bancorp; Chairman of the Board of HV Bank	54	1999	2017
Travis J. Thompson	Chairman of the Board, President, and Chief Executive Officer of HV Bancorp; President, Chief Executive Officer and Trustee of HV Bank	41	2007	2017

(1) As of December 31, 2013.

Board Independence

Since our common stock will be traded on the Nasdaq Capital Market upon completion of the offering, we will be subject to certain rules respecting the independence of HV Bancorp directors. The Board of Directors has determined that each of the directors of HV Bancorp, with the exception of Mr. Thompson, is “independent” as defined in Nasdaq Marketplace Rule 5605(a)(2). Mr. Thompson is not independent because he serves as a compensated executive officer of HV Bank.

Business Background of Directors, Trustees and Executive Officers of HV Bancorp and HV Bank

The business experience for the past five years of each of our directors, trustees and executive officers is set forth below. Unless otherwise indicated, trustees and executive officers of HV Bank have held their positions for the past five years.

Directors

Carl Hj. Asplundh, Jr. began working for Asplundh Tree Expert Company in 1953. He was Chairman of the Board of that company from 1996 until 2000. At various times he served on the boards of Doylestown Hospital, The Heritage Conservancy of Bucks County, and Bryn Athyn Academy. Mr. Asplundh’s business and financial experience and contacts in the local community are among his qualifications to serve as a trustee and director.

Donald A. Gordon began his working career as a systems analyst (with Sears) focusing primarily on the efficient movement of merchandise into, through, and out of a large distribution center. Subsequent to his original assignment, he served in various progressive operating management positions, and ultimately advanced to the position of Personnel Director. Following Mr. Gordon’s departure from Sears, he served as Associate Director of Human Resources at the College of New Jersey. Mr. Gordon retired from the College after 19 years of service. Mr. Gordon’s business and personnel management experience are among his qualifications to serve as a trustee and director.

Joseph F. Kelly is currently an officer of Frank Kelly Builders Inc. Mr. Kelly is also President/Owner of J.M.J.M. Inc., a construction company. In addition, Mr. Kelly owns and manages several residential and commercial properties. Mr. Kelly has served on many homeowners and condominium association boards. He has worked in various capacities, including property management. He also is a licensed real estate builder owner salesperson. Mr. Kelly’s business experience, including experience with his construction company and as the owner/manager of residential and commercial properties, are among his qualifications to serve as a trustee and director.

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Joseph F. Spanier has served in various financial positions. He is a Certified Public Accountant in the state of Pennsylvania. His most recent experience has been with Breeze-Eastern Corporation (NYSE Amex: BZC), an aerospace/defense company, where he served as Chief Financial Officer from 1997 until his retirement in 2010. Prior to that, he was the Chief Financial Officer for MG Industries, 1994-1996, an industrial gas manufacturer, and Quaker Chemical Corporation (NYSE: KWR), 1981-1994, a chemical specialty producer. Mr. Spanier started his career with Price Waterhouse in 1969, served in the United States Army in 1970 and 1971, and returned to Price Waterhouse until 1981. Mr. Spanier’s experience as the Chief Financial Officer of a publicly traded, SEC registered company, as well as his other financial positions, are among his qualifications as a trustee and director.

Scott W. Froggatt is currently an executive vice president at Robert Chalphin Associates Inc., a title insurance agency; he has worked for Robert Chalphin Associates since 1981. Prior experience includes vice president/title insurance underwriting at UGT—MidAtlantic Inc., and vice president/audits, marketing, management and commercial closings at Stewart of Pennsylvania Inc. He has served on many committees for Pennsylvania Land Title Association, and has earned the designation of Associate Land Title Professional. He also is a Trustee of the Old School Baptist Meetinghouse. Mr. Froggatt’s business and financial experience and contacts in the local community are among his qualifications to serve as a trustee and director.

Travis J. Thompson was appointed President and Chief Executive Officer of HV Bank in January 2013. From 2006 through 2012, Mr. Thompson was an executive officer of Suburban Marble & Granite Inc., first as its Chief Operating Officer and later as its President. From 1998 to 2006, Mr. Thompson was an associate, shareholder and managing shareholder at Liederbach, Hahn, Foy, VanBlunk & Thompson PC which merged into Stark & Stark. Mr. Thompson was solicitor to HV Bank for most of this period and represented several other local community banks in the late 1990s and early 2000s. Mr. Thompson’s business and legal experience, as well as his long relationship with HV Bank, are among his qualifications as a trustee and director.

Executive Officers Who Are Not Also Directors

Joseph C. O’Neill, Jr., age 55, was appointed Senior Vice President and Chief Financial Officer of HV Bank in January 2010, and assumed the additional duties of Chief Operating Officer in January 2013. In his current position Mr. O’Neill is responsible for HV Bank’s finance, accounting and deposit operations, including policies and procedures, as well as coordination and maintenance of accounting and management reporting systems. Mr. O’Neill is also responsible for regulatory reporting, tax and cost accounting and HV Bank’s investment portfolio. From 1999 to 2009, Mr. O’Neill held various positions with General Motors and General Motors Acceptance Corporation, including chief financial officer for General Motors’ wholly owned thrift subsidiary, vice president for financial reporting for GMAC Commercial Mortgage and divisional controller for GMAC Residential Mortgage.

Charles S. Hutt, age 56, has been employed by HV Bank since 2007. He was appointed Senior Vice President—Chief Credit Officer in January 2013. Mr. Hutt is responsible for HV Bank’s residential and consumer lending portfolio, as well as for retail loan originations and sales operations.

Mary Ann Murtha, age 50, joined HVBank in 2008. In January 2013, she was appointed Senior Vice President—Chief Retail Officer. In her current position Ms. Murtha is responsible for HV Bank’s retail banking branch network. She develops, directs and controls branch deposit products and services, marketing activities and staffing.

Meetings and Committees of the HV Bank Board of Trustees and the HV Bancorp Board of Directors

HV Bank conducts business through meetings of its Board of Trustees and its committees. During the year ended June 30, 2013, the Board of Trustees of HV Bank met 14 times.

The Board of Directors of HV Bancorp has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee.

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• The Audit Committee consists of Messrs. Spanier (Chairman), Gordon and Kelly. The Audit Committee is responsible for providing oversight of the financial statements and financial reporting process, systems of internal accounting and financial controls, internal audit function, annual independent audit and the compliance and ethics programs established by management and the Board. Each member of the Audit Committee will be independent in accordance with the listing standards of the Nasdaq Capital Market. The Board of Directors of HV Bancorp has determined that Mr. Spanier is an “audit committee financial expert” under the rules of the Securities and Exchange Commission.

• The Compensation Committee consists of Messrs. Froggatt (Chairman), Asplundh, Gordon and Kelly. The Compensation Committee is responsible for human resources policies, salaries and benefits, incentive compensation, executive development and management succession planning. Each member of the Compensation Committee will be independent in accordance with the listing standards of the Nasdaq Capital Market.

• The Nominating and Corporate Governance Committee consists of Messrs. Gordon (Chairman), Asplundh, Froggatt and Kelly. The Nominating and Corporate Governance Committee is responsible for identifying individuals qualified to become Board members and recommending a group of nominees for election as directors at each annual meeting of shareholders, ensuring that the Board and its committees have the benefit of qualified and experienced independent directors, and developing corporate governance policies and procedures. Each member of the Nominating and Corporate Governance Committee is independent in accordance with the listing standards of the Nasdaq Capital Market.

Each of these committees operates under a written charter which governs each committee’s composition, responsibilities and operations.

Corporate Governance Policies and Procedures

HV Bancorp’s Board of Directors does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as the Board believes that it is in the best interests of our organization to make that determination from time to time based on the position and direction of our organization and the membership of the Board. Mr. Thompson currently serves as Chairman and CEO of HV Bancorp. The Board has determined that the most effective leadership model for the Company currently is for the role of Chairman to be separate from the role of CEO. As is discussed in “The Merger,” Mr. Thompson will serve as Chairman of HV Bancorp following consummation of the conversion and merger, and Mr. Major will serve as Chief Executive Officer and President of HV Bancorp. The Board believes that it will function effectively under this structure, and that this structure will provide appropriate oversight protection. The Board believes that introducing a separate Chairman during the conversion and merger would not be in the best interests of HV Bank and HV Bancorp, and the lack of continuity could cause uncertainty, confusion and unnecessary delays.

In addition to establishing committees of the Board of Directors, HV Bancorp will adopt policies governing the activities of both HV Bancorp and HV Bank, including a corporate governance policy and a code of business conduct and ethics. The corporate governance policy will set forth:

• the duties and responsibilities of each director;

• the composition, responsibilities and operation of the Board of Directors;

• the establishment and operation of Board committees, including audit, nominating and compensation committees;

• succession planning;

• convening executive sessions of independent directors;

• the Board of Directors’ interaction with management and third parties; and

• the evaluation of the performance of the Board of Directors and the chief executive officer.

HV Bancorp will adopt a Code of Ethics that applies to its principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The Code of Ethics will be designed to deter wrongdoing and to promote honest and ethical conduct, the avoidance of conflicts of interest, full and accurate disclosure and compliance with all applicable laws, rules and regulations.

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HV Bank Trustees’ Compensation

Each of the individuals who serve as a director of HV Bancorp also serves as a trustee of HV Bank and earns trustee and committee fees in that capacity. Each trustee is paid $1,250 for each regular board meeting attended. For each special meeting attended, each trustee is paid a fee of $400. The chairman is also paid a monthly fee of $750. Each member of a committee of the HV Bank Board receives $400 per meeting attended; the chairman of each committee receives $500 per meeting attended.

The following table sets forth the compensation paid to HV Bank’s trustees for the fiscal year ended June 30, 2013. Mr. Thompson has received no additional compensation for his service as a trustee since his appointment as President and Chief Executive Officer of HV Bank.

Name	Fees Earned or Paid in Cash
Carl Hj. Asplundh, Jr.	$	12,300
Scott W. Froggatt		24,950
Donald A. Gordon		22,200
Joseph F. Kelly		17,700
Joseph F. Spanier		17,850

Executive Officer Compensation

Summary Compensation Table. The following table sets forth for the fiscal year ended June 30, 2013, certain information as to the total compensation paid by HV Bank to its principal executive officer and the next two most highly compensated executive officers whose total compensation exceeded $100,000. These individuals are referred to in this prospectus as “named executive officers.”

Name and Principal Position	Fiscal Year		Salary			Bonus			All Other Compensation			Total
Travis J. Thompson President and CEO		2013	$	97,485	(1)	$	45,000	(2)	$	6,060	(3)	$	148,545
Joseph C. O’Neill, Jr. Senior Vice President, CFO and COO		2013	$	142,913		$	21,338	(4)	$	5,158	(5)	$	169,409
Charles S. Hutt Senior Vice President and Chief Credit Officer		2013	$	126,555		$	97,991	(4)	$	—		$	224,546

(1) Represents Mr. Thompson’s salary from January 1 to June 30, 2013. Also includes Board of Trustees fees of $15,100 paid to Mr. Thompson from July 1 to December 31, 2012, prior to his appointment as President and Chief Executive Officer.

(2) See “—Benefit Plans —Current Employment Agreement” for a description of Mr. Thompson’s bonus payments.

(3) “All Other Compensation” for Mr. Thompson includes an automobile allowance and club dues.

(4) See “—Performance Cash Incentives” below.

(5) “All Other Compensation” for Mr. O’Neill includes an automobile allowance and employer paid insurance premiums.

Performance Cash Incentives

HV Bank uses annual cash incentives as a short-term incentive to drive achievement of our annual performance goals.

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The annual cash incentive focuses on the achievement of annual performance goals and awards in cash. It is designed to:

• support our strategic business objectives;

• promote the attainment of specific financial goals;

• reward achievement of specific performance objectives; and

• encourage teamwork.

Cash bonuses, if any, are entirely discretionary, and based on an annual assessment of performance at year-end. Annual cash bonus incentives are designed to provide competitive levels of compensation based upon achievement of pre-determined performance factors which are determined at the beginning of each year and may change from year to year. In general, these factors may be measures such as return on assets, return on equity, and earnings per share or similar indicators. The size of an annual cash bonus incentive is influenced by these factors, as well as individual performance.

Annual cash incentives are accrued for expected levels of performance, with upside opportunities for superior performance, subject to the discretion of the Compensation Committee. Annual cash bonus incentive awards are contingent upon employment with HV Bank through the end of the fiscal year.

Benefit Plans

Current Employment Agreement. In December 2012, HV Bank entered into an employment agreement with Mr. Thompson. The agreement with Mr. Thompson has a term of three years, until December 31, 2015. Under the agreement, the base salary for Mr. Thompson currently is $180,000. Mr. Thompson’s base salary is reviewed periodically and may be increased. In addition to the base salary, the agreement provides for, among other things, a bonus of $30,000 (to vest at the rate of $10,000 per year over the term of the agreement), an automobile allowance of $650 per month, and inclusion in discretionary bonuses that the Board may award from time to time to senior management employees, retirement and medical plans, customary fringe benefits, vacation and sick leave.

The employment agreement provides for termination for cause at any time. If the agreement is terminated for cause, Mr. Thompson would not be entitled to any further compensation or other benefits after such a termination. In the event termination is without cause, HV Bank shall pay Mr. Thompson his full salary, including incentive compensation due to him, through the date of termination and his then annual salary for a six-month severance period. If such termination is within 24 months of a change in control of the Board of Trustees, a lump sum severance payment equal to 1.5 times Mr. Thompson’s base salary also shall be made.

For a period of two years after any termination of Mr. Thompson’s employment under the agreement, he shall not solicit any employee to leave HV Bank or to breach any non-disclosure agreement, solicit customers of HV Bank, or compete with HV Bank.

401(k) Plan. HV Bank has established a tax-advantaged safe harbor 401(k) program for its employees in order to encourage them to save for their retirement. HV Bank pays all administrative expenses. The 401(k) Plan will not invest in HV Bancorp common stock.

Bonus Plan. In 2009, HV Bank agreed to pay Charles S. Hutt, Senior Vice President and Chief Credit Officer, a bonus based on the net gain on loan sales. If the gain on loan sales is $300,000 for any year, Mr. Hutt’s payout would be $12,000, or a payout rate 4.0% of the amount of the gain. If the gain on loan sales is greater than $300,000, the payout rate and the payout increase.

For additional information regarding new employment agreements and other benefits to be available after the merger, see “The Merger—Interests of Certain Persons in the Merger.”

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Stock-Based Plans in Connection with and Following Completion of the Conversion and Merger

We intend to adopt and request shareholder approval of one or more stock-based incentive plans, including a stock option plan and a stock recognition and retention plan, no earlier than six months after the completion of the conversion. The stock option plan and stock recognition and retention plan may be established as separate plans or part of a single stock-based incentive plan.

Stock Option Plan. If adopted within one year of the conversion and merger and approved by shareholders, the stock option plan would reserve an amount equal to 10% of the shares of common stock issued in the offering and merger for issuance upon exercise of stock options, which would amount to 165,049 shares, 194,175 shares, 219,680 shares and 236,930 shares at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range, respectively. If we adopt the stock option plan after one year following the completion of the conversion, we may grant options in an amount greater than 10% of the shares of common stock issued in the offering and merger. We have not yet determined whether we will present this plan for shareholder approval within 12 months or more than 12 months following the completion of the conversion. No options would be granted under the new stock option plan until shareholder approval of the plan is received. In the event that shares underlying options come from authorized but unissued shares of common stock, shareholders would experience dilution of approximately 9% of their ownership interest in HV Bancorp. We will have to recognize compensation expense for accounting purposes ratably over the vesting period, equal to the fair value of the options on the original grant date.

The exercise price of the options granted under the stock option plan will be equal to the fair market value of HV Bancorp common stock on the date of grant of the stock options. If the stock option plan is adopted within one year following the conversion, options may vest no faster than 20% per year beginning 12 months after the date of grant. Options granted under the stock option plan would be adjusted for capital changes such as stock splits and stock dividends. Awards will be 100% vested upon termination of employment due to death, disability or following a change in control, and if the stock option plan is adopted more than one year after the conversion, awards would be 100% vested upon normal retirement. Under FDIC regulations, if the stock option plan is adopted within one year of the conversion, no individual officer may receive more than 25% of the awards under the plan, no non-employee director may receive more than 5% of the awards under the plan and all non-employee directors as a group may receive in the aggregate no more than 30% of the awards under the plan.

The stock option plan would be administered by a committee of non-employee members of the Board of Directors of HV Bancorp. Options granted under the stock option plan to employees may be “incentive” stock options, which are designed to result in a beneficial tax treatment to the employee but no tax deduction to HV Bancorp. Non-qualified stock options may also be granted to employees under the stock option plan, and will be granted to the non-employee directors who receive stock options. In the event an option recipient terminates his or her employment or service as an employee or director, the options would terminate after certain specified periods following termination.

Stock Recognition and Retention Plan. If adopted within one year of the conversion and merger and approved by shareholders, the stock recognition and retention plan would reserve an amount equal to 4% of the shares of common stock issued in the offering and merger, or 66,019 shares, 77,670 shares, 87,872 shares and 94,772 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively. If we adopt the recognition and retention plan after one year following the completion of the conversion, we may grant shares in an amount greater than 4% of the shares of common stock issued in the offering. We have not yet determined whether we will present this plan for shareholder approval within 12 months or more than 12 months following the completion of the conversion. We must recognize an expense for shares of common stock awarded over their vesting period at the fair market value of the shares on the date they are awarded. The recipients will be awarded shares of common stock under the stock recognition and retention plan at no cost to them. No awards would be made under the stock recognition and retention plan until the plan is approved by shareholders. If the shares awarded under the stock recognition and retention plan come from authorized but unissued shares of the common stock totaling 4% of the shares issued in the offering and merger, shareholders would experience dilution of 4% in their ownership interest in HV Bancorp

Awards granted under the stock recognition and retention plan would be nontransferable and nonassignable. Under FDIC regulations, if the stock recognition and retention plan is adopted within one year

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following the conversion, the shares of common stock which are subject to an award may vest no faster than 20% per year beginning 12 months after the date of grant of the award. Awards would be adjusted for capital changes such as stock dividends and stock splits. Awards would be 100% vested upon termination of employment or service due to death, disability or following a change-in-control, and if the stock recognition and retention plan is adopted more than one year after the conversion, awards also would be 100% vested upon normal retirement. Under FDIC rules, if the stock recognition and retention plan is adopted within one year of the conversion, no individual officer may receive more than 25% of the awards under the plan, no non-employee director may receive more than 5% of the awards under the plan, and all non-employee directors as a group may receive no more than 30% of the awards under the plan in the aggregate.

The recipient of an award will recognize income equal to the fair market value of the stock earned, determined as of the date of vesting, unless the recipient makes an election under Section 83(b) of the Internal Revenue Code of 1986, as amended, to be taxed earlier. The amount of income recognized by the recipient would be a deductible expense of HV Bancorp for tax purposes.

Employee Stock Ownership Plan and Trust. We intend to implement an ESOP in connection with the stock offering and merger. Employees who are at least 21 years old with at least one year of employment with HV Bank will be eligible to participate. As part of the stock offering, the ESOP trust intends to borrow funds from HV Bancorp and use those funds to purchase up to 6.0% of the common stock to be issued in the conversion stock offering and the merger. This purchase may be reduced if deemed necessary to generate Tier I capital of 9.0% after the stock offering and the merger. Collateral for the loan will be the common stock purchased by the ESOP. The loan will be repaid principally from discretionary contributions by HV Bank to the ESOP over a period of up to 25 years. The loan documents will provide that the loan may be repaid over a shorter period, without penalty for prepayments. We anticipate that the interest rate on the loan will equal the prime interest rate at the closing of the stock offering, and will adjust annually at the beginning of each calendar year. Shares purchased by the ESOP will be held in a suspense account for allocation among participants as the loan is repaid.

Shares released from the suspense account will be allocated among ESOP participants on the basis of compensation in the year of allocation. Benefits under the plan will vest at the rate of 20% per year, and become fully vested upon completion of six years of service. Credit will be given for vesting purposes to participants for years of service with HV Bank prior to the adoption of the plan, up to five years. A participant’s interest in his account under the plan will also fully vest in the event of termination of service due to a participant’s early retirement, normal retirement, death, disability, or upon a change in control (as defined in the plan). Vested benefits will be payable in a lump sum or by payment in a series of equal annual installments over a period of five years, in the form of common stock and, to the extent the participant’s account contains cash, benefits will be paid in cash, unless the participant elects to receive his entire vested interest in the form of stock. HV Bank’s contributions to the ESOP are discretionary, subject to the loan terms and tax law limits. Therefore, benefits payable under the ESOP cannot be estimated. Pursuant to SOP 93-6, we will be required to record compensation expense each year in an amount equal to the fair market value of the shares released from the suspense account. In the event of a change in control, the ESOP will terminate.

Limitations on Liability

HV Bancorp’s articles of incorporation provide that the personal liability of its directors and officers for monetary damages shall be eliminated to the fullest extent permitted by the Pennsylvania Business Corporation Law of 1988, as amended (the “PBCL”), as it exists on the effective date of the articles of incorporation or as such law may be thereafter in effect. Section 1713 of the PBCL currently provides that directors, but not officers, of corporations that have adopted such a provision will not be so liable, unless:

• the director has breached or failed to perform the duties of his office in accordance with the PBCL; and

• the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness.

This provision would absolve directors of personal liability for monetary damages for negligence in the performance of their duties, including gross negligence. It would not permit a director to be exculpated, however, for liability for actions involving conflicts of interest or breaches of the traditional “duty of loyalty” to HV Bancorp and its shareholders, and it would not affect the availability of injunctive or other equitable relief as a remedy.

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If Pennsylvania law is amended in the future to provide for greater limitations on the personal liability of directors or to permit corporations to limit the personal liability of officers, the provision in HV Bancorp’s articles of incorporation limiting the personal liability of directors and officers would automatically incorporate such amendments to the law without further action by shareholders. Similarly, if Pennsylvania law is amended in the future to restrict the ability of a corporation to limit the personal liability of directors, HV Bancorp’s articles of incorporation would automatically incorporate such restrictions without further action by shareholders.

The provision limiting the personal liability of HV Bancorp’s directors does not eliminate or alter the duty of HV Bancorp’s directors; it merely limits personal liability for monetary damages to the extent permitted by the PBCL. Moreover, it applies only to claims against a director arising out of his role as a director; it currently does not apply to claims arising out of his role as an officer, if he is also an officer, or arising out of any other capacity in which he serves because the PBCL does not authorize such a limitation of liability. Such limitation also does not apply to the responsibility or liability of a director pursuant to any criminal statute, or the liability of a director for the payment of taxes pursuant to federal, state or local law.

The provision in HV Bancorp’s articles of incorporation which limits the personal liability of directors is designed to ensure that the ability of HV Bancorp’s directors to exercise their best business judgment in managing HV Bancorp’s affairs is not unreasonably impeded by exposure to the potentially high personal costs or other uncertainties of litigation. The nature of the tasks and responsibilities undertaken by directors of publicly-held corporations often require such persons to make difficult judgments of great importance which can expose such persons to personal liability, but from which they will acquire no personal benefit. In recent years, litigation against publicly-held corporations and their directors and officers challenging good faith business judgments and involving no allegations of personal wrongdoing has become common. Such litigation regularly involves damage claims in huge amounts which bear no relationship to the amount of compensation received by the directors or officers, particularly in the case of directors who are not employees of the corporation. The expense of such litigation, whether it is well-founded or not, can be enormous. The provision of HV Bancorp’s articles of incorporation relating to director liability is intended to reduce, in appropriate cases, the risk incident to serving as a director and to enable HV Bancorp to elect and retain the persons most qualified to serve as directors.

Indemnification of Directors, Officers, Employees and Agents

HV Bancorp’s bylaws provide that HV Bancorp shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of HV Bancorp, or is or was serving at HV Bancorp’s request as a representative of another domestic or foreign corporation for profit or non-profit, partnership, joint venture, trust or other enterprise, against expenses, including attorney’s fees actually and reasonably incurred by him in connection with the defense or settlement of the action or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, HV Bancorp’s best interests and, with respect to any criminal proceeding, had no reasonable cause to believe his conduct was unlawful. Similar rights to indemnification are provided in the case of derivative and other actions by or in the right of HV Bancorp. Indemnification shall not be made with respect to an action by or in the right of HV Bancorp as to which the person has been adjudged to be liable to HV Bancorp unless and only to the extent that the proper court determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for the expenses that the court deems proper. HV Bancorp’s bylaws further provide that to the extent that HV Bancorp’s representative has been successful on the merits or otherwise in defense of any action or proceeding or in defense of any claim, issue or matter therein, he shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection therewith. Unless otherwise ordered by a court, any indemnification shall be made by HV Bancorp only as authorized in the specific case upon a determination that indemnification is proper in the circumstance because such person has met the applicable standard of conduct set forth in the bylaws. Expenses, including attorney’s fees, incurred in defending any action or proceeding shall be paid by HV Bancorp in advance of the final disposition of the action or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined that he is not entitled to be indemnified by HV Bancorp.

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Transactions with Certain Related Persons

Loans and Extensions of Credit. The Sarbanes-Oxley Act of 2002 generally prohibits HV Bank from making loans to its executive officers and trustees, but it contains a specific exemption from such prohibition for loans made by HV Bank to its executive officers and trustees in compliance with federal banking regulations. Federal regulations require that all loans or extensions of credit to executive officers, trustees and directors of insured institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and must not involve more than the normal risk of repayment or present other unfavorable features. HV Bank is therefore prohibited from making any loans or extensions of credit to executive officers and trustees at different rates or terms than those offered to the general public, except for loans made under a benefit program generally available to all other employees and that does not give preference to any executive officer or trustee over any other employee. HV Bank is in compliance with these federal regulations with respect to its loans and extensions of credit to executive officers and trustees, and all loans and extensions of credit made to these individuals are made on substantially the same terms, including interest-rates and collateral, as those made to individuals unrelated to HV Bank.

In addition, loans made to a trustee or executive officer must be approved in advance by a majority of the disinterested members of the Board of Trustees. The aggregate amount of our loans to HV Bank’s officers and trustees and their related entities was $39,899 at December 31, 2013. As of December 31, 2013, these loans were performing according to their original terms.

Other Transactions. Since July 1, 2010, there have been no transactions, and there are no currently proposed transactions, in which HV Bank was or is to be a participant and the amount involved exceeds of $120,000, and in which any of its executive officers and trustees had or will have a direct or indirect material interest.

SUBSCRIPTIONS BY DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information regarding intended common stock subscriptions by each of the trustees and executive officers of HV Bank and their associates, and by all trustees and executive officers as a group. In the event the individual maximum purchase limitation is increased, persons subscribing for the maximum amount may increase their purchase order. Trustees and executive officers will purchase shares of common stock at the same $10.00 purchase price per share and on the same terms as other purchasers in the offering. This table excludes shares of common stock to be purchased by the employee stock ownership plan, as well as any recognition and retention plan awards or stock option grants that may be made no earlier than six months after the completion of the offering. The trustees and officers have indicated their intention to subscribe in the offering for an aggregate of $1.2 million of shares of common stock at the midpoint of the offering range. These purchases equal approximately 14.1% of the number of shares of common stock to be sold in the offering at the minimum of the offering range, and 10.4% of the shares of common stock to be sold at the maximum of the offering range, assuming shares are available. Purchases by trustees, executive officers and their associates will be included in determining whether the required minimum number of shares has been subscribed for in the offering. The shares being acquired by the directors, executive officers and their associates are being acquired for investment purposes, and not with a view towards resale.

Name	Number of Shares		Aggregate Purchase Price		Percent at Minimum			Percent at Maximum
Trustees:
Travis J. Thompson		20,000	$	200,000		2.4	%		1.7	%
Scott Froggatt		15,000		150,000		1.8	%		1.3	%
Donald A. Gordon		10,000		100,000		1.2	%		0.9	%
Joseph F. Kelly		25,000		250,000		2.9	%		2.2	%
Joseph F. Spanier		10,000		100,000		1.2	%		0.9	%
Carl Hj. Asplundh, Jr.		25,000		250,000		2.9	%		2.2	%
Executive Officers Who Are Not Also Trustees:
Joseph C. O’Neill, Jr.		5,000		50,000		0.6	%		0.4	%
Charles Hutt		5,000		50,000		0.6	%		0.4	%
Mary Ann Murtha		5,000		50,000		0.6	%		0.4	%
All trustees and executive officers as a group (9 persons)		120,000	$	1,200,000		14.1	%		10.4	%

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Includes purchases by the individual’s spouse and other relatives of the named individual living in the same household. The above named individuals are not aware of any other purchases by a person who, or entity which, would be considered an associate of the named individuals under the plan of conversion.

BUSINESS OF VICTORY BANCORP AND VICTORY BANK

In this section, references to “we,” “us” and “our” refer to Victory Bancorp and/or Victory Bank, as applicable.

General

The Victory Bancorp is a registered bank holding company, which owns 100% of the outstanding capital stock of The Victory Bank, or Victory Bank. We were incorporated under the laws of the State of Pennsylvania in 2009 for the purpose of serving as Victory Bank’s holding company. The holding company structure provides flexibility for growth through expansion of our businesses and access to varied capital raising operations. Our primary business activity consists of ownership of all of the outstanding stock of Victory Bank. As of December 31, 2013, we had 321 shareholders of record.

Victory Bank is a Pennsylvania chartered commercial bank which was chartered in January 2008. Victory Bank operates a full-service commercial and consumer banking business in Montgomery County, Pennsylvania. Our focus is on small- and middle-market commercial and retail customers. Victory Bank originates secured and unsecured commercial loans, commercial mortgage loans, consumer loans and construction loans. We do not make subprime loans. We also offer revolving credit loans, small business loans and automobile loans. Victory Bank offers a variety of deposit products, including demand and savings deposits, regular savings accounts, investment certificates and fixed-rate certificates of deposit. Victory Bank offers an enhanced delivery system option of telephone banking and Internet banking. Other services include safe deposit facilities, travelers’ checks, money orders, remote deposit capture, wire transfers, two drive-through facilities, 24-hour depositories and an ATM.

Victory Bank’s telephone number is 610.948.9000. Victory Bank’s website is www.thevictorybank.com. Information on Victory Bank’s website should not be considered part of this prospectus.

Our Business Strategy

We are a locally-focused commercial bank with special expertise in serving the borrowing, cash management and depository needs of small- to medium-sized business and professional practices, and emphasize providing advice and responsive and personalized service to our clients. Due to the consolidation of financial institutions in Pennsylvania and in our primary market area, Montgomery County, Pennsylvania, we believe there is a significant opportunity for a locally-focused bank to provide a full range of financial services to small-and middle-market commercial and retail customers. By offering highly professional, personalized banking products and service delivery methods and employing advanced banking technologies, we believe we distinguish ourselves from larger, regional banks operating in our market areas and are able to compete effectively against community banks.

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Our strategies center on our ability to provide diversified loan and deposit products and a personalized service approach in Montgomery County and surrounding communities. In order to realize these objectives, we pursue the following strategies:

Hiring Experienced Employees with a Customer Service Focus. The foundation of our business is our employees. Our ability to attract and retain banking professionals with strong community relationships and significant knowledge of our markets is a key to our success. We believe that our focus on experienced bankers who are established in their communities enables us to obtain profitable growth opportunities. Our employees understand and are committed to the importance of delivering advice and exemplary customer service and seeking opportunities to build further relationships with our customers. Our goal is to compete by relying on the strength of our customer service and relationship banking approach.

Growth in Our Market. We believe there is a large customer base in our market that prefers doing business with a local institution that has a local management team, a local board of directors and local founders and that this customer base may be dissatisfied with the service received from larger regional banks. By providing our customers with quality service, coupled with the underlying characteristics of Montgomery County, we have generated and expect to continue to generate organic growth. We have targeted Berks, Chester and Montgomery Counties, and in particular, the Route 422 and Route 100 corridors, as our primary market area because of our senior management and lender’s extensive knowledge of the area as well as the anticipated continued economic growth and potential for business development in this market.

Diversified Product Offerings. We offer a diversified loan portfolio consisting primarily of commercial real estate and commercial business loans with higher risk-adjusted returns, shorter maturities and more sensitivity to interest rate fluctuations, while still providing high quality loan products for single-family and multi-family residential borrowers. We offer a full range of consumer and commercial deposit products, including on-line banking with free bill pay, cash management, sweep accounts, wire transfer, check imaging, remote deposit capture and courier services. We continue to review our product offerings and based on such reviews may selectively add additional products to provide diversification of revenue sources and to capture our customers’ full banking relationship.

Market Area and Competition

We consider Montgomery County, Pennsylvania to be Victory Bank’s primary market area for lending and deposit activities, with secondary concentrations of business activity in neighboring adjoining counties.

Montgomery County is the third largest county in the Commonwealth of Pennsylvania with a population estimated at 800,000 according to 2010 US Census Bureau data. Montgomery County includes highly urbanized centers, villages and rural farmland and comprises 487 square miles in suburban Philadelphia. Over the last several years, Montgomery County has been subject to large-scale consolidation of local community banks, primarily by larger, out-of-state financial institutions. According to US Census Bureau statistics, Montgomery County has had strong population growth from 2000 to 2010 with an increase of 6.6%, which is almost double that of the Pennsylvania growth rate of 3.4%. As of 2010, homeownership in the County of 73.8% was slightly above the state average of 70.6%, but the median value of an owner-occupied home was 82.5% higher than that of the state average at $297,900 compared to $163,200 in 2010. Similarly, the median household income of Montgomery County in 2010 was approximately $78,400, or 51.6% higher than the state average of $51,700. Montgomery County has a high density of commercial enterprises, led by the health services, personal services and business services industries.

We face significant competition for the attraction of deposits and origination of loans. Our most direct competition for deposits has historically come from the financial institutions operating in our market area. We also face competition for investors’ funds from money market funds, mutual funds and other corporate and government securities. Our competition for loans comes primarily from financial institutions in our market area and, to a lesser extent, from other financial service providers, such as mortgage companies and mortgage brokers. Competition for loans also comes from the increasing number of non-depository financial service companies entering the mortgage market, such as insurance companies, securities companies and specialty finance companies.

Lending Activities

General. We provide a wide range of short- to medium-term commercial, mortgage, construction and personal loans, both secured and unsecured.

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Commercial Mortgage Loans. We originate loans secured by commercial real estate located in our market area which is used as the primary site of the borrower’s business operations. At December 31, 2013, we had $66.6 million of these loans representing 50.9% of our outstanding loans. We originate both adjustable and fixed interest rate commercial real estate loans with maturities usually ranging from three to five years, which generally amortize over 15 to 20 years. In reaching a decision on whether to make a commercial real estate loan, we consider the cash flow of the borrower, the net operating profitability of the borrower’s business and historical trends, the borrower’s industry expertise, credit history and profitability, and the value, location and characteristics of the underlying property. Loan to value ratios for our commercial real estate loans generally do not exceed 80% and are supported by either a real estate appraisal or other form of acceptable property valuation. The average size of our commercial mortgage loans is between $200,000 and $250,000. We generally require that the borrowers have debt service coverage ratios (the ratio of generated cash available to debt service) of at least 1.2:1. In some circumstances, loans are also collateralized by business assets, assignments of leases and/or the business owner’s primary residence. In almost all cases, we also require personal guarantees. An environmental assessment, which may include an environmental Phase I report, is obtained when the possibility exists that hazardous materials may have existed on the site, or the site may have been impacted by adjoining properties that handled hazardous materials. In order to monitor these loans, we generally require the borrower and, in some cases, guarantors to provide annual financial statements and/or income tax returns.

Commercial Term Loans. We make commercial business term loans to businesses on a secured and unsecured basis. As of December 31, 2013, our commercial term loan portfolio totaled $19.8 million. The average size of our commercial business term loans is between $150,000 and $200,000. Commercial loans include loans for working capital, equipment purchases, business expansion and other business purposes. Short term working capital loans generally are secured by accounts receivable, inventory and/or equipment. When making such loans, we consider the financial statements of the borrower, the borrower’s payment history of both corporate and personal debt, the debt service capabilities of the borrower, the projected cash flows of the business, the viability of the borrower, the market and industry in which the borrower operates and the value of the collateral.

We also offer loans guaranteed by the Small Business Administration through its SBA 7A loan program, which offers a government guarantee of 75% on loans up to $5.0 million and through the SBA 504 program, which offers direct funding through the SBA of up to 40% for real estate and equipment projects up to $10.0 million. We have also been approved by the SBA as an express lender which allows us to make SBA express working capital loans up to $350,000. These express loans are guaranteed by the government up to 50%.

Commercial Lines of Credit. We provide business lines of credit to small businesses within our market area. As of December 31, 2013 we had commercial line commitments of $22.7 million with $12.8 million outstanding representing 9.8% of Victory Bank’s loan portfolio. We originate adjustable interest rate commercial lines of credit loans, which may contain an interest rate floor, with expirations annually. In reaching a decision on whether to extend a commercial line of credit loan, we consider the borrower’s: cash flow, characteristics and position of their working capital, operating profitability and historical trends, their market and industry, and credit history. Loan to value ratios for our line loans generally do not exceed 80%. The average size of our commercial line loans is $85,000. We generally require that borrowers have debt service coverage ratios (the ratio of generated cash available to debt service) of at least 1.2:1. Loans are usually secured by general business assets and, in some circumstances, loans are also collateralized by real estate and/or the business owner’s primary residence. In almost all cases, we also require personal guarantees. In order to monitor these loans, we generally require the borrower and, in some cases, guarantors to provide annual financial statements and/or income tax returns.

Construction Loans. We originate loans to finance the construction of real property improvements, including residential subdivisions and commercial properties. We also make loans on vacant land and for land development. Our construction loans, totaling $9.3 million at December 31, 2013, generally provide for the payment of interest only during the construction phase. Loans in this category generally have a loan-to-value ratio of 75% or less. As of December 31, 2013, construction loans within our portfolio have a loan-to-value ratio ranging between 53% and 75%. Loan to value ratios vary and are generally supported by an “as completed” appraisal of the property by an independent licensed or certified appraiser. Advances on such loans are generally based on an inspection report, prepared by a satisfactory third party, certifying the work was completed in an acceptable manner. We also will require an inspection of the property before the initial disbursement of any funds for the construction loan. On occasion, a loan officer may perform a site inspection prior to funds being disbursed. Loan terms vary between three months to 24 months, depending on the project size and scope and payments of principal and interest are generally due monthly during the construction period.

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Home Equity Loans. Our home equity loans, totaling $10.7 million at December 31, 2013, consist of second mortgage loans, home equity loans, and home equity lines of credit. Fixed rate home equity loans were typically extended for a fixed amount with an amortization of up to 20 years and generally have loan to value ratios of 80% or less. The rates on these loans were normally fixed for a period of no longer than 5 years with a balloon payment at the end of the 5 year period. We discontinued offering fixed rate home equity loans in January of 2014. Home equity lines of credit, which are a form of revolving credit which is secured by the underlying equity in the borrower’s home or second residence, generally have adjustable interest rates and loan to value ratios of 80% or less. We may, at times and or on an exception basis due to other credit enhancements or strengths, originate home equity lines of credit with a loan to value ratio in excess of 100%. Unfunded home equity lines of credit totaled $1.8 million at December 31, 2013.

Consumer Loans. Our consumer loans of $11.7 million at December 31, 2013 consist of secured and unsecured personal loans, automobile loans and unsecured lines of credit. The procedures for underwriting consumer loans include an assessment of the applicant’s payment history on other debts and ability to meet existing obligations and payments on the proposed loan. We generally require that borrowers have a debt to income ratio of no more than 40%. Although the applicant’s creditworthiness is a primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, to the proposed loan amount.

Loan Underwriting Risks

Adjustable-Rate Loans. While we anticipate that adjustable-rate loans will better offset the adverse effects of an increase in interest rates as compared to fixed-rate mortgages, an increased monthly payment required of adjustable-rate loan to borrowers in a rising interest rate environment could cause an increase in delinquencies and defaults. The marketability of the underlying property also may be adversely affected in a high interest rate environment. In addition, although adjustable-rate loans make our asset base more responsive to changes in interest rates, the extent of this interest sensitivity is limited by the annual and lifetime interest rate adjustment limits.

Commercial Loans. Unlike consumer loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable and commercial loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial loans may depend substantially on the success of the business itself. Further, any collateral securing such loans may depreciate over time, may be difficult to appraise and may fluctuate in value.

Commercial Real Estate Loans. Loans secured by commercial real estate generally have larger balances and involve a greater degree of risk than one- to four-family residential mortgage loans. Of primary concern in commercial real estate lending is the borrower’s creditworthiness and cash flow. Payments on loans secured by investment properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject to adverse conditions in the real estate market or the economy.

Construction Loans. Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost (including interest) of construction. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs proves to be inaccurate, we may be required to advance funds beyond the amount originally committed to permit completion of the building. If the estimate of value proves to be inaccurate, we may be confronted, at or before the maturity of the loan, with a loan having a value which is insufficiently collateralized. If we are forced to foreclose on a building before or at completion due to a default, there can be no assurance that we will be able to recover all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs.

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Consumer Loans. Consumer loans may entail greater risk than do residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly, such as motor vehicles. In the latter case, repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower. Consumer loan collections depend on the borrower’s continuing financial stability, and therefore are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

Loan Originations, Purchases and Sales. Loan originations come from a number of sources. Our loan originations are generated primarily through the efforts of our loan officers and supplemented by existing customers, walk-in traffic, referrals from customers and advertising. We will on occasion sell and purchase loans in accordance with our interest rate strategy, and in the case of loan purchases, if the loan presented to us meets our underwriting criteria.

Loan Approval Procedures and Authority. Our lending activities follow written, non-discriminatory, underwriting standards and loan origination procedures established by our Board of Directors and management. All loans are reported to the Board of Directors on a monthly basis. The Board of Directors has granted loan approval authority to certain officers up to prescribed limits, based on the officer’s experience and tenure. Loans over certain specified amounts are approved either by the Loan Committee or by the Board of Directors.

Loans to One Borrower. The maximum amount that we may lend to one borrower and the borrower’s related entities is generally limited, by internal policy, to 15% of our Tier 1 capital and reserves. At December 31, 2013, our regulatory limit on loans to one borrower was $2.1 million.

Loan Commitments. We issue commitments for fixed-rate and adjustable-rate mortgage loans conditioned upon the occurrence of certain events. Commitments to originate mortgage loans are legally binding agreements to lend to our customers. Generally, our loan commitments expire after 90 days.

Investment Activities

We have legal authority to invest in various types of liquid assets, including U.S. Treasury obligations, securities of various federal agencies and of state and municipal governments, mortgage-backed securities, bankers acceptances, corporate bonds and certificates of deposit of federally insured institutions. Investment securities will generally carry an investment grade rating or better. At December 31, 2013, our investment portfolio is classified as “available for sale”. We also are required to maintain an investment in Federal Home Loan Bank of Pittsburgh stock as part of our membership and for borrowing privileges and also in Atlantic Community Bankers Bank, again for the use of their services and borrowing privileges.

Our investment objectives are to maximize portfolio yield over the long term in a manner that is consistent with our liquidity needs, pledging requirements, asset/liability strategies and safety and soundness. Our Board of Directors has the overall responsibility for the investment portfolio, including approval of our investment policy. The Asset Liability Committee is responsible for implementation of the investment policy. Our Board of Directors reviews the status of our investment portfolio on a monthly basis, or more frequently, if warranted.

Deposit Activities and Other Sources of Funds

General. Deposits, borrowings and loan repayments are the major sources of our funds for lending and other investment purposes. Scheduled loan repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general interest rates and money market conditions.

Deposit Accounts. Substantially all of our depositors are residents of Pennsylvania. We obtain deposits from within our market area through the offering of a broad selection of deposit instruments, including non interest-bearing demand deposits (such as checking accounts), interest-bearing demand accounts (such as NOW accounts),

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money market accounts, savings accounts and certificates of deposit. At December 31, 2013, we held $17.4 million in interest-bearing demand deposits, interest-bearing demand accounts and money market accounts of $6.1 million and $14.2 million, respectively, savings accounts of $59.6 million, and certificates of deposit of $22.8 million. In addition to accounts for individuals, we also offer commercial checking accounts designed for the businesses operating in our market area. From time to time we promote various accounts in an effort to increase deposits. We also use brokered deposits to raise deposits to fit maturity niches that are usually not found in our local marketplace.

Deposit account terms vary according to the minimum balance required, the time periods the funds must remain on deposit and the interest rate, among other factors. In determining the terms of our deposit accounts, we consider the rates offered by our competition, our liquidity needs, profitability to us, and customer preferences and concerns. We generally review our deposit mix and pricing weekly. Our deposit pricing strategy has generally been to offer competitive rates and to be towards the top of the local market for rates on selected types of deposit products.

Borrowings. We utilize advances from the FHLB of Pittsburgh to supplement our investable funds. The FHLB functions as a central reserve bank providing credit for member financial institutions. As a member, we are required to own capital stock in the FHLB and are authorized to apply for advances on the security of such stock and certain of our mortgage loans and other assets (principally securities which are obligations of, or guaranteed by, the United States), provided certain standards related to creditworthiness have been met. Advances are made under several different programs, each having its own interest rate and range of maturities. Depending on the program, limitations on the amount of advances are based either on a fixed percentage of an institution’s net worth or on the FHLB’s assessment of the institution’s creditworthiness. Victory Bank also maintains an advance credit facility agreement with Atlantic Central Bankers Bank.

Personnel

As of December 31, 2013, we had 30 full-time equivalent employees and three part-time employees, none of whom is represented by a collective bargaining unit. We believe our relationship with our employees is good.

Properties

Our main and executive offices are located at 548 N. Lewis Road, Limerick, Pennsylvania 19468. Victory Bank also maintains a Loan Office at 200 Spring Ridge Drive, Suite 206, Wyomissing, Pennsylvania 19610.

Legal Proceedings

Victory Bancorp is not a party to any pending legal proceedings that we believe would have a material adverse effect on the financial condition or operations of Victory Bancorp or Victory Bank.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF VICTORY BANCORP

The objective of this section is to help potential investors understand our views on our results of operations and financial condition. You should read the discussion in conjunction with the consolidated financial statements and notes to the financial statements that appear at the end of this prospectus. In this section, references to “we,” “us” and “our” refer to Victory Bancorp and/or Victory Bank, as applicable.

Overview

We conduct banking activities by accepting deposits and making loans in our market area. Our lending products include commercial real estate loans, commercial business loans, home equity loans and to a much lesser extent, consumer and construction loans. We also maintain an investment portfolio consisting of mortgage-backed securities to manage our liquidity and interest rate risk. Our loan and investment portfolios are primarily funded with deposits. We offer a broad array of deposit services including demand deposits, money market accounts, savings accounts and certificates of deposit.

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Income. Our primary source of pre-tax income is net interest income. Net interest income is the difference between interest income, which is the income that we earn on our loans and investments, and interest expense, which is the interest that we pay on our deposits and borrowings. Changes in levels of interest rates affect our net interest income.

A secondary source of income is noninterest income. Our noninterest income generally comes from two sources: service charges (mostly from service charges on deposit accounts) and income recognized from the sale of loans.

Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for losses inherent in the loan portfolio. We evaluate the need to establish allowances against losses on loans on a quarterly basis. When additional allowances are necessary, a provision for loan losses is charged to earnings.

Expenses. The noninterest expenses we incur in operating our business consist of salaries and employee benefits expenses, occupancy expenses, data processing expenses and other miscellaneous expenses, such as office supplies, telephone, postage, advertising and professional services.

Our largest noninterest expense is salaries and employee benefits, which consist primarily of salaries and wages paid to our employees, payroll taxes, and expenses for health insurance, retirement plans and other employee benefits.

Occupancy expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of depreciation charges, furniture and equipment expenses, maintenance, real estate taxes and costs of utilities.

Data processing expenses are the fees we pay to third parties for processing customer information, deposits and loans.

Federal deposit insurance premiums are payments we make to the FDIC for insurance of our deposit accounts.

Our significant accounting policies are described in the notes to our audited consolidated financial statements included in this prospectus.

Critical Accounting Policies

We consider accounting policies involving significant judgments and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. The following represent our critical accounting policies:

Allowance for Loan Losses

The allowance for loan losses (“allowance”) represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The allowance is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Because all identified losses are immediately charged off, no portion of the allowance is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses.

The allowance is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based

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our past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class including commercial loans not considered impaired, as well as smaller balance homogeneous loans, such as home equity and other consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These qualitative risk factors include:

• Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.

• National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans.

• Nature and volume of the portfolio and terms of loans.

• Volume and severity of past due, classified and nonaccrual loans as well as and other loan modifications.

• Existence and effect of any concentrations of credit and changes in the level of such concentrations.

• Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. The unallocated component of the reserve is based, in part, on underlying economic and environmental conditions of the overall markets as well as subjective factors within Victory Bank’s environment. Victory Bank considers, among others, the following economic factors: unemployment rates of Montgomery County and the local Reading Metropolitan Statistical Area (“MSA”); the sales price of existing homes in the local Reading Metropolitan Statistical Area; and the Consumer Price Index change for a year-over year average. In addition, such environmental factors, among others, that are considered include: changes in Victory Bank policy and procedures, changes in the nature and volume of Victory Bank’s portfolio; changes in the lending staff of Victory Bank; and changes in loan portfolio concentrations.

In addition, banking regulatory agencies, as an integral part of their examination process, periodically review our allowance for loan losses and may require us to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

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Other-Than-Temporary Impairment of Securities

Management evaluates securities for other-than-temporary impairment on at least an annual basis, and more frequently when economic or market concerns warrant such evaluation. Declines in fair value of securities below their cost that are deemed to be other-than-temporary are separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive income (loss). In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) whether or not management intends to sell or expects that it is more likely than not that it will be required to sell the debt security prior to any anticipated recovery in fair value.

Fair Value of Financial Instruments

Fair value of financial instruments are estimated using relevant market information and other assumptions. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could have significantly affected the estimates.

Valuation of Deferred Taxes

Victory Bancorp evaluates the carrying amount of its deferred tax assets on a quarterly basis or more frequently, if necessary, in accordance with the guidance provided in Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 740 (ASC 740), in particular, applying the criteria set forth therein to determine whether it is more likely than not (i.e. a likelihood of more than 50%) that some portion, or all, of the deferred tax asset will not be realized within its life cycle, based on the weight of available evidence. If management makes a determination based on the available evidence that it is more likely than not that some portion or all of the deferred tax assets will not be realized in future periods, a valuation allowance is calculated and recorded. These determinations are inherently subjective and dependent upon estimates and judgments concerning management’s evaluation of both positive and negative evidence.

In conducting the deferred tax asset analysis, Victory Bancorp believes it is important to consider the unique characteristics of an industry or business. In particular, characteristics such as business model, level of capital and reserves held by financial institutions and their ability to absorb potential losses are important distinctions to be considered for bank holding companies like Victory Bancorp. In addition, it is important to consider that net operating losses for federal income tax purposes can generally be carried back two years and carried forward for a period of twenty years. In order to realize our deferred tax assets, we must generate sufficient taxable income in such future years.

In assessing the need for a valuation allowance, Victory Bancorp carefully weighed both positive and negative evidence currently available. Judgment is required when considering the relative impact of such evidence. The weight given to the potential effect of positive and negative evidence must be commensurate with the extent to which it can be objectively verified. A cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome. As a result of continued profitability and taxable income in recent years, Victory Bancorp has concluded that no valuation allowance is required for the deferred tax assets at December 31, 2013.

Victory Bancorp recognizes interest and penalties on income taxes, if any, as a component of the provision for income taxes. There were no interest and penalties recognized in 2013 or 2012.

Balance Sheet

General. Total assets at December 31, 2013 were $141.3 million, consisting primarily of net loans of $129.3 million, premises and fixed assets of $4.0 million and cash and cash equivalents of $2.4 million, compared with total assets at December 31, 2012 of $127.3 million, consisting primarily of net loans of $109.2 million, cash

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and cash equivalents of $5.6 million and securities available for sale of $4.9 million. Total deposits at December 31, 2013 were $120.1 million compared with $112.3 million at December 31, 2012. Cash and cash equivalents at December 31, 2013 totaled $2.4 million compared to $5.6 million at December 31, 2012. Cash balances were reduced to partially fund loan growth. Investment securities available for sale decreased in 2013 to $1.9 million at December 31, 2013 from $4.9 million at December 31, 2012 due primarily to the sale of $2.1 million of securities during the third quarter of 2013 for interest rate risk purposes.

Total liabilities increased from $114.7 million at December 31, 2012 to $128.4 million at December 31, 2013, an increase of $13.6 million, due primarily to a $7.8 million increase in total deposits and a $5.7 million increase in borrowings that were used to partially fund loan growth in 2013. Total shareholders’ equity increased from $12.6 million at December 31, 2012 to $13.0 million at December 31, 2013, due primarily to the net income earned during the year ended December 31, 2013.

Loans. We offer commercial term, commercial mortgage, commercial line, construction, home equity and other consumer loans. We offer both adjustable- and fixed-rate loans. As of December 31, 2013, our loan portfolio totaled $131.0 million (including net unamortized deferred origination costs), representing approximately 92.6% of total assets. Commercial loans, which totaled 75.8% of our loan portfolio at December 31, 2013, were comprised of commercial term, commercial mortgage and commercial line loans.

The increase in our loan portfolio for the year ended December 31, 2013 was primarily due to an increase in commercial real estate loans.

The following table sets forth the composition of our loan portfolio at the dates indicated.

	At December 31,
	2013						2012
	Amount			Percent			Amount			Percent
	(Dollars in thousands)
Commercial:
Commercial term		19,784			15.10	%		21,999			19.92	%
Commercial mortgage		66,644			50.88	%		46,820			42.40	%
Commercial line		12,833			9.80	%		13,398			12.13	%
Construction		9,332			7.12	%		8,030			7.27	%
Consumer:
Home equity		10,725			8.19	%		10,523			9.53	%
Other consumer		11,664			8.91	%		9,661			8.75	%
Total loans	$	130,982			100.00	%	$	110,431			100.00	%
Unearned discounts, origination and commitment fees		15						65
Allowance for loan losses		(1,660	)					(1,338	)
Total loans, net	$	129,337					$	109,158

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Loan Maturity. The following table sets forth certain information at December 31, 2013 regarding scheduled contractual maturities during the periods indicated. The tables do not include any estimate of prepayments which significantly shorten the average life of all loans and may cause our actual repayment experience to differ from that shown below. Demand loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less. The amounts shown below exclude deferred loan fees and costs.

	Commercial Term		Commercial Mortgage		Commercial Line		Construction		Home Equity		Consumer		Total
	(In thousands)
Amounts due after December 31, 2013 in:
One year or less	$	6,096	$	3,830	$	12,242	$	1,821	$	96	$	704	$	24,789
After one year through two years		2,718		5,884		441		361		109		331		9,844
After two years through three years		2,082		10,079		—		717		327		360		13,565
After three years through five years		6,932		33,330		150		2,832		469		1,388		45,101
After five years through ten years		430		11,483		—		2,968		1,791		316		16,988
After ten years through fifteen years		229		380		—		633		3,906		1,185		6,333
After fifteen years		1,297		1,658		—		—		4,027		7,380		14,362
Total	$	19,784	$	66,644	$	12,833	$	9,332	$	10,725	$	11,664	$	130,982

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Fixed vs. Adjustable Rate Loans. The following table sets forth the dollar amount of all scheduled maturities of loans at December 31, 2013 that are due after December 31, 2014 and have either fixed interest rates or adjustable interest rates. The amounts shown below exclude deferred loan fees and costs.

	Due after December 31, 2014
	Fixed Rate		Adjustable Rate		Total
	(In thousands)
Commercial:
Commercial term	$	12,351	$	1,337	$	13,688
Commercial mortgage		54,549		8,265		62,814
Commercial line		—		591		591
Construction		6,911		600		7,511
Consumer:
Home equity		3,965		6,664		10,629
Other consumer		106		10,854		10,960
	$	77,882	$	28,311	$	106,193

Investment Securities. We maintain an investment securities portfolio, which at December 31, 2013 totaled $1.9 million and represented approximately 1.3% of our total assets. Securities in the portfolio are classified as available-for-sale or held-to-maturity based on management’s positive intent and ability to hold such securities to maturity. At December 31, 2013, no securities were classified as held-to-maturity.

Securities available-for-sale decreased to $3.0 million at December 31, 2013 from $4.9 million at December 31, 2012. Investment securities decreased primarily due to the sale of $2.1 million of corporate bonds, for interest rate risk purposes, and paydowns on mortgage-backed securities of $730,000 during the year ended December 31, 2013.

The following table sets forth the amortized cost and fair values of our securities portfolio at the dates indicated.

	At December 31,
	2013				2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Securities available-for-sale:
Mortgage-backed securities-agency residential	$	1,869	$	1,901	$	2,614	$	2,695
Corporate notes		—		—		2,109		2,190
Total securities available-for-sale	$	1,869	$	1,901	$	4,723	$	4,885

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The following table sets forth the stated maturities and weighted average yields of investment securities at December 31, 2013. Weighted average yields on tax-exempt securities are presented on a tax equivalent basis. Certain mortgage related securities have adjustable interest rates and will reprice annually within the various maturity ranges. These repricing schedules are not reflected in the table below.

	More than Ten Years(1)					Total
	Amortized Cost		Weighted Average Yield			Amortized Cost		Fair Value		Weighted Average Yield
Securities Available for sale:
Mortgage backed securitized	$	1,869		2.48	%	$	1,869	$	1,901		2.48	%
Total Investment securities	$	1,869		2.48	%	$	1,869	$	1,901		2.48	%

(1) At December 31, 2013, there were no securities in our investment portfolio that had stated maturities of less than 10 years.

Deposits. Our primary source of funds is our deposit accounts, which are comprised of interest-bearing and noninterest-bearing demand accounts, money market accounts, savings accounts and certificates of deposit. These deposits are provided primarily by individuals and businesses within our market area. We offer competitive rates for all of our deposit products. We set our interest rates on deposits based on a variety of factors, including rates offered by our competition, our liquidity needs and market interest rates.

We increased our usage of brokered deposits from $3.4 million, or 3.0% of total deposits, at December 31, 2012, to $4.1 million, or 3.4% of total deposits, at December 31, 2013. Victory Bank uses brokered deposits to either raise deposits at yields less expensive than those found in the local market or to fit maturity niches that are difficult to find in our local marketplace. Brokered deposits for Victory Bank typically included Certificates of Deposit with Promontory Interfinancial Network LLC’s Certificate of Deposit Account Registry Service (“CDARs”) and Money Market accounts with Promontory Interfinancial Network LLC’s Insured Cash Sweep (“ICS”). CDARs and ICS are privately owned services that break up large deposits and places them into a network of FDIC insured financial institutions which allows depositors to deal with a single bank that participates in CDARs and ICS, but avoids having funds above the FDIC deposit insurance limits in any one bank. Deposits placed through a deposit placement service, such as CDARs and ICS, are eligible for “pass-through” FDIC insurance. As of December 31, 2013 and 2012, Victory Bank had $0 and $1.6 million of funds, respectively, in the CDARs program and $2.4 million and $1.8 million of funds, respectively, in the ICS program.

Deposits increased $7.8 million, or 6.9%, to $120.1 million at December 31, 2013, from $112.3 million at December 31, 2012, primarily as a result of a $6.2 million increase in savings accounts and a $3.4 million of growth in money market accounts. At times, Victory Bank will see an outflow of deposits to financial institutions paying the highest and most attractive interest rates and terms. If needed, we believe we can raise the interest rates we offer to attract new funds or retain existing deposits.

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The following table sets forth the average balances and average rates of our deposit products for the periods indicated. For the purposes of this table, average balances have been calculated using daily averages.

	At December 31,
	2013							2012
	Average Balance		Interest Expense		Average Rate Paid			Average Balance		Interest Expense		Average Rate Paid
					(Dollars in thousands)
Demand, non-interest bearing	$	16,621	$	—		—	%	$	13,327	$	—		—	%
Demand, interest bearing		6,902		15		0.21	%		5,827		18		0.31	%
Money Market accounts		13,788		74		0.54	%		12,391		92		0.74	%
Savings accounts		57,824		549		0.95	%		49,427		560		1.13	%
Certificates of deposit		24,192		360		1.49	%		22,842		400		1.75	%
Total deposits	$	119,327	$	998		0.84	%	$	103,814	$	1,070		1.03	%

The following table indicates the amount of jumbo certificates of deposit by time remaining until maturity at December 31, 2013. Jumbo certificates of deposit require minimum deposits of $100,000.

	At December 31, 2013
	(In thousands)
	Amount		Weighted Average Rate
Three months or less	$	2,448		1.40	%
Over three months through six months		906		1.55	%
Over six months through one year		3,921		1.30	%
Over one year		6,878		1.65	%
Total	$	14,153		1.50	%

Borrowings. We have an agreement with a correspondent bank for a $1.5 million unsecured federal funds overnight line of credit to provide cash advances, should we need additional funds for loan originations or other purposes. There were no borrowings on this line of credit at December 31, 2013 and December 31, 2012. We also have the ability to borrow from the FHLB of Pittsburgh on an unsecured basis. Our maximum borrowing capacity from the FLHB of Pittsburgh at December 31, 2013, was $52.4 million. At December 31, 2013, we had $7.7 million outstanding at the FLHB of Pittsburgh compared to $2.0 million at December 31, 2012.

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Results of Operations for the Years Ended December 31, 2013 and December 31, 2012

Financial Highlights. Net income, before taxes, for the year ended December 31, 2013 was $1.2 million compared to $473,000 for the year ended December 31, 2012. The $710,000, or 150.1% increase in net income, before taxes, for the year ended December 31, 2013 was primarily due to an increase in net interest income of $1.1 million and an increase in non-interest income of $600,000, partially offset by an increase in non-interest expenses of $1.2 million.

Net Interest Income. Net interest income increased by $1.1 million, or 25.4%, to $5.8 million for the year ended December 31, 2013 from $4.6 million in the same period in 2012. The net interest rate spread increased to 4.37% for the year ended December 31, 2013 from 4.04% for same period in 2012 primarily as a result of the increase in average loans of $24.5 million, or 25.0% and a decrease in the cost of interest bearing funds from 1.18% for the year ended December 31, 2012 to 0.97% for the same period in 2013. The net interest margin increased to 4.53% for the year ended December 31, 2013 from 4.24% for the year ended December 31, 2012. The increase in the net interest margin was the result of the growth in higher yielding assets, namely loans, reduction in Federal funds sold and the reduction in the cost of deposits.

Total interest income increased to $6.8 million for the year ended December 31, 2013, or 19.9%, from $5.7 million for the same period in 2012. The increase in interest income primarily reflects the increase in loan receivables which increased, on average, 25.0% for the year ending December 31, 2013 as compared to the same period in 2012. Interest income earned on loans increased to $6.7 million for the year ended December 31, 2013, or 20.7%, from $5.6 million for the same period in 2012.

Interest expense on interest-bearing liabilities decreased $44,000 or 4.1%, to $1.0 million for the year ended December 31, 2013, from $1.1 million for the same period in 2012. The decrease was due primarily to the decrease in the cost of funds on total interest bearing liabilities for the year ending December 31, 2013 to 0.97% from 1.18% as compared to the same period in 2012, and partially offset by an increase in average total deposits for the year ended December 31, 2013 to $119.3 million as compared to $103.8 million for the year ended December 31, 2012.

Provision for Loan Losses. A provision for loan losses is charged to earnings to maintain the total allowance for loan losses at a level calculated by management based on historical experience, the volume and type of lending conducted by us, the status of past due principal and interest payments and other factors related to the collectability of the loan portfolio. Based upon our analysis of these factors, management decreased the provision for loan losses by $124,000, or 26.3%, for the year ended December 31, 2013 as compared to the same period in 2012, which was primarily due to improving economic indicators for our market area, the decrease in non-accrual loans, and the limited net charge-offs for the year ended December 31, 2013. The allowance for loan losses was $1.7 million, or 1.27% of total loans, as of December 31, 2013 as compared with $1.3 million, or 1.21% of total loans, as of December 31, 2012.

Noninterest Income. Noninterest income increased $600,000 to $969,000 for the year ended December 31, 2013 from $369,000 for the same period in 2012, due primarily to a $557,000 increase in gains on sales of the guaranteed portion of SBA originated loans.

Noninterest Expenses. Noninterest expenses increased $1.2 million, or 29.3%, to $5.2 million for the year ended December 31, 2013 as compared to $4.1 million of the year ended December 31, 2012. The primary reason for increase was the increase in salaries and benefits of $535,000, or 23.2%, driven mainly by the increase in personnel and by annual merit increases and increased employee benefit costs. Legal and professional fees increased $285,000 from $260,000 for the year ended December 31, 2012, to $545,000 for the year ended December 31, 2013 primarily due to $314,000 in fees related to the merger.

Income Taxes. An income tax expense of $473,000 was accrued on pre-tax income of $1.2 million for the year ended December 31, 2013. The Company recorded an income tax benefit of $1.1 million during the year ended December 31, 2012 related to the decrease in the deferred tax asset valuation allowance. The decrease in valuation allowance is the result of management’s estimate of net operating loss carryforwards more likely than not to be utilized over future periods.

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The net deferred tax asset balance before consideration of a valuation allowance was $916,000 as of December 31, 2013 and $1.3 million as of December 31, 2012. The tax planning strategies assessed resulted in the projected realization of the tax assets which can be considered more likely than not to be realized as of December 31, 2013 and 2012. Accordingly, Victory Bancorp did not record a partial valuation allowance related to the deferred tax asset balance during 2013 or 2012.

The deferred tax asset will continue to be analyzed on a quarterly basis for changes affecting realization of the tax assets.

Average Balances and Yields. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Loan fees are included in interest income on loans and are insignificant. Yields are not presented on a tax-equivalent basis. Any adjustments necessary to present yields on a tax-equivalent basis are insignificant. Average balances have been calculated using daily balances.

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	Years Ended December 31,
	2013								2012
	Average Outstanding Balance			Interest Income Expense		Yield/ Rate			Average Outstanding Balance			Interest Income Expense		Yield/ Rate
	(Dollars in thousands)
Interest-earning assets
Federal funds sold	$	1,377		$	3		0.21	%	$	5,767		$	9		0.16	%
Interest bearing deposit at- other banks		273			—		0.06	%		976			3		0.25	%
Securities available for sale		3,741			98		2.61	%		4,379			113		2.58	%
Loan receivable		122,241			6,734		5.51	%		97,760			5,581		5.71	%
Restricted Investment in bank stocks		530			4		0.73	%		384			1		0.21	%
Total interest earning assets		128,162			6,839		5.34	%		109,266			5,707		5.22	%
Non interest earning assets		7,835								6,925
Total assets	$	135,997							$	116,191
Interest-bearing liabilities
Interest bearing demand deposits	$	6,902			15		0.21	%	$	5,827			18		0.31	%
Money market		13,788			74		0.54	%		12,391			92		0.74	%
Savings accounts		57,824			549		0.95	%		49,427			560		1.13	%
Certificates of deposit		24,192			360		1.49	%		22,842			400		1.75	%
Borrowed funds		3,095			32		1.05	%		641			4		0.66	%
Total interest bearing liabilities		105,801			1,030		0.97	%		91,128			1,074		1.18	%
Non-interest bearing liabilities		17,413								13,609
Total liabilities		123,214								104,737
Stockholders’ equity		12,783								11,417
Total liabilities and stockholders’ equity	$	135,997							$	116,154
Net interest income				$	5,809							$	4,633
Net interest spread							4.37	%							4.04	%
Net interest earning assets	$	22,361							$	18,138
Net interest margin(4)							4.53	%							4.24	%
Ratio of average of interest earning assets to interest bearing liabilities		121.13	%							119.90	%

Rate/Volume Analysis. The following table sets forth the effects of changing rates and volumes on our net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by current volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionately to changes due to rate and the changes due to volume.

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	Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
	Increase (Decrease) Due to
	Volume			Rate			Net
	(In thousands)
Interest-earning assets:
Fed funds sold	$	(7	)	$	1		$	(6	)
Interest bearing deposits at other banks		(3	)		—			(3	)
Securities available-for-sale		(15	)		—			(15	)
Loans receivable		1,398			(245	)		1,153
Restricted investment in bank stocks		—			3			3
Total interest-earning assets	$	1,373		$	(241	)	$	1,132
Interest-bearing liabilities:
Interest-bearing demand deposits	$	3		$	(6	)	$	(3	)
Money market accounts		10			(28	)		(18	)
Savings accounts		95			(106	)		(11	)
Certificates of deposit		24			(64	)		(40	)
Borrowed funds		16			12			28
Total interest bearing liabilities		148			(192	)		(44	)
Increase/(decrease) in net interest income	$	1,225		$	(49	)	$	1,176

Risk Management

Overview. Managing risk is an essential part of successfully managing a financial institution. Our most prominent risk exposures are credit risk, interest rate risk and market risk. Credit risk is the risk of not collecting the interest and/or the principal balance of a loan or investment when it is due. Interest rate risk is the potential reduction of interest income as a result of changes in interest rates. Market risk arises from fluctuations in interest rates that may result in changes in the values of financial instruments, such as available-for-sale securities that are accounted for on a mark-to-market basis. Other risks that we face are operational risks, liquidity risks and reputation risk. Operational risks include risks related to fraud, regulatory compliance, processing errors, technology and disaster recovery. Liquidity risk is the possible inability to fund obligations to depositors, lenders or borrowers. Reputation risk is the risk that negative publicity or press, whether true or not, could cause a decline in our customer base or revenue.

Credit Risk Management. Our strategy for credit risk management focuses on having well-defined credit policies and uniform underwriting criteria and providing prompt attention to potential problem loans.

When a borrower fails to make a required loan payment, we take a number of steps to have the borrower cure the delinquency and restore the loan to current status, including contacting the borrower by letter and phone at regular intervals. When the borrower is in default, we may commence collection proceedings. Generally, when a commercial loan becomes 90 days past due, we institute collection proceedings.

Analysis of Nonperforming and Classified Assets. We consider repossessed assets and loans that are 120 days or more past due to be nonperforming assets. Under current accounting guidelines, a loan is defined as impaired when, based on current information and events, it is probable that the creditor will be unable to collect all amounts due under the contractual terms of the loan agreement. When a loan becomes 90 days delinquent, the loan may be placed on a nonaccrual status at which time the accrual of interest ceases, the interest previously accrued to income is reversed and the loan is placed on a cash basis. Generally, payments on a nonaccrual loan are applied to the outstanding principal and interest as determined at time of the collection of the loan.

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The following table provides information with respect to our non-performing assets at the dates indicated. We had no troubled debt restructurings as of December 31, 2013 and 2012.

	At December 31,
	2013			2012
	(Dollars in thousands)
Non-accrual loans:
Commercial:
Commercial term	$	186		$	279
Commercial mortgage		261			1,350
Consumer:
Home equity		—			—
Other consumer		50			50
Total non-accrual loans	$	497		$	1,679
Total non-performing assets	$	497		$	1,679
Ratios:
Non-performing loans to total loans		0.4	%		1.5	%
Non-performing assets to total assets		0.4	%		1.3	%

We had no loans classified as troubled debt restructurings as of and for the years ended December 31, 2013 and 2012.

During the years ended December 31, 2013 and 2012, interest income of $33,000 and $27,000, respectively, would have been recorded on a loan accounted for on a nonaccrual basis if the loan had been current throughout the period. There was no interest on such loans included in income during the year ended December 31, 2013 and for the years ended December 31, 2012 we recorded income of $65,000 on these credits.

Banking regulations require us to regularly review and classify our assets. In addition, our regulators have the authority to identify problem assets and, if appropriate, require them to be classified. We utilize three classifications for problem assets: substandard, doubtful and loss. Loans classified as “substandard” are those loans with clear and defined weaknesses, such as highly leveraged positions, unfavorable financial ratios, uncertain repayment resources or poor financial condition, which may jeopardize recoverability of the loan. Loans classified as “doubtful” are those loans that have characteristics similar to those of substandard loans, but also have an increased risk that loss may occur or at least a portion of the loan may require a charge-off if liquidated at present. Although loans classified as substandard do not duplicate loans classified as doubtful, both substandard and doubtful loans may include some loans that are past due at least 90 days, are on non-accrual status or have been restructured. Loans classified as “loss” are those loans that are in the process of being charged-off. Assets that do not currently expose Victory Bank to sufficient risk to warrant classification as a classified asset but possesses weaknesses are designated “special mention” and monitored by us.

At December 31, 2013 and December 31, 2012, we had $497,000 and $472,000, respectively, in assets classified as substandard and no assets classified as doubtful or loss. In addition, at December 31, 2013 and 2012, we had $3.7 million and $1.2 million, respectively, in assets classified as special mention.

Analysis and Determination of the Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for probable losses inherent in the loan portfolio. We evaluate the need to establish allowances against losses on loans on a quarterly basis based on written policies and procedures that we have established to evaluate the risk in our portfolio, ensure the timely charge off of loans and properly reflect estimated future losses in the portfolio. When additional allowances are necessary, a provision for loan losses is charged to earnings. The recommendations for increases or decreases to the allowance are presented by management to the board of directors. Where specific loan loss allowances have been established, any difference between the loss allowances and the amount of loss realized would be charged or credited to current income.

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The following table sets forth a breakdown of the allowance for loan losses by loan category at the dates indicated.

	December 31, 2013							December 31, 2012
	Allowance for Loan Losses		Loan Balances by Category		Percent of Loans in Each Category to Total Loans			Allowance for Loan Losses		Loan Balances by Category		Percent of Loans in Each Category to Total Loans
	(Dollars in thousands)
Commercial:
Commercial term	$	203	$	19,784		15.10	%	$	248	$	21,999		19.9	%
Commercial mortgage		423		66,644		50.88	%		297		46,820		42.4	%
Commercial line		90		12,833		9.80	%		131		13,398		12.1	%
Construction		71		9,332		7.12	%		62		8,030		7.3	%
Consumer loans:
Home equity		66		10,725		8.19	%		65		10,523		9.5	%
Other consumer		71		11,664		8.91	%		60		9,661		8.8	%
Unallocated reserves		736		—		—			475		—		—
Total loans	$	1,660	$	130,982		100	%	$	1,338	$	110,431		100.0	%

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Analysis of Loan Loss Experience. The following table sets forth an analysis of the allowance for loan losses for the periods indicated.

	At or For the Years Ended December 31,
	2013			2012
	(Dollars in thousands)
Balance at beginning of period	$	1,338		$	1,078
Charge-offs:
Commercial:
Commercial term		(33	)		(14	)
Construction
Consumer
Home equity		—			—
Other consumer		—			(204	)
Unallocated reserve		—			—
Total charge-offs		(33	)		(218	)
Recoveries:
Commercial:
Commercial line		7			6
Total recoveries		7			6
Net (charge-offs) recoveries		(26	)		(212	)
Provision for loan losses		348			472
Balance at end of year	$	1,660		$	1,338
Ratios:
Net charge-offs to average loans outstanding		—	%		0.2	%
Allowance for loan losses to non-performing loans at end of period		334.0	%		79.7	%
Allowance for loan losses to total loans at end of period		1.3	%		1.2	%

Interest Rate Risk Management. Our earnings and the market value of our assets and liabilities are subject to fluctuations caused by changes in the level of interest rates. We manage the interest rate sensitivity of our interest-bearing liabilities and interest-earning assets in an effort to minimize the adverse effects of changes in the interest rate environment. Deposit accounts typically react more quickly to changes in market interest rates than loans because of the shorter maturities of deposits. To reduce the potential volatility of our earnings, we have sought to improve the match between asset and liability maturities and rates, while maintaining an acceptable interest rate spread.

We have an Asset/Liability Committee to coordinate all aspects involving asset/liability management. The committee establishes and monitors the volume, maturities, pricing and mix of assets and funding sources with the objective of managing assets and funding sources to provide results that are consistent with liquidity, growth, risk limits and profitability goals.

Liquidity Management. Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary source of funds consists of deposit inflows, loan repayments and maturities of and payments on investment securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition.

Our primary investing activities are the origination and purchase of loans and the purchase of securities. Our primary funding activities consist of activity in deposit accounts. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors and other factors. We generally manage the pricing of our deposits to be competitive. Occasionally, we offer promotional rates on certain deposit products to attract deposits.

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Capital Management. We are subject to various regulatory capital requirements administered by the FDIC, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At December 31, 2013 and 2012, we exceeded all of our regulatory capital requirements. We are considered “well capitalized” under regulatory guidelines.

Off-Balance Sheet Arrangements. In the normal course of operations, we engage in a variety of financial transactions that, in accordance with generally accepted accounting principles, are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers’ requests for funding and take the form of loan commitments and lines of credit. For information about our loan commitments and unused lines of credit, see note 13 of the notes to the consolidated financial statements of Victory Bancorp included in this prospectus.

For the years ended December 31, 2013 and 2012, we did not engage in any off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations or cash flows. At December 31, 2013 and 2012, Victory Bank had $22.8 million and $19.4 million, respectively, in commitments to grant loans or under lines of credit and letters of credit.

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MANAGEMENT OF VICTORY BANCORP AND VICTORY BANK

Shared Management Structure

The directors of Victory Bancorp are the same persons who are the trustees of Victory Bank. In addition, each executive officer of Victory Bancorp is also an executive officer of Victory Bank. We expect that our holding company and its subsidiary bank will continue to have common executive officers until the merger unless there is a business reason to establish separate management structures. To date, executive officers and trustees have been compensated for their services by Victory Bank. In the future, directors and executive officers may receive additional compensation for their services to Victory Bancorp.

Executive Officers of Victory Bancorp and Victory Bank

The following table sets forth information regarding the executive officers of Victory Bancorp and Victory Bank.

Name	Age(1)	Position
Joseph W. Major	58	Chairman and Chief Executive Officer of Victory Bancorp and Victory Bank; President of Victory Bank
Richard L. Graver	52	President of Victory Bancorp ; Chief Banking Officer of Victory Bank
Eric B. Offner	55	Executive Vice President of Victory Bancorp and Victory Bank; Chief Credit Officer of Victory Bank
Robert H. Schultz	49	Chief Financial Officer, Chief Operating Officer and Secretary of Victory Bancorp and Victory Bank

(1) As of December 31, 2013.

The executive officers of Victory Bancorp and Victory Bank are elected annually.

Directors of Victory Bancorp and Victory Bank

Victory Bancorp and Victory Bank each currently has 9 directors. Six of these directors, including Mr. Major, will be elected to the Boards of HV Bancorp and its subsidiary bank in connection with the merger. Directors of Victory Bancorp and Victory Bank serve three-year staggered terms so that approximately one-third of the directors are elected at each annual meeting.

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The following table states the directors’ names, their ages as of December 31, 2013, the years when they began serving as directors of Victory Bancorp and Victory Bank and when their current terms expire:

Name	Position(s) Held	Age	Director Since(1)	Current Term Expires
Alan S. Apt	Director	62	2008	2015
Matthew B. Bates	Director	52	2008	2015
Robert L. Brant	Director	58	2008	2016
Beryl B. Byles	Director	74	2008	2016
Michael A. Eddinger	Director	52	2008	2014
Karl Glocker	Director	76	2008	2014
Kevin L. Johnson	Director	54	2008	2014
Joseph W. Major	Chairman of the Board of Victory Bancorp and Victory Bank	58	2008	2015
Dennis R. Urffer	Director	66	2008	2016

(1) Years prior to 2009 indicate service with Victory Bank.

Boards of Directors and Executive Officers of Victory Bancorp and Victory Bank

Directors

The business experience for the past five years of each of the directors is set forth below. Unless otherwise indicated, directors have held their positions for the past five years.

Alan S. Apt is founder, president and chief executive of Aptcor Commercial, Realtors established in 1979 and is a co-founding member and officer in Eagle Property Management, LLC. In addition, Mr. Apt is a partner/member in various real estate development and investment companies active in owning, managing and developing commercial real estate. Mr. Apt is a founding and charter member of TriState Realtors Commercial Alliance for Pennsylvania, New Jersey and Delaware, having served on the board of directors from 1992 to 1998. He has been a member of the National Association of Realtors and the statewide Pennsylvania Association of Realtors since 1973. Mr. Apt served on the board of directors of Community Housing Services, a Montgomery County based 501(c)(3) housing agency providing self-sufficiency and housing initiatives to low- and moderate-income clients, from 2002 to 2006 and has served as an elected director of the Norristown Area School District. Mr. Apt’s extensive experience in the commercial real estate industry and involvement in civic and business organizations in the market area in which we operate qualify him to serve on our board of directors.

Matthew B. Bates is chief executive officer of West Motor Freight and Evans Delivery Company and All Points Transport. In 1988, Mr. Bates joined the family-owned business. Mr. Bates managed the newly acquired West Motor Freight of PA. During the past 25 years, the Evans Group of companies grew organically and through acquisitions. The group currently includes Evans Delivery Company Inc., West Motor Freight, All Points Transport, Hale International Division, DM Transportation and 562 Terminal Facility Limited Partnership. Mr. Bates’ background offers the board of directors substantial experience in operating and growing a local business, which is invaluable given our focus on commercial lending to businesses, and qualifies him to serve on our board of directors.

Robert L. Brant is a principal in the Trappe law firm Robert L. Brant & Associates, LLC. He is on the Board of Trustees of Ursinus College. Mr. Brandt provides the board of directors with important knowledge and insight necessary to assess the legal issues inherent to the business of Victory Bank. In addition, Mr. Brandt has strong ties to the community in which we operate. This background and experience qualifies Mr. Brandt to serve on our board of directors.

Beryl B. Byles is an Executive Coach in her own consulting practice and specializes in leadership development for senior executives. She recently completed a book entitled, Authentic Leadership: An Inside Job. A Workbook of Annotated Leadership Findings from a Career of Coaching Leaders. In addition, she has coached executives in the arts including two local clients, the Kimmel Center and Opera Philadelphia. Ms. Byles is a member of the Forum of Executive Women and serves on the board of The Crossing Choir. Ms. Byles is currently on a leave of absence. Ms. Byles’ background and experience with leadership development for senior executives along with her ties to our local community qualify her to serve on our board of directors.

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Michael A. Eddinger is a principal and co-owner of Suburban Water Technology since 1992. Mr. Eddinger is also a partner in several real estate development and construction projects in Florida, Pennsylvania and Delaware. The scope of these projects has included land acquisition, land development, construction, sales and property management. He is a life-long member of the Boyertown Community, serving as a member of the Berks County Community Foundation, a member of the Boyertown Area Grant-making Board, and the board of the Boyertown Area YMCA since 1995, serving on both the Strategic Planning Committee and the Building and Grounds Committee. Mr. Eddinger’s extensive experience in the real estate industry, both locally and outside of our market area, and his long-term connections with our local community through both civic and business relationships qualify him to serve on our board of directors.

Karl Glocker is president of Glocker & Co. Inc., a full-service residential and commercial real estate broker, appraisal service and insurance company. He is a long-standing member of the Central Montgomery County Board of Realtors, the Pennsylvania State Association of Realtors, and the National Association of Realtors, including their appraisal section. Mr. Glocker has also served on various other charitable and non-profit boards throughout his career in the real estate business. Mr. Glocker’s background provides the board of directors with critical experience in certain real estate matters, specifically in the markets in which Victory Bank conducts its business, as well as valuable insight regarding the local business environment.

Kevin L. Johnson is president and founder of Traffic Planning and Design, Inc. (“TPD”). Mr. Johnson sits on the Board of Directors for several organizations including the Southeastern Pennsylvania Transportation Authority where he serves as Chairman of both the audit and operations committees. In 2011, Mr. Johnson was one of three engineers to serve on Governor Corbett’s Transportation Funding Advisory Commission. Mr. Johnson is the past president of the American Society for Highway Engineers, Delaware Valley section and is a member of the Institute of Transportation Engineers. Mr. Johnson is also a major supporter of the University of Pennsylvania’s Transportation Systems Engineering Alumni Club. Mr. Johnson’s background and service on other boards of directors, as well as his involvement in local transportation matters, provides the board of directors with valuable insight regarding the business environment and qualifies Mr. Johnson to serve on the board of directors.

Joseph W. Major has served as chairman of the board and chief executive officer of The Victory Bank since its formation. Prior to that, he served as president and chief executive officer of two other financial services companies, Vartan National Bank and Patriot Bank Corp. Mr. Major is a member of the Board of Directors of the Pennsylvania Bankers Association, and formerly served as a director of The First National Bank of Liverpool and a director of ETA, a bank data processing service bureau. Mr. Major’s extensive knowledge of Victory Bank’s operations, along with his former experience in the local banking industry and involvement in business and civic organizations in the communities that are served by Victory Bank, affords the board of directors with valuable insight involving the operations of Victory Bank. Mr. Major’s knowledge of all aspects of our business, combined with his success and strategic vision, are invaluable to our Company.

Dennis R. Urffer has been a Certified Public Accountant and shareholder with Resnick Amsterdam Leshner, PC (an accounting firm), since 1989. Mr. Urffer is a member of the American Institute of Certified Public Accountants and the Pennsylvania Institute of Certified Public Accountants. His former and present community affiliations include service with the following organizations: former treasurer and board member of the Boyertown Area YMCA; founding member and former board member of the Berks Mont Business Association; first president and former board member of Building a Better Boyertown; and current member of Boyertown Area YMCA Endowment Committee. Mr. Urffer’s extensive accounting experience and his civic and community background qualify him to serve on our board of directors.

Executive Officers Who Are Not Directors

A brief description of the background of each of our executive officers who is not also a director is set forth below.

Eric B. Offner is an Executive Vice President of the Company and the Bank and Chief Credit Officer of the Bank. Mr. Offner served as Senior Vice President for National Penn Bank and was responsible for its commercial loan group in Montgomery County. His tenure at National Penn was from 1989 to 2008.

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Robert H. Schultz is the Chief Financial Officer, Chief Operating Officer and Secretary of the Company and the Bank. Mr. Schultz served as chief financial officer for Allegiance Bank of North America from 1998 until 2007.

Richard L. Graver is the President of the Company and Chief Banking Officer of the Bank. Mr. Graver served as Senior Vice President-Private Banking for National Penn Bank located in Boyertown, Pennsylvania from 1991 until 2007.

Victory Bancorp Directors’ Compensation

Each of the individuals who serves as a director of Victory Bancorp also serves as a director of Victory Bank and earns director and committee fees in that capacity. Each director other than the chairman is paid $300 for each board meeting attended. The chairman is not paid for attending meetings. Each member of the audit committee of Victory Bancorp consisting of Messrs. Apt, Eddigner, Johnson, and Urffer, receives $200 per meeting attended.

The following table sets forth the compensation paid to Victory Bancorp’s directors for the fiscal year ended December 31, 2013, except for Mr. Major who is in the summary compensation table below.

Name	Fees Earned or Paid in Cash
Alan S. Apt	$	6,600
Matthew B. Bates		6,300
Robert L. Brant		7,600
Beryl B. Byles		4,000
Michael A. Eddinger		6,700
Karl Glocker		7,400
Kevin L. Johnson		6,100
Dennis R. Urffer		7,100

Executive Officer Compensation

Summary Compensation Table. The following table sets forth for the fiscal year ended December 31, 2013, certain information as to the total compensation paid by Victory Bank to its principal executive officer and the next two most highly compensated executive officers whose total compensation exceeded $100,000. These individuals are referred to in this prospectus as “named executive officers.”

Name and Principal Position	Fiscal Year		Salary		Bonus		All Other Compensation(1)		Total
Joseph W. Major		2013	$	199,763	$	40,000	$	15,468	$	255,231
Chairman and CEO
Richard L. Graver		2013	$	148,957	$	18,000	$	23,518	$	190,475
President and Chief Banking Officer
Robert H. Schultz		2013	$	142,999	$	13,000	$	25,564	$	182,563
Chief Financial Officer and Chief Operations Officer

(1) Details of the amounts disclosed in the “All Other Compensation” column are provided in the table below:

	Mr. Major			Mr. Graver			Mr. Schultz
Employer contributions to 401(k) plan	$	3,995		$	5,009		$	4,780
Perquisites		11,473	(1)		18,509	(a)		21,784	(a)
Total	$	15,468		$	23,518		$	26,564

(1) Perquisites for Messrs. Major, Graver and Offner include a company automobile, and employee paid insurance premiums and for Messrs. Major and Graver country club dues.

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Performance Cash Incentives

Victory Bancorp uses annual cash incentives as a short-term incentive to drive achievement of our annual performance goals.

The annual cash incentive focuses on the achievement of annual performance goals and awards in cash. It is designed to:

• support our strategic business objectives;

• promote the attainment of specific financial goals;

• reward achievement of specific performance objectives; and

• encourage teamwork.

Cash bonuses, if any, are entirely discretionary, based on an annual assessment of performance at year-end. Annual cash bonus incentives are designed to provide competitive levels of compensation based upon achievement of pre-determined performance factors which are determined at the beginning of each year and may change from year to year. In general, these factors may be measures such as return on assets, return on equity, earnings per share or similar indicators. The size of an annual cash bonus incentive is influenced by these factors, as well as individual performance.

Annual cash incentives are accrued for expected levels of performance, with upside opportunities for superior performance, subject to the discretion of the Compensation Committee. Annual cash bonus incentive awards are contingent upon employment with Victory Bank through the end of the fiscal year.

Existing Victory Employment Agreements and Change in Control Severance Agreement

Joseph W. Major, Chairman of the Board and Chief Executive Officer of Victory Bancorp and Victory Bank, is a party to an employment agreement with Victory Bank. Robert H. Schultz, Chief Financial Officer and Chief Operating Officer of Victory Bancorp and Victory Bank, Richard L. Graver, Chief Banking Officer of Victory Bancorp and Victory Bank, and Eric B. Offner, Executive Vice President and Chief Credit Officer are also parties to employment agreements with Victory Bank. Saul S. Rivkin, Vice President and Chief Retail Officer of Victory Bank, has entered into a change in control severance agreement with Victory Bank. Generally, these agreements provide compensation to each executive officer following a change of control and certain terminations of employment. Those agreements generally provided for a severance payment equal to 1 to 2.99 times the executive’s “base amount” (which is defined as his average annual compensation includable in his gross income during the most recent five taxable years ending before the year in which the change of control of Victory Bank occurs) prior to the date of termination, plus continued health and welfare insurance benefits or reimbursement of after tax cost of receiving substantially similar benefits.

Under Mr. Major’s employment agreement, he is entitled to receive a lump-sum cash payment upon the occurrence of an involuntary termination and a “change in control,” which is defined to mean a change in ownership of Victory Bancorp or Victory Bank, a change in effective control of Victory Bancorp or Victory Bank, or a change in the ownership of a substantial portion of the assets of Victory Bancorp or Victory Bank. In such event, Mr. Major’s employment agreement provides that he is entitled to receive a lump-sum cash payment equal to 2.99 times Mr. Major’s “base amount,” which is defined as his average annual compensation includable in his gross income during the most recent five taxable years ending before the year in which the change of control of Victory Bank occurs. The employment agreement also provides for a payment of continued medical, dental and life insurance benefits for Mr. Major and his dependents for the remaining term of his agreement, or reimbursement of the after-tax

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cost of obtaining substantially similar benefits. The merger transaction with HV Bancorp will constitute a “change in control” within the meaning of Mr. Major’s employment agreement. However, Mr. Major has agreed to forgo any change in control payment due under his existing employment agreement in exchange for a new employment agreement, which is to be effective upon consummation of the merger.

Under Mr. Graver’s employment agreement, he is entitled to receive a lump-sum cash payment upon the occurrence of an involuntary termination (other than for cause) and a “change in control,” which is defined to mean a change in ownership of Victory Bancorp or Victory Bank, a change in effective control of Victory Bancorp or Victory Bank, or a change in the ownership of a substantial portion of the assets of Victory Bancorp or Victory Bank. In such event, Mr. Graver’s employment agreement provides that he is entitled to receive a lump-sum cash payment equal to 2.99 times Mr. Graver’s “base amount,” which is defined as his average annual compensation includable in his gross income during the most recent five taxable years ending before the year in which the change of control of Victory Bank occurs. The employment agreement also provides for a payment of continued health and welfare insurance benefits for Mr. Graver and his dependents for the remaining term of his agreement, or reimbursement of the after-tax cost of obtaining substantially similar benefits. The merger transaction with HV Bancorp will constitute a “change in control” within the meaning of Mr. Graver’s employment agreement. However, Mr. Graver has agreed to forgo any change in control payment due under his existing employment agreement in exchange for a new employment agreement, which is to be effective upon consummation of the merger.

Under Mr. Schultz’s employment agreement, he is entitled to receive a lump-sum cash payment upon the occurrence of an involuntary termination (other than for cause) and a “change in control,” which is defined to mean a change in ownership of Victory Bancorp or Victory Bank, a change in effective control of Victory Bancorp or Victory Bank, or a change in the ownership of a substantial portion of the assets of Victory Bancorp or Victory Bank. In such event, Mr. Schultz’s employment agreement provides that he is entitled to receive a lump-sum cash payment equal to 2 times Mr. Schultz’s “base amount,” which is defined as his average annual compensation includable in his gross income during the most recent five taxable years ending before the year in which the change of control of Victory Bank occurs. The employment agreement also provides for a payment of continued health and welfare insurance benefits for Mr. Schultz and his dependents for the remaining term of his agreement, or reimbursement of the after-tax cost of obtaining substantially similar benefits. The merger transaction with HV Bancorp will constitute a “change in control” within the meaning of Mr. Schultz’s employment agreement. However, Mr. Schultz has agreed to forgo any change in control payment due under his existing employment agreement in exchange for a new employment agreement, which is to be effective upon consummation of the merger.

Under Mr. Offner’s employment agreement, he is entitled to receive a lump-sum cash payment upon the occurrence of an involuntary termination (other than for cause) and a “change in control,” which is defined to mean a change in ownership of Victory Bancorp or Victory Bank, a change in effective control of Victory Bancorp or Victory Bank, or a change in the ownership of a substantial portion of the assets of Victory Bancorp or Victory Bank. In such event, Mr. Offner’s employment agreement provides that he is entitled to receive a lump-sum cash payment equal to 2.5 times Mr. Offner’s “base amount,” which is defined as his average annual compensation includable in his gross income during the most recent five taxable years ending before the year in which the change of control of Victory Bank occurs. The employment agreement also provides for a payment of continued health and welfare insurance benefits for Mr. Offner and his dependents for the remaining term of his agreement, or reimbursement of the after-tax cost of obtaining substantially similar benefits. The merger transaction with HV Bancorp will constitute a “change in control” within the meaning of Mr. Offner’s employment agreement. However, Mr. Offner has agreed to forgo any change in control payment due under his existing employment agreement in exchange for a new employment agreement, which is to be effective upon consummation of the merger.

The change in control severance agreement for Mr. Rivkin provides for a lump-sum cash payment upon the occurrence of an involuntary termination (other than for cause) and a “change in control,” which is defined the same as for purposes of the above employment agreements and would include the merger transaction with HV Bancorp. Under his change in control agreement, Mr. Rivkin would be entitled to lump-sum cash payments equal to one times Mr. Rivkin’s base salary (at the rate in effect immediately prior to the change in control). The change in control agreement also provides for continued life and medical benefits for a period of one year, or reimbursement of the after-tax cost of obtaining substantially similar benefits. However, Mr. Rivkin has agreed to forego any change in control payment due under his existing change in control agreement in exchange for a new change in control agreement, which is to be effective upon consummation of the merger.

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2013 Equity Incentive Plan

At the 2013 annual meeting, Victory Bancorp’s shareholders approved The Victory Bancorp, Inc. 2013 Equity Incentive Plan (the “2013 Plan”).

Under the 2013 Plan, Victory Bancorp may grant performance awards that can be settled in stock or cash, restricted stock and restricted stock units (“Stock Awards”), incentive stock options (within the meaning of Section 422 of the Internal Revenue Code), non-qualified stock options, and stock appreciation rights (“SARs”).

Under the 2013 Plan, the maximum number of shares of common stock available for awards is 228,000, subject to adjustment in the event of a stock split, stock dividend, recapitalization, reorganization, merger, spin-off or other similar change or event.

Under the 2013 Plan, employees, non-employee directors and other service providers, such as consultants or independent contractors, are eligible to receive awards under the plan. The Plan Committee has discretion to designate awards recipients and the type and terms of awards made to such recipients. As of March 31, 2014, no options were granted to officers and directors of Victory Bancorp and Victory Bank.

The 2013 Plan became effective upon approval by the shareholders and will terminate on the tenth anniversary of the effective date, unless earlier terminated by the Board. The Board may amend the 2013 Plan at any time, subject to shareholder approval if (i) required by applicable law, rule or regulation or (ii) the Board seeks to modify the option and SAR repricing provisions in the 2013 Plan. No amendment may impair the rights of a holder of an outstanding award without the consent of such holder.

Immediately prior to the effective time of the merger and after all of the conditions to consummation of the merger have been satisfied, each then outstanding option to purchase shares of Victory Bancorp common stock will be canceled for no consideration. There were no awards under the 2013 Plan during the year ended December 31, 2013.

Transactions with Certain Related Persons

Loans and Extensions of Credit. Federal regulations require that all loans or extensions of credit to executive officers, directors, principal shareholders and their related interests must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and must not involve more than the normal risk of repayment or present other unfavorable features. Victory Bank, therefore, is prohibited from making any loans or extensions of credit to executive officers and directors at different rates or terms than those offered to the general public, except for loans made under a benefit program generally available to all other employees that does not give preference to any executive officer or director over any other employee. In addition, Pennsylvania law regulates the granting of loans to our officers and directors.

In addition, loans made to a director or executive officer in an amount that, when aggregated with the amount of all other loans to the person and his or her related interests, are in excess of the greater of $25,000 or 5% of our capital and surplus, up to a maximum of $500,000, must be approved in advance by a majority of the disinterested members of our Board of Directors. Loans to executive officers are subject to additional restrictions.

Other Transactions. Victory Bank may lend to or enter into business arrangements with certain organizers, founding investors, directors, officers or employees (and their families or related interests) under terms and conditions that are permissible under applicable law and regulations and consistent with safe and sound banking practices.

Since January 1, 2011, there have been no transactions, and there are no currently proposed transactions, in which Victory Bancorp was or is to be a participant and the amount involved exceeds of $120,000, and in which any of its executive officers and directors had or will have a direct or indirect material interest.

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Stock Ownership

The following table provides information as of December 31, 2013 about the shares of Victory Bancorp common stock that may be considered to be beneficially owned by each director, by executive officers of Victory Bancorp and by all directors and executive officers of Victory Bancorp as a group. A person may be considered to beneficially own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investment power.

Name	Number of Shares Owned (Including Convertible Securities)			Number of Shares That May be Acquired Within 60 Days by Converting Preferred Stock(10)		Percent of Common Stock Outstanding(1)
Alan S. Apt		12,500	(2)		3,940		1.6	%
Matthew B. Bates		20,000	(3)		9,850		2.9	%
Robert L. Brant		15,000			9,850		2.4	%
Beryl B. Byles		10,000	(4)		3,940		1.4	%
Michael A. Eddinger		20,000	(5)		—		2.0	%
Karl Glocker		12,500	(6)		23,640		3.5	%
Richard L. Graver		6,500	(7)		3,940		1.0	%
Kevin L. Johnson		20,000			—		2.0	%
Joseph W. Major		55,833	(8)		17,691		7.2	%
Eric B. Offner		2,500			9,850		1.2	%
Robert H. Schultz		7,000	(9)		—		0.7	%
Dennis R. Urffer		11,000			9,850		2.0	%
All directors and executive officers as a group (12 persons)		192,833			92,551		27.8	%

(1) Based on 1,025,464 shares of Company common stock outstanding and entitled to vote as of April 1, 2013, plus the number of shares issuable upon the conversion of Series E convertible preferred stock that may be acquired within 60 days by each individual (or group of individuals).

(2) Includes 9,430 shares held in an IRA for the benefit of Mr. Apt.

(3) Includes 3,400 shares held in an IRA for the benefit of Mr. Bates.

(4) Includes 7,500 shares held in an IRA for the benefit of Ms. Byles.

(5) Includes 4,219 shares held in an IRA for the benefit of Mr. Eddinger, 2,849 shares held in an IRA for the benefit of Mr. Eddinger’s spouse, and 12,932 shares held by Sunrise Lane, LLC, over which Mr. Eddinger has voting power.

(6) Includes 2,000 shares held in Glocker and Co. Inc., Employee Profit Sharing Plan, in which Mr. Glocker is a trustee.

(7) Shares are held in an IRA for the benefit of Mr. Graver.

(8) Includes 50,000 shares held in an IRA for the benefit of Mr. Major and 5,000 shares held in an IRA for the benefit of Mr. Major’s spouse.

(9) Shares are held in an IRA for the benefit of Mr. Schultz.

(10) Immediately prior to the effective time of the merger and after all of the conditions to consummation of the merger have been satisfied, each then outstanding option to purchase shares of Victory Bancorp common stock will be canceled for no consideration. Given the exercise price of stock options and stock warrants to purchase Victory Bancorp common stock held by Victory Bancorp directors and officers, we do not anticipate that any of the directors and officers will exercise any such options or warrants prior to the merger. As such, options and warrants held by the directors and officers are not included in this table.

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REGULATION AND SUPERVISION

The following discussion describes elements of an extensive regulatory framework applicable to bank holding companies and banks and specific information about HV Bank and HV Bancorp upon consummation of the conversion and merger. Upon consummation of the conversion, HV Bank will become a Pennsylvania-chartered commercial bank regulated by the Department of Banking and the FDIC, and HV Bancorp will be a registered bank holding company, subject to supervision and regulation by the Board of Governors of the Federal Reserve System. Victory Bank is a Pennsylvania-chartered commercial bank and Victory Bancorp is a registered bank holding company, and both of them are currently subject to such regulation and supervision.

Federal and state regulation of banks and bank holding companies is intended primarily for the protection of depositors and the Deposit Insurance Fund, rather than for the protection of potential shareholders and creditors.

General

Upon consummation of the conversion and merger, HV Bank will be a Pennsylvania-chartered bank that is subject to extensive regulation, examination and supervision by the Department of Banking, as its primary regulator, and the FDIC, as its deposits insurer. HV Bank is a member of the Federal Home Loan Bank system and, with respect to deposit insurance, of the Deposit Insurance Fund managed by the FDIC. HV Bank must file reports with the Department of Banking and the FDIC concerning its activities and financial condition, in addition to obtaining regulatory approvals prior to entering into certain transactions such as mergers with, or acquisitions of, other financial institutions. The Department of Banking and/or the FDIC conducts periodic examinations to test HV Bank’s safety and soundness and compliance with various regulatory requirements. This regulatory structure gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. Any change in the regulatory requirements and policies, whether by the Department of Banking, the FDIC or Congress, could have a material adverse impact on HV Bank, HV Bancorp and their operations.

Certain regulatory requirements applicable to HV Bank and HV Bancorp are referred to below or elsewhere herein. This description of statutes and regulations is not intended to be a complete explanation of such statutes and regulations and their effects on HV Bank and HV Bancorp and is qualified in its entirety by reference to the actual statutes and regulations.

Bank Regulation

Pennsylvania Banking Regulation

Activity Powers. The Department of Banking will regulate the internal organization of HV Bank, as well as our activities, including, deposit-taking, lending and investment. The basic authority for our activities is specified by Pennsylvania law and by regulations, policies and directives issued by the Department of Banking. The FDIC also regulates many of the areas regulated by the Department of Banking, and federal law limits some of the authority that the Department of Banking grants to us.

Examination and Enforcement. The Department of Banking regularly examines state chartered banks in such areas as reserves, loans, investments, management practices and other aspects of operations. Although the Pennsylvania Department of Banking may accept the examinations and reports of the FDIC in lieu of its own examination, the present practice is for the Pennsylvania Department of Banking to conduct individual examinations. The Department of Banking may order any commercial bank to discontinue any violation of law or unsafe or unsound business practice and may direct any director, trustee, officer, attorney or employee of a commercial bank engaged in an objectionable activity, after the Department of Banking has ordered the activity to be terminated, to show cause at a hearing before the Department of Banking why such person should not be removed.

The Department of Banking may examine HV Bank whenever it deems an examination advisable. The Department of Banking regularly examines HV Bank. The Department may order any bank to discontinue any violation of law or unsafe or unsound business practice and may direct any director, officer, attorney or employee of a bank engaged in an objectionable activity, after the Department has ordered the activity to be terminated, to show cause at a hearing before the Commissioner of the Department why such person should not be removed.

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Loans-to-One-Borrower Limitations. With certain specified exceptions, a Pennsylvania chartered bank may not make loans or extend credit to a single borrower and to entities related to the borrower in an aggregate amount that would exceed 15% of a bank’s capital funds. Under the Pennsylvania Banking Code, loans which are secured by collateral which has a market value of not less than 120% of the amount of the obligations secured by such collateral are partially excluded from the loan-to-one-borrower limitation. Such loans are excluded from the loan-to-one borrower limitation to the extent of 15% of the aggregate of the capital accounts of HV Bank after conversion and the merger.

Loans to HV Bank’s Insiders. Pennsylvania law provides that we may make loans to our executive officers and directors and greater than 10% shareholders in accordance with federal regulations, as discussed below.

Dividends Restrictions. HV Bancorp is a legal entity separate and distinct from its subsidiary, HV Bank. There are various legal and regulatory on the extent to which HV Bank can, among other things, finance or otherwise supply funds to, HV Bank. Specifically, dividends from HV Bank are the principal source of HV Bancorp’s cash funds and are there are certain legal restrictions under Pennsylvania law and Pennsylvania banking regulations on the payment of dividends by state-chartered banks. The Department of Banking, the FDIC and the Federal Reserve Board also have authority to prohibit HV Bancorp and HV Bank from engaging in certain practices deemed an unsafe and unsound banking practice. The payment of dividends could, depending upon the condition of HV Bancorp and HV Bank, be deemed to constitute an unsafe and unsound practice.

The Pennsylvania Banking Code regulates the distribution of dividends by banks and states, in part, that dividends may be declared and paid only out of accumulated net earnings. In addition, we may not declare and pay dividends from the surplus funds that Pennsylvania law requires that we maintain. Each year we will be required to set aside as surplus funds a sum equal to not less than 10% of our net earnings until the surplus funds equal 100% of our capital stock. We may invest surplus funds in the same manner as deposits, subject to certain exceptions. In addition, dividends may not be declared or paid if a bank is in default in payment of any assessment due the FDIC. See “Our Dividend Policy.”

Minimum Capital Requirements. Regulations of the Department of Banking impose on Pennsylvania chartered depository institutions, including HV Bank, minimum capital requirements similar to those imposed by the FDIC on insured state banks. See “—Federal Banking Regulation—Capital Requirements.”

Federal Banking Regulation

Capital Requirements. HV Bank is required to comply with the FDIC’s capital adequacy standards for insured banks. The FDIC has issued risk-based capital and leverage capital guidelines for measuring capital adequacy, and all applicable capital standards must be satisfied for HV Bank to be considered in compliance with regulatory capital requirements.

Under the FDIC’s risk-based capital measure, the minimum ratio (“Total Capital Ratio”) of HV Bank’s total capital (“Total Capital”) to its risk-weighted assets (including various off-balance-sheet items, such as standby letters of credit) is 8.0%. At least half of Total Capital must be composed of “Tier 1 Capital.” Tier 1 Capital includes common equity, undivided profits, minority interests in the equity accounts of consolidated subsidiaries, qualifying noncumulative perpetual preferred stock, and a limited amount of cumulative perpetual preferred stock, less goodwill and various other intangible assets. The remainder of Total Capital may consist of “Tier 2 Capital” which includes certain subordinated debt, certain hybrid capital instruments and other qualifying preferred stock, and a limited amount of loan loss reserves. A bank that does not satisfy minimum capital requirements may be required to adopt and implement a plan acceptable to its federal banking regulator to achieve an adequate level of capital.

Under the leverage capital measure, the minimum ratio (“Leverage Capital Ratio”) of Tier 1 Capital to average assets, less goodwill and various other intangible assets, generally is 4.0%. The FDIC’s guidelines also provide that banks experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum levels without significant reliance on intangible assets, and a bank’s “Tangible Leverage Ratio” (determined by deducting all intangible assets) and other indicators of a bank’s capital strength also are taken into consideration by banking regulators in evaluating proposals for expansion or new activities.

The FDIC also considers interest rate risk (arising when the interest rate sensitivity of HV Bank’s assets does not match the sensitivity of its liabilities or its off-balance-sheet position) in the evaluation of a bank’s capital

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adequacy. Banks with excessive interest rate risk exposure are required to hold additional amounts of capital against their exposure to losses resulting from that risk. Through the risk-weighting of assets, the regulators also require banks to incorporate market risk components into their risk-based capital. Under these market risk requirements, capital is allocated to support the amount of market risk related to a bank’s lending and trading activities.

HV Bank’s capital categories are determined solely for the purpose of applying the “prompt corrective action” rules described below and they are not necessarily an accurate representation of its overall financial condition or prospects for other purposes. A failure to meet the capital guidelines could subject HV Bank to a variety of enforcement actions under those rules, including the issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on the taking of brokered deposits, and other restrictions on its business. As described below, the FDIC also can impose other substantial restrictions on banks that fail to meet applicable capital requirements.

As a bank holding company, HV Bancorp is subject to capital adequacy guidelines for bank holding companies substantially similar to those of the FDIC for state-chartered commercial banks.

Basel III Capital Rule. On July 9, 2013, the federal bank regulatory agencies issued a final rule that will revise their risk based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. The final rule applies to all depository institutions, top-tier bank holding companies with total consolidated assets of $500 million or more and top-tier savings and loan holding companies.

Most community banks will have to comply with the higher capital standards under the Basel III capital rule. Bank holding companies with less than $500 million in assets are exempt, but their depository institution subsidiaries must comply.

The rule establishes a new common equity Tier 1 minimum capital requirement (4.5% of risk-weighted assets), increases the minimum Tier 1 capital to risk-based assets requirement (from 4.0% to 6.0% of risk-weighted assets) and assigns a higher risk weight (150%) to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property.

The rule also includes changes in what constitutes regulatory capital, some of which are subject to a two-year transition period. These changes include the phasing-out of certain instruments as qualifying capital. In addition, Tier 2 capital is no longer limited to the amount of Tier 1 capital included in total capital. Mortgage servicing rights, certain deferred tax assets and investments in unconsolidated subsidiaries over designated percentages of common stock will be required to be deducted from capital, subject to a two-year transition period. Finally, Tier 1 capital will include accumulated other comprehensive income (which includes all unrealized gains and losses on available for sale debt and equity securities), subject to a two-year transition period.

The new capital requirements also include changes in the risk-weights of assets to better reflect credit risk and other risk exposures. These include a 150% risk weight (up from 100%) for certain high volatility commercial real estate acquisition, development and construction loans and non-residential mortgage loans that are 90 days past due or otherwise on nonaccrual status; a 20% (up from 0%) credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable; a 250% risk weight (up from 100%) for mortgage servicing rights and deferred tax assets that are not deducted from capital; and increased risk-weights (from 0% to up to 600%) for equity exposures.

Finally, the rule limits capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements.

The final rule becomes effective on January 1, 2015. The capital conservation buffer requirement will be phased in beginning January 1, 2016, at 0.625% of risk-weighted assets, increasing each year until fully implemented at 2.5% on January 1, 2019. See “Regulatory Capital Compliance:” for a presentation of HV Bank’s regulatory capital compliance upon consummation of the conversion, the offering and the merger.

Activity Restrictions on State-Chartered Banks. Federal law and FDIC regulations generally limit the activities and investments of state-chartered FDIC insured banks and their subsidiaries to those permissible for national banks and their subsidiaries, unless such activities and investments are specifically exempted by law or consented to by the FDIC.

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Before making a new investment or engaging in a new activity that is not permissible for a national bank or otherwise permissible under federal law or the FDIC regulations, an insured bank must seek approval from the FDIC to make such investment or engage in such activity. The FDIC will not approve the activity unless a bank meets its minimum capital requirements and the FDIC determines that the activity does not present a significant risk to the FDIC insurance funds. Certain activities of subsidiaries that are engaged in activities permitted for national banks only through a “financial subsidiary” are subject to additional restrictions.

Federal law permits a state-chartered bank to engage, through financial subsidiaries, in any activity in which a national bank may engage through a financial subsidiary and on substantially the same terms and conditions. In general, the law permits a national bank that is well-capitalized and well-managed to conduct, through a financial subsidiary, any activity permitted for a financial holding company other than insurance underwriting, insurance investments, real estate investment or development or merchant banking. A bank must have policies and procedures to assess the financial subsidiary’s risk and protect the bank from such risk and potential liability, must not consolidate the financial subsidiary’s assets with the bank’s and must exclude from its own assets and equity all equity investments, including retained earnings, in the financial subsidiary. Although HV Bank meets all conditions necessary to establish and engage in permitted activities through financial subsidiaries, it has not yet determined whether or the extent to which it will seek to engage in such activities.

Federal Home Loan Bank System. HV Bank is a member of the Federal Home Loan Bank System, which consists of 12 regional Federal Home Loan Banks. The Federal Home Loan Bank System provides a central credit facility primarily for member institutions. As a member of the Federal Home Loan Bank of Pittsburgh, HV Bank is required to acquire and hold shares of capital stock in the Federal Home Loan Bank in an amount at least equal to 1% of the aggregate principal amount of its unpaid residential mortgage loans and similar obligations at the beginning of each year, 1/20th of its borrowings from the Federal Home Loan Bank, or 0.3% of assets, whichever is greater. As of December 31, 2013, HV Bank was in compliance with this requirement.

Enforcement. The FDIC has extensive enforcement authority over insured banks, including HV Bank. This enforcement authority includes, among other things, the ability to assess civil money penalties, to issue cease and desist orders and to remove directors and officers. In general, these enforcement actions may be initiated in response to violations of laws and regulations and to unsafe or unsound practices.

Prompt Corrective Action. Federal law establishes a system of prompt corrective action to resolve the problems of undercapitalized banks. Under this system, the FDIC has established five capital categories (“well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized”) and is required to take various mandatory supervisory actions, and is authorized to take other discretionary actions with respect to banks in the three undercapitalized categories. The severity of any such actions taken will depend upon the capital category in which a bank is placed. Generally, subject to a narrow exception, current federal law requires the FDIC to appoint a receiver or conservator for a bank that is critically undercapitalized.

Under the FDIC’s prompt corrective action rules, a bank that (1) has a Total Capital Ratio of 10.0% or greater, a Tier 1 Capital Ratio of 6.0% or greater, and a Leverage Ratio of 5.0% or greater, and (2) is not subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the FDIC, is considered to be “well capitalized.” A bank with a Total Capital Ratio of 8.0% or greater, a Tier 1 Capital Ratio of 4.0% or greater, and a Leverage Ratio of 4.0% or greater, is considered to be “adequately capitalized.” A bank that has a Total Capital Ratio of less than 8.0%, a Tier 1 Capital Ratio of less than 4.0%, or a Leverage Ratio of less than 4.0%, is considered to be “undercapitalized.” A bank that has a Total Capital Ratio of less than 6.0%, a Tier 1 Capital Ratio of less than 3.0%, or a Leverage Ratio of less than 3.0%, is considered to be “significantly undercapitalized,” and a bank that has a tangible equity capital to assets ratio equal to or less than 2.0% is deemed to be “critically undercapitalized.” For purposes of these rules, the term “tangible equity” includes core capital elements counted as Tier 1 Capital for purposes of the risk-based capital standards, plus the amount of outstanding cumulative perpetual preferred stock (including related surplus), minus all intangible assets (with various exceptions). A bank may be considered to be in a capitalization category lower than indicated by its actual capital position if it receives an unsatisfactory examination rating or is subject to a regulatory action that requires heightened levels of capital.

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A bank that becomes “undercapitalized,” “significantly undercapitalized,” or “critically undercapitalized” is required to submit an acceptable capital restoration plan to the FDIC. An “undercapitalized” bank also is generally prohibited from increasing its average total assets, making acquisitions, establishing new branches, or engaging in any new line of business, except in accordance with an accepted capital restoration plan or with the approval of the FDIC. Also, the FDIC may treat an “undercapitalized” bank as being “significantly undercapitalized” if it determines that those actions are necessary to carry out the purpose of the law.

As of December 31, 2013, all of HV Bank’s capital ratios were at levels that would qualify it to be “well capitalized” for regulatory purposes.

Federal Deposit Insurance and Assessments. HV Bank’s deposits are insured by the FDIC to the full extent provided by law, and HV Bank pays assessments to the FDIC for that insurance coverage. The Dodd-Frank Act established a permanent $250,000 limit for federal deposit insurance coverage. The FDIC may terminate HV Bank’s deposit insurance if it finds that it has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated applicable laws, regulations, rules or orders.

Under the Federal Deposit Insurance Act, the FDIC uses a revised risk-based assessment system to determine the amount of HV Bank’s deposit insurance assessment based on an evaluation of the probability that the Deposit Insurance Fund will incur a loss with respect to HV Bank. That evaluation takes into consideration risks attributable to different categories and concentrations of HV Bank’s assets and liabilities and any other factors the FDIC considers to be relevant. A higher assessment rate results in an increase in the assessments HV Bank pays to the FDIC for deposit insurance.

The FDIC is responsible for maintaining the adequacy of the Deposit Insurance Fund, and the amount HV Bank pays for deposit insurance is influenced not only by the assessment of the risk it poses to the Deposit Insurance Fund, but also by the adequacy of the insurance fund at any time to cover the risk posed by all insured institutions. Because the Deposit Insurance Fund reserve ratio had fallen below the minimum level required by law, during 2008 the FDIC adopted a restoration plan to return the reserve ratio to the minimum level and, during 2009, it imposed a special assessment on insured institutions, increased regular assessment rates, and required that insured institutions prepay their regular quarterly assessments through 2012. More recently, as required by the Dodd-Frank Act, the FDIC has increased the minimum Deposit Insurance Fund reserve ratio to 1.35%, which must be achieved by December 31, 2020. Although the Dodd-Frank Act requires the FDIC to offset the effect of the higher minimum ratio on insured depository institutions with assets of less than $10 billion, FDIC insurance assessments could be increased substantially in the future if the FDIC finds such an increase to be necessary in order to adequately maintain the insurance fund.

Transactions with Affiliates of HV Bank. Transactions between an insured bank, such as HV Bank, and any of its affiliates is governed by Sections 23A and 23B of the Federal Reserve Act and implementing regulations. An affiliate of a bank is any company or entity that controls, is controlled by or is under common control with the bank. Generally, a subsidiary of a bank that is not also a depository institution or financial subsidiary is not treated as an affiliate of the bank for purposes of Sections 23A and 23B.

Among other things, Section 23A limits on the amount of:

• a bank’s loans or extensions of credit to, or investment in, its affiliates;

• assets a bank may purchase from affiliates, except for real and personal property exempted by the Federal Reserve;

• the amount of loans or extensions of credit by a bank to third parties which are collateralized by the securities or obligations of the bank’s affiliates; and

• a bank’s guarantee, acceptance or letter of credit issued on behalf of one of its affiliates.

Transactions of the type described above are limited in amount, as to any one affiliate, to 10 percent of a bank’s capital and surplus and, as to all affiliates combined, to 20% of a bank’s capital and surplus. In addition to the amount limitations, each of the above transactions must also meet specified collateral requirements. HV Bank also must comply with other provisions designed to avoid the taking of low-quality assets from an affiliate.

Section 23B, among other things, prohibits a bank or its subsidiaries generally from engaging in transactions with its affiliates unless the transactions are on terms substantially the same, or at least as favorable to the bank or its subsidiaries, as those prevailing at the time for comparable transactions with nonaffiliated companies.

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Prohibitions Against Tying Arrangements. Banks are prohibited, subject to some exceptions, from extending credit to or offering any other service, or fixing or varying the consideration for such extension of credit or service, on the condition that the customer obtain some additional service from the institution or its affiliates or not obtain services of a competitor of the institution.

Community Reinvestment Act and Fair Lending Laws. All FDIC insured institutions have a responsibility under the Community Reinvestment Act and related regulations to help meet the credit needs of their communities, including low- and moderate-income neighborhoods. In connection with its examination of a state chartered bank, the FDIC is required to assess the institution’s record of compliance with the Community Reinvestment Act. In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes. A bank’s failure to comply with the provisions of the Community Reinvestment Act could, at a minimum, result in denial of certain corporate applications such as branches or mergers, or in restrictions on its activities. The failure to comply with the Equal Credit Opportunity Act and the Fair Housing Act could result in enforcement actions by the FDIC, as well as other federal regulatory agencies and the Department of Justice. HV Bank received an outstanding Community Reinvestment Act rating in its most recent federal examination.

Loans to Insiders

Federal Regulation. A bank’s loans to its executive officers, directors, any owner of 10.0% or more of its stock (each, an insider) and any of certain entities affiliated with any such person (an insider’s related interest) are subject to the conditions and limitations imposed by Section 22(h) of the Federal Reserve Act and its implementing regulations. Under these restrictions, the aggregate amount of the loans to any insider and the insider’s related interests may not exceed the loans-to-one-borrower limit applicable to national banks, which is comparable to the loans-to-one-borrower limit applicable to HV Bank’s loans. See “—Pennsylvania Banking Regulation—Loans-to-One-Borrower Limitations.” All loans by a bank to all insiders and insiders’ related interests in the aggregate may not exceed the bank’s unimpaired capital and unimpaired surplus. With certain exceptions, loans to an executive officer, other than loans for the education of the officer’s children and certain loans secured by the officer’s residence, may not exceed the lesser of $100,000 or the greater of $25,000 or 2.5% of the bank’s unimpaired capital and surplus. Federal regulation also requires that any proposed loan to an insider or a related interest of that insider be approved in advance by a majority of the board of directors of the bank, with any interested directors not participating in the voting, if such loan, when aggregated with any existing loans to that insider and the insider’s related interests, would exceed the greater of $25,000 or 5% of the bank’s unimpaired capital and surplus. Generally, such loans must be made on substantially the same terms as, and follow credit underwriting procedures that are not less stringent than, those that are prevailing at the time for comparable transactions with other persons.

An exception is made for extensions of credit made pursuant to a benefit or compensation plan of the bank that is widely available to employees of the bank and that does not give any preference to insiders of the bank over other employees of the bank.

In addition, federal law prohibits extensions of credit to the bank’s insiders and their related interests by any other institution that has a correspondent banking relationship with the bank, unless such extension of credit is on substantially the same terms as those prevailing at the time for comparable transactions with other persons and does not involve more than the normal risk of repayment or present other unfavorable features.

Pennsylvania. Provisions of the Pennsylvania Banking Code impose conditions and limitations on the liabilities to a bank of its directors and executive officers and of corporations and partnerships controlled by such persons, that are comparable in many respects to the conditions and limitations imposed on the loans and extensions of credit to insiders and their related interests under federal law, as discussed above. The Pennsylvania Banking Code also provides that a bank that is in compliance with federal law is deemed to be in compliance with such provisions of the Pennsylvania Banking Code.

The USA PATRIOT Act

The USA PATRIOT Act of 2001 gave the federal government new powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements. The USA PATRIOT Act also required the federal banking agencies to take into consideration the effectiveness of controls designed to combat money laundering activities in determining whether to approve a merger or other acquisition application of a member institution. Accordingly, if

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we engage in a merger or other acquisition, our controls designed to combat money laundering would be considered as part of the application process. We have established policies, procedures and systems designed to comply with these regulations.

Dodd-Frank Act

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, was enacted. The Dodd-Frank Act aims to restore responsibility and accountability to the financial system by significantly altering the regulation of financial institutions and the financial services industry. Full implementation of the Dodd-Frank Act will require many new rules to be issued by federal regulatory agencies over the next several years, which will profoundly affect how financial institutions will be regulated in the future. The ultimate effect of the Dodd-Frank Act and its implementing regulations on the financial services industry in general, and on us in particular, is uncertain at this time.

The Dodd-Frank Act, among other things:

• establishes the Consumer Financial Protection Bureau, an independent organization within the Federal Reserve with centralized responsibility for promulgating and enforcing federal consumer protection laws applicable to all entities offering consumer financial products or services;

• establishes the Financial Stability Oversight Council, tasked with the authority to identify and monitor institutions and systems that pose a systemic risk to the financial system;

• changes the assessment base for federal deposit insurance from the amount of insured deposits held by the depository institution to the institution’s average total consolidated assets less tangible equity;

• increases the minimum reserve ratio for the Deposit Insurance Fund from 1.15% to 1.35%;

• permanently increases the deposit insurance coverage amount from $100,000 to $250,000;

• requires the FDIC to make its capital requirements for insured depository institutions countercyclical, so that capital requirements increase in times of economic expansion and decrease in times of economic contraction;

• requires bank holding companies and banks to be “well capitalized” and “well managed” in order to acquire banks located outside of their home state and requires any bank holding company electing to be treated as a financial holding company to be “well capitalized” and “well managed”;

• directs the Federal Reserve to establish interchange fees for debit cards under a restrictive “reasonable and proportional cost” per transaction standard;

• limits the ability of banking organizations to sponsor or invest in private equity and hedge funds and to engage in proprietary trading;

• increases regulation of consumer protections regarding mortgage originations, including originator compensation, minimum repayment standards, and prepayment consideration;

• restricts the preemption of select state laws by federal banking law applicable to national banks and disallow subsidiaries and affiliates of national banks from availing themselves of such preemption;

• authorizes national and state banks to establish de novo branches in any state that would permit a bank chartered in that state to open a branch at that location; and

• repeals the federal prohibition on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts.

Some of these provisions may have the consequence of increasing our expenses, decreasing our revenues, and changing the activities in which we choose to engage. The environment in which banking organizations will operate after the financial crisis, including legislative and regulatory changes affecting capital, liquidity, supervision, permissible activities, corporate governance and compensation, changes in fiscal policy and steps to eliminate government support for banking organizations, may have long-term effects on the business model and profitability of banking organizations that cannot now be foreseen.

The specific impact on our current activities or new financial activities we may consider in the future, our financial performance and the market in which we operate will depend on the manner in which the relevant agencies develop and implement the required rules and the reaction of market participants to these regulatory developments. Many aspects of the Dodd-Frank Act are subject to further rulemaking and will take effect over several years. While we cannot predict what effect any presently contemplated or future changes in the laws or regulations or their interpretations would have on us, these changes could be materially adverse to our investors.

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Supervision and Regulation of Mortgage Banking Operations

Our mortgage banking business is subject to the rules and regulations of the U.S. Department of Housing and Urban Development (“HUD”), the Federal Housing Administration (“FHA”), the Veterans’ Administration (“VA”) and Fannie Mae with respect to originating, processing, selling and servicing mortgage loans. Those rules and regulations, among other things, prohibit discrimination and establish underwriting guidelines, which include provisions for inspections and appraisals, require credit reports on prospective borrowers, and fix maximum loan amounts. Lenders such as us are required annually to submit audited financial statements to Fannie Mae, FHA and VA. Each of these regulatory entities has its own financial requirements. Our affairs are also subject to review by HUD, Fannie Mae, FHA and VA at all times to assure compliance with the applicable regulations, policies and procedures. Mortgage origination activities are subject to, among others, the Equal Credit Opportunity Act, Federal Truth-in-Lending Act, Fair Housing Act, Fair Credit Reporting Act, the National Flood Insurance Act and the Real Estate Settlement Procedures Act and related regulations that prohibit discrimination and require the disclosure of certain basic information to mortgagors concerning credit terms and settlement costs. Our mortgage banking operations also are affected by various state and local laws and regulations and the requirements of various private mortgage investors.

Holding Company Regulation

Upon completion of the conversion, HV Bancorp will be a bank holding company, subject to regulation and supervision by the Board of Governors of the Federal Reserve System, or the Federal Reserve Board. The Federal Reserve Board will have enforcement authority over HV Bancorp and its non-banking institution subsidiaries. Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a risk to HV Bank.

As a bank holding company, HV Bancorp is permitted to engage in those activities permissible for financial holding companies or for multiple bank holding companies. A financial holding company may engage in activities that are financial in nature, including underwriting equity securities and insurance as well as activities that are incidental to financial activities or complementary to a financial activity. A bank holding company is generally limited to activities permissible for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act, subject to the prior approval of the Federal Reserve Board, and certain additional activities authorized by Federal Reserve Board regulations.

Federal law prohibits a bank holding company, directly or indirectly, or through one or more subsidiaries, from acquiring control of another savings institution or holding company thereof, without prior written approval of the Federal Reserve Board. It also prohibits the acquisition or retention of, with specified exceptions, more than 5% of the equity securities of any company engaged in activities that are not closely related to banking or financial in nature or acquiring or retaining control of an institution that is not federally insured. In evaluating applications by holding companies to acquire banking institutions, the Federal Reserve Board must consider the financial and managerial resources and future prospects of the savings institution involved, the effect of the acquisition on the risk to the insurance fund, the convenience and needs of the community, the effectiveness of each parties’ anti-money laundering program, and competitive factors.

The Federal Reserve Board also takes the position that its capital distribution regulations apply to banks in bank holding company structures. Those regulations impose limitations upon all capital distributions by an institution, including cash dividends, payments to repurchase its shares and payments to shareholders of another institution in a cash-out merger. Under the regulations, an application to and prior approval of the Federal Reserve Board is required prior to any capital distribution if the institution does not meet the criteria for “expedited treatment” of applications under Federal Reserve Board (i.e., generally, examination and Community Reinvestment Act ratings in the two top categories), the total capital distributions for the calendar year exceed net income for that year plus the amount of retained net income for the preceding two years, the institution would be undercapitalized following the distribution or the distribution would otherwise be contrary to a statute, regulation or agreement with the Federal Reserve Board. If an application is not required, the institution must still provide prior notice to the Federal Reserve Board of the capital distribution if, like HV Bank, it is a subsidiary of a holding company. In the event HV Bank’s capital fell below its regulatory requirements or the Federal Reserve Board notified it that it was in need of increased supervision, HV Bank’s ability to make capital distributions could be restricted. In addition, the Federal Reserve Board could prohibit a proposed capital distribution by any institution, which would otherwise be permitted by the regulation, if the Federal Reserve Board determines that such distribution would constitute an unsafe or unsound practice.

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Acquisition of Control. Under the federal Change in Bank Control Act, a notice must be submitted to the Federal Reserve Board if any person (including a company), or group acting in concert, seeks to acquire “control” of a bank holding company. An acquisition of “control” can occur upon the acquisition of 10.0% or more of the voting stock of a bank holding company or as otherwise defined by the Federal Reserve Board. Under the Change in Bank Control Act, the Federal Reserve Board has 60 days from the filing of a complete notice to act, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the anti-trust effects of the acquisition. Any company that so acquires control would then be subject to regulation as a bank holding company.

Source of Strength Doctrine for Bank Holding Companies. Under longstanding Federal Reserve policy which has been codified by the Dodd-Frank Act, we are expected to act as a source of financial strength to, and to commit resources to support, HV Bank. This support may be required at times when we may not be inclined to provide it. In addition, any capital loans that we make to HV Bank are subordinate in right of payment to deposits and to certain other indebtedness of HV Bank. In the event of our bankruptcy, any commitment by us to a federal bank regulatory agency to maintain the capital of HV Bank will be assumed by the bankruptcy trustee and entitled to a priority of payment.

Incentive Compensation Guidance. The federal banking agencies have issued comprehensive guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of those organizations by encouraging excessive risk-taking. The incentive compensation guidance sets expectations for banking organizations concerning their incentive compensation arrangements and related risk-management, control and governance processes. The incentive compensation guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon three primary principles: (1) balanced risk taking incentives, (2) compatibility with effective controls and risk management, and (3) strong corporate governance. Any deficiencies in compensation practices that are identified may be incorporated into the organization’s supervisory ratings, which can affect its ability to make acquisitions or take other actions. In addition, under the incentive compensation guidance, a banking organization’s federal supervisor may initiate enforcement action if the organization’s incentive compensation arrangements pose a risk to the safety and soundness of the organization.

Restrictions on Repurchase of Stock

Under Federal Reserve Board regulations, for a period of one year from the date of the completion of the offering we may not repurchase any of our common stock from any person, except (1) in an offer made to all shareholders to repurchase the common stock on a pro rata basis, approved by the Federal Reserve Board , (2) the repurchase of qualifying shares of a director, or (3) repurchases to fund restricted stock plans or tax-qualified employee stock benefit plans. Where extraordinary circumstances exist, the Federal Reserve Board may approve the open market repurchase of up to 5% of our outstanding common stock during the first year following completion of the offering. To receive such approval, we must establish compelling and valid business purposes for the repurchase to the satisfaction of the Federal Reserve Board. Furthermore, repurchases of any common stock are prohibited if they would cause HV Bank’s regulatory capital to be reduced below the amount required under the regulatory capital requirements imposed by the Federal Reserve Board.

Federal Securities Laws

HV Bancorp has filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 for the registration of the shares of common stock to be issued pursuant to the stock offering, including the merger shares. Upon completion of the stock offering, our common stock will be registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934. We will be subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934.

The registration under the Securities Act of 1933 of shares of common stock to be issued in the stock offering does not cover the resale of those shares. Shares of common stock purchased by persons who are not our affiliates may be resold without registration. Shares purchased by our affiliates will be subject to the resale restrictions of Rule 144 under the Securities Act of 1933. If we meet the current public information requirements of Rule 144 under the Securities Act of 1933, each affiliate of ours that complies with the other conditions of Rule 144, including those that require the affiliate’s sale to be aggregated with those of other persons, would be able to sell in

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the public market, without registration, a number of shares not to exceed, in any three-month period, the greater of 1% of our outstanding shares, or the average weekly volume of trading in the shares during the preceding four calendar weeks. In the future, we may permit affiliates to have their shares registered for sale under the Securities Act of 1933.

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 addresses, among other issues, corporate governance, auditing and accounting, executive compensation, and enhanced and timely disclosure of corporate information. As directed by the Sarbanes-Oxley Act, our Chief Executive Officer and Chief Financial Officer will be required to certify that our quarterly and annual reports do not contain any untrue statement of a material fact. The rules adopted by the Securities and Exchange Commission under the Sarbanes-Oxley Act have several requirements, including having these officers certify that: they are responsible for establishing, maintaining and regularly evaluating the effectiveness of our internal control over financial reporting; they have made certain disclosures to our auditors and the audit committee of the Board of Directors about our internal control over financial reporting; and they have included information in our quarterly and annual reports about their evaluation and whether there have been changes in our internal control over financial reporting or in other factors that could materially affect internal control over financial reporting. We may be subject to further reporting and audit requirements beginning with the year ending June 30, 2014 under the requirements of the Sarbanes-Oxley Act. We will prepare policies, procedures and systems designed to ensure compliance with these regulations.

Future Legislation and Regulatory Reform

New regulations and statutes are regularly proposed that contain wide-ranging proposals for altering the structures, regulations and competitive relationships of financial institutions operating in the United States. We cannot predict whether or in what form any proposed regulation or statute will be adopted or the extent to which our business may be affected by any new regulation or statute. Future legislation and policies, and the effects of that legislation and those policies, may have a significant influence on our business, activities and growth and the overall growth and distribution of loans, investments and deposits. Such legislation and policies have had a significant effect on the operating results of commercial banks in the past and are expected to continue.

Federal and State Taxation

Federal Income Taxation

General. HV Bancorp and HV Bank are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. Neither HV Bancorp’s nor HV Bank’s federal tax returns are currently under audit, and neither entity has been audited during the past five years.

HV Bancorp and HV Bank will enter into a tax allocation agreement that will become effective upon completion of the conversion. Upon completion of the conversion, because HV Bancorp owns 100% of the issued and outstanding capital stock of HV Bank, HV Bancorp and HV Bank are members of an affiliated group within the meaning of Section 1504(a) of the Internal Revenue Code, of which group HV Bancorp is the common parent corporation. As a result of this affiliation, HV Bank may be included in the filing of a consolidated federal income tax return with HV Bancorp and, if a decision to file a consolidated tax return is made, the parties agree to compensate each other for their individual share of the consolidated tax liability and/or any tax benefits provided by them in the filing of the consolidated federal income tax return.

The following discussion of federal taxation is intended only to summarize certain pertinent federal income tax matters and is not a comprehensive description of the tax rules applicable to HV Bancorp or HV Bank.

Method of Accounting. For federal income tax purposes, HV Bank currently reports its income and expenses on the accrual method of accounting and uses a tax year ending June 30 for filing its federal and state income tax returns.

Bad Debt Reserves. Historically, HV Bank has been subject to special provisions in the tax law regarding allowable tax bad debt deductions and related reserves. Tax law changes were enacted in 1996, pursuant to the Small Business Protection Act of 1996 (the “1996 Act”), that eliminated the use of the percentage of taxable income method for tax years after 1995 and required recapture into taxable income over a six-year period of all bad debt reserves accumulated after 1988. HV Bank recaptured its excess reserve balance.

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Currently, HV Bank uses the specific charge-off method to account for bad debt deductions for income tax purposes.

Taxable Distributions and Recapture. At June 30, 2013, our total federal pre-base year reserve was approximately $1.7 million upon which no deferred taxes have been provided. Under current law, pre-base year reserves remain subject to recapture should HV Bank make certain non-dividend distributions, repurchase any of its stock, pay dividends in excess of tax earnings and profits, or cease to maintain a bank charter.

Alternative Minimum Tax. The Internal Revenue Code of 1986, as amended (the “Code”) imposes an alternative minimum tax (“AMT”) at a rate of 20% on a base of regular taxable income plus certain tax preferences (“alternative minimum taxable income” or “AMTI”). The AMT is payable to the extent such AMTI is in excess of an exemption amount and the AMT exceeds the regular income tax. Net operating losses can offset no more than 90% of AMTI. Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years. HV Bancorp and HV Bank have been subject to the AMT and have approximately $49,000 available as credits for carryover at June 30, 2013.

Net Operating Loss Carryforwards. A financial institution may carry back net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years. At December 31, 2013, HV Bank had no net operating loss carryforwards for federal income tax purposes.

State Taxation

Pennsylvania State Taxation. HV Bank currently files Pennsylvania Mutual Thrift Institution Income Tax returns. Generally, the income of savings institutions in Pennsylvania, which is calculated based on generally accepted accounting principles, subject to certain adjustments, is subject to Pennsylvania tax. HV Bank is not currently under audit with respect to its Pennsylvania income tax returns and HV Bank’s state tax returns have not been audited for the past five years. HV Bank has approximately $354,000 in Pennsylvania state tax net operating loss carryforwards at June 30, 2013.

In connection with the conversion, HV Bank will become a Pennsylvania chartered commercial bank and be subject to the Pennsylvania Bank Shares Tax, and not Pennsylvania income tax. The Bank Shares Tax is currently imposed at the rate of 0.89% of shareholders’ equity at year end less adjustments for goodwill and holdings in U.S. obligations.

THE CONVERSION AND STOCK OFFERING

This stock offering is being conducted pursuant to a plan of conversion approved by the Board of Trustees of HV Bank. The plan of conversion must also be approved by the voting members as of September 30, 2012, of HV Bank. A special meeting of members has been called for this purpose. The FDIC and the Department of Banking have each conditionally approved the plan of conversion. Such approvals, however, do not constitute a recommendation or endorsement of the plan of conversion by these agencies.

General

On December 12, 2013, the Board of Trustees of HV Bank unanimously adopted a plan of conversion from mutual to stock form of organization. Pursuant to the plan of conversion, HV Bank will convert from the mutual (meaning no shareholders), to the stock form of organization and will become the wholly owned subsidiary of HV Bancorp, a new Pennsylvania corporation. HV Bancorp will own all of the capital stock of HV Bank upon completion of the conversion. All of the common stock of HV Bancorp will be owned by public shareholders, including former shareholders of Victory Bancorp who receive shares of HV Bancorp in the merger.

HV Bancorp anticipates that net proceeds of the offering will be between $7.5 million and $10.4 million, or $12.1 million if the offering range is increased by 15%. The conversion will be consummated only upon the issuance of at least 850,000 shares of our common stock offered pursuant to the plan of conversion.

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The plan of conversion provides that we will offer shares of common stock for sale in a subscription offering to eligible members of HV Bank and to our employee stock ownership plan and, if necessary, to members of the general public through a community offering and, possibly, through a syndicate of registered broker-dealers. In any community offering, we will give a preference to natural persons residing in the Pennsylvania Counties of Montgomery, Bucks and Philadelphia.

We have the right to accept or reject, in whole or in part, any orders to purchase shares of common stock received in the community offering. The community offering, if any, may begin at the same time as, during, or after the subscription offering, and must be completed within 45 days after the completion of the subscription offering unless otherwise extended by us with the approval of the Federal Reserve Board, the FDIC and the Department of Banking. See “—Community Offering.”

We determined the number of shares of common stock to be offered in the offering based upon an independent valuation appraisal of the estimated consolidated pro forma market value of HV Bancorp. All shares of common stock to be sold in the offering will be sold at $10.00 per share. Investors will not be charged a commission to purchase shares of common stock in the offering. The independent valuation will be updated and the final number of the shares of common stock to be issued in the offering will be determined at the completion of the offering. See “—How We Determined the Offering Range and the $10.00 Per Share Purchase Price” for more information as to the determination of the estimated pro forma market value of the common stock.

The following is a brief summary of the pertinent aspects of the conversion and offering. A copy of the plan of conversion is available from HV Bank upon request and is available for inspection at the offices of HV Bank and at the FDIC and the Department of Banking. The plan of conversion is also filed as an exhibit to the registration statement that we have filed with the Securities and Exchange Commission. See “Where You Can Find More Information.”

Reasons for the Conversion and Offering

The primary reasons for the conversion and stock offering are to:

• facilitate the merger with Victory Bancorp;

• raise capital to support the future growth of HV Bank by hiring experienced bankers with extensive market relationships, by successful implementation of electronic delivery channels like remote check capture and mobile banking although we have no specific plans to do so at this time;

• enhance profitability and earnings by investing and leveraging the offering proceeds, primarily through the acquisition of Victory Bancorp and also through traditional funding and commercial banking activities; and

• attract and retain highly qualified officers, other employees and directors through, in part, the use of equity compensation plans, and to enhance our current compensation programs.

In addition, in the stock holding company structure, we will have greater flexibility then HV Bank currently has in structuring mergers and acquisitions. Potential sellers often want a stock component for at least part of the acquisition consideration. Our new stock holding company structure will enable us to offer stock or cash consideration, or a combination thereof, and will therefore enhance our ability to compete with other bidders when acquisition opportunities arise. Other than the merger with Victory Bancorp, we have no current arrangements or agreements to acquire other banks, thrifts, financial service companies or branch offices.

The offering will afford our directors, officers and employees the opportunity to become shareholders, which we believe to be an effective performance incentive and an effective means of attracting and retaining qualified personnel. The offering also will provide our customers and local community members with an opportunity to acquire our common stock.

Effects of Conversion on Depositors, Borrowers and Members

Continuity. While the conversion is being accomplished, HV Bank’s normal business of accepting deposits and making loans will continue without interruption. HV Bank will continue to be a Pennsylvania state-chartered mutual savings bank and will continue to regulated by the Department of Banking. After the conversion,

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HV Bank will continue to offer existing services to depositors, borrowers and other customers. The trustees serving HV Bank at the time of the conversion will be the directors of HV Bank and of HV Bancorp, Inc., a Pennsylvania corporation, after the conversion.

Effect on Deposit Accounts. Pursuant to the plan of conversion, each depositor of HV Bank at the time of the conversion will automatically continue as a depositor after the conversion, and the deposit balances, interest rates and other terms of their deposit accounts will not change as a result of the conversion. Each such account will be insured by the FDIC to the same extent as before the conversion. Depositors will continue to hold their existing certificates, passbooks and other evidences of their accounts.

Effect on Loans. No loan outstanding from HV Bank will be affected by the conversion, and the amount, interest rate, maturity and security for each loan will remain as it was contractually fixed prior to the conversion.

Effect on Voting Rights of Members. At present, all of our depositors and certain borrowers are members of, and have voting rights in, HV Bank as to all matters requiring membership action. Upon completion of the conversion, depositors and certain borrowers will cease to be members of HV Bank and will no longer have voting rights. Upon completion of the conversion, all voting rights in HV Bank will be vested in HV Bancorp as the sole shareholder of HV Bank. The shareholders of HV Bancorp will possess exclusive voting rights with respect to HV Bancorp capital stock.

Tax Effects. We will receive an opinion of counsel or tax advisor with regard to federal and state income tax consequences of the conversion to the effect that the conversion will not be taxable for federal or state income tax purposes to HV Bank or its members. See “—Material Income Tax Consequences.”

Effect on Liquidation Rights. Each depositor in HV Bank has both a deposit account in HV Bank and a pro rata ownership interest in the net worth of HV Bank based upon the deposit balance in his or her account. This ownership interest is tied to the depositor’s account and has no tangible market value separate from the deposit account. This interest may only be realized in the event of a complete liquidation of HV Bank. Any depositor who opens a deposit account obtains a pro rata ownership interest in HV Bank without any additional payment beyond the amount of the deposit. A depositor who reduces or closes his or her account receives a portion or all, respectively, of the balance in the deposit account but nothing for his or her ownership interest in the net worth of HV Bank, which is lost to the extent that the balance in the account is reduced or closed.

Consequently, depositors in a mutual savings institution normally have no way of realizing the value of their ownership interest, which has realizable value only in the unlikely event that the institution is completely liquidated. If this occurs, the depositors of record at that time, as owners, would share pro rata in any residual surplus and reserves of HV Bank after other claims, including claims of depositors to the amounts of their deposits, are paid.

In the unlikely event that HV Bank were to liquidate after the conversion, all claims of creditors, including those of depositors, also would be paid first, followed by distribution of the “liquidation account” to Eligible Account Holders and Supplemental Eligible Account Holders who continue to maintain their deposit accounts as of the date of liquidation, with any assets remaining thereafter distributed to HV Bancorp as the holder of HV Bank’s capital stock. Pursuant to the rules and regulations of the FDIC, a post-conversion merger, consolidation, sale of bulk assets or similar combination or transaction with another insured savings institution would not be considered a liquidation and, in such a transaction, the liquidation account would be assumed by the surviving institution. See “—Liquidation Rights.”

Subscription Offering and Subscription Rights

Under the plan of conversion, we have granted rights to subscribe for HV Bancorp common stock to the following persons in the following order of priority:

• Persons with deposits in HV Bank with balances aggregating $50 or more (“qualifying deposits”) as of September 30, 2012 (“eligible account holders”);

• Our tax-qualified employee stock ownership plan, or ESOP;

• Persons with qualifying deposits in HV Bank as of             , 201     (“supplemental eligible account holders”); and

• Other members of HV Bank as of,            , 201    , who are not eligible or supplemental eligible account holders, including borrowers of HV Bank as of July 1, 2003, who continue to be borrowers as of             , 2014.

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The amount of common stock that any person may purchase will depend on the availability of the common stock after satisfaction of all subscriptions having prior rights in the subscription offering and the maximum purchase limitations set forth in the plan of conversion. See “—Limitations on Purchases of Shares.”

All persons on a joint account will be counted as a single depositor for purposes of determining the maximum amount that may be subscribed for by owners of a joint account.

Priority 1: Eligible Account Holders. Subject to the overall maximum purchase limitation, each eligible account holder will receive nontransferable subscription rights to subscribe for up to the greater of:

• 5% of common stock sold in the conversion offering;

• one-tenth of 1% of the total offering of conversion shares; or

• 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be issued by a fraction, the numerator of which is the amount of the qualifying deposit of the eligible account holder and the denominator is the total amount of qualifying deposits of all eligible account holders, in each case as of the eligibility record date.

If there are insufficient shares to satisfy all subscriptions by eligible account holders, shares first will be allocated so as to permit each subscribing eligible account holder, if possible, to purchase a number of shares sufficient to make the person’s total allocation equal 100 shares or the number of shares actually subscribed for, whichever is less. After that, unallocated shares will be allocated among the remaining subscribing eligible account holders whose subscriptions remain unfilled in the proportion that the amounts of their respective qualifying deposits bear to the total qualifying deposits of all remaining eligible account holders whose subscriptions remain unfilled. Subscription rights of eligible account holders who are also executive officers or directors of HV Bancorp or HV Bank or their associates will be subordinated to the subscription rights of other eligible account holders to the extent attributable to increased deposits in HV Bank in the one year period preceding December 31, 2012.

To ensure a proper allocation of stock, each eligible account holder must list on his or her stock order form all deposit accounts in which such eligible account holder had an ownership interest at December 31, 2012. Failure to list an account, or providing incomplete or incorrect information, could result in the loss of all or part of a subscriber’s stock allocation.

Priority 2: Tax-Qualified Employee Plans. The ESOP, our only tax-qualified employee plan, will have nontransferable subscription rights to purchase up to 6.0% of the shares of common stock issued in the offering, including shares issued to shareholders of Victory Bancorp in the merger. Subscriptions by the ESOP will not be aggregated with shares of common stock purchased by any other participants in the offering, including subscriptions by our officers and directors, for the purpose of applying the purchase limitations in the plan of conversion. If eligible account holders subscribe for all of the shares being offered and sold, subscriptions for shares by the ESOP may be satisfied, in whole or in part, out of authorized but unissued shares subject to the maximum purchase limitations applicable to the ESOP, or may be satisfied, in whole or in part, through open market purchases by the ESOP subsequent to the closing of the offering.

Priority 3: Supplemental Eligible Account Holders. To the extent that there are sufficient shares of common stock remaining after satisfaction of subscriptions by eligible account holders and the tax-qualified employee plans, and subject to the overall maximum purchase limitation, each supplemental eligible account holder will receive nontransferable subscription rights to subscribe for up to the greater of:

• 5% of common stock sold in the conversion;

• one-tenth of 1% of the total offering of shares; or

• 15 times the product, rounded down to the next whole number, obtained by multiplying the total number of shares of common stock to be sold by a fraction of which the numerator is the amount of qualifying deposits of the supplemental eligible account holder and the denominator is the total amount of qualifying deposits of all supplemental eligible account holders.

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If eligible account holders and the tax-qualified employee plans subscribe for all of the shares being sold, no shares will be available for supplemental eligible account holders. If shares are available for supplemental eligible account holders but there are insufficient shares to satisfy all subscriptions by supplemental eligible account holders, shares first will be allocated so as to permit each subscribing supplemental eligible account holder, if possible, to purchase a number of shares sufficient to make the person’s total allocation equal 100 shares or the number of shares actually subscribed for, whichever is less. After that, unallocated shares will be allocated among the remaining subscribing supplemental eligible account holders whose subscriptions remain unfilled in the proportion that the amounts of their respective qualifying deposits bear to the total qualifying deposits of all remaining supplemental eligible account holders whose subscriptions remain unfilled.

To ensure a proper allocation of stock, each supplemental eligible account holder must list on his or her stock order form all deposit accounts in which such supplemental eligible account holder had an ownership interest at             . Failure to list an account, or providing incomplete or incorrect information, could result in the loss of all or part of a subscriber’s stock allocation.

Priority 4: Other Members. To the extent that there are sufficient shares of common stock remaining after satisfaction of subscriptions by eligible account holders, the tax-qualified employee plans and supplemental eligible account holders, subject to the overall maximum purchase limitation, other members—certain depositors and borrowers who are members of HV Bank as of the voting record date and entitled to vote at the special meeting, but who are not otherwise eligible account holders or supplemental eligible account holders—shall receive nontransferable subscription rights to subscribe for up to the greater of:

• 5% of common stock sold in the conversion offering;

• one-tenth of 1% of the total offering of shares.

If eligible account holders, the employee stock ownership plan and supplemental eligible account holders subscribe for all of the shares being sold, no shares will be available for other members. If shares are available for other members but there are not sufficient shares to satisfy all subscriptions by other members, shares first will be allocated so as to permit each subscribing other member, if possible, to purchase a number of shares sufficient to make each other member’s total allocation equal to 100 shares or the number of shares actually subscribed for, whichever is less. After that, unallocated shares will be allocated among the remaining subscribing other member in the proportion that each member’s subscription bears to the total subscriptions of all such subscribing other members whose subscriptions remain unfilled.

To ensure a proper allocation of stock, each other member must list on his or her stock order form all deposit accounts in which such other member had an ownership interest at [voting record date]. Failure to list an account or providing incorrect or incomplete information could result in the loss of all or part of a subscriber’s stock allocation.

Expiration Date for the Subscription Offering. The subscription offering, and all subscription rights under the plan of conversion, will terminate at             ,          noon, Eastern time, on [offering deadline]. We will not accept orders for common stock in the subscription offering received after that time. We will make reasonable attempts to provide a prospectus and related offering materials to holders of subscription rights; however, all subscription rights will expire on the expiration date whether or not we have been able to locate each person entitled to subscription rights.

We are required to complete the sale of common stock within 45 days after the close of the subscription offering. If the sale of the common stock is not completed within that period, all funds received will be returned promptly with interest at our passbook savings rate and all withdrawal authorizations will be canceled unless we receive regulatory approval to extend the time for completing the offering. If regulatory approval of an extension beyond             , 2014 has been granted, we will notify all subscribers of the extension and of the duration of any extension that has been granted, and subscribers will have the right to confirm, modify or rescind their purchase orders. If we do not receive a response from a subscriber to any resolicitation, the subscriber’s order will be rescinded and all funds received will be returned promptly with interest, or withdrawal authorizations will be canceled. No single subsequent extension can exceed 90 days. Aggregate extensions may not go beyond             , 200    , which is two years after the special meeting of members of HV Bank to vote on the plan of conversion.

Persons in Non-Qualified States. We will make reasonable efforts to comply with the securities laws of all states in the United States in which persons entitled to subscribe for stock under the plan of conversion reside.

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However, we are not required to offer stock in the subscription offering to any person who resides in a foreign country or who resides in a state of the United States in which (1) only a small number of persons otherwise eligible to subscribe for shares of common stock reside; (2) the granting of subscription rights or the offer or sale of shares to such person would require that we or our officers or directors register as a broker, dealer, salesman or selling agent under the securities laws of the state, or register or otherwise qualify the subscription rights or common stock for sale or qualify as a foreign corporation or file a consent to service of process; or (3) we determine that compliance with that state’s securities laws would be impracticable or unduly burdensome for reasons of cost or otherwise.

Restrictions on Transfer of Subscription Rights and Shares. Subscription rights are nontransferable. Federal law prohibits the transfer of subscription rights. We may reasonably investigate to determine compliance with this restriction. Persons selling or otherwise transferring their rights to subscribe for shares of common stock in the subscription offering or subscribing for shares of common stock on behalf of another person may forfeit those rights and may face possible further sanctions and penalties imposed by the FDIC or another agency of the United States Government. We will pursue any and all legal and equitable remedies in the event we become aware of the transfer of subscription rights and we will not honor orders known by us to involve the transfer of these rights. Each person exercising subscription rights will be required to certify on the stock order form that he or she is purchasing shares solely for his or her own account and that he or she has no agreement or understanding with any other person for the sale or transfer of the shares of common stock. When registering your stock purchase on the order form, you should not add the name(s) or persons who have no subscription rights or who qualify in a lower purchase priority than you do. Doing so may jeopardize your subscription rights.

Community Offering

To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, we may, in our discretion, offer shares to the general public in a community offering. In the community offering, we will give preference first to natural persons and trustees of natural persons residing in Montgomery, Bucks and Philadelphia Counties, Pennsylvania (the “Local Community”), and then to the general public.

Shares will be sold at the $10.00 per share purchase price. Subject to the overall maximum purchase limitations, these persons may purchase up to up to 5% of the total shares sold in the conversion offering. The community offering, if any, may begin concurrently with, during or promptly after the subscription offering, and may terminate at any time without notice, but may not terminate later than             , 201    , unless extended by HV Bancorp. Subject to any required regulatory approvals, we will determine, in our discretion, the advisability of a community offering, the commencement and termination dates of any community offering, and the methods of finding potential purchasers in such offering.

If there are not sufficient shares of common stock available to fill orders in the community offering, the shares of common stock will be allocated, first to the Local Community subscribers whose orders we accept, in an amount equal to a maximum of 2% of the total shares sold in the offering. We intend to first allocate to each Local Community subscriber 100 shares or the number subscribed for whichever is less. Thereafter, unallocated shares of common stock will be allocated to Local Community subscribers whose orders remain unsatisfied, on an equal number of shares basis per order until all shares are allocated. If instead, oversubscription occurs among the general public and there are any available shares of common stock, these shares will be allocated by applying the same allocation described above for persons who reside in the Local Community.

The opportunity to subscribe for shares of common stock in the community offering is subject to our right to reject orders in our sole discretion, in whole or part, either at the time of receipt of an order or as soon as practicable following the expiration date of the offering. If your order is rejected in part, you will not have the right to cancel the remainder of your order.

Syndicated Community Offering or Underwritten Public Offering

The plan of conversion provides that, if necessary, all shares of common stock not purchased in the subscription offering and community offering may be offered for sale to the general public in a syndicated community offering to be managed by Griffin Financial Group, acting as our placement agent. In such capacity, Griffin Financial Group may form a syndicate of other brokers-dealers who are FINRA member firms. Alternatively, we may sell any remaining shares in an underwritten public offering. Neither Griffin Financial Group nor any registered broker-dealer will have any obligation to take or purchase any shares of the common stock in the

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syndicated community offering; however, Griffin Financial Group has agreed to use its best efforts in the sale of shares in any syndicated community offering. We have not selected any particular broker-dealers to participate in a syndicated community offering and will not do so until prior to the commencement of the syndicated community offering. The syndicated community offering would terminate no later than 45 days after the expiration of the subscription offering, unless extended by us, with approval of the Federal Reserve Board, the FDIC and the Department of Banking. See “—Community Offering” above for a discussion of rights of subscribers in the event an extension is granted.

The opportunity to subscribe for shares of common stock in the syndicated community offering or underwritten public offering is subject to our right in our sole discretion to accept or reject orders, in whole or part, either at the time of receipt of an order or as soon as practicable following the expiration date of the offering. If your order is rejected in part, you will not have the right to cancel the remainder of your order.

Common stock sold in the syndicated community offering also will be sold at the $10.00 per share purchase price. Subject to the overall maximum purchase limitation, purchasers in the syndicated community offering are eligible to purchase up to 5% of the total shares sold in the conversion offering. We may begin the syndicated community offering or underwritten public offering at any time following the commencement of the subscription offering.

If we are unable to find purchasers from the general public to meet the minimum of the offering range, we will make other purchase arrangements, if feasible. Other purchase arrangements must be approved by the Federal Reserve Board, the FDIC and the Department of Banking. If other purchase arrangements cannot be made, we may either: terminate the stock offering and promptly return all funds; or set a new offering range and give all the opportunity to confirm, modify or rescind their order for shares of HV Bancorp common stock; or take such other actions as may be permitted by the Federal Reserve Board, the FDIC, the Department of Banking and the Securities and Exchange Commission.

Limitations on Purchases of Shares

The plan of conversion includes the following limitations on the number of shares of common stock that may be purchased in the offering:

• Except for our ESOP which may purchase up to 6.0% of the common stock issued in the offering, no person or entity, together with associates or persons acting in concert with such person or entity, may purchase more than 5% of the total shares sold in the conversion offering; in all categories of the offering combined;

• Our tax-qualified employee benefit plans, including our ESOP may purchase in the aggregate up to 6.0% of the shares of common stock issued in the offering;

• No person (or persons exercising subscription rights through a single qualifying deposit held jointly) may purchase fewer than 25 shares of common stock;

• These maximum purchase limitations may not be increased to a percentage in excess of 5% of the shares sold in the conversion offering, except that they may be increased to up to 9.99% of the shares sold in the offering, provided that orders for common stock exceeding 5% of the shares of common stock shall not exceed in the aggregate 10.0% of the total shares of common stock; and

• The maximum number of shares of common stock that may be purchased in all categories of the offering by our executive officers and directors and their associates, in the aggregate may not exceed 32% of the shares issued in the offering.

Depending upon market or financial conditions, our Board of Directors, with the approval of the FDIC and the Department of Banking and without further approval of the voting members of HV Bank, may decrease the purchase limitations or increase the purchase limitations, as described above. If a purchase limitation is increased, subscribers in the subscription offering who ordered the maximum amount will be, and, in our sole discretion, some other large subscribers may be, given the opportunity to increase their subscriptions up to the then applicable limit. The effect of this type of resolicitation will be an increase in the number of shares of common stock owned by subscribers who choose to increase their subscriptions.

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The plan of conversion defines “acting in concert” to mean knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not by an express agreement or understanding; or a combination or pooling of voting or other interests in the securities of an issuer for a common purpose under any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. In general, a person who acts in concert with another party will also be deemed to be acting in concert with any person who is also acting in concert with that other party. We may presume that certain persons are acting in concert based upon, among other things, joint account relationships and the fact that persons may have filed joint Schedules 13D or 13G with the Securities and Exchange Commission with respect to other companies. For purposes of the plan of conversion, our directors are not deemed to be acting in concert solely by reason of their board membership.

The plan of conversion defines “associate,” with respect to a particular person, to mean:

• a corporation other than HV Bancorp or HV Bank or a majority-owned subsidiary of HV Bancorp of which a person is an officer, director or owner of 10.0% or more of the outstanding voting stock;

• any person who is a parent, spouse, sister, brother, child or anyone married to one of the foregoing persons;

• a trust or other estate in which a person has a substantial beneficial interest or as to which a person serves as a trustee or a fiduciary; and

• any partnership in which the person is a general or limited partner; provided, however, that any tax-qualified or non-tax-qualified employee plan shall not be deemed to be an associate of any director or officer of HV Bancorp or HV Bank.

For example, a corporation of which a person serves as an officer would be an associate of that person and, therefore, all shares purchased by the corporation would be included with the number of shares that the person could purchase individually under the purchase limitations described above. We have the right in our sole discretion to reject any order submitted by a person whose representations we believe to be false or who we otherwise believe, either alone or acting in concert with others, is violating or circumventing, or intends to violate or circumvent, the terms and conditions of the plan of conversion. Directors and officers are not treated as associates of each other solely by virtue of holding such positions. We have the sole discretion to determine whether prospective purchasers are “associates” or “acting in concert.”

Marketing and Distribution; Compensation

Offering materials have been initially distributed by mail to persons eligible to subscribe in the subscription offering. Additional materials are available through our Stock Information Center.

We have engaged Griffin Financial Group, a broker-dealer registered with FINRA as a financial and marketing advisor in connection with the offering of our common stock. In its role in providing advisory, administrative and marketing services, Griffin Financial Group will assist us in the offering as follows, among other matters:

• advising with respect to business planning issues in preparation for the public offering;

• advising with respect to the choice of charter and form of organization;

• reviewing and advising with respect to the plan of conversion;

• advising with respect to listing on a stock exchange;

• reviewing and providing input with respect to the business plan to be prepared in connection with the conversion;

• discussing the appraisal process and analyzing the appraisal with the Board of Directors;

• participating in drafting the offering document and proxy materials, and assisting in obtaining all requisite regulatory approvals;

• developing a marketing plan for the subscription and community offerings, considering various sales method options, including direct mail, advertising, community meetings and telephone solicitation;

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• acting as our financial advisor for the conversion and offering;

• providing administrative services and managing the Stock Information Center;

• educating our employees regarding the stock offering;

• targeting our sales efforts, including assisting in the preparation of marketing materials;

• soliciting orders for common stock; and

• assisting in soliciting proxies of HV Bank other members.

For these services, Griffin Financial Group has received or will receive a non-refundable retainer fee of $40,000 and a success fee of 1.5% of the aggregate dollar amount of shares sold in the subscription and community offerings, excluding (i) shares purchased by HV Bank’s officers, directors and employees (or members of their immediate families), (ii) shares purchased by any HV Bank employee benefit plan, and (iii) shares purchased by Victory Bancorp shareholders; and (iv) shares issued to Victory Bancorp shareholders in connection with the merger. Fees payable by HV Bancorp with respect to any syndicated community offering will equal 5.5% of the aggregate dollar amount of shares of common stock sold in such syndicated community offering.

The plan of conversion provides that, if necessary, all shares of common stock not purchased in the subscription offering and community offering may be offered for sale to the general public in a syndicated community offering to be managed by Griffin Financial Group. In such capacity, Griffin Financial Group may form a syndicate of other broker-dealers. Neither Griffin Financial Group nor any registered broker-dealer will have any obligation to purchase any shares of common stock in the syndicated community offering. However, Griffin Financial Group has agreed to use its best efforts in the sale of shares in any syndicated community offering. If there is a syndicated community offering, Griffin Financial Group will receive a management fee of at least 1.0% of the aggregate dollar amount of the common stock sold in the syndicated community offering. The total fees payable to Griffin Financial Group and other FINRA member firms in the syndicated community offering will not exceed 5.5% of the aggregate dollar amount of the common stock sold in the syndicated community offering.

We also will reimburse Griffin Financial Group for its reasonable out-of-pocket expenses associated with its marketing effort, up to a maximum of $20,000. We will also reimburse Griffin Financial Group for its legal fees up to $75,000. If the plan of conversion is terminated or if the engagement of Griffin Financial Group is terminated in accordance with the provisions of the agreement, Griffin Financial Group will only receive reimbursement of its reasonable out-of-pocket expenses and will return any amounts paid or advanced by us in excess of these expenses. We will indemnify Griffin Financial Group against liabilities and expenses (including legal fees) incurred in connection with certain claims or litigation arising out of or based upon untrue statements or omissions contained in the offering material for the common stock, including liabilities under the Securities Act of 1933.

Our directors and executive officers may participate in the solicitation of offers to purchase common stock. These persons will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with the solicitation. Other trained employees of HV Bank may assist in the offering in ministerial capacities, providing clerical work in effecting a sales transaction or answering questions of a ministerial nature. No offers or sales may be made by tellers or at the teller counters. All sales activity will be conducted in a segregated or separately identifiable area of HV Bank’s Corporate Headquarters apart from the area accessible to the general public. Other questions of prospective purchasers will be directed to executive officers or registered representatives of Griffin Financial Group. Our other employees have been instructed not to solicit offers to purchase shares of common stock or provide advice regarding the purchase of common stock. We will rely on Rule 3a4-1 under the Securities Exchange Act of 1934, as amended, and sales of common stock will be conducted within the requirements of Rule 3a4-1, so as to permit officers, directors and employees to participate in the sale of common stock. None of our officers, directors or employees will be compensated in connection with their participation in the offering by the payment of commissions or other remuneration based either directly or indirectly on the transactions in the shares of common stock.

The offering will comply with the requirements of Rule 10b-9 under the Securities Exchange Act of 1934.

Conversion Agent

We have also engaged Mediant Communications LLC (“Mediant”) to act as our conversion agent in connection with the stock offering. In its role as conversion agent, Mediant will among other things:

• consolidate and develop a central file of account holders;

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• assist with the labeling of proxy materials and provide support for any follow-up mailings;

• tabulate proxies and ballots;

• assist the inspector of election at the special meeting of members;

• assist us in establishing record-keeping and reporting procedures;

• assist our financial printer with labeling of stock offering materials;

• process stock order and certification forms and produce daily reports and analysis;

• assist our transfer agent with the generation and mailing of stock certificates;

• advise us on interest and refund calculations; and

• create tax forms for interest reporting.

For these services, Mediant will receive estimated fees of approximately $30,000. We will indemnify Mediant against certain liabilities and expenses (including legal fees) related to or arising out of Mediant’s engagement as our conversion agent and performance of services as our conversion agent.

Description of Sales Activities

HV Bancorp will offer the common stock in the subscription offering and community offering principally by the distribution of this prospectus and through activities conducted at our stock information center. The stock information center is expected to operate during normal business hours throughout the subscription offering and community offering, if any. It is expected that at any particular time one or more Griffin Financial Group employees will be working at the stock information center. Employees of Griffin Financial Group will be responsible for responding to questions regarding the offering.

Sales of common stock in the syndicated community offering will be made by registered representatives affiliated with Griffin Financial Group or by the selected dealers managed by Griffin Financial Group.

HV Bank’s officers and employees may participate in the offering in clerical capacities, providing administrative support in effecting sales transactions or, when permitted by state securities laws, answering questions of a mechanical nature relating to the proper execution of the order form. HV Bank’s officers may answer questions regarding our business when permitted by state securities laws. Other questions of prospective purchasers, including questions as to the advisability or nature of the investment, will be directed to registered representatives. Officers and employees of HV Bank, Victory Bancorp and Victory Bank have been instructed not to solicit offers to purchase common stock or provide advice regarding the purchase of common stock.

Procedure for Purchasing Shares

Expiration Date. The subscription offering will expire at 12:00 noon, Eastern time, on [offering deadline]. The community offering is expected to expire at the same time. We may extend the offering for up to 45 days without notice to purchasers in the offering. Any extension of the offering beyond             , 2014 would require regulatory approvals.

Delivery of Prospectus. To ensure that each purchaser receives a prospectus at least 48 hours before the expiration date of the offering in accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, as amended, no prospectus will be mailed any later than five days prior to the expiration date or hand delivered any later than two days prior to the expiration date. Execution of a stock order form will confirm receipt of delivery in accordance with Rule 15c2-8. Stock order forms will be distributed only with a prospectus.

We reserve the right in our sole discretion to terminate the offering at any time and for any reason, in which case we will cancel any deposit account withdrawal orders and promptly return all funds delivered to us, with interest calculated at HV Bank’s passbook savings rate from the date the stock order form was processed.

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We have the right to reject any order submitted in the offering by a person who we believe is making false representations or who we otherwise believe, either alone or acting in concert with others, is violating, evading, circumventing, or intends to violate, evade or circumvent the terms and conditions of the plan of conversion.

Use of Order Forms. In order to purchase shares of common stock in the subscription offering and community offering, you must complete a stock order form and remit full payment. We will not be required to accept incomplete order forms, unsigned stock order forms, or stock orders submitted on photocopied or facsimiled order forms. All order forms must be received (not postmarked) by the Stock Information Center prior to 12:00 noon, Eastern time, on [offering deadline]. We are not required to accept stock order forms that are not received by that time, are executed defectively or are received without full payment or without appropriate withdrawal instructions. We are not required to notify purchasers of incomplete or improperly executed stock order forms. We have the right to permit the correction of incomplete or improperly executed order forms or waive immaterial irregularities. We do not represent, however, that we will do so and we have no affirmative duty to notify any prospective purchaser of any such defects. You may submit your stock order form and payment by mail using the order reply envelope provided, by bringing your stock order form to our Stock Information Center or by overnight delivery to the indicated address on the stock order form. Once tendered, a stock order form cannot be modified or revoked without our consent. We reserve the absolute right, in our sole discretion, to reject orders received in the community offering and syndicated community offering, in whole or in part, at the time of receipt or at any time prior to completion of the offering. If you are ordering shares, you must represent that you are purchasing shares for your own account and that you have no agreement or understanding with any person for the sale or transfer of the shares. Our interpretation of the terms and conditions of the plan of conversion and of the acceptability of the stock order forms will be final, subject to the authority of the FDIC and the Department of Banking.

By signing the stock order form, you will be acknowledging that the common stock is not a deposit or savings account and is not federally insured or otherwise guaranteed by HV Bank or the federal government, and that you received a copy of this prospectus. However, signing the stock order form will not result in you waiving your rights under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Payment for Shares. Payment for all shares of common stock will be required to accompany completed stock order forms, in order for the purchase to be valid. Payment for shares may only be made by:

• personal check, bank check or money order, made payable to HV Bancorp; or

• authorization of withdrawal from the types of HV Bank deposit accounts permitted on the stock order form.

Cash and wire transfers will not be accepted. Additionally, you may not use a check drawn on a HV Bank line of credit, and we will not accept third-party checks of any type (a check written by someone other than you) payable to you and endorsed over to HV Bancorp.

Appropriate means for designating withdrawals from deposit accounts at HV Bank are provided on the stock order form. The funds designated must be available in the account(s) at the time the stock order form is received. A hold will be placed on these funds, making them unavailable to the depositor. Funds authorized for withdrawal will continue to earn interest within the account at the contract rate until the offering is completed, at which time the designated withdrawal will be made. Interest penalties for early withdrawal applicable to certificate of deposit accounts will not apply to withdrawals authorized for the purchase of shares of common stock; however, if a withdrawal results in a certificate account with a balance less than the applicable minimum balance requirement, the certificate of deposit will be canceled at the time of withdrawal without penalty and the remaining balance will earn interest at the current passbook rate subsequent to the withdrawal.

In the case of payments made by personal check, these funds must be available in the account(s) when the order form is received. Checks and money orders will be immediately cashed and placed in a segregated account at HV Bank, or in our discretion at another insured depository institution, and will earn interest at HV Bank’s passbook savings rate from the date payment is received until the offering is completed or terminated.

We will have the right, in our sole discretion, to permit institutional investors to submit irrevocable orders together with the legally binding commitment for payment and to thereafter pay for the shares of common stock for which they subscribe in the community offering at any time prior to 48 hours before the completion of the offering. This payment may be made by wire transfer.

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Our employee stock ownership plan will not be required to pay for any shares purchased in the offering until consummation of the offering. Our employee stock ownership plan must provide a loan commitment from an unrelated financial institution or from HV Bancorp to lend to the employee stock ownership plan the necessary amount to fund the purchase.

Regulations prohibit HV Bank from knowingly lending funds or extending credit to any persons to purchase shares of common stock in the offering.

Once we receive your executed stock order form, it may not be modified, amended or rescinded without our consent, unless the offering is not completed by the expiration date, in which event purchasers may be given the opportunity to increase, decrease or rescind their orders for a specified period of time.

Using IRA Funds. If you are interested in using some or all of your funds in an individual retirement account, you must do so through a self-directed individual retirement account. By regulation, HV Bank’s individual retirement accounts are not self-directed, so they cannot be invested in shares of our common stock. Therefore, if you wish to use funds that are currently in a HV Bank individual retirement account, you may not designate on the stock order form that you wish funds to be withdrawn from the account for the purchase of common stock. The funds you wish to use must first be transferred to an independent trustee, such as a brokerage account. It will take time to transfer your funds, so please allow yourself sufficient time to take this action. An annual administrative fee may be payable to the new trustee. There will be no early withdrawal or Internal Revenue Service interest penalties for these transfers. If you are interested in using funds in a HV Bank individual retirement account or any other retirement account to purchase shares of common stock, please contact our Stock Information Center as soon as possible, preferably at least two weeks prior to the end of the offering period, because processing such transactions takes time, and whether such funds can be used may depend on limitations imposed by the institutions where such funds are currently held. We cannot guarantee that you will be able to use such funds.

Other Restrictions. Notwithstanding any other provision of the plan of conversion, no person is entitled to purchase any shares of common stock to the extent the purchase would be illegal under any federal or state law or regulation, including state “blue sky” regulations, or would violate regulations or policies of the National Association of Securities Dealers, Inc., particularly those regarding free riding and withholding. We may ask for an acceptable legal opinion from any purchaser as to the legality of his or her purchase, and we may refuse to honor any purchase order if an opinion is not timely furnished. In addition, we are not required to offer shares of common stock to any person who resides in a foreign country.

How We Determined the Offering Range and the $10.00 Per Share Purchase Price

Federal and state regulations require that the aggregate purchase price of the securities sold in connection with the offering be based on the appraised pro forma market value of the common stock, as determined by an independent appraisal. We have retained Feldman Financial Advisors, Inc., or Feldman Financial, which is experienced in the evaluation and appraisal of financial institutions, to prepare the independent appraisal. Feldman Financial will receive fees totaling $60,000 for the preparation and delivery of the original appraisal report, plus reimbursement of reasonable out-of-pocket expenses and $8,500 for the preparation and delivery of each required updated appraisal report. We have agreed to indemnify Feldman Financial under certain circumstances against liabilities and expenses, including legal fees, arising out of, related to, or based upon the offering.

Feldman Financial prepared the appraisal taking into account the pro forma impact of the offering, as well as the merger. For its analysis, Feldman Financial undertook substantial investigations to learn about our business and operations. We supplied financial information, including annual and quarterly financial statements, information on the composition of assets and liabilities, and other financial schedules. In addition to this information, Feldman Financial reviewed our conversion application and our registration statement as filed with the Securities and Exchange Commission. Furthermore, Feldman Financial visited our facilities and had discussions with our management also visited with Victory Bancorp management. Feldman Financial did not perform a detailed individual analysis of the separate components of our assets and liabilities. We did not impose any limitations on Feldman Financial in connection with its appraisal.

In connection with its appraisal, Feldman Financial reviewed the following factors, among others:

• the impact of the acquisition of Victory Bancorp by HV Bancorp;

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• our historical, present and projected operating results and financial condition and the economic and demographic characteristics of our market area;

• a comparative evaluation of the operating and financial statistics of HV Bank with those of other similarly situated, publicly traded thrift holding companies;

• the effect of the capital raised in this offering on our net worth and earnings potential;

• the trading market for securities of comparable institutions and general conditions in the market for such securities;

• the aggregate size of the offering of common stock;

• our proposed dividend policy; and

• the effect of implementing our stock-based incentive plans.

Consistent with regulatory appraisal guidelines, the independent appraisal applied three primary methodologies to estimate the pro forma market value of our common stock: the pro forma price-to-book value approach applied to both reported book value and tangible book value after deducting intangible assets; the pro forma price-to-earnings approach applied to reported and estimated core earnings; and the pro forma price-to-assets approach, all of which are described in its report. Feldman Financial’s appraisal report is filed as an exhibit to the registration statement that we have filed with the Securities and Exchange Commission. See “Where You Can Find More Information.” The market value ratios applied in the three methodologies were based upon the current market valuations of a peer group of companies considered by Feldman Financial to be comparable to us after completion of the merger and the offering, subject to valuation adjustments applied by Feldman Financial to account for differences between HV Bancorp and the peer group. The peer group analysis conducted by Feldman Financial included a total of ten publicly traded fully converted institutions with assets between $263 million and $426 million. In preparing its appraisal, Feldman Financial considered the fully converted pricing ratios of the peer group and placed the greatest emphasis on the price-to-core earnings approach and price-to-tangible book value approach with lesser emphasis on the price-to-book value and price-to-assets approaches in estimating pro forma market value.

The peer group consists of the following ten companies, all of which are traded on the Nasdaq Stock Market. Total assets for the peer group companies are reported as of December 31, 2013.

Company Name	Ticker Symbol	Headquarters Location	Total Assets ($mil.)
Alliance Bancorp, Inc.	ALLB	Broomall, PA	$	425.5
Athens Bancshares Corporation	AFCB	Athens, TN		294.8
Georgetown Bancorp, Inc.	GTWN	Georgetown, MA		263.0
Hamilton Bancorp, Inc.	HBK	Towson, MD		300.5
Jacksonville Bancorp, Inc.	JXSB	Jacksonville, IL		318.4
LSB Financial Corp.	LSBI	Lafayette, IN		367.6
Poage Bankshares, Inc.	PBSK	Ashland, KY		289.2
Polonia Bancorp, Inc.	PBCP	Huntingdon Valley, PA		305.6
Wolverine Bancorp, Inc.	WBKC	Midland, MI		297.8
WVS Financial Corp.	WVFC	Pittsburgh, PA		314.0

The peer group included companies with:

• average assets of $318 million;

• average non-performing assets of 1.69% of total assets;

• average loans of 63.44% of total assets;

• average equity of 14.96% of total assets; and

• average net income of 0.40% of average assets.

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On the basis of the analysis in its report, Feldman Financial has advised us that, in its opinion, as of March 26, 2014, our estimated pro forma market value, including shares issued in the merger with Victory Bancorp, was within the valuation range of $16.5 million and $22.0 million with a midpoint of $19.4 million.

The following table presents a summary of selected pricing ratios for HV Bancorp, for the peer group companies and for all publicly traded thrifts as presented in the Feldman Financial appraisal. Compared to the average pricing ratios of the peer group, HV Bancorp’s pro forma pricing ratios at the maximum of the offering range indicated a discount of 14.5% on a price-to-book value basis and a discount of 12.5% on a price-to-tangible book value basis.

	Price to Core Earnings Multiple(1)			Price to Book Value Ratio(2)			Price to Tangible Book Value Ratio(2)
HV Bancorp (pro forma):
Minimum			*		68.8	%		71.3	%
Midpoint			*		73.1	%		75.5	%
Maximum			*		76.3	%		79.0	%
Maximum, as adjusted			*		78.2	%		80.8	%
Peer Group:
Average		28.5x			89.2	%		90.3	%
Median		29.2x			87.8	%		90.2	%
All Publicly-Traded Thrifts:
Average		27.6x			105.9	%		114.2	%
Median		20.5x			97.4	%		101.9	%

* Not meaningful for comparative valuation purposes.

⁽¹⁾  Ratios are based on earnings for the 12 months ended December 31, 2013 and share prices as of April 15, 2014.

⁽²⁾  Ratios are based on book value as of December 31, 2013 and share prices as of April 15, 2014.

Our Board of Directors reviewed Feldman Financial’s appraisal report, including the methodology and the assumptions used by Feldman Financial, and determined that the valuation range was reasonable and adequate. Based on financial information through December 31, 2013 our Board of Directors determined that up to 2,196,804 shares of our common stock should be issued in connection with the merger and sold in the offering at a purchase price of $10.00 per share. Feldman Financial’s valuation range yielded an offering range of $8.5 million to $11.5 million, with a midpoint of $10.0 million. Dividing these dollar amounts by the purchase price resulted in an offering range of between 850,000 and 1,150,000 shares, with a midpoint of 1,000,000 shares. The purchase price of $10.00 per share was determined by us, taking into account, among other factors, the requirement under federal banking regulations that the common stock be offered in a manner that will achieve the widest distribution of the stock and desired liquidity in the common stock after the offering.

Since the outcome of the offering relates in large measure to market conditions at the time of sale, it is not possible for us to determine the exact number of shares that we will issue at this time. The offering range may be amended, with the approval of the FDIC and the Department of Banking if necessitated by developments following the date of the appraisal in, among other things, market conditions, our financial condition or operating results, regulatory guidelines or national or local economic conditions.

If, upon completion of the offering, the number of shares are subscribed for that is equal to or greater than 850,000 shares, Feldman Financial, after taking into account factors similar to those involved in its initial appraisal, will determine its estimate of our pro forma market value as of the close of the offering. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, Feldman Financial determines that our pro forma market value has increased, we may sell up to 1,322,500 shares in the offering.

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No shares will be sold unless Feldman Financial confirms that, to the best of its knowledge and judgment, nothing of a material nature has occurred that would cause it to conclude that the actual total purchase price of the shares on an aggregate basis was materially incompatible with its appraisal. If, however, the facts do not justify that statement, the offering may be canceled. Alternatively, a new offering range may be set and subscribers resolicited and given an opportunity to increase, decrease or rescind their order. If we do not receive an affirmative response from a subscriber to any resolicitation, the subscriber’s order will be rescinded and all funds received will be returned promptly with interest at our passbook savings rate, or withdrawal authorizations will be cancelled. No single subsequent extension can exceed 90 days. Aggregate extensions may not go beyond             , 2014, which is two years after the special meeting of members of HV Bank to vote on the plan of conversion. If the offering is terminated all subscriptions will be cancelled and subscription funds will be returned promptly with interest, and holds on funds authorized for withdrawal from deposit accounts will be released or reduced. If Feldman Financial establishes a new valuation range, it must be approved by the FDIC and the Department of Banking.

In formulating its appraisal, Feldman Financial relied upon the truthfulness, accuracy and completeness of all documents we furnished to it. Feldman Financial also considered financial and other information from regulatory agencies, other financial institutions, and other public sources, as appropriate. While Feldman Financial believes this information to be reliable, Feldman Financial does not guarantee the accuracy or completeness of the information and did not independently verify the consolidated financial statements and other data provided by us or independently value our assets or liabilities. The appraisal is not intended to be, and must not be interpreted as, a recommendation of any kind as to the advisability of purchasing shares of common stock. Moreover, because the appraisal must be based on many factors that change periodically, there is no assurance that purchasers of shares in the offering will be able to sell shares after the offering at prices at or above the purchase price.

Copies of the appraisal report of Feldman Financial, including any amendments to the report, and the detailed memorandum of the appraiser setting forth the method and assumptions for such appraisal are available for inspection at our main office and the other locations specified under “Where You Can Find More Information.”

Delivery of Stock Certificates

Certificates representing shares of common stock issued in the subscription and community offerings will be mailed by regular mail by our transfer agent as soon as practicable following completion of the conversion and offering. Certificates will be mailed to purchasers at the registration address provided by them on the order form. All shares of common stock sold in the syndicated community offering will be in book entry form and paper stock certificates will not be issued. Until certificates for common stock are available and delivered to purchasers, purchasers may not be able to sell their shares, even though trading of the common stock will have commenced. Your ability to sell the shares of common stock before your receipt of the stock certificate will depend on arrangements you may make with your brokerage firm.

Stock Information Center

If you have any questions regarding the offering, please call the Stock Information Center (toll free) at (844) 225-4855. You may also visit the Stock Information Center, which is located at 607 Washington Street, Reading, Pennsylvania 19603. The Stock Information Center is open Monday through Friday, except for bank holidays, from 10:00 a.m. to 4:00 p.m., Eastern time.

Certain Restrictions on Purchase or Transfer of Shares After the Conversion Applicable to Officers and Directors

Common stock purchased in the offering will be freely transferable, except for shares purchased by our directors and executive officers. All shares of common stock purchased in the offering by one of our directors or executive officers generally may not be sold for a period of one year following the closing of the conversion, except in the event of the death of the director or executive officer. Shares purchased by these persons in the open market after the offering will be free of this restriction. Each certificate for restricted shares will bear a legend giving notice of this restriction on transfer, and instructions will be issued to the effect that any transfer within this time period of any certificate or record ownership of the shares other than as provided above is a violation of the restriction. Any shares of common stock issued at a later date as a stock dividend, stock split or otherwise with respect to the restricted stock will be similarly restricted. The directors and executive officers of HV Bancorp and HV Bank also will be restricted by the insider trading rules promulgated pursuant to the Securities Exchange Act of 1934.

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Purchases of shares of our common stock by any of our directors, executive officers and their associates during the three-year period following the closing of the conversion may be made only through a broker or dealer registered with the Securities and Exchange Commission, except with the prior written approval of the Federal Reserve Board. This restriction does not apply, however, to negotiated transactions involving more than 1% of our outstanding common stock or to purchases of our common stock by our stock-based benefit plan or any of our tax-qualified employee stock benefit plans or nontax-qualified employee stock benefit plans, including any recognition and retention plans or restricted stock plans.

We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 for the registration of the common stock to be issued in the offering. This registration does not cover the resale of the shares. Shares of common stock purchased by persons who are not affiliates of us may be resold without registration. Shares purchased by any of our affiliates will have resale restrictions under Rule 144 of the Securities Act. If we meet the current public information requirements of Rule 144, each affiliate of ours who complies with the other conditions of Rule 144, including those that require the affiliate’s sale to be aggregated with those of certain other persons, would be able to sell in the public market, without registration, a number of shares not to exceed, in any three-month period, the greater of 1% of our outstanding shares or the average weekly volume of trading in the shares during the preceding four calendar weeks.

Material Income Tax Consequences

Consummation of the conversion is subject to the prior receipt of an opinion of counsel or tax advisor with respect to federal income taxation that the conversion will not be a taxable transaction to HV Bank or HV Bancorp, eligible account holders, supplemental eligible account holders, and other members of HV Bank. Unlike private letter rulings, opinions of counsel or tax advisors are not binding on the Internal Revenue Service or any state taxing authority, and such authorities may disagree with such opinions. In the event of such disagreement, there can be no assurance that HV Bancorp or HV Bank would prevail in a judicial proceeding.

HV Bank and HV Bancorp have received an opinion of counsel, Jones Walker LLP, regarding all of the material federal income tax consequences of the conversion, which includes the following:

1. The conversion of HV Bank to a Pennsylvania-chartered stock commercial bank will qualify as a tax-free reorganization within the meaning of Internal Revenue Code Section 368(a)(1)(F).

2. No gain or loss will be recognized by HV Bank as a Pennsylvania-chartered stock commercial bank on the receipt of money from HV Bancorp in exchange for its shares or by HV Bancorp upon receipt of money from the sale of HV Bancorp Common Stock. (Section 1032(a) of the Internal Revenue Code).

3. The assets of HV Bank will have the same basis in the hands of HV Bank as they had in the hands of HV Bank immediately prior to the conversion. The holding period of HV Bank’s assets to be received by HV Bank will include the period during which the assets were held by HV Bank prior to the conversion. (Sections 362(b) and 1223(2) of the Internal Revenue Code).

4. No gain or loss will be recognized by the account holders of HV Bank upon the issuance to them of withdrawable deposit accounts in HV Bank as a Pennsylvania-chartered stock savings bank in the same dollar amount and under the same terms as their deposit accounts in HV Bank and no gain or loss will be recognized by Eligible Account Holders or Supplemental Eligible Account Holders upon receipt by them of an interest in the liquidation account of HV Bank as a Pennsylvania-chartered stock commercial bank, in exchange for their deemed ownership interests in HV Bank. (Section 354(a) of the Internal Revenue Code).

5. The basis of the account holders’ deposit accounts in HV Bank will be the same as the basis of their deposit accounts in HV Bank surrendered in exchange therefor. The basis of each Eligible Account Holder’s and Supplemental Eligible Account Holder’s interests in the liquidation account of HV Bank as a Pennsylvania-chartered commercial bank will be zero, that being the cost of such property.

6. It is more likely than not that the nontransferable subscription rights have no value. The subscription rights will be granted at no cost to the recipients, will be legally nontransferable and of short duration, and will provide the recipient with the right only to purchase shares of HV Bancorp common stock at the same price to be paid by members of the general public in our

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community offering. Accordingly, no gain or loss will be recognized by Eligible Account Holders, Supplemental Eligible Account Holders or Other Members upon distribution to them of nontransferable subscription rights to purchase shares of HV Bancorp common stock, provided that the amount to be paid for such common stock is equal to its fair market value.

7. It is more likely than not that the basis of the shares of HV Bancorp common stock purchased in the offering will be the purchase price and the holding period of the HV Bancorp common stock purchased pursuant to the exercise of nontransferable subscription rights will commence on the date on which the right to acquire such stock was exercised. (Section 1223(6) of the Internal Revenue Code).

The opinions set forth in the sixth and seventh paragraph above are based on the position that the subscription rights do not have any fair market value at the time of distribution or at the time they are exercised. Whether subscription rights have a market value for federal income tax purposes is a question of fact, depending upon all relevant facts and circumstances. According to our counsel, the Internal Revenue service will not issue rulings on whether subscription rights have a market value. Counsel has advised us that they are unaware of any instance in which the Internal Revenue Service has taken the position that nontransferable subscription rights have a market value. In our counsel’s view, which view is not binding on the Internal Revenue Service, the subscription rights do not have any value for the reasons set forth in paragraph 6, above. If the subscription rights granted to eligible account holders, supplemental eligible account holders and other members are deemed to have an ascertainable value, receipt of these rights could result in taxable gain to those eligible account holders, supplemental eligible account holders and other members who exercise the subscription rights in an amount equal to their value, and HV Bancorp could recognize gain on a distribution. Moreover, if the receipt of the subscription rights resulted in taxable gain to the persons exercising such rights, the recognition of gain is likely to add to such persons basis in the HV Bancorp common stock and the period during which the subscription rights were held would be added to the holding period of the HV Bancorp common stock. Eligible account holders, supplemental eligible account holders and other members are encouraged to consult with their own tax advisors as to the tax consequences in the event that subscription rights are deemed to have an ascertainable value.

The Internal Revenue Service has announced that it will not issue private letter rulings with respect to the issue of whether nontransferable rights have value. Unlike private letter rulings, an opinion of counsel or the view of an independent appraiser is not binding on the Internal Revenue Service and the Internal Revenue Service could disagree with the conclusions reached therein. Depending on the conclusion or conclusions with which the Internal Revenue Service disagrees, the Internal Revenue Service may take the position that the transaction is taxable to any one or more of HV Bank, HV Bancorp and the eligible account holders, supplemental eligible account holders and other members who exercise their subscription rights. In the event of a disagreement, there can be no assurance that HV Bancorp or HV Bank would prevail in a judicial or administrative proceeding.

The federal tax opinion will be filed with the Securities and Exchange Commission as an exhibit to this registration statement.

Liquidation Rights

In the unlikely event that HV Bank were to liquidate after the conversion, all claims of creditors, including those of depositors, would be paid first, followed by distribution of a “liquidation account” to certain depositors, with any assets remaining thereafter distributed to HV Bancorp as the sole shareholder of HV Bank’s capital stock. Pursuant to the rules and regulations of the Federal Reserve Board , a post-conversion merger, consolidation, sale of bulk assets or similar combination or transaction with another insured savings institution would not be considered a liquidation and, in these types of transactions, the liquidation account would be assumed by the surviving institution.

The plan of conversion provides for the establishment, upon the completion of the conversion, of a special “liquidation account” for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders in an amount equal to the total equity of HV Bank as of the date of its latest balance sheet contained in this prospectus.

The purpose of the liquidation account is to provide Eligible Account Holders and Supplemental Eligible Account Holders who maintain their deposit accounts with HV Bank after the conversion with a liquidation interest in the unlikely event of the complete liquidation of HV Bank after the conversion. Each Eligible Account Holder and Supplemental Eligible Account Holder that continues to maintain his or her deposit account at HV Bank, would be entitled, on a complete liquidation of HV Bank after the conversion, to an interest in the liquidation account prior to any payment to the shareholders of HV Bancorp. Each Eligible Account Holder and Supplemental Eligible

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Account Holder would have an initial interest in the liquidation account for each deposit account, including without limitation savings accounts, transaction accounts such as negotiable order of withdrawal accounts, money market deposit accounts, and certificates of deposit and passbook accounts, with a balance of $50 or more held in HV Bank on December 31, 2012 and             ,     , respectively. Each Eligible Account Holder and Supplemental Eligible Account Holder would have a pro rata interest in the total liquidation account for each such deposit account, based on the proportion that the balance of each such deposit account on December 31, 2012 or             ,     , respectively, bears to the balance of all deposit accounts in HV Bank on such dates.

If, however, on any December 31 annual closing date commencing on or after the effective date of the conversion, the amount in any such deposit account is less than the amount in the deposit account on June 30, 2012 or December 31, 2013, as applicable, or any other annual closing date, then the interest in the liquidation account relating to such deposit account would be reduced from time to time by the proportion of any such reduction, and such interest will cease to exist if such deposit account is closed. In addition, no interest in the liquidation account would ever be increased despite any subsequent increase in the related deposit account. Payment pursuant to liquidation rights of Eligible Account Holders and Supplemental Eligible Account Holders would be separate and apart from the payment of any insured deposit accounts to such depositor. Any assets remaining after the above liquidation rights of Eligible Account Holders and Supplemental Eligible Account Holders are satisfied would be distributed to HV Bancorp as the sole shareholder of HV Bank.

Interpretation, Amendment and Termination

To the extent permitted by law, all interpretations by us of the plan of conversion will be final; however, such interpretations have no binding effect on the FDIC or the Department of Banking. The plan of conversion provides that, if deemed necessary or desirable, we may substantively amend the plan of conversion as a result of comments from regulatory authorities or otherwise.

Completion of the offering requires the sale of all shares of the common stock within 90 days following regulatory approval of the plan of conversion, unless an extension is granted by the FDIC and the Department of Banking. If this condition is not satisfied, the plan of conversion will be terminated and we will continue our business as a mutual savings bank. Completion of the conversion does not require consummation of the merger with Victory Bancorp (described below). We may terminate the plan of conversion at any time. See “The Merger—Termination, Amendment and Waiver.”

THE MERGER

General

On December 12, 2013, HV Bancorp and HV Bank entered into an Agreement and Plan of Merger with Victory Bancorp and Victory Bank (the “Merger Agreement”) pursuant to which Victory Bancorp will merge with and into HV Bancorp, with HV Bancorp as the surviving entity. Immediately following the merger of Victory Bancorp with HV Bancorp, it is expected that Victory Bank will merge with and into HV Bank, with HV Bank as the surviving entity, to be renamed “Victory Bank.”

Background and Negotiation of the Merger

HV Bank is a Pennsylvania chartered mutual savings bank, originally founded in 1871. HV Bank has operated as a community-oriented thrift institution by offering residential and, to a lesser extent, commercial loans and mortgages, as well as a wide variety of deposit products, while serving the financial needs of its local community, primarily Montgomery, Bucks and Philadelphia Counties, Pennsylvania.

The market areas in which HV Bank and Victory Bank operate are intensely competitive, and many of their competitors are larger financial institutions with substantially greater financial and other resources. In the face of this competition, coupled with an increasing regulatory compliance burden and a difficult economic environment, management of each of HV Bank and Victory Bancorp independently determined that the stock conversion and proposed merger would be in the best interests of both institutions and their customers, HV Bank’s members and Victory Bancorp’s shareholders.

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Specifically, HV Bank’s Board of Trustees determined that, although HV Bank would be able to convert to stock form on a stand-alone basis, a strategic alliance with an in-market partner with significant commercial lending or other complementary expertise would be a better alternative.

Since commencing operations in January 2008, Victory Bank has provided high quality commercial banking services to individuals, small and-medium-sized businesses, entrepreneurs, and professionals located in its service area, primarily Montgomery, Chester and Berks Counties, Pennsylvania.

Similarly, Victory Bancorp’s Board of Directors determined that, although Victory Bancorp would be able to raise additional capital through private placements or public offerings of its securities to support current and anticipated growth and earnings pressures, a strategic alliance with an in-market partner with significant residential mortgage lending expertise coupled with access to capital, would be a better alternative.

On February 6, 2013, Travis J. Thompson, CEO of HV Bank, met with Joseph M. Major, CEO of Victory Bancorp and discussed a possible transaction whereby HV Bank would convert to stock form and acquire Victory. At the meeting it was decided that the goals and interests of each party were sufficiently aligned to warrant further analyses. At the request of Messrs. Thompson and Major, Griffin Financial provided preliminary analyses to the parties.

At the regular meeting of the Victory Bancorp Board of Directors on March 19, 2013, Mr. Major discussed the potential transaction with the Victory Bancorp board. The discussion was very preliminary and Mr. Major outlined some of the benefits to a transaction with a converting mutual bank and some of the hurdles that would have to be overcome. The Board indicated that it might be the right time to explore discussions with HV Bank in light of its proposed conversion and capital raise strategy. The Board authorized management to further discuss and negotiate a potential conversion-merger transaction with HV Bank and to report back to the board.

On March 20, 2013 at the regular meeting of HV Bank’s Board of Trustees, Mr. Thompson informed the Board of his informal meetings with Mr. Major of Victory Bank. Due to the sensitive nature of a mutual to stock conversion strategy and the acquisition of a local bank, the discussions occurred in executive session without senior management present. After much discussion and debate on the strategy of the acquisition, Mr. Thompson was authorized to continue to review this transaction and requested him to report back to the board in the near term.

At the regular April Board meeting of HV Bank held on April 19, 2013 the Board of Trustees, in executive session, were updated of the on-going meetings between HV Bank and Griffin Financial Group. The preliminary results of the analysis performed by Griffin indicated that a full Board meeting to review a conversion-merger strategy with The Victory Bank should be scheduled.

On April 23, 2013, Mr. Major met with Griffin Financial Group to confirm his understanding of the mechanics of a conversion offering and to understand the financial impact of potential merger scenarios.

On April 30, 2013, Messrs. Thompson, O’Neill and Major met with Griffin Financial to discuss financial aspects of the potential transaction. At the meeting, preliminary terms and due diligence process were discussed.

During the week of May 6, 2013, Messrs. Thompson and Major met for three consecutive days for intensive discussions concerning a possible transaction, the potential benefits, the risks, the areas of concern held by each, a potential timetable and proper strategy for the combined banks to bank our local markets. Based upon these meetings, both executives reported back to their respective boards that a potential combination appeared to be in the best interests of both banks.

On May 15, 2013, at the regular meeting of the HV Bank Board of Trustees a strategic planning session was held to determine the future strategy of the institution. Organic growth opportunities, mutual to mutual mergers, conversion from mutual to stock and conversion-merger strategies were reviewed and debated. At the end of said meeting, the Board of Trustees voted to authorize management to retain professionals for a conversion-merger strategy.

On May 21, 2013, HV Bank engaged Feldman Financial Advisors to prepare an appraisal in connection with a proposed mutual to stock conversion of HV Bank.

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On May 28, 2013, HV Bank engaged RP Financial to assist in preparing a business plan for the proposed transaction.

On May 30, 2013, representatives from HV Bank, Victory Bancorp, Griffin Financial Group, ParenteBeard and Jones Walker met to discuss the proposed transaction, potential structures (including discussions surrounding adoption of a commercial bank charter versus a thrift charter), SEC filing requirements and a possible timeline.

From early June 2013 through December 12, 2013, HV Bank and Victory performed due diligence reviews on the other party. The parties and their respective financial and legal advisors negotiated the terms of the definitive Merger Agreement and prepared and negotiated related documents, including employment and change of control agreements for certain executive officers and certain documents relating to HV Bank’s mutual-to-stock conversion.

At special meeting of trustees held on June 7, 2013, representatives from HV Bank, Victory Bancorp, Griffin Financial Group, Jones Walker LLP and ParenteBeard met to discuss the transaction, including questions regarding regulatory requirements, SEC filing requirements and a possible timeline. Presentations from HV Bank’s counsel and Griffin Financial Group on the demutualization process, a capital raise and the acquisition of The Victory Bank. At the meeting, Mr. Major was introduced to the board and spoke of the combination of the two banks from The Victory Bank standpoint.

On June 17, 2013, Kafafian Group met with Victory Bancorp’s Board of Directors to discuss the proposed merger and stock conversion. At the conclusion of the regular board meeting held on May 14, 2013 the Victory Bank Board of Directors, based on evaluations of the information presented, determined to pursue the transaction described in this prospectus.

On June 25, 2013, HV Bank engaged Griffin Financial Group to provide investment banking services with respect to the proposed transaction.

On July 10, 2013, Victory engaged Kafafian Group to provide investment banking services with respect to the proposed transaction.

On August 15, 2013 representatives from HV Bank, Victory Bancorp, Jones Walker and Kilpatrick Townsend met informally with FDIC regional representatives to discuss certain aspects of the transaction.

On October 2, 2013, representatives from HV Bank, Victory Bancorp, Griffin Financial Group and Kafafian Group met to discuss the terms of the transaction. At this meeting, specific terms of the transaction were discussed and agreed upon and a preliminary term sheet was drafted.

On October 16, 2013, representatives from Griffin Financial Group and Jones Walker met with the HV Bank Board of Trustees to discuss in detail the proposed conversion and acquisition. Griffin Financial Group presented overviews of the conversion and terms of the proposed merger. Jones Walker LLP discussed with the Board the terms of the proposed Plan of Conversion. At the meeting, the Board adopted, subject to ratification, the proposed Plan of Conversion, and requested that management and HV Bank’s advisors move forward toward negotiating and drafting a final merger agreement.

On December 9, 2013, the Victory Bancorp Board met to discuss the terms of the Merger Agreement. Also attending the meeting were representatives from Kafafian Group and Kilpatrick Townsend. At the meeting, the board of directors reviewed the financial terms of the details of the proposed merger and various financial analyses relating to the proposed transaction. Legal counsel reviewed the terms of the proposed Merger Agreement and related documents, as well as fiduciary duties in connection with the proposed transaction. At the meeting, Kafafian rendered its oral advice that the consideration to be paid in the merger was fair to Victory Bancorp’s shareholders from a financial point of view, and confirmed that they would deliver this opinion in writing as of the date of execution of the Merger Agreement. Following discussions and further deliberations and questions, Victory scheduled a telephonic meeting for December 12, 2013 for the purpose of voting on the Merger Agreement.

On December 12, 2013, the HV Bank Board met to discuss the terms of the Merger Agreement and the Plan of Conversion. Also attending the meetings were representatives from Griffin Financial Group and Jones Walker. At the meeting, the Board reviewed the financial terms of the proposed merger and various financial analyses relating to the proposed transaction. Legal counsel reviewed the terms of the proposed Merger Agreement and related documents, the impact of the Plan of Conversion on the proposed merger, and the board’s fiduciary

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duties in connection with the proposed transaction. At the meeting, Griffin Financial rendered its oral advice that the consideration to be paid in the merger was fair to HV Bancorp from a financial point of view, and confirmed that they would deliver this opinion in writing as of the date of execution of the Merger Agreement. Following discussions and further deliberations and questions, the Board unanimously agreed to approve the proposed Merger Agreement.

On December 12, 2013, the Victory Board convened a telephonic meeting to vote on the Merger Agreement. The board discussed both the Merger Agreement and its terms with the Kafafian Group. At the meeting, the Board unanimously agreed to approve the proposed Merger Agreement.

Victory Bancorp and HV Bancorp executed the definitive Merger Agreement and related documents on December 12, 2013 and publicly announced the transaction on December 12, 2013.

See “Opinion of HV Bancorp’s Financial Advisor” for a description of the fees Griffin Financial Group will receive for its services to HV Bancorp in connection with the merger.

HV Bancorp’s Reasons for the Merger

HV Bancorp’s Board of Directors believes that the merger will enhance the competitive position of HV Bancorp by enabling us to expand our franchise in Montgomery, Chester, Berks, Bucks and Philadelphia Counties, Pennsylvania.

The merger with Victory Bancorp will facilitate a key step in the execution of HV Bank’s business strategy–to increase market share in HV Bank’s primary market area through the acquisition or purchase of deposits, as well as increasing HV Bank’s commercial loan originations. The combination of HV Bank and Victory Bank will provide customers of both institutions with convenient access to their accounts by increasing the number of branches available in their market areas.

The merger, combined with the stock offering, will create a larger and more competitive retail distribution platform, and will enhance our ability to grow our loan portfolio, thus reducing our dependency on lower-yielding investment products.

The terms of the Merger Agreement were the result of arm’s length negotiations between HV Bank and Victory Bancorp. In their deliberations and in making their determinations, HV Bank’s Board of Trustees and Victory Bancorp’s Board of Directors considered many factors including the factors described above, as well as the following:

• information concerning the financial condition, results of operations, capital levels, asset quality and prospects of HV Bank and Victory Bancorp, including consideration of each institution’s historical and projected results of operation and financial condition and a review of Victory Bancorp’s financial performance by comparison to peer group;

• the anticipated impact the offering and merger will have on our ability to increase market share through organic growth;

• the general structure of the transaction and the perceived compatibility of the respective management teams and business philosophies of HV Bank and Victory Bank, which both boards believe will facilitate integration of the operations of the two companies;

• the belief that the merger will enhance each bank’s franchise value by the expansion of its branch network and by enhancing its ability to compete in its primary market area; and

• both banks’ long-term growth strategies.

The discussion of the information and factors considered is not intended to be exhaustive, but includes all material factors considered. In reaching their determination to approve the merger, neither board assigned any specific or relative weights to any of the foregoing factors, and individual trustees and directors may have weighed factors differently.

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Legal Steps of the Proposed Transaction

Pursuant to the terms of the Merger Agreement, at the effective time of the merger, Victory Bancorp will merge with and into HV Bancorp, with HV Bancorp as the surviving entity. The articles of incorporation and bylaws of HV Bancorp will continue to be the articles of incorporation and bylaws of the surviving corporation.

In order to effectuate the acquisition of Victory Bancorp, HV Bank is converting from the mutual to stock form of organization, and HV Bancorp is offering shares of its common stock for sale in the conversion stock offering. The merger will occur immediately after consummation of the offering. Failure to complete the offering will result in the termination of the merger, but failure to complete the merger will not necessarily terminate the offering. Among the conditions that must be satisfied before the merger can be consummated is the receipt of all required regulatory approvals and non-objections and the approval of the Merger Agreement by the Victory Bancorp shareholders. HV Bancorp has filed applications with the FDIC, the Department of Banking and the Federal Reserve Board in connection with the merger. HV Bank needs the approval of its voting members in order to consummate the conversion to stock form, including the stock offering.

HV Bancorp intends to conduct its offering at the same time Victory Bancorp is soliciting the approval of the Merger Agreement from its shareholders and HV Bank is soliciting the approval of the conversion from its members. HV Bancorp is distributing this prospectus to potential investors on or around [—], 2014. Victory Bancorp currently expects to mail its proxy statement to its shareholders soliciting their votes in favor of the Merger Agreement on or around [—], 2014, and HV Bank mailed its proxy statement to its members soliciting their votes in favor of the conversion on or around [—], 2014. The offering will terminate on [offering deadline] unless extended to a later date. Victory Bancorp’s meeting of shareholders is scheduled for [—], 2014, and HV Bank’s special meeting of members is scheduled for [—], 2014. Assuming Victory Bancorp shareholders approve the merger, HV Bancorp receives sufficient subscriptions to complete the offering and HV Bank receives the approval of its voting members and all required regulatory approvals and non-objectives, it is expected the offering and merger will be consummated in [—], 2014.

Consideration to be Received in the Merger

Whether holders of Victory Bancorp Series E convertible preferred stock elect to convert their preferred shares to Victory Bancorp common stock, exchange their preferred shares for Victory Bancorp subordinated debt, or redeem their preferred shares for cash may affect the number of shares of HV Bancorp common stock to be issued in the merger and the amount of cash to be paid in the merger. In addition, the number of shares sold in the conversion stock offering will affect the number of shares of HV Bancorp common stock and the amount of cash to be issued and paid in the merger. We, therefore, cannot predict the consideration Victory Bancorp shareholders will receive, the number of shares of HV Bancorp capital stock that we may issue, nor the amount of cash that we may pay. We have used assumptions that we believe are reasonable under the circumstances, but we cannot assure you that the merger will be consummated in accordance with these assumptions. See “The Merger- Pro Forma Presentation” and “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger.”.

Common Stock. When the merger becomes effective, each share of Victory Bancorp common stock issued and outstanding immediately prior to the completion of the merger will automatically be converted into the right to receive 0.6794 of a share of HV Bancorp common stock, and, in certain limited circumstances, cash, subject to the following ownership limitation, adjustment and proration procedures:

• In the event that the aggregate HV Bancorp common stock consideration to be issued in the merger, when added to the aggregate number of shares of HV Bancorp common stock to be purchased by holders of Victory Bancorp common stock in the conversion stock offering, would result in Victory Bancorp shareholders owning in excess of 48.5% of the outstanding HV Bancorp common stock, then HV Bancorp will substitute cash in an amount sufficient to reduce the ownership to comply with this limitation.

• HV Bancorp also will pay cash to each holder of Victory Bancorp common stock who would otherwise be entitled to a fraction of a share of HV Bancorp common stock in the merger.

• Each cash payment will be an amount, rounded to the nearest cent, determined by multiplying the $10.00 per share conversion price by the number of excess shares or fraction of a share of HV Bancorp common stock which the holders of Victory Bancorp common stock would otherwise be entitled to receive in the merger.

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All common shareholders of Victory Bancorp will be subject to the ownership limitation and adjustment procedures, as well as other provisions in the Merger Agreement. In particular, in the event that the aggregate common stock merger consideration, when added to the aggregate number of shares of HV Bancorp common shares to be purchased by Victory Bancorp shareholders in the conversion stock offering, would result in Victory Bancorp’s shareholders owning an amount of HV Bancorp common stock in excess of 48.5% of the combined company on a pro forma basis, then HV Bancorp must substitute cash in lieu of common stock in an amount sufficient to reduce the aggregate common stock ownership of Victory Bancorp shareholders to 48.5%. All Victory Bancorp common shareholders will receive a mix of common stock and, if applicable, cash consideration per share on a pro rata basis. Based on 1,025,464 outstanding shares of Victory Bancorp common stock, we would issue approximately 697,700 shares of our common stock to Victory Bancorp shareholders in the merger. However, because some of the outstanding shares of Series E convertible preferred stock may convert to Victory Bancorp common stock prior to the merger, we may issue additional shares of our common stock to Victory Bancorp shareholders in the merger. Assuming that 81% of the outstanding Series E convertible preferred stock is converted to common stock and the closing of the Offering at the midpoint of the offering range, we would issue approximately 941,563 shares of our common stock to Victory Bancorp shareholders in the merger.

The cash consideration to be paid to Victory Bancorp common shareholders in the merger for their excess and/or fractional shares will be an amount in cash, rounded to the nearest cent, determined by multiplying the $10.00 per share conversion stock offering price by the number of excess shares or fraction of a share of HV Bancorp common stock which the holder would otherwise be entitled to receive under the Merger Agreement.

Series E Convertible Preferred Stock. Victory Bancorp has 26,158 outstanding shares of 7% Series E noncumulative convertible preferred stock that was issued in 2010 and 2011 to accredited investors in a private placement offering under Regulation D. The annual cash dividend on each share of Series E convertible preferred stock is $7.00, which is equal to 7.0% of the original issue price of $100.00 per share, and is payable quarterly in cash, if and when declared by the Board of Directors, on the last day of February, May, August and November. Each share of Series E convertible preferred stock is convertible, at the holder’s option, at any time into 19.7 shares of Victory Bancorp common stock. Subject to prior approval by the Federal Reserve Board, the Series E convertible preferred stock is redeemable, in whole or in part, at Victory Bancorp’s option any time after the third anniversary of the original issue date for a redemption price of $100.00 per share, plus any declared and unpaid dividends.

Issue Date	3 Year Anniversary – date at which shares are redeemable	Series E Convertible Preferred Shares		Potential Common Shares, if converted
December 29, 2010	December 29, 2013		13,208		260,198
February 25, 2011	February 25, 2014		7,550		148,735
July 7, 2011	July 7, 2014		5,400		106,380

Immediately prior to the merger and conditioned upon the closing of the merger, Victory Bancorp will effect an exchange offer under Regulation D to holders of Victory Bancorp Series E convertible preferred stock, to be effective upon the closing of the merger, whereby Victory Bancorp will offer each holder of Series E convertible preferred stock the right to exchange shares of Series E convertible preferred stock for an equal amount of the to-be-issued Victory Bancorp subordinated debt having an interest rate of 8.50% per annum, maturing in seven years, and both callable and redeemable after five years. Interest on the subordinated debt will be payable semi-annually in arrears on May 1 and November 1 of each year, commencing on November 1, 2014 on the basis of a 360-day year consisting of twelve 30-day months.

The subordinated debt will be unsecured and subordinated to the claims of the depositors of Victory Bank and other creditors of Victory Bancorp and will rank equal in right of payment to all of Victory Bancorp existing and future unsecured and subordinated indebtedness.

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The subordinated debt will not contain any limitation on the amount of debt, deposits or other obligations ranking senior to the indebtedness evidenced by the subordinated debt that Victory Bancorp may incur hereafter. Victory Bancorp may, without the consent of the holders of the subordinated debt, create and issue additional subordinated debt having the same terms and conditions of the subordinated debt (except for the issue date and issue price) so that such further subordinated debt shall be consolidated and form a single series with the subordinated debt. Any such issuance shall be made pursuant to another offering document and will either be registered or issued pursuant to an exemption from registration under the Securities Act or similar laws or regulations.

The subordinated debt will mature seven years from the date of issuance. Beginning five years from the date of issuance, Victory Bancorp may redeem some or all of the subordinated debt, at any time, at a price equal to 100% of the principal amount of the subordinated debt redeemed plus accrued and unpaid interest to the redemption date.

Beginning five years from the date of issuance, holders of the subordinated debt may redeem their subordinated debt at 100% of the principal amount of the notes plus accrued and unpaid interest prior to the redemption date.

The subordinated debt has not been, and will not be, registered with the SEC under the Securities Act. The subordinated debt exchange will be conducted in reliance upon an exemption provided by Section 4(2) of the Securities Act and Regulation D under that Act. The subordinated debt will be offered and issued only to “accredited investors” within the meaning of Rule 501 under the Securities Act.

Any shares of Series E convertible preferred stock that are not exchanged for Victory Bancorp subordinated debt will be redeemed for cash by Victory Bancorp immediately prior to the closing date, to the extent a redemption is permitted by the terms of Series E convertible preferred stock. Each share of Series E convertible preferred stock that is not exchanged in the exchange offer, redeemed by Victory Bancorp or converted pursuant to its terms into Victory Bancorp common stock immediately prior to the effective time, will become and be converted into, as provided in and subject to the limitations set forth in the Merger Agreement and Victory Bancorp’s articles of incorporation, the right to receive one share of HV Bancorp Series A convertible preferred stock subject to the same designations, preferences and rights relating to the shares of such Victory Bancorp Series E convertible preferred stock and the qualifications, limitations and restrictions thereof.

In order to ensure that Victory Bancorp shareholders, in the aggregate, do not own shares of HV Bancorp Common Stock in excess of the 48.5% limit at the effective time, each of the members of the Board of Directors of Victory Bancorp and each executive officer of Victory Bancorp has entered into an agreement pursuant to which they have agreed to exchange a certain percentage of shares of Victory Bancorp preferred stock held by each of them in the exchange offer for Victory Bancorp subordinated debt in the event that the conversion offering closes at or below midpoint of the conversion offering.

At the effective time of the merger, all outstanding Victory Bancorp subordinated debt will be assumed by HV Bancorp.

Series F preferred stock. In September 2011, Victory Bancorp entered into a Purchase Agreement with the United States Department of the Treasury (“Treasury”), pursuant to which Victory Bancorp issued and sold to the Treasury 3,431 shares of its Series F preferred stock, having a liquidation preference of $1,000 per share, for proceeds of $3,431,000. The Purchase Agreement was entered into, and the Series F preferred stock was issued, pursuant to the Treasury’s Small Business Lending Fund program, a $30 billion fund established under the Small Business Jobs Act of 2010 that encourages lending to small businesses by providing capital to qualified community banks with assets of less than $10 billion.

The Series F preferred stock is non-voting, other than class voting on matters that could adversely affect the shares. The Series F preferred stock is redeemable at any time with Treasury, Federal Reserve Board and FDIC approval. For additional information, see note 9 of notes to consolidated financial statements of Victory Bancorp.

Upon consummation of the merger, each share of Victory Bancorp Series F preferred stock at the effective time will be assumed by HV Bancorp and exchanged for one share with an equal liquidation preference of HV Bancorp Series B preferred stock. Any such HV Bancorp Series B preferred stock will entitle holders thereof to dividends from the date of issuance of such HV Bancorp Series B preferred stock on terms that are equivalent to the

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terms set forth in the articles of incorporation of Victory Bancorp, and will have such other right, preferences, privileges and voting powers, limitations and restrictions thereof that are the same as the right, preferences, privileges and voting powers, and limitations and restrictions thereof of the Victory Bancorp Series F preferred stock issued and outstanding immediately prior to the exchange, taken as a whole. The exchange of the Victory Bancorp Series F preferred stock for shares of HV Bancorp Series B preferred stock will be in accordance with the articles of incorporation and other governing documents of Victory Bancorp, and in accordance with the terms of any securities purchase and/or other agreements with Treasury pursuant to which the shares of Victory Bancorp Series F preferred stock were issued or required to be entered into in order to effect the exchange.

HV Bancorp and HV Bank will use their commercially reasonable efforts to take any action as is necessary or advisable on their part for HV Bancorp to succeed, by assumption, exchange or otherwise, to all of the then-outstanding Series F preferred stock upon the consummation of the merger. Victory Bancorp will cooperate with HV Bancorp and HV Bank, and will use its commercially reasonable efforts to provide for the succession by HV Bancorp to the then-outstanding Series F preferred stock, and in such regard will notify Treasury of the transactions contemplated by the Merger Agreement and effect all filings necessary to obtain any requisite regulatory approval for HV Bancorp’s succession to such Series F preferred stock.

Cancelation of Victory Bancorp Stock Options

Immediately prior to the effective time of the merger and after all of the conditions to consummation of the merger have been satisfied, each then outstanding option to purchase shares of Victory Bancorp common stock will be canceled for no consideration.

Settlement of Victory Bancorp Warrants

All outstanding warrants to purchase Victory Bancorp common stock at $10.00 per share, which are held by the founders of Victory Bank, will be settled in cash at estimated fair value, which is $0.54 per warrant, or $54,000 in the aggregate.

Accounting Treatment

HV Bancorp will account for the merger under the “purchase” method of accounting in accordance with United States generally accepted accounting principles. Using the purchase method of accounting, the assets and liabilities of Victory Bancorp will be recorded by HV Bancorp at their respective fair values at the time of the completion of the merger. The excess of Victory Bancorp’s purchase price over the net fair value of the assets acquired and liabilities assumed will then be allocated to identified intangible assets, with any remaining unallocated cost recorded as goodwill.

Tax Aspects

Jones Walker LLP, special counsel to HV Bancorp, and Kilpatrick Townsend & Stockton LLP, counsel to Victory Bancorp, have delivered to the parties their opinions that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code and that, consequently, the merger will be tax-free for federal income tax purposes to HV Bancorp, HV Bank, Victory Bancorp, Victory Bank, and Victory Bancorp’s shareholders to the extent that they receive only HV Bancorp common stock for their Victory Bancorp common stock. The opinions will be filed with the Securities and Exchange Commission as exhibits to this registration statement.

Regulatory Approvals Needed to Complete the Merger and Offering

General. The merger cannot proceed in the absence of the requisite regulatory approvals. See “—Conditions to Completing the Merger” and “—Termination, Amendment and Waiver.” There can be no assurance that the requisite regulatory approvals will be obtained, and if obtained, there can be no assurance as to the date of issuance of any approval. There can also be no assurance that any regulatory approvals will not contain a condition or requirement that causes the approvals to fail to satisfy the condition set forth in the Merger Agreement and described under “—Conditions to Completing the Merger.”

The approval of the applications merely implies the satisfaction of regulatory criteria for these approvals, which does not include review of the merger from the standpoint of the adequacy of the exchange ratio for converting Victory Bancorp common stock to HV Bancorp common stock and cash. Furthermore, regulatory approvals do not constitute any endorsement or recommendation of the merger or the conversion.

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Merger Approvals. Completion of the merger is subject to prior approval of the FDIC and the Department of Banking. In reviewing applications for transactions of this type, the FDIC must consider, among other factors, the financial and managerial resources and future prospects of the existing and resulting institutions, the convenience and needs of the communities to be served, and competitive factors. Similarly, the Department of Banking must consider, among other factors, whether the merger will be consistent with adequate and sound banking practices and in the public interest on the basis of the following:

• the financial history and condition of the parties;

• their prospects;

• the character of their managements;

• the potential effect of the merger on competition; and

• the convenience and needs of the area primarily to be served by the resulting institution.

In addition, the FDIC may not approve a transaction if it will result in a monopoly or otherwise be anticompetitive. HV Bancorp and HV Bank and Victory Bank filed applications with the FDIC and the Department of Banking on             , 2014.

Under the Community Reinvestment Act of 1977, the FDIC must take into account the performance records of Victory Bank and HV Bank in meeting the credit needs of the entire community, including low- and moderate-income neighborhoods, served by each institution. As part of the review process, bank regulatory agencies frequently receive comments and protests from community groups and others. Victory Bank received a “Satisfactory” rating during its last Community Reinvestment Act examination by the FDIC, and HV Bank received an “Outstanding” rating during its last Community Reinvestment Act examination conducted by the FDIC.

In addition, a period of 15 to 30 days must expire following non-objection by the FDIC before completion of the merger of HV Bank and Victory Bank is allowed, within which period the U.S. Department of Justice may file objections to the merger under the federal antitrust laws. While Victory Bancorp and HV Bancorp believe that the likelihood of objection by the Department of Justice is remote in this case, there can be no assurance that the Department of Justice will not initiate proceedings to block the merger of the two banks, or that the Attorney General of the Commonwealth of Pennsylvania will not challenge the merger of the two banks, or if any proceeding is instituted or challenge is made, as to the result of the challenge.

Conversion Applications. Consummation of the merger is subject to satisfaction of a number of conditions, including the receipt of all approvals necessary to complete the conversion stock offering. Specifically, the conversion must be approved by the FDIC and the Department of Banking. Applications were filed with these agencies on             , 2014. HV Bancorp also filed a Registration Statement on Form S-1 with the SEC on             , 2014.

Interests of Certain Persons in the Merger

As described below, certain of Victory Bancorp’s officers and directors have interests in the merger that are in addition to, or different from, the interests of Victory Bancorp’s shareholders generally. Victory Bancorp’s Board of Directors was aware of these conflicts of interest and took them into account in approving the merger.

Proposed Employment Agreements. In connection with the merger and as a condition to the closing of the merger, HV Bancorp and HV Bank will enter into employment agreements with Messrs. Thompson and Major. HV Bancorp and HV Bank intend for these agreements to help ensure that they maintain a stable and competent management base. HV Bancorp and HV Bank will also enter into employment agreements with Messrs. O’Neill, Graver, Offner, Schultz, and Hutt and Ms. Murtha (“other executive officers”) (collectively, with Messrs. Thompson and Major, the “executive officers”), with terms that range from one to three years.

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The employment agreements for Mr. Thompson and Mr. Major provide for initial terms of three years for each of Mr. Thompson and Mr. Major, which terms may be extended annually for an additional year in the sole discretion of the Board so that the remaining term is extended to its original duration. The employment agreements for the other executive officers provide for initial terms ranging from one to three years and provide that such agreements may be extended annually for an additional year in the sole discretion of the Board so that the remaining term is extended to its original duration.

The employment agreements specify each executive officer’s base salary and eligibility to participate in the cash- and equity-based incentive programs and employee benefit plans. Under the agreements, the executive officers agree to maintain the confidentiality of non-public information and trade secrets learned during the course of employment and further agree that HV Bancorp and HV Bank maintain ownership over their work product (as defined in the agreement). In addition, during their employment and for a specified period following termination of employment, the executive officers are subject to restrictive covenants relating to their ability to (i) solicit customers for or on behalf of a competing business (as defined under the agreement), (ii) recruit employees of HV Bancorp or HV Bank for another business, or (iii) serve as directors, officers or employees of a competing business. The term of the restrictive covenants is one year.

Under the agreements, HV Bancorp or HV Bank may terminate the officers or further benefits under the agreement upon termination for cause. Upon voluntary termination of employment, the executive officer receives only accrued compensation and vested benefits through the termination date. The agreements provide for specified severance if the executive officer’s employment is terminated by HV Bancorp or HV Bank without cause or if the executive officer voluntarily terminates employment “with good reason” (as defined in the agreements).

Upon a termination of employment by us without “cause” (as defined in the employment agreements or by the executive officer for “good reason” (as defined in the employment agreements) in addition to any accrued or earned but unpaid amounts, subject to the execution of a general release of claims in favor of HV Bancorp and HV Bank, the executive officer will be entitled to a lump-sum payment equal to a multiple of their then current base salary. If, after a change in control (as defined the employment agreement), an executive officer is terminated without “cause” or voluntarily terminates for “good reason,” the severance benefit is based on a multiple of then current base salary and bonus (with such multiples ranging between one to three times sum of base salary and average bonus (calculated based on the amount of time remaining under the agreement divided by the original term of the agreement), depending on the terms of the executive officer’s employment agreement). However, with respect to a termination that occurs in connection with a change in control, the payments are subject to reduction if the severance benefit, whether alone or in conjunction with other payments or benefits that are contingent on the change in control, create an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended. For each executive officer, payment of severance benefits is also conditioned upon the execution of a release of claims against HV Bancorp and HV Bank.

Proposed Change in Control Agreement. Upon completion of the merger, HV Bancorp and HV Bank intend to enter into a change in control agreement with Saul Rivkin. Under the change in control agreement, if we terminate Mr. Rivkin’s employment for any reason other than cause (as defined in the agreements) or if Mr. Rivkin terminates his employment for “good reason,” in either case in connection with or within one year of a change in control and he is not offered a comparable position with our successor, we will pay him a lump sum cash payment equal to one times his base salary then in effect. In addition, he will receive continued coverage under our health and life insurance programs for twelve months. Under the change in control agreement, Mr. Rivkin generally has the ability to terminate his employment for “good reason” if we (i) materially reduce his base salary, (ii) materially reduce his authority, duties or responsibilities, (iii) materially reduce the authority, duties or responsibilities of the person to whom he reports, or (iv) relocate his office more than 25 miles. The change in control agreement provides that, if necessary, the payments under the agreement will be reduced so that none of the payments constitute excess parachute payments for purposes of Section 280G of the Code.

Equity Compensation Awards. The Merger Agreement provides that each option to purchase shares of Victory Bancorp common stock that is issued and outstanding immediately prior to the completion of the transaction, including all options held by Victory Bancorp officers and directors, will be canceled for no consideration. Officers and directors of Victory who become officers and directors of HV Bancorp and/or HV Bank upon the merger will be eligible to participate in the equity stock plans to be adopted by HV Bancorp in connection with the conversion.

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Appointment of Directors to HV Bancorp and HV Bank Boards of Directors. HV Bancorp will appoint six members of Victory Bancorp’s Board of Directors to the boards of directors of HV Bancorp and HV Bank. Those individuals will be Messrs. Major, Glocker, Brant, Bates, Johnson and Eddinger. Messrs. Brant and Johnson shall serve as directors in the class of directors whose term expires in 2015. Messrs. Glocker and Eddinger shall serve as directors in the class of directors whose term expires in 2016. Messrs. Major and Bates shall serve as directors in the class of directors whose term expires in 2017. Subject to their fiduciary duties, the boards of directors of HV Bancorp and HV Bank will take all action necessary to appoint each of Messrs. Major, Glocker, Brant, Bates, Johnson and Eddinger to their respective boards for a three-year term following the expiration of their initial terms listed above.

Employee Severance. Except in the circumstances described below, an employee of Victory Bancorp or Victory Bank who continues as an employee of HV Bank or any of its subsidiaries but is involuntarily terminated, other than for cause, or voluntarily resign under certain circumstances within 12 months of the effective time of the merger, will receive a lump sum payment equal to 4 weeks base pay (as defined below) for each full year of service at Victory Bancorp or Victory Bank, with a minimum payment equal to four weeks of base pay and a maximum payment amount equal to 20 weeks of base pay. Any employee of Victory Bancorp or Victory Bank who has a separate employment agreement, change in control agreement or severance agreement is entitled only to the payments provided by such agreement.

With respect to the severance benefits described above, “base pay” means, with respect to employees who are paid on an hourly rate, the employee’s average weekly compensation for the two months prior to the termination date.

Continued Director and Officer Liability Coverage. For a period of six years following the effective time of the merger, HV Bancorp has agreed to indemnify, and advance expenses in matters that may be subject to indemnification to, persons who served as directors or officers of Victory Bancorp, Victory Bank or any of their subsidiaries with respect to liabilities and claims (and related expenses, including fees and disbursements of counsel) made against them resulting from their service as such prior to the effective time of the merger to the same extent as Victory Bancorp currently provides for indemnification of its officers and directors. HV Bancorp has also agreed to purchase and keep in force for a period of six years following the effective time of the merger directors’ and officers’ liability insurance to provide coverage for acts or omissions of the type and in the amount currently covered by Victory Bancorp’s and Victory Bank’s existing directors’ and officers’ liability insurance for acts or omissions occurring on or prior to the effective time of the merger. However, HV Bancorp is not required to expend in the aggregate an amount greater than 250% of the annual cost currently expended by Victory Bancorp and Victory Bank with respect to such insurance (the “Insurance Amount”). If the cost of procuring such insurance would exceed the Insurance Amount, HV Bancorp shall use its reasonable best efforts to obtain as much comparable insurance as is available for the Insurance Amount.

Employee Matters

Cost efficiencies are being identified by managements of HV Bank and Victory Bancorp. As decisions are made regarding the integration of Victory Bank and HV Bank , decisions will also be made regarding positions that may be eliminated. Each person who is an employee of Victory Bank as of the closing of the merger (whose employment is not specifically terminated at or prior to the closing) will become an employee of HV Bank. HV Bancorp or its subsidiaries will make available employer-provided health and other employee welfare benefit plans to each continuing employee on the same basis that such employees received coverage from Victory Bank during the 2014 calendar year. Beginning in 2015, HV Bank will alter such benefits to make them consistent with the benefits being offered by Victory Bank. Former employees of Victory Bank who become employees of HV Bank in connection with the merger will generally be eligible to participate in the HV Bank’s 401(k) Plan and the HV Bank employee stock ownership plan in accordance with the eligibility provisions of the respective plans. Continuing Victory Bancorp and Victory Bank employees and their eligible dependents will receive credit under HV Bancorp’s and HV Bank’s medical plans and other welfare plans for any expenses incurred by such continuing employees and their eligible dependents during the portion of the calendar year prior to the effective time of the merger with Victory Bancorp for purposes of satisfying applicable deductible, co-insurance, maximum out-of-pocket and similar expenses.

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Time of Completion

The closing of the merger will take place no later than the 30^th calendar day after the last condition precedent pursuant to the Merger Agreement has been fulfilled or waived (including the expiration of any applicable waiting period), or at such other place, date or time upon which HV Bancorp and Victory Bancorp mutually agree. On the closing date, Victory Bancorp will merge with and into HV Bancorp. HV Bancorp will file articles of merger with the Pennsylvania Department of State in accordance with the Pennsylvania Business Corporation Act of 1988. The merger will become effective at the time stated in such articles of merger.

It is currently expected that the merger will be completed in the third calendar quarter of 2014. However, because completion of the merger is subject to regulatory approvals and other conditions, the parties cannot be certain of the actual timing. Furthermore, either company may terminate the Merger Agreement if, among other reasons, the merger has not been completed on or before July 31, 2014, unless failure to complete the merger by that time is due to a failure to fulfill any material obligation under the Merger Agreement by the party seeking to terminate the agreement. See “—Termination, Amendment and Waiver.”

Possible Alternative Structures

HV Bancorp and Victory Bancorp are entitled to revise the structure of the merger, provided that:

• there are no adverse Federal or state income tax consequences to Victory Bancorp shareholders as a result of the modification;

• the consideration to be paid to the holders of shares of Victory Bancorp common stock under the Merger Agreement is not changed in kind or value or reduced in amount;

• the modification will not delay materially or jeopardize receipt of any required regulatory approvals or other consents and approvals relating to the consummation of the merger;

• the revision does not adversely limit or impact the qualification of the Merger as a reorganization under the provisions of Section 368(a) of the IRC; and

• in the case of revision to the structure of the conversion, the pro forma capitalization of HV Bancorp shall not be materially different than that contemplated by this prospectus.

Representations and Warranties

The Merger Agreement contains various representations and warranties by HV Bancorp and HV Bank, on the one hand, and Victory Bancorp and Victory Bank, on the other hand, that are customary for a transaction of this kind. Some of the representations and warranties are qualified by materiality and other exceptions. They include, among other things:

• the organization, existence, and corporate power and authority, and capital structure of each of the companies and their subsidiaries;

• ownership of subsidiaries;

• authority to enter into the Merger Agreement and that the Merger Agreement is binding on the parties;

• the absence of conflicts with and violations of law and various documents, contracts and agreements;

• filings of applications required to be made with and consents and approvals required to be obtained from governmental agencies and third parties in connection with the Merger Agreement, and a statement that the parties are not aware of any reason why such approvals and consents should not be obtained;

• regulatory reports and financial statements;

• filing of tax returns and payment of taxes;

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• the absence of any development materially adverse to the companies;

• material contracts and leases;

• ownership of property;

• insurance coverage;

• the absence of adverse material litigation and regulatory action;

• compliance with applicable laws and regulations;

• employee benefit matters, including employee benefit plans;

• brokers and finders;

• environmental matters;

• loan portfolios, including delinquent, nonperforming and classified loans;

• transactions with related parties;

• termination benefits related to employment agreements and other benefit plans;

• investment securities;

• deposits;

• Victory Bancorp’s receipt of a fairness opinion with respect to the merger consideration from a financial point of view;

• treatment of the merger as a reorganization for tax purposes;

• intellectual property; and

• regulatory capital.

All representations, warranties and covenants of the parties, other than the covenants in specified sections that relate to continuing matters, terminate upon the completion of the merger.

Covenants of the Parties

Conduct Pending the Merger. The parties have agreed to generally customary covenants that place restrictions on them, from the date of the Merger Agreement until the completion of the merger, except as otherwise specifically permitted or required by the Merger Agreement, or consented to by the other party in writing (which consent will not be unreasonably withheld, conditioned or delayed). The Merger Agreement describes these generally reciprocal restrictions in detail, including the following:

• conduct its business other than in the regular, ordinary and usual course consistent with past practice; fail to use reasonable efforts to maintain and preserve intact its business organization, properties, leases, employees and advantageous business relationships and retain the services of its officers and key employees;

• take any action that would adversely affect or delay its ability to perform its obligations under the Merger Agreement or to consummate the transactions contemplated by the Merger Agreement;

• as to Victory Bancorp, issue any additional shares of capital stock or any securities or obligations convertible or exercisable for any shares of its capital stock, except pursuant to the exercise of Victory Bancorp Stock Options and Victory Bancorp Warrants and the conversion of the Victory Bancorp Series E convertible preferred stock;

• as to Victory Bancorp, declare or pay any dividends on its capital stock, other than required distributions in accordance with its Series E convertible preferred stock and Series F preferred stock

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• as to Victory Bancorp, directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock;

• incur, modify, extend or renegotiate any material indebtedness other than deposit liabilities in the ordinary course of business consistent with past practice and Federal Home Loan Bank advances;

• prepay any indebtedness or other similar arrangements so as to incur any prepayment penalty;

• as to Victory Bancorp, issue a stock split or combine, adjust or reclassify any shares of its capital stock;

• purchase any brokered certificates of deposit;

• take any action that would adversely affect or delay its ability to perform its obligations under the Merger Agreement or to consummate the transactions;

• take any action that is intended to or expected to result in any of its representations and warranties set forth in the Merger Agreement being or becoming untrue in any material respect at any time prior to the closing date, or in any of the closing conditions to the merger not being satisfied or in a violation of any provision of the Merger Agreement;

• knowingly take action that would prevent or impede the merger from qualifying as a reorganization within the meaning of Section 368 of the IRC;

• agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by these negative covenants;

• amend, repeal or modify any provision of its articles of incorporation or bylaws in a manner which would adversely affect Victory Bancorp, any Victory Bancorp shareholders or the transactions contemplated by the Merger Agreement;

• consummate, or enter into any agreement with respect to any transaction involving a third party that would constitute an acquisition proposal with respect to such third party;

• other than in the ordinary course of business consistent with past practice (including the sale, transfer or disposal of other real estate owned, (i) sell, transfer, mortgage, encumber or otherwise dispose of any of its real property or other assets to any person other than a subsidiary, or (ii) cancel, release or assign any indebtedness to any such person or any claims held by any such person;

• make any equity investment, either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other person, or form any new subsidiary;

• enter into, renew, amend or terminate any material contract, plan or agreement, or make any change in any of its leases or contracts within certain limits below;

• make, renegotiate, renew, increase the amount of, extend the term of, modify or purchase any loan, or make any commitment in respect of any of the foregoing, except (i) in conformity with existing lending practices in amounts not to exceed $100,000 if such loan is not fully secured or $1,000,000 if such loan is fully secured or (ii) loans as to which it has a binding obligation to make such loans (including without limitation lines of credit and letters of credit) as of the date of the Merger Agreement and which are described in HV Bancorp’s disclosure letter; provided, however, that it shall not make, renegotiate, renew, increase the amount of, extend the term of, modify or purchase any loan, or make any commitment in respect of any of the foregoing, to any person if when aggregated with all outstanding loans and commitments for loans made to such person and such person’s family members and affiliates, the loans would exceed $1,500,000;

• except for loans made in accordance with Regulation O of the Federal Reserve Board rules, make or increase any loan, or commit to make or increase any such loan, to any director or executive officer, or any entity controlled, directly or indirectly, by any of them;

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• increase in any manner the compensation, bonuses or other fringe benefits of any of its employees or directors other than in the ordinary course of business consistent with past practice and pursuant to policies then in effect, or pay any bonus, pension, retirement allowance or contribution not required by any existing plan or agreement to any such employees or directors;

• become a party to, amend, renew, extend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment, severance or change in control agreement with or for the benefit of any employee or director, except for amendments to any plan or agreement that are required by law;

• as to Victory Bancorp, amend, modify or revise the terms of any outstanding stock option or voluntarily accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation;

• elect to any office with the title of senior vice president or higher any person who does not hold such office as of the date of the Merger Agreement or elect to its Board of Directors any person who is not a member of its Board of Directors as of the date of the Merger Agreement;

• hire any employee with an annualized salary in excess of $100,000 except as may be necessary to replace any non-officer employee whose employment is terminated, whether voluntarily or involuntarily;

• commence any action or proceeding, other than to enforce any obligation owed to it and in accordance with past practice, or settle any claim, action or proceeding (i) involving payment by it of money damages in excess of $50,000 or (ii) which would impose any material restriction on its operations or the operations of any of its subsidiaries;

• increase or decrease the rate of interest paid on time deposits or on certificates of deposit, except in the ordinary course of business;

• purchase any debt security, including mortgage-backed and mortgage-related securities, not in accordance with past practices;

• make any capital expenditures in excess of $100,000, other than pursuant to binding commitments existing on the date hereof and expenditures reasonably necessary to maintain existing assets in good repair;

• establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office;

• enter into any futures contract, option, swap agreement, interest rate cap, interest rate floor, interest rate exchange agreement, or take any other action for purposes of hedging the exposure of its interest-earning assets or interest-bearing liabilities to changes in market rates of interest;

• make any changes in policies in any material respect in existence on the date hereof with regard to: the extension of credit, or the establishment of reserves with respect to possible loss thereon or the charge off of losses incurred thereon; investments; asset/liability management; or other material banking policies, except as may be required by changes in applicable law or regulations, GAAP, or the direction of a governmental entity;

• except as required by law or for communications in the ordinary course of business consistent with past practice that do not relate to the merger or other transactions contemplated hereby, issue any communication relating to post-closing employment, benefits or compensation information, without the prior consent of the other party;

• except with respect to foreclosures in process as of the date hereof, foreclose upon or take a deed or title to any commercial real estate (i) without providing prior notice to the other party and conducting a Phase I environmental assessment of the property or (ii) if the Phase I environmental assessment referred to in the prior clause reflects the presence of any hazardous material or underground storage tank; or

• make, change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment, or surrender any right to claim a refund of taxes or obtain any tax ruling;

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Current Information. Each party has agreed to keep the other informed of the general status of its ongoing operations. Each party has agreed to promptly notify the other of any material change in its business.

Access to Properties and Records. Subject to other terms of the Merger Agreement, each party has agreed to permit the other party reasonable access to its properties, and to disclose and make available its books, papers and records relating to their operations, except where such materials relate to the Merger Agreement, pending or threatened litigation, or another acquisition proposal. Each party will promptly provide the other party with a copy of each report filed with a governmental entity, a copy of each periodic report to its senior management and all materials relating to its business or operations furnished to its Board of Directors, a copy of each press release made available to the public and all other information concerning its business, properties and personnel as the other party may reasonably request, provided that a party shall not be entitled to receive reports or other documents relating to matters involving the Merger Agreement, pending or threatened litigation or investigations if, in the opinion of counsel, the disclosure of such information would or might adversely affect the confidential nature of, or any privilege relating to, the matters being discussed, or matters involving an acquisition proposal.

Consents and Approvals of Third Parties; All Reasonable Efforts. The parties each have agreed to use all commercially reasonable efforts to obtain all consents and approvals necessary for the consummation of the merger. Subject to the terms of the Merger Agreement, the parties have agreed to use all commercially reasonable efforts to take all action necessary or advisable to consummate the merger.

Failure to Fulfill Conditions. The parties have each agreed to promptly notify the other in the event that they determine that a condition to their obligation to complete the merger cannot be fulfilled and that they will not waive the condition.

No Solicitation. HV Bancorp and Victory Bancorp have agreed that, unless the Merger Agreement has been terminated, neither it, its subsidiaries, its officers, directors, employees, representatives, agents or affiliates will:

• initiate, solicit or knowingly encourage (including furnishing non-public information or assistance) any inquiries or the making of any proposal that constitutes or that would reasonably be expected to lead to an acquisition proposal; or

• enter into, maintain or continue discussions or negotiate with any person or entity in furtherance of inquiries relating to or to obtain an acquisition proposal or agree to or endorse an acquisition proposal.

Each party is required to notify the other of all of the relevant details relating to all inquiries and proposals which it may receive relating to acquisition proposals. The Merger Agreement provides that either party’s Board of Directors may furnish information to, or enter into discussions or negotiations relating to unsolicited written acquisition proposals, so long as such actions are required by the fiduciary duties of the Board of Directors to consider a financially superior proposal.

Prohibition on Solicitation of Employees. If the Merger Agreement is terminated and the merger is not consummated, Victory Bancorp and HV Bank have each agreed not solicit for employment any employee of the other designated as a loan officer or a vice president or higher, for a period of two years from the date the merger is terminated.

Employee Benefits. HV Bancorp and HV Bank entered into employment agreements, effective at the effective time of the merger, with Messrs. Thompson and Major. HV Bancorp and HV Bank will also enter into employment agreements with Messrs. O’Neill, Graver, Schultz, Offner, and Hutt and Ms. Murtha.

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Conditions to Completing the Merger

HV Bancorp’s and Victory Bancorp’s obligations to consummate the merger are conditioned on the following:

Conditions to the Obligations of Each Party Under the Merger Agreement. The respective obligations of HV Bancorp, HV Bank, Victory Bancorp and Victory Bank are subject to various conditions prior to the merger, which conditions cannot be waived. The conditions include the following:

• approval of the Merger Agreement by the requisite vote of Victory Bancorp shareholders entitled vote at a meeting called for that purpose;

• approval of the conversion and plan of conversion by the requisite vote of members of HV Bank;

• approval of the transactions contemplated by the Merger Agreement by all applicable federal and state regulatory agencies and the expiration of all statutory waiting periods, and the absence of conditions or requirements in such approvals that would, in the reasonable judgment of the Board of Directors of HV Bank, Victory Bancorp or Victory Bank, materially and adversely affect the businesses, or economic benefits of the merger such that HV Bancorp, HV Bank and Victory Bancorp would not have entered into the Merger Agreement;

• the absence of any order, decree or injunction by which the merger is restrained or enjoined;

• receipt of all required third party consents;

• the merger registration statement shall have been declared effective by the SEC, no proceedings shall be pending or threatened by the SEC to suspend the effectiveness, and all required approvals by state securities or “blue sky” authorities shall have been received;

• the shares of common stock of HV Bancorp to be issued as merger consideration shall have been authorized for listing on the Nasdaq Capital Market;

• HV Bancorp and Victory Bancorp shall have received from Jones Walker LLP and Kilpatrick Townsend & Stockton LLP, respectively, an opinion to the effect that the merger will qualify as a tax-free reorganization under United States federal income tax laws;

• HV Bancorp shall have received and accepted orders to purchase the minimum number of shares in the offering, and the conversion and the offering shall have been completed;

• HV Bancorp and HV Bank shall have entered into employment agreements with each of Travis J. Thompson and Joseph W. Major; and

• Victory Bancorp shall have conducted an exchange offer in which holders of a minimum of 19% of the issued and outstanding Victory Bancorp Series E convertible preferred stock shall have made an irrevocable election to exchange such preferred shares for Victory Bancorp subordinated debt.

Additional Conditions to the Obligations Under the Merger Agreement. The obligations of HV Bancorp, HV Bank and Victory Bancorp are further subject to various conditions, including the following:

• except as otherwise contemplated or qualified by the Merger Agreement, the accuracy of the representations and warranties of the parties made in the Merger Agreement;

• the other party to the Merger Agreement has performed its obligations under the Merger Agreement;

• HV Bank and Griffin Financial Group shall have received a “comfort” letter from the independent accountants for Victory Bancorp;

• HV Bancorp or HV Bank shall have deposited with an exchange agent cash and shares of HV Bancorp common stock to be exchanged for shares of common stock of Victory Bancorp; and

• since the date of the Merger Agreement, neither party shall have suffered any material adverse effect as defined in the Merger Agreement.

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The parties may waive conditions to their obligations unless they are legally prohibited from doing so. HV Bancorp and Victory Bancorp cannot guarantee whether all of the conditions to the merger will be satisfied or waived by the party permitted to do so.

Termination, Amendment and Waiver

Termination. The Merger Agreement may be terminated at any time prior to the completion of the merger under the following circumstances:

• by the mutual written consent of HV Bancorp, HV Bank and Victory Bancorp; or

• by either HV Bank or Victory Bancorp, in the event of the failure of (i) Victory Bancorp’s shareholders to approve the Merger Agreement at Victory Bancorp shareholder meeting; provided, however, that Victory Bancorp will only be entitled to terminate the Merger Agreement if it has complied in all material respects with its obligations, or (ii) the HV Bank members fail to approve the Conversion at the HV Bank members meeting; provided, however, that HV Bank will only be entitled to terminate the Merger Agreement pursuant to this clause if it has complied in all material respects with its obligations; or

• by either HV Bank or Victory Bancorp, if either (i) any approval, consent or waiver of a governmental entity required to permit consummation of the transactions contemplated by the Merger Agreement has been denied and the denial has become final and non-appealable or (ii) any court or other governmental entity of competent jurisdiction has issued a final, unappealable order enjoining or otherwise prohibiting consummation of the transactions contemplated by the Merger Agreement; or

• by either HV Bank or Victory Bancorp, in the event that the Merger is not consummated by July 31, 2014, unless the failure to so consummate by that time is due to the failure of the party seeking to terminate the Merger Agreement to perform or observe the covenants and agreements of that party set forth in the Merger Agreement; or

• by either HV Bank or Victory Bancorp (provided that the party seeking termination is not then in material breach of any representation, warranty, covenant or other agreement contained in the Merger Agreement), in the event of a breach of any covenant or agreement on the part of the other party set forth in this Agreement, or if any representation or warranty of the other party shall have become untrue, in either case such that the conditions set forth in the Merger Agreement would not be satisfied and such breach or untrue representation or warranty has not been or cannot be cured within 30 days following written notice to the party committing such breach or making such untrue representation or warranty; or

• by HV Bank, if (i) Victory Bancorp shall have materially breached its obligations under the Merger Agreement or (ii) if the Board of Directors of Victory Bancorp does not publicly recommend in the Victory Bancorp Proxy Statement that shareholders approve and adopt the Merger Agreement or if, after recommending in the Victory Bancorp Proxy Statement that shareholders approve and adopt the Merger Agreement, the Board of Directors modifies or qualifies its recommendation in a manner adverse to HV Bank; or

• by Victory Bancorp, if (i) HV Bancorp or HV Bank shall have materially breached its obligations under the Merger Agreement or (ii) if the Board of Directors of HV Bank does not publicly recommend in the member proxy statement that members approve the Plan of Conversion or if, after recommending in the member proxy statement that members approve the Plan of Conversion, the Board of Directors modifies or qualifies its recommendation in a manner adverse to Victory Bancorp; or

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• by Victory Bancorp, at any time prior to the adoption and approval of the Merger Agreement by its shareholders, in order to enter into an agreement with respect to a superior proposal, but only if (i) Victory Bancorp’s Board of Directors has determined in good faith based on the advice of legal counsel that failure to take such action would cause the Board of Directors to violate its fiduciary duties under applicable law, and (ii) Victory Bancorp has not materially breached its obligations under the Merger Agreement; or

• By HV Bank, if Victory Bancorp has received a superior proposal, and in accordance with the Merger Agreement, the Board of Directors of Victory Bancorp has entered into an acquisition agreement with respect to the superior proposal, terminated the Merger Agreement, or withdraws its recommendation of the Merger Agreement, fails to make such recommendation, or modifies or qualifies its recommendation in a manner adverse to HV Bank.

• by Victory Bancorp, if HV Bancorp (i) enters into an acquisition agreement to merge with or acquire another financial institution, or (ii) refuses to consummate the Merger within thirty (30) days of the later of: (A) receipt of all necessary approvals of governmental entities or (B) the expiration of any applicable regulatory waiting periods.

Effect of Termination. The Merger Agreement describes the expenses and damages that will be payable in the event the Merger Agreement is terminated. These terms provide that in certain circumstances termination will be without liability, cost or expense on the part of either party. If the termination results from a willful breach of certain provisions, the breaching party will be liable for any and all damages, costs and expenses (including all reasonable attorneys’ fees), sustained or incurred by the non-breaching party.

In the event of a termination of the Merger Agreement due to Victory Bancorp’s acceptance of a Superior Proposal, Victory Bancorp will be obligated to pay a termination fee of $300,000 to HV Bank, which payment will be the sole and exclusive remedy of HV Bank under the Merger Agreement. HV Bancorp must pay to Victory Bancorp a termination fee of $300,000 if Victory Bancorp terminates the Merger Agreement as result of HV Bancorp’s (i) entering into an acquisition agreement to merge with or acquire another financial institution, or (ii) refusing to consummate the merger within 30 days of the later of: (A) receipt of all necessary approvals of governmental entities or (B) the expiration of any applicable regulatory waiting periods.

Amendment, Extension and Waiver. By action of their respective boards of directors, the parties to the Merger Agreement may:

• amend or modify the Merger Agreement (including the structure of the transaction);

• waive certain provisions of the Merger Agreement; and

• waive compliance with any of the agreements or conditions contained in the Merger Agreement, except that after any approval of the agreement by the shareholders of Victory Bancorp, there may not be, without further approval of such shareholders, any amendment of the Merger Agreement which reduces the amount or value or changes the form of consideration to be delivered to Victory Bancorp’s shareholders pursuant to the Merger Agreement or that would contravene any provision of the Pennsylvania Business Corporation Law or applicable federal or state banking laws, rules and regulations.

Any amendment to the Merger Agreement must be in writing.

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REGULATORY CAPITAL COMPLIANCE

At December 31, 2013, HV Bank exceeded all regulatory capital requirements. The following table presents HV Bank’s regulatory capital position relative to regulatory capital requirements at December 31, 2013, on a historical and a pro forma basis, assuming completion of the merger with Victory Bancorp and completion of the offering. The table reflects receipt by HV Bank of 50% of the net proceeds of the offering after funding the offering expenses and costs of the merger with Victory Bancorp. For purposes of the table, the amount expected to be borrowed by the employee stock ownership plan (6.0% of the shares issued in the offering, including shares issued to Victory Bancorp shareholders in the merger) is deducted from pro forma regulatory capital. For a discussion of the assumptions underlying the pro forma capital calculations presented below, see “Use of Proceeds,” “Capitalization” and “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger.” For a discussion of the capital standards applicable to HV Bank and Victory Bank, see “Regulation and Supervision—Bank Regulation.”

						HV Bank Pro forma (giving effect to the offering and merger) at December 31, 2013
	HV Bank Historical at December 31, 2013					Minimum of Offering Range 850,000 Shares at $10.00 per share (2)					Midpoint of Offering Range 1,000,000 Shares at $10.00 per share (2)					Maximum of Offering Range 1,150,000 Shares at $10.00 per share (2)					15% Above Maximum of Offering Range 1,322,500 Shares at $10.00 per share (2)
	Amount		Percent of Assets (1)			Amount		Percent of Assets (2)			Amount		Percent of Assets (2)			Amount		Percent of Assets (2)			Amount		Percent of Assets (2)
	(Dollars in Thousands)
Equity under generally accepted accounting principles	$	10,261		6.28	%	$	25,701		8.30	%	$	26,254		8.45	%	$	26,997		8.67	%	$	27,728		8.88	%
Tier I Leverage Capital:
Actual	$	11,019		6.85	%	$	25,384		8.29	%	$	25,937		8.45	%	$	26,512		8.61	%	$	27,243		8.83	%
Requirement	$	8,039		5.00	%	$	15,319		5.00	%	$	15,356		5.00	%	$	15,392		5.00	%	$	15,434		5.00	%
Excess	$	2,980		1.85	%	$	10,065		3.29	%	$	10,581		3.45	%	$	11,120		3.61	%	$	11,809		3.83	%
Tier I Risk-Based Capital:
Actual	$	11,019		12.30	%	$	25,384		11.51	%	$	25,937		11.75	%	$	26,512		12.01	%	$	27,243		12.33	%
Requirement	$	5,374		6.00	%	$	13,231		6.00	%	$	13,239		6.00	%	$	13,248		6.00	%	$	13,258		6.00	%
Excess	$	5,645		6.30	%	$	12,153		5.51	%	$	12,698		5.75	%	$	13,264		6.01	%	$	13,985		6.33	%
Total Risk-Based Capital:
Total Risk-Based Capital:	$	11,504		12.84	%	$	25,869		11.73	%	$	26,422		11.97	%	$	26,997		12.23	%	$	27,728		12.55	%
Requirement (3)	$	8,956		10.00	%	$	22,051		10.00	%	$	22,066		10.00	%	$	22,080		10.00	%	$	22,097		10.00	%
Excess	$	2,548		2.84	%	$	3,818		1.73	%	$	4,356		1.97	%	$	4,917		2.23	%	$	5,631		2.55	%

(1) Shown as a percent of assets under generally accepted accounting principles, adjusted total, or adjusted risk-weighted assets as appropriate.

(2) Reflects the issuance of shares in the merger with Victory Bancorp.

(3) Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 20% risk-weighting.

(4) Reconciliation of capital adjustment for HV Bank.

	Minimum			Midpoint			Maximum			Maximum, As Adjusted
	(in thousands)
Gross offering proceeds	$	8,500		$	10,000		$	11,500		$	13,225
Less: offering expenses		(973	)		(1,016	)		(1,060	)		(1,115	)
Less: cash to fund the acquisition		(1,798	)		(385	)		0			0
Less: loan to ESOP		(990	)		(1,165	)		(1,318	)		(1,422	)
Less: cash retained by the holding company		(975	)		(2,942	)		(3,902	)		(4,633	)
Net cash infused into the Bank		3,764			4,492			5,220			6,055
Less: ESOP adjustment at bank		(990	)		(1,165	)		(1,318	)		(1,422	)
Net increase in capital resulting from the offering		2,774			3,327			3,902			4,633
Net increase in capital resulting from the merger		12,666			12,666			12,834			12,834
Increase in GAAP equity	$	15,440		$	15,993		$	16,736		$	17,467
Less: increase in disallowed intangible assets		(834	)		(834	)		(1,002	)		(1,002	)
Less: increase in disallowed def. tax assets		(241	)		(241	)		(241	)		(241	)
Increase in Tier 1 capital	$	14,365		$	14,918		$	15,493		$	16,224
Plus: increase in allowable Tier 2 capital		0			0			0			0
Increase in risk-based capital	$	14,365		$	14,918		$	15,493		$	16,224

173

PRO FORMA UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS GIVING

EFFECT TO THE CONVERSION AND MERGER

The following pro forma unaudited condensed consolidated statements of financial condition and the pro forma unaudited consolidated statements of income give effect to the proposed offering and the merger with Victory Bancorp, based on the assumptions set forth below. As a result, the pro forma data assumes the completion of the offering and the merger with Victory Bancorp. The condensed pro forma unaudited consolidated financial statements are based, in part, on the audited financial statements of HV Bank for the year ended June 30, 2013, the audited consolidated financial statements of Victory Bancorp for the years ended December 31, 2013 and 2012, and the unaudited consolidated financial statements of HV Bank for the six months ended December 31, 2013. The pro forma unaudited condensed consolidated financial statements give effect to the offering at historical cost and the merger using the purchase method of accounting as required by accounting principles generally accepted in the United States of America.

The pro forma adjustments in the tables and the net proceeds of the offering are based upon the following assumptions:

• HV Bancorp will sell in the offering 850,000 shares of common stock (at the minimum of the offering range) and 1,322,500 shares of common stock (at the maximum, as adjusted, of the offering range);

• In connection with the merger with Victory Bancorp, HV Bancorp will issue to Victory Bancorp shareholders 800,485 shares of common stock (at the minimum of the offering range) and 1,046,804 shares of common stock (at the maximum, as adjusted, of the offering range);

• In connection with the merger with Victory Bancorp, 19% of the Victory Bancorp Series E convertible preferred stock is exchanged for Victory Bancorp subordinated debt at the minimum of the offering range, and zero percent of the Victory Bancorp Series E is exchanged for Victory Bancorp subordinated debt at the maximum, as adjusted, of the offering range;

• In connection with the merger with Victory Bancorp, the merger consideration will include $1.8 million of cash at the minimum of the offering range. No cash will be included as part of the merger consideration at the maximum, as adjusted, of the offering range;

• HV Bancorp’s employee stock ownership plan will purchase, with a loan from HV Bancorp, a number of shares equal to 6.0% of the total number of outstanding shares of HV Bancorp, which includes shares sold in the offering and shares issued to Victory Bancorp shareholders in the merger;

• Total expenses of the offering, including fees paid to Griffin Financial Group, will range from $1.0 million at the minimum of the offering range to $1.1 million at the maximum, as adjusted of the offering range;

• 120,000 shares of common stock will be purchased by HV Bancorp’s executive officers and directors, and their associates; and

• Griffin Financial Group will receive fees equal to 1.5% and 5.5% of the aggregate purchase price of the shares of stock sold in the subscription and syndicated offerings, respectively, excluding any shares purchased by any employee benefit plans, and purchased by any of HV Bancorp’s directors, officers or employees or members of their immediate families, and shares issued in the merger.

For a more detailed discussion of the impact of the different elections available to the holders of Victory Bancorp Series E and the impact on the Company’s pro forma financial information, see “Pro Forma Impact of Victory Bancorp Series E Convertible Preferred Stock”. For a more detailed discussion of how many shares will be issued in connection with the offering and the merger, see “Pro Forma Unaudited Condensed Consolidated Financial Statements Giving Effect to the Conversion and Merger—Analysis of Pro Forma Outstanding Shares of HV Bancorp Common Stock.”

The purchase price for Victory Bancorp at the minimum of the offering range for purposes of the pro forma presentation was calculated as follows:

	December 31, 2013
Stockholders’ equity	$	12,958
Less preferred equity historical		(6,047	)
Plus: conversion of Series E to Victory Bancorp Common Equity		2,119
Net assets acquired (not adjusted for purchase accounting)		9,030
Estimated unrecognized non-tax deductible merger costs		(146	)
Loans receivable, net(1)		1,286
Deposits(1)		(263	)
Borrowings(1)		22
Fixed assets		(477	)
Core deposit intangible asset (2)		694
Tax impact of purchase accounting adjustments at 34%		(429	)
Settlement of Victory Bancorp warrants		(54	)
Goodwill		140
Purchase price, net(3)	$	9,803

(1) Fair value adjustments are calculated using discounted cash flow analysis using a comparison of portfolio rates to market rates. Fair value adjustments are amortized using the estimated lives of the respective assets and liabilities.

(2) Core deposit intangible reflects the present value benefit to HV Bancorp of utilizing the acquired core deposits as a funding source relative to wholesale funding costs based on the rates of Federal Home Loan Bank advances. The core deposit intangible is calculated using portfolio deposit balances and interest rates. Costs of the acquired core deposits include interest costs, plus estimated operating expenses, less estimated non-interest income to be derived from the core deposits. Acquired core deposits are projected to decay based on assumptions promulgated by the Office of Thrift Supervision, as maintained by the Office of the Comptroller of the Currency. The yield benefit for each period is discounted to present value using a weighted average cost of capital. The core deposit intangibles are amortized over the estimated lives of the core deposits using an accelerated amortization method.

(3) The composition of the purchase price, net, at December 31, 2013, at the minimum of the offering range, is as follows (in thousands):

	Minimum
Stock portion of merger consideration	$	8,005
Cash portion of merger consideration	$	1,798
Purchase Price, net	$	9,803

The purchase price for Victory Bancorp at the maximum, as adjusted, of the offering range for purposes of the pro forma presentation was calculated as follows:

	December 31, 2013
Stockholders’ equity	$	12,958
Less preferred equity historical		(6,047	)
Plus: conversion of Series E to Victory Bancorp Common Equity		2,616
Net assets acquired (not adjusted for purchase accounting)		9,527
Estimated unrecognized non-tax deductible merger costs		(146	)
Loans receivable, net(1)		1,286
Deposits(1)		(263	)
Borrowings(1)		22
Fixed assets		(477	)
Core deposit intangible asset (2)		694
Tax impact of purchase accounting adjustments at 34%		(429	)
Settlement of Victory Bancorp warrants		(54	)
Goodwill		308
Purchase price, net(3)	$	10,468

(1) Fair value adjustments are calculated using discounted cash flow analysis using a comparison of portfolio rates to market rates. Fair value adjustments are amortized using the estimated lives of the respective assets and liabilities.

(2) Core deposit intangible reflects the present value benefit to HV Bancorp of utilizing the acquired core deposits as a funding source relative to wholesale funding costs based on the rates of Federal Home Loan Bank advances. The core deposit intangible is calculated using deposit balances and interest rates. Costs of the acquired core deposits include interest costs, plus estimated operating expenses, less estimated non-interest income to be derived from the core deposits. Acquired core deposits are projected to decay based on assumptions promulgated by the Office of Thrift Supervision, as maintained by the Office of the Comptroller of the Currency. The yield benefit for each period is discounted to present value using a weighted average cost of capital. The core deposit intangibles are amortized over the estimated lives of the core deposits using an accelerated amortization method.

(3) The composition of the purchase price, net, at December 31, 2013, at the maximum, as adjusted, of the valuation range, is as follows (in thousands):

	Maximum, as adjusted
Stock portion of merger consideration	$	10,468
Cash portion of merger consideration	$	0
Purchase Price, net	$	10,468

174

In addition, the expenses of the offering and the merger may vary from those estimated, and the fees paid to Griffin Financial Group will vary from the amounts estimated if the amount of shares of HV Bancorp common stock sold varies from the amounts assumed above or based on the actual amount of shares sold in the subscription/community offering and in a syndicated offering, if necessary. These items, net of income tax effects, are shown as a reduction in stockholders’ equity in the following tables, but are not shown as a reduction in net income for the periods shown in the following tables.

Pro forma net earnings has been calculated for the year ended June 30, 2013 and the six months ended December 31, 2013 as if the shares of HV Bancorp common stock to be issued in the offering had been sold and the merger exchange shares had been issued as of the beginning of the period. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the indicated number of shares of HV Bancorp common stock.

The unaudited condensed consolidated pro forma statements of financial condition assume the offering and merger were consummated on December 31, 2013 and June 30, 2013.

The pro forma unaudited statements are provided for informational purposes only. The pro forma statements of income presented are not necessarily indicative of the actual results that would have been achieved had the offering and merger been consummated on December 31, 2013 and June 30, 2013 at the beginning of the periods presented, and are not indicative of future results. The pro forma unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto of HV Bank and Victory Bancorp contained elsewhere in this prospectus.

175

Pro forma stockholders’ equity represents the resulting book value of the common and preferred stockholders’ ownership of HV Bancorp and Victory Bancorp computed in accordance with accounting principles generally accepted in the United States of America. Pro forma stockholders’ equity and book value are not intended to represent the fair market value of the common stock and, due to the existence of the tax bad debt reserve and intangible assets, may be different than amounts that would be available for distribution to stockholders in the event of liquidation.

The unaudited pro forma net earnings and common stockholders’ equity derived from the above assumptions are qualified by the statements set forth under this caption and should not be considered indicative of the market value of HV Bancorp common stock or the actual results of operations of HV Bancorp and Victory Bancorp for any period. Such pro forma data may be materially affected by the actual gross proceeds from the sale of shares of HV Bancorp in the offering and the actual expenses incurred in connection with the offering and the merger.

Pro forma merger adjustments to net income include entries to reflect the estimated fair value adjustments on financial assets and liabilities and the amortization of identifiable intangible assets created in the acquisition. Excluded from the calculation of pro forma net income are any adjustments to reflect the estimated interest income to be earned on the net proceeds of the offering, the estimated interest income to be foregone on the cash required to fund the merger with Victory Bancorp and related expenses, and other estimated expense reductions from consolidating the operations of Victory Bancorp with those of HV Bancorp.

176

The following table presents pro forma statement of financial condition information at December 31, 2013 at the minimum of the offering range assuming the issuance of 850,000 shares and the issuance to shareholders of Victory Bancorp in the merger of 800,485 shares of stock and $1.8 million of cash.

Pro Forma Unaudited Condensed Consolidated Statement of Financial Condition

December 31, 2013

	HV Bank December 31, 2013 Historical			Offering Adjustments (1)			HV Bancorp Pro Forma as Converted			Victory Bancorp December 31, 2013 Historical			Merger Adjustments (2)			HV Bancorp Pro Forma Consolidated
	(In thousands)
Assets
Cash and cash equivalents	$	22,898		$	5,877	(3)	$	28,775		$	2,389		$	(2,159	)(9)	$	29,005
Securities available for sale		46,239			—			46,239			1,901			—			48,140
Securities held to maturity		5,020			—			5,020			—			—			5,020
Loans held for sale		3,745			—			3,745			—			—			3,745
Loans receivable, net		75,789			—			75,789			129,337			1,286	(10)		206,412
Premises and equipment, net		1,793			—			1,793			3,960			(477	)(11)		5,276
Restricted investment in bank stocks		910			—			910			627			—			1,537
Bank owned life insurance (BOLI)		3,617			—			3,617			1,306			—			4,923
Goodwill		—			—			—			—			140	(12)		140
Core deposit intangible		—			—			—			—			694	(13)		694
Other		3,412			—			3,412			1,799			(429	)(14)		4,782
Total assets	$	163,423		$	5,877		$	169,300		$	141,319		$	(945	)	$	309,674
Liabilities
Deposits	$	140,631		$	—		$	140,631		$	120,126		$	263	(15)	$	261,020
Borrowings		10,759			—	(4)		10,759			7,665			(22	)(16)		18,402
Subordinated debt		—			—			—			—			497	(17)		497
Other liabilities		1,772			—			1,772			570			—			2,342
Total liabilities		153,162			—			153,162			128,361			738			282,261
Stockholders’ equity
Preferred stock		—			—			—			6,047			(2,616	)(17)		3,431
Common stock		—			8	(5)		8			1,025			(1,017	)(18)		16
Additional paid-in capital		—			7,519	(6)		7,519			9,221			(1,224	)(19)		15,516
Retained earnings		11,502			—			11,502			(3,356	)		3,195	(20)		11,341
Accumulated other comprehensive income/(loss)		(1,241	)		—			(1,241	)		21			(21	)(21)		(1,241	)
Employee stock ownership plan		—			(990	)(7)		(990	)		—			—			(990	)
Equity incentive plan		—			(660	)(8)		(660	)		—			—			(660	)
Total equity		10,261			5,877			16,138			12,958			(1,683	)		27,413
Total liabilities and equity	$	163,423		$	5,877		$	169,300		$	141,319		$	(945	)	$	309,674

(1) Shows the effect of the mutual-to-stock conversion of HV Bancorp, assuming gross proceeds of $8.5 million, the minimum of the valuation range, offering expenses of $1.0 million, and establishment of an ESOP and stock-based incentive plan that will acquire 6.0% and 4.0% of total pro forma shares outstanding, respectively. The ESOP will purchase its shares in the offering and, to the extent there are not sufficient shares available after subscriptions by eligible members, in the open market. The stock-based incentive plan will purchase shares in the open market after receiving shareholder approval to adopt the plan. Open market purchases by the ESOP and equity incentive plan are assumed at $10 per share.

(2) Reflects the purchase accounting and acquisition adjustments related to the acquisition of Victory Bancorp. Assumes that 81% of Victory Bancorp Series E convertible preferred stock is converted to Victory Bancorp common stock, and 19% is converted to Victory Bancorp subordinated debt.

(3) Calculated as follows:

	(in thousands)
Gross proceeds of offering	$	8,500
Estimated offering expenses		(973	)
Common stock acquired by ESOP		(990	)
Common stock acquired by stock-based incentive plan		(660	)
Pro forma adjustment	$	5,877

(4) The ESOP loan is funded internally with a loan from HV Bancorp, thus no borrowing liability is recorded on the consolidated balance sheet of HV Bancorp.

(5) Par value $0.01 per share and the issuance of 850,000 shares of common stock in the offering.

177

(6) Calculated as follows:

	(in thousands)
Net proceeds of offering	$	7,527
Less: par value (See footnote 5)		(8	)
Pro forma adjustment	$	7,519

(7) Contra-equity account established to reflect the obligation to repay the loan to the ESOP.

(8) Contra-equity account established to reflect the stock-based incentive plan.

(9) Includes the cash portion of the merger consideration paid to shareholders of Victory Bancorp, transaction expenses and settlement of Victory Bancorp warrants.

	(in thousands)
Cash portion of merger consideration	$	(1,798	)
Non-tax deductible transaction expenses by HVBancorp and Victory Bancorp		(307	)
Settlement of Victory Bancorp warrants		(54	)
Total cash adjustment	$	(2,159	)

(10) Fair value adjustment that includes reversal of historical valuation allowances maintained by Victory Bancorp and establishment of a fair value adjustment including a yield component and a credit component. The yield component reflects the difference between portfolio yields and market rates. The credit component includes estimates of specific losses in the portfolio and an estimate of inherent losses going forward. The variable rate loans reprice frequently and with no significant change in credit risk, the yield component of fair value is the carrying value. For other categories of loans such as fixed rate residential mortgages, commercial and consumer loans, fair value is estimated based on discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar collateral and credit ratings and for similar remaining maturities. Yield adjustments are accreted into income utilizing the level yield method of the underlying loans, including prepayment assumptions.

	(in thousands)
Loan yield premium	$	1,254
Establishment of new credit adjustment		(1,628	)
Plus: reversal of historical valuation allowance		1,660
Total loan portfolio adjustment	$	1,286

(11) Adjustment to reflect the estimated market values of the land and building acquired with Victory Bancorp, based on a recent appraisal.

(12) Goodwill is an intangible asset that is not subject to amortization. The goodwill balance will be tested annually for impairment. Goodwill is calculated as:

	Calculation of Goodwill
	(In thousands, except per share data)
Purchase price per share ($)	$	6.794
Number of Victory Bancorp shares acquired
- Issued and outstanding as of December 31, 2013		1,025,464
- Conversion of Series E into common shares prior to the merger		417,403
Shares acquired in the merger		1,442,867
Stock portion of merger consideration	$	8,005
Cash portion of merger consideration	$	1,798
Cost of purchasing options		—
Purchase price, net	$	9,803
Less: acquired common shareholders’ equity, giving effect to conversion of the Series E into common shares prior to the merger (net assets acquired)		(9,030	)
Settlement of Victory Bancorp warrants		54
Plus: non-tax deductible transaction expenses expected to be paid by Victory		146
Plus: taxable purchase accounting adjustments:
Fair value adjustment for acquired CDs		263
Fair value adjustment for acquired borrowings		(22	)
Fair value adjustment for acquired loans		(1,286	)
Fair value adjustment for acquired fixed assets		477
Core deposit intangible		(694	)
Tax effect of purchase accounting adjustments at the marginal tax rate at 34.0%		429
Goodwill	$	140

178

(13) Core deposit intangible is an identifiable intangible asset representing the economic value of the acquired core deposit base, calculated as the present value benefit of funding operations with the acquired core deposit base versus using an alternative wholesale funding source. A core deposit intangible arises from a financial institution having a deposit base comprised of stable customer relationships. These deposits are generally at interest rates or on terms that are favorable to the financial institution. HV Bancorp considered recently completed transactions amid the current market environment and assigned a preliminary value of $694,000 to Victory Bancorp’s core deposit accounts. The core deposit intangible asset will be amortized on an accelerated basis.

(14) Adjustment to deferred tax asset created as a result of purchase accounting - See footnote 12.

(15) Fair value adjustment to reflect the difference between portfolio yields and market rates for time deposits acquired in the merger. Estimated using a present value analysis and the fair value adjustment is accreted into interest expense based on the level yield method over an approximate eight year period.

(16) Fair value adjustment to reflect the difference between portfolio costs and market rates for borrowings with comparable maturities. The fair value adjustment is amortized into interest expense based on the level yield method over an approximate five year period.

(17) All of Victory Bancorp’s Series E convertible preferred stock ($2.6 million), is assumed to be converted to either a new class of subordinated debt or be converted into Victory Bancorp common shares immediately prior to completion of the merger. The Series E convertible preferred stock that will be converted into subordinated debt is assumed to equal $497,000, or 19% of the total Series E outstanding.

(18) Adjustment to common stock is calculated as follows:

	(In thousands)
Par value of common stock issued to Victory Bancorp shareholders (800,485 shares at $0.01 par value per share)	$	8
Less: elimination of Victory Bancorp par value of common stock		(1,025	)
Adjustment to common stock	$	(1,017	)

(19) Adjustment to additional paid-in capital is calculated as follows:

	(In thousands)
Stock issued to Victory Bancorp shareholders as merger consideration (800,485 shares at $10.00 per share)	$	8,005
Less: settlement of Victory Bancorp warrants and elimination of Victory Bancorp historical paid-in capital		(9,221	)
Less par value of common stock issued in merger		(8	)
Adjustment to additional paid-in capital	$	(1,224	)

(20) Adjustment to retained earnings is calculated as follows:

	(In thousands)
Deduct: HV Bancorp merger expenses	$	(161	)
Addback: elimination of Victory Bancorp’s historical retained deficit		3,356
Adjustment to retained earnings	$	3,195

(21) Adjustment to eliminate Victory Bancorp’s accumulated other comprehensive (income/loss) account.

179

The following table presents pro forma statement of financial condition information at December 31, 2013 at the adjusted maximum of the offering range assuming the issuance of 1,322,500 shares of common stock in the offering and the issuance to shareholders of Victory Bancorp in the merger of 1,046,804 shares of common stock.

Pro Forma Unaudited Condensed Consolidated Statement of Financial Condition

December 31, 2013

	HV Bank December 31, 2013 Historical			Offering Adjustments (1)			HV Bancorp Pro Forma as Converted			Victory Bancorp December 31, 2013 Historical			Merger Adjustments (2)			HV Bancorp Pro Forma Consolidated
	(In thousands)
Assets
Cash and cash equivalents	$	22,898		$	9,740	(3)	$	32,638		$	2,389		$	(361	)(9)	$	34,666
Securities available for sale		46,239			—			46,239			1,901			—			48,140
Securities held to maturity		5,020			—			5,020			—			—			5,020
Loans held for sale		3,745			—			3,745			—			—			3,745
Loans receivable, net		75,789			—			75,789			129,337			1,286	(10)		206,412
Premises and equipment, net		1,793			—			1,793			3,960			(477	)(11)		5,276
Restricted investment in bank stocks		910			—			910			627			—			1,537
Bank owned life insurance (BOLI)		3,617			—			3,617			1,306			—			4,923
Goodwill		—			—			—			—			308	(12)		308
Core deposit intangible		—			—			—			—			694	(13)		694
Other		3,412			—			3,412			1,799			(429	)(14)		4,782
Total assets	$	163,423		$	9,740		$	173,163		$	141,319		$	1,021		$	315,503
Liabilities
Deposits	$	140,631		$	—		$	140,631		$	120,126		$	263	(15)	$	261,020
Borrowings		10,759			—	(4)		10,759			7,665			(22	)(16)		18,402
Subordinated debt		—			—			—			—			—	(17)		—
Other liabilities		1,772			—			1,772			570			—			2,342
Total liabilities		153,162			—			153,162			128,361			241			281,764
Stockholders’ equity
Preferred stock		—			—			—			6,047			(2,616	)(17)		3,431
Common stock		—			13	(5)		13			1,025			(1,015	)(18)		23
Additional paid-in capital		—			12,097	(6)		12,097			9,221			1,237	(19)		22,555
Retained earnings		11,502			—			11,502			(3,356	)		3,195	(20)		11,341
Accumulated other comprehensive income/(loss)		(1,241	)		—			(1,241	)		21			(21	)(21)		(1,241	)
Employee stock ownership plan		—			(1,422	)(7)		(1,422	)		—			—			(1,422	)
Equity incentive plan		—			(948	)(8)		(948	)		—			—			(948	)
Total equity		10,261			9,740			20,001			12,958			780			33,739
Total liabilities and equity	$	163,423		$	9,740		$	173,163		$	141,319		$	1,021		$	315,503

(1) Shows the effect of the mutual-to-stock conversion of HV Bancorp, assuming gross proceeds of $13.2 million, the adjusted maximum of the valuation range, offering expenses of $1.1 million, and establishment of an ESOP and stock-based incentive plan that will acquire 6.0% and 4.0% of total pro forma shares outstanding, respectively. The ESOP will purchase its shares in the offering and, to the extent there are not sufficient shares available after subscription by eligible members, in the open market. The stock-based incentive plan will purchase shares in the open market after receiving shareholder approval to adopt the plan. Open market purchases by the ESOP and equity incentive plan are assumed at $10 per share.

(2) Reflects the purchase accounting and acquisition adjustments related to the acquisition of Victory Bancorp. Assumes that 100% of Victory Bancorp Series E convertible preferred stock is converted to Victory Bancorp common stock.

(3) Calculated as follows:

	(in thousands)
Gross proceeds of offering	$	13,225
Estimated offering expenses		(1,115	)
Common stock acquired by ESOP		(1,422	)
Common stock acquired by stock-based incentive plan		(948	)
Pro forma adjustment	$	9,740

(4) The ESOP loan is funded internally with a loan from HV Bancorp, thus no borrowing liability is recorded on the consolidated balance sheet of HV Bancorp.

(5) Par value $0.01 per share and the issuance of 1,322,500 shares of common stock in the offering.

180

(6) Calculated as follows:

	(in thousands)
Net proceeds of offering	$	12,110
Less: par value (See footnote 5)		(13	)
Pro forma adjustment	$	12,097

(7) Contra-equity account established to reflect the obligation to repay the loan to the ESOP.

(8) Contra-equity account established to reflect the stock-based incentive plan.

(9) Includes the cash portion of the merger consideration paid to shareholders of Victory Bancorp, transaction expenses and settlement of Victory Bancorp warrants.

	(in thousands)
Cash portion of merger consideration	$	—
Non-tax deductible transaction expenses by HVBancorp and Victory Bancorp		(307	)
Settlement of Victory Bancorp warrants		(54	)
Total cash adjustment	$	(361	)

(10) Fair value adjustment that includes reversal of historical valuation allowances maintained by Victory Bancorp and establishment of a fair value adjustment including a yield component and a credit component. The yield component reflects the difference between portfolio yields and market rates. The credit component includes estimates of specific losses in the portfolio and an estimate of inherent losses going forward. The variable rate loans reprice frequently and with no significant change in credit risk, the yield component of fair value is the carrying value. For other categories of loans such as fixed rate residential mortgages, commercial and consumer loans, fair value is estimated based on discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar collateral and credit ratings and for similar remaining maturities. Yield adjustments are accreted into income utilizing the level yield method of the underlying loans, including prepayment assumptions.

	(in thousands)
Loan yield premium	$	1,254
Establishment of new credit adjustment		(1,628	)
Plus: reversal of historical valuation allowance		1,660
Total loan portfolio adjustment	$	1,286

(11) Adjustment to reflect the estimated market values of the land and building acquired with Victory Bancorp, based on a recent appraisal.

(12) Goodwill is an intangible asset that is not subject to amortization. The goodwill balance will be tested annually for impairment. Goodwill is calculated as:

	Calculation of Goodwill
	(In thousands, except per share data)
Purchase price per share ($)	$	6.794
Number of Victory Bancorp shares acquired
- Issued and outstanding as of December 31, 2013		1,025,464
- Conversion of Series E into common shares prior to the merger		515,313
Shares acquired in the merger		1,540,777
Stock portion of merger consideration	$	10,468
Cash portion of merger consideration	$	—
Cost of purchasing options		—
Purchase price, net	$	10,468
Less: acquired common shareholders’ equity, giving effect to conversion of the Series E into common shares prior to the merger (net assets acquired)		(9,527	)
Settlement of Victory Bancorp warrants		54
Plus: non-tax deductible transaction expenses expected to be paid by Victory		146
Plus: taxable purchase accounting adjustments:
Fair value adjustment for acquired CDs		263
Fair value adjustment for acquired borrowings		(22	)
Fair value adjustment for acquired loans		(1,286	)
Fair value adjustment for acquired fixed assets		477
Core deposit intangible		(694	)
Tax effect of purchase accounting adjustments at the marginal tax rate at 34.0%		429
Goodwill	$	308

181

(13) Core deposit intangible is an identifiable intangible asset representing the economic value of the acquired core deposit base, calculated as the present value benefit of funding operations with the acquired core deposit base versus using an alternative wholesale funding source. A core deposit intangible arises from a financial institution having a deposit base comprised of stable customer relationships. These deposits are generally at interest rates or on terms that are favorable to the financial institution. HV Bancorp considered recently completed transactions amid the current market environment and assigned a preliminary value of $694,000 to Victory Bancorp’s core deposit accounts. The core deposit intangible asset will be amortized on an accelerated basis.

(14) Adjustment to deferred tax asset created as a result of purchase accounting - See footnote 12.

(15) Fair value adjustment to reflect the difference between portfolio yields and market rates for time deposits acquired in the merger. Estimated using a present value analysis and the fair value adjustment is accreted into interest expense based on the level yield method over an approximate eight year period.

(16) Fair value adjustment to reflect the difference between portfolio costs and market rates for borrowings with comparable maturities. The fair value adjustment is amortized into interest expense based on the level yield method over an approximate five year period.

(17) All of Victory Bancorp’s Series E convertible preferred stock ($2.6 million), is assumed to be converted to Victory Bancorp common shares immediately prior to completion of the merger.

(18) Adjustment to common stock is calculated as follows:

	(In thousands)
Par value of common stock issued to Victory Bancorp shareholders (1,046,804 shares at $0.01 par value per share)	$	10
Less: elimination of Victory Bancorp par value of common stock		(1,025	)
Adjustment to common stock	$	(1,015	)

(19) Adjustment to additional paid-in capital is calculated as follows:

	(In thousands)
Stock issued to Victory Bancorp shareholders as merger consideration (1,046,804 shares at $10.00 per share)	$	10,468
Less: settlement of Victory Bancorp warrants and elimination of Victory Bancorp historical paid-in capital		(9,221	)
Less par value of common stock issued in merger		(10	)
Adjustment to additional paid-in capital	$	1,237

(20) Adjustment to retained earnings is calculated as follows:

	(In thousands)
Deduct: HV Bancorp merger expenses	$	(161	)
Addback: elimination of Victory Bancorp’s historical retained deficit		3,356
Adjustment to retained earnings	$	3,195

(21) Adjustment to eliminate Victory Bancorp’s accumulated other comprehensive (income/loss) account.

182

The following table presents pro forma income statement information for the six months ended December 31, 2013, at the minimum of the offering range, including the issuance of 850,000 shares in the offering and the issuance to shareholders of Victory Bancorp in the merger of 800,485 shares of stock and $1.8 million of cash.

Pro Forma Unaudited Condensed Consolidated

Statement of Income

For the Six Months Ended December 31, 2013

	HV Bank Historical			Offering Adjustments (1)(2)			HV Bancorp Pro Forma as Converted			Victory Bancorp Historical			Merger Adjustments (5)			HV Bancorp Pro Forma Consolidated
	(In thousands)
Interest and dividend income	$	2,545		$	—		$	2,545		$	3,577		$	(242	)(6)	$	5,880
Interest expense		(435	)		—			(435	)		(512	)		68	(7)		(879	)
Net interest income		2,110			—			2,110			3,065			(174	)		5,001
Credit (Provision) for loan losses		31			—			31			(133	)		—			(102	)
Net interest income after provision for loan losses		2,141			—			2,141			2,932			(174	)		4,899
Noninterest income		1,202			—			1,202			408			—	(8)		1,610
Noninterest expense		(3,252	)		(20	)(3)		(3,272	)		(2,742	)		80	(9)		(5,934	)
Income before income taxes		91			(20	)		71			598			(94	)		575
Income tax expense		(36	)		7	(4)		(29	)		(272	)		32	(10)		(269	)
Net income		55			(13	)		42			326			(62	)		306
Preferred stock dividends		—			—			—			(110	)		92	(11)		(18	)
Net income available to common	$	55		$	(13	)	$	42		$	216		$	30		$	288
Basic EPS (12)		—			—		$	0.06		$	0.21			—		$	0.19
Diluted EPS (12)		—			—		$	0.06		$	0.21			—		$	0.19

(1) Reflects the impact of HV Bancorp’s conversion stock offering, assuming gross proceeds of $8.5 million at the minimum of the offering range, offering expenses of $1.0 million and establishment of an ESOP that will acquire 6.0% of the pro forma shares to be outstanding, including merger shares. The ESOP is assumed to purchase shares in the offering at a price of $10.00 per share, however, such shares may be purchased in open market purchases following completion of the offering. The ESOP stock purchases will be funded by a loan amortized over 25 years on a straight line basis. The adjustment to noninterest expense shown reflects the estimated ESOP amortization expense on a pre-tax basis for the period shown.

(2) HV Bancorp also intends to adopt a stock-based incentive plan and a stock option plan following completion of the merger and offering. The estimates of the impact of these benefit plans are not reflected in the calculations of pro forma income, since these estimates are speculative, both on the timing of the implementation of such plans and the amount of HV Bancorp stock to be contained in each plan. The stock-based incentive plan intends to purchase 4.0% of the pro forma shares to be outstanding, including merger shares, in the open market after receiving shareholder approval. HV Bancorp also intends to adopt a stock option plan that will contain 10.0% of the pro forma shares to be outstanding, including merger shares. Pursuant to an application of the Black-Scholes option pricing model, the stock options are assumed to have a value of $3.33 per option. The option value is assumed to be expensed over the five year vesting period for the options and 25% of the option expense is assumed to be deductible for income tax purposes. The stock option plan would be subject to shareholder approval. Adjustments to record estimated stock-based incentive plan expense and stock option plan expense will be recorded as incurred. The estimated expense for the stock-based equity incentive plan assuming gross proceeds of $8.5 million is $66,000 pretax for the six months ended December 31, 2013. The estimated expense for the stock option plan assuming gross proceeds of $8.5 million is $55,000 pretax for the six months ended December 31, 2013. Stock-based incentive plan shares are assumed to vest over 5 years on a straight-line basis. Taxes are calculated on an assumed marginal rate of 34%.

Interest income to be earned on the net proceeds of the offering will be recorded as incurred. Since these estimates are speculative, they are not reflected in the calculations of pro forma income. The estimated interest income assuming net cash proceeds of $6.0 million from the offering are invested at an average pretax yield of 1.75 percent for the six months ended December 31, 2013 would be approximately $53,000 on a pre-tax basis. The yield utilized approximates the yield on a five year U.S. Treasury security as of December 31, 2013.

(3) ESOP loan with a balance of $1.0 million and an amortization period of 25 years straight line. ESOP loan is assumed to be funded internally, so no interest expense is recorded on the consolidated income statement for HV Bancorp. ESOP expense thus reflects only the amortization of principal for the period shown.

(4) Assumes a marginal tax rate of 34.0%, that reflects the effective tax rate of HV Bancorp on a combined basis with Victory Bancorp operating as a commercial bank.

(5) Reflects the impact of the purchase accounting fair value adjustments related to the acquisition of Victory Bancorp for the period.

(6) Adjustment to interest income is the amortization of the $1.3 million yield premium fair value adjustment for acquired loans resulting from the application of purchase accounting using the level yield method over the assumed life of the underlying loans, including prepayment assumptions. Adjustments to record estimated interest income to be foregone as a result of funding the cash portion of the merger consideration and the expenses of the merger will be recorded as incurred. Because they are non-recurring, these expenses are not reflected in the pro forma financial statements. The estimated reduction in interest income assuming funding requirements of $2.2 million for the merger and related expenses, assuming such cash costs were funded with investments yielding 1.75 percent for the six months ended December 31, 2013 would be approximately $12,000. The yield approximates the yield on the five year U.S. Treasury security on December 31, 2013.

Amortization of yield component of fair value adjustment to loans	$	(242	)
(Reduction in interest income)

183

(7) Adjustment to interest expense includes the amortization or accretion of the fair value adjustments on the time deposit portfolio and the borrowings portfolio and the additional interest expense incurred on the subordinated debentures of $497,000 issued at the minimum and midpoint of the offering range in conjunction with the exchange of the Victory Bancorp Series E convertible preferred stock with an interest rate of 8.5% annually. The deposit fair value adjustment of $263,000 is amortized into interest expense based on the level yield method over an approximate eight year period. The borrowings fair value adjustment of $22,000 is accreted into interest expense based on the level yield method over an approximate five year period.

Accretion of time deposit premium	$	91
Amortization of borrowings discount		(2	)
Interest costs on newly issued subordinated debt		(21	)
Adjustment to interest expense	$	68

(8) HV Bancorp expects that the merger with Victory Bancorp will provide the pro forma institution with opportunities to earn additional revenue. The adjustments do not reflect these expected benefits.

(9) Adjustments to non-interest expense include the amortization of the core deposit intangible established by HV Bancorp as a result of the merger. The core deposit intangible is assumed to be amortized over the expected life of Victory Bancorp’s acquired core deposit base on an accelerated basis. The expected life of the core deposit base is assumed to approximate 11 years, and the amortization method is assumed to be the double declining balance method. The conversion of HV Bancorp from a state-chartered savings institution to a state-chartered commercial bank will result in an increased expense in the form of a state shares tax based on the book value of the combined institution. The increase in the Pennsylvania shares tax has been calculated based on the additional equity subject to the shares tax resulting from the charter conversion of HV Bancorp and the Offering. The reduction in depreciation expense is based on the assumed fair value adjustment of the fixed assets of Victory Bancorp, a reduction of $477,000, which is assumed to be amortized over a 20 year period. The adjustments also do not include any merger related expenses, all of which are assumed to be one-time non-recurring expenses. The adjustments also do not include transaction expenses that may be incurred by HV Bancorp after the closing of the merger and conversion. These expenses may include legal and accounting fees and any other similar expenses. Any such transaction expenses would generally increase non-interest expense on a pre-tax basis and are expected to be non-recurring. HV Bancorp expects that the merger with Victory Bancorp will provide the pro forma merged institution with opportunities to realize reduced operating expenses. The adjustments do not reflect these expected benefits.

Elimination of merger costs recorded through December 31, 2013	$	198
Amortization of core deposit intangible		(65	)
Increased Pennsylvania shares tax		(66	)
Reduced depreciation for fixed assets		12
Adjustment to non-interest expense	$	80

(10) Income tax expense computed at an effective tax rate of 34% of all merger adjustments.

(11) Reflects the elimination of all cash dividends on Victory Bancorp Series E convertible preferred stock. Remaining preferred dividends reflect cash dividends paid on the $3.4 million of Series F preferred stock at an annual rate of 1%, which remains after the merger and conversion.

(12) Earnings per share calculated using the following share information which is assumed to be the same for the entire period:

	HV Bank Historical		Offering Adjustments (a)			HV Bancorp Pro Forma As Converted		Plus: Victory Bancorp Historical		Plus: Merger Shares Issued to Victory Bancorp Shareholders		Less: Elimination of existing Victory Bancorp Common Shares			HV Bancorp Pro Forma Consolidated
Basic EPS		N/A		752,952			752,952		1,025,464		800,485		(1,025,464	)		1,553,437
Diluted EPS		N/A		752,952			752,952		1,025,464		800,485		(1,025,464	)		1,553,437
(a) Shares sold in the offering				850,000
Less: shares to be acquired by the ESOP				(99,029	)
Plus: ESOP shares allocated or committed to be released				1,981
Weighted average shares outstanding				752,952

184

The following table presents pro forma income statement information for the year ended June 30, 2013, at the minimum of the offering range, including the issuance of 850,000 shares in the offering and the issuance to shareholders of Victory Bancorp in the merger of 800,485 shares of stock and $1.8 million of cash.

Pro Forma Unaudited Condensed Consolidated

Statement of Income

For the Twelve Months Ended June 30, 2013

	HV Bank June 30, 2013 Historical			Offering Adjustments (1)(2)			HV Bancorp Pro Forma as Converted			Victory Bancorp June 30, 2013 Historical			Merger Adjustments (5)			HV Bancorp Pro Forma Consolidated
	(In thousands)
Interest and dividend income	$	4,994		$	—		$	4,994		$	6,257		$	(541	)(6)	$	10,710
Interest expense		(982	)		—			(982	)		(1,059	)		101	(7)		(1,940	)
Net interest income		4,012			—			4,012			5,198			(440	)		8,770
(Credit) Provision for loan losses		(120	)		—			(120	)		(488	)		—			(608	)
Net interest income after provision for loan losses		3,892			—			3,892			4,710			(440	)		8,162
Noninterest income		2,700			—			2,700			708			—	(8)		3,408
Noninterest expense		(6,511	)		(39	)(3)		(6,550	)		(4,618	)		(236	)(9)		(11,404	)
Income before income taxes		81			(39	)		42			800			(676	)		166
Income tax expense		42			13	(4)		55			859			230	(10)		1,144
Net income		123			(26	)		97			1,659			(446	)		1,310
Preferred stock dividends		—			—			—			(216	)		184	(11)		(32	)
Net income available to common	$	123		$	(26	)	$	97		$	1,443		$	(262	)	$	1,278
Basic EPS (12)		—			—		$	0.13		$	1.41			—		$	0.82
Diluted EPS (12)		—			—		$	0.13		$	1.41			—		$	0.82

(1) Reflects the impact of HV Bancorp’s conversion stock offering, assuming gross proceeds of $8.5 million at the minimum of the offering range, offering expenses of $1.0 million and establishment of an ESOP that will acquire 6.0% of the pro forma shares to be outstanding, including merger shares. The ESOP is assumed to purchase shares in the offering at a price of $10.00 per share, however, such shares may be purchased in open market purchases following completion of the offering. The ESOP stock purchases will be funded by a loan amortized over 25 years on a straight line basis. The adjustment to noninterest expense shown reflects the estimated ESOP amortization expense on a pre-tax basis for the period shown.

(2) HV Bancorp also intends to adopt a stock-based incentive plan and a stock option plan following completion of the merger and offering. The estimates of the impact of these benefit plans are not reflected in the calculations of pro forma income, since these estimates are speculative, both on the timing of the implementation of such plans and the amount of HV Bancorp stock to be contained in each plan. The stock-based incentive plan intends to purchase 4.0% of the pro forma shares to be outstanding, including merger shares, in the open market after receiving shareholder approval. HV Bancorp also intends to adopt a stock option plan that will contain 10.0% of the pro forma shares to be outstanding, including merger shares. Pursuant to an application of the Black-Scholes option pricing model, the stock options are assumed to have a value of $3.33 per option. The option value is assumed to be expensed over the five year vesting period for the options and 25% of the option expense is assumed to be deductible for income tax purposes. The stock option plan would be subject to shareholder approval. Adjustments to record estimated stock-based incentive plan expense and stock option plan expense will be recorded as incurred. The estimated expense for the stock-based equity incentive plan assuming gross proceeds of $8.5 million is $132,000 pretax for the year ended June 30, 2013. The estimated expense for the stock option plan assuming gross proceeds of $8.5 million is $110,000 pretax for the year ended June 30, 2013. Stock-based incentive plan shares are assumed to vest over 5 years on a straight-line basis. Taxes are calculated on an assumed marginal rate of 34%.

Interest income to be earned on the net proceeds of the offering will be recorded as incurred. Since these estimates are speculative, they are not reflected in the calculations of pro forma income. The estimated interest income assuming net cash proceeds of $6.0 million from the offering are invested at an average pretax yield of 1.41 percent for the year ended June 30, 2013 would be approximately $85,000 on a pre-tax basis. The yield utilized approximates the yield on a five year U.S. Treasury security as of June 30, 2013.

(3) ESOP loan with a balance of $1.0 million and an amortization period of 25 years straight line. ESOP loan is assumed to be funded internally, so no interest expense is recorded on the consolidated income statement for HV Bancorp. ESOP expense thus reflects only the amortization of principal for the period shown.

(4) Assumes a marginal tax rate of 34.0%, that reflects the effective tax rate of HV Bancorp on a combined basis with Victory Bancorp operating as a commercial bank.

(5) Reflects the impact of the purchase accounting fair value adjustments related to the acquisition of Victory Bancorp for the year.

(6) Adjustment to interest income is the amortization of the $1.3 million yield premium fair value adjustment for acquired loans resulting from the application of purchase accounting using the level yield method over the assumed life of the underlying loans, including prepayment assumptions. Adjustments to record estimated interest income to be foregone as a result of funding the cash portion of the merger consideration and the expenses of the merger will be recorded as incurred. Because they are non-recurring, these expenses are not reflected in the pro forma financial statements. The estimated reduction in interest income assuming funding requirements of $2.2 million for the merger and related expenses, assuming such cash costs were funded with investments yielding 1.41% for the year ended June 30, 2013 would be approximately $20,000. The yield approximates the yield on the five year U.S. Treasury security on June 30, 2013.

Amortization of yield component of fair value adjustment to loans	$	(541	)
(Reduction in interest income)

185

(7) Adjustment to interest expense includes the amortization or accretion of the fair value adjustments on the time deposit portfolio and the borrowings portfolio and the additional interest interest expense incurred on the subordinated debentures issued at the minimum and midpoint of the offering range in conjunction with the exchange of the Victory Bancorp Series E convertible preferred stock with an interest rate of 8.5% annually. The deposit fair value adjustment of $263,000 is amortized into interest expense based on the level yield method over an approximate eight year period. The borrowings fair value adjustment is accreted into interest expense based on the level yield method over an approximate five year period.

Accretion of time deposit premium from purchase accounting	$	147
Amortization of borrowings discount from purchase accounting		(4	)
Interest costs on newly issued subordinated debt		(42	)
Adjustment to interest expense	$	101

(8) HV Bancorp expects that the merger with Victory Bancorp will provide the pro forma institution with opportunities to earn additional revenue. The adjustments do not reflect these expected benefits.

(9) Adjustments to non-interest expense include the amortization of the core deposit intangible established by HV Bancorp as a result of the merger. The core deposit intangible is assumed to be amortized over the expected life of Victory Bancorp’s acquired core deposit base on an accelerated basis. The expected life of the core deposit base is assumed to approximate 11 years, and the amortization method is assumed to be the double declining balance method. The conversion of HV Bancorp from a state-chartered savings institution to a state-chartered commercial bank will result in an increased expense in the form of a state shares tax based on the book value of the combined institution. The increase in the Pennsylvania shares tax has been calculated based on the additional equity subject to the shares tax resulting from the charter conversion of HV Bancorp and the offering. The reduction in depreciation expense is based on the assumed fair value adjustment of the fixed assets of Victory Bancorp a reduction of $477,000, which is assumed to be amortized over a 20 year period. The adjustments also do not include any merger related expenses, all of which are assumed to be one-time non-recurring expenses. The adjustments also do not include transaction expenses that may be incurred by HV Bancorp after the closing of the merger and conversion. These expenses may include legal and accounting fees and any other similar expenses. Any such transaction expenses would generally increase non-interest expense on a pre-tax basis and are expected to be non-recurring. HV Bancorp expects that the merger with Victory Bancorp will provide the pro forma merged institution with opportunities to realize reduced operating expenses. The adjustments do not reflect these expected benefits.

Amortization of core deposit intangible	$	(129	)
Increased Pennsylvania shares tax		(130	)
Reduced depreciation for fixed assets		24
Adjustment to non-interest expense	$	(236	)

(10) Income tax computed at an effective rate of 34% for all merger adjustments

(11) Reflects the elimination of all cash dividends on Victory Bancorp Series E convertible preferred stock. Remaining preferred dividends reflect cash dividends paid on the $3.431 million of Series F preferred stock at an annual rate of 1%, which remains after the merger and conversion.

(12) Earnings per share calculated using the following share information which is assumed to be the same for the entire period:

	HV Bank Historical		Offering Adjustments (a)			HV Bancorp Pro Forma As Converted		Plus: Victory Bancorp Historical		Plus: Merger Shares Issued to Victory Bancorp Shareholders		Less: Elimination of existing Victory Bancorp Common Shares			HV Bancorp Pro Forma Consolidated
Basic EPS		N/A		754,932			754,932		1,025,464		800,485		(1,025,464	)		1,555,417
Diluted EPS		N/A		754,932			754,932		1,025,464		800,485		(1,025,464	)		1,555,417
(a) Shares sold in the offering				850,000
Less: shares to be acquired by the ESOP				(99,029	)
Plus: ESOP shares allocated or committed to be released				3,961
Weighted average shares outstanding				754,932

186

The following table presents pro forma income statement information for the six months ended December 31, 2013, at the adjusted maximum of the offering range, including the issuance of 1,322,500 shares in the offering and the issuance to shareholders of Victory Bancorp in the merger of 1,046,804 shares of stock.

Pro Forma Unaudited Condensed Consolidated

Statement of Income

For the Six Months Ended December 31, 2013

	HV Bank Historical			Offering Adjustments (1)(2)			HV Bancorp Pro Forma as Converted			Victory Bancorp Historical			Merger Adjustments (5)			HV Bancorp Pro Forma Consolidated
	(In thousands)
Interest and dividend income	$	2,545		$	—		$	2,545		$	3,577		$	(242	)(6)	$	5,880
Interest expense		(435	)		—			(435	)		(512	)		89	(7)		(858	)
Net interest income		2,110			—			2,110			3,065			(153	)		5,022
Credit (Provision) for loan losses		31			—			31			(133	)		—			(102	)
Net interest income after provision for loan losses		2,141			—			2,141			2,932			(153	)		4,920
Noninterest income		1,202			—			1,202			408			—	(8)		1,610
Noninterest expense		(3,252	)		(29	)(3)		(3,281	)		(2,742	)		80	(9)		(5,943	)
Income before income taxes		91			(29	)		62			598			(73	)		587
Income tax expense		(36	)		10	(4)		(26	)		(272	)		25	(10)		(273	)
Net income		55			(19	)		36			326			(48	)		314
Preferred stock dividends		—			—			—			(110	)		92	(11)		(18	)
Net income available to common	$	55		$	(19	)	$	36		$	216		$	44		$	296
Basic EPS (12)		—			—		$	0.03		$	0.21			—		$	0.13
Diluted EPS (12)		—			—		$	0.03		$	0.21			—		$	0.13

(1) Reflects the impact of HV Bancorp’s conversion stock offering, assuming gross proceeds of $13.2 million at the adjusted maximum of the offering range, offering expenses of $1.1 million and establishment of an ESOP that will acquire 6.0% of the pro forma shares to be outstanding, including merger shares. The ESOP is assumed to purchase shares in the offering at a price of $10.00 per share, however, such shares may be purchased in open market purchases following completion of the offering. The ESOP stock purchases will be funded by a loan amortized over 25 years on a straight line basis. The adjustment to noninterest expense shown reflects the estimated ESOP amortization expense on a pre-tax basis for the period shown.

(2) HV Bancorp also intends to adopt a stock-based incentive plan and a stock option plan following completion of the merger and offering. The estimates of the impact of these benefit plans are not reflected in the calculations of pro forma income, since these estimates are speculative, both on the timing of the implementation of such plans and the amount of HV Bancorp stock to be contained in each plan. The stock-based incentive plan intends to purchase 4.0% of the pro forma shares to be outstanding, including merger shares, in the open market after receiving shareholder approval. HV Bancorp also intends to adopt a stock option plan that will contain 10.0% of the pro forma shares to be outstanding, including merger shares. Pursuant to an application of the Black-Scholes option pricing model, the stock options are assumed to have a value of $3.33 per option. The option value is assumed to be expensed over the five year vesting period for the options and 25% of the option expense is assumed to be deductible for income tax purposes. The stock option plan would be subject to shareholder approval. Adjustments to record estimated stock-based incentive plan expense and stock option plan expense will be recorded as incurred. The estimated expense for the stock-based equity incentive plan assuming gross proceeds of $13.2 million is $95,000 pretax for the six months ended December 31, 2013. The estimated expense for the stock option plan assuming gross proceeds of $13.2 million is $79,000 pretax for the six months ended December 31, 2013. Stock-based incentive plan shares are assumed to vest over 5 years on a straight-line basis. Taxes are calculated on an assumed marginal rate of 34%.

Interest income to be earned on the net proceeds of the offering will be recorded as incurred. Since these estimates are speculative, they are not reflected in the calculations of pro forma income. The estimated interest income assuming net cash proceeds of $10.0 million from the offering are invested at an average pretax yield of 1.75 percent for the six months ended December 31, 2013 would be approximately $87,000 on a pre-tax basis. The yield utilized approximates the yield on a five year U.S. Treasury security as of December 31, 2013.

(3) ESOP loan with a balance of $1.4 million and an amortization period of 25 years straight line. ESOP loan is assumed to be funded internally, so no interest expense is recorded on the consolidated income statement for HV Bancorp. ESOP expense thus reflects only the amortization of principal for the period shown.

(4) Assumes a marginal tax rate of 34.0%, that reflects the effective tax rate of HV Bancorp on a combined basis with Victory Bancorp operating as a commercial bank.

(5) Reflects the impact of the purchase accounting fair value adjustments related to the acquisition of Victory Bancorp for the period.

(6) Adjustment to interest income is the amortization of the $1.3 million yield premium fair value adjustment for acquired loans resulting from the application of purchase accounting using the level yield method over the assumed life of the underlying loans, including prepayment assumptions. Adjustments to record estimated interest income to be foregone as a result of funding the cash portion of the merger consideration and the expenses of the merger will be recorded as incurred. Because they are non-recurring, these expenses are not reflected in the pro forma financial statements. The estimated reduction in interest income assuming funding requirements of $0.4 million for the merger and related expenses, assuming such cash costs were funded with investments yielding 1.75 percent for the six months ended December 31, 2013 would be approximately $2,000. The yield approximates the yield on the five year U.S. Treasury security on December 31, 2013.

Amortization of yield component of fair value adjustment to loans	$	(242	)
(Reduction in interest income)

187

(7) Adjustment to interest expense includes the amortization or accretion of the fair value adjustments on the time deposit portfolio and the borrowings portfolio and the additional interest expense incurred on the subordinated debentures of $497,000 issued at the minimum and midpoint of the offering range in conjunction with the exchange of the Victory Bancorp Series E convertible preferred stock with an interest rate of 8.5% annually. The deposit fair value adjustment of $263,000 is amortized into interest expense based on the level yield method over an approximate eight year period. The borrowings fair value adjustment of $22,000 is accreted into interest expense based on the level yield method over an approximate five year period.

Accretion of time deposit premium	$	91
Amortization of borrowings discount		(2	)
Interest costs on newly issued subordinated debt		—
Adjustment to interest expense	$	89

(8) HV Bancorp expects that the merger with Victory Bancorp will provide the pro forma institution with opportunities to earn additional revenue. The adjustments do not reflect these expected benefits.

(9) Adjustments to non-interest expense include the amortization of the core deposit intangible established by HV Bancorp as a result of the merger. The core deposit intangible is assumed to be amortized over the expected life of Victory Bancorp’s acquired core deposit base on an accelerated basis. The expected life of the core deposit base is assumed to approximate 11 years, and the amortization method is assumed to be the double declining balance method. The conversion of HV Bancorp from a state-chartered savings institution to a state-chartered commercial bank will result in an increased expense in the form of a state shares tax based on the book value of the combined institution. The increase in the Pennsylvania shares tax has been calculated based on the additional equity subject to the shares tax resulting from the charter conversion of HV Bancorp and the Offering. The reduction in depreciation expense is based on the assumed fair value adjustment of the fixed assets of Victory Bancorp, a reduction of $477,000, which is assumed to be amortized over a 20 year period. The adjustments also do not include any merger related expenses, all of which are assumed to be one-time non-recurring expenses. The adjustments also do not include transaction expenses that may be incurred by HV Bancorp after the closing of the merger and conversion. These expenses may include legal and accounting fees and any other similar expenses. Any such transaction expenses would generally increase non-interest expense on a pre-tax basis and are expected to be non-recurring. HV Bancorp expects that the merger with Victory Bancorp will provide the pro forma merged institution with opportunities to realize reduced operating expenses. The adjustments do not reflect these expected benefits.

Elimination of merger costs recorded through December 31, 2013	$	198
Amortization of core deposit intangible		(65	)
Increased Pennsylvania shares tax		(66	)
Reduced depreciation for fixed assets		12
Adjustment to non-interest expense	$	80

(10) Income tax expense computed at an effective tax rate of 34% of all merger adjustments.

(11) Reflects the elimination of all cash dividends on Victory Bancorp Series E convertible preferred stock. Remaining preferred dividends reflect cash dividends paid on the $3.4 million of Series F preferred stock at an annual rate of 1%, which remains after the merger and conversion.

(12) Earnings per share calculated using the following share information which is assumed to be the same for the entire period:

	HV Bank Historical		Offering Adjustments (a)			HV Bancorp Pro Forma As Converted		Plus: Victory Bancorp Historical		Plus: Merger Shares Issued to Victory Bancorp Shareholders		Less: Elimination of existing Victory Bancorp Common Shares			HV Bancorp Pro Forma Consolidated
Basic EPS		N/A		1,183,185			1,183,185		1,025,464		1,046,804		(1,025,464	)		2,229,989
Diluted EPS		N/A		1,183,185			1,183,185		1,025,464		1,046,804		(1,025,464	)		2,229,989
(a) Shares sold in the offering				1,322,500
Less: shares to be acquired by the ESOP				(142,158	)
Plus: ESOP shares allocated or committed to be released				2,843
Weighted average shares outstanding				1,183,185

188

The following table presents pro forma income statement information for the year ended June 30, 2013, at the adjusted maximum of the offering range, including the issuance of 1,322,500 shares in the offering and the issuance to shareholders of Victory Bancorp in the merger of 1,046,804 shares of common stock.

Pro Forma Unaudited Condensed Consolidated

Statement of Income

For the Twelve Months Ended June 30, 2013

	HV Bank June 30, 2013 Historical			Offering Adjustments (1)(2)			HV Bancorp Pro Forma as Converted			Victory Bancorp June 30, 2013 Historical			Merger Adjustments (5)			HV Bancorp Pro Forma Consolidated
	(In thousands)
Interest and dividend income	$	4,994		$	—		$	4,994		$	6,257		$	(541	)(6)	$	10,710
Interest expense		(982	)		—			(982	)		(1,059	)		143	(7)		(1,898	)
Net interest income		4,012			—			4,012			5,198			(398	)		8,812
(Credit) Provision for loan losses		(120	)		—			(120	)		(488	)		—			(608	)
Net interest income after provision for loan losses		3,892			—			3,892			4,710			(398	)		8,204
Noninterest income		2,700			—			2,700			708			—	(8)		3,408
Noninterest expense		(6,511	)		(58	)(3)		(6,569	)		(4,618	)		(236	)(9)		(11,423	)
Income before income taxes		81			(58	)		23			800			(634	)		189
Income tax expense		42			20	(4)		62			859			216	(10)		1,137
Net income		123			(38	)		85			1,659			(418	)		1,326
Preferred stock dividends		—			—			—			(216	)		184	(11)		(32	)
Net income available to common	$	123		$	(38	)	$	85		$	1,443		$	(234	)	$	1,294
Basic EPS (12)		—			—		$	0.07		$	1.41			—		$	0.58
Diluted EPS (12)		—			—		$	0.07		$	1.41			—		$	0.58

(1) Reflects the impact of HV Bancorp’s conversion stock offering, assuming gross proceeds of $13.2 million at the adjusted maximum of the offering range, offering expenses of $1.1 million and establishment of an ESOP that will acquire 6.0% of the pro forma shares to be outstanding, including merger shares. The ESOP is assumed to purchase shares in the offering at a price of $10.00 per share, however, such shares may be purchased in open market purchases following completion of the offering. The ESOP stock purchases will be funded by a loan amortized over 25 years on a straight line basis. The adjustment to noninterest expense shown reflects the estimated ESOP amortization expense on a pre-tax basis for the period shown.

(2) HV Bancorp also intends to adopt a stock-based incentive plan and a stock option plan following completion of the merger and offering. The estimates of the impact of these benefit plans are not reflected in the calculations of pro forma income, since these estimates are speculative, both on the timing of the implementation of such plans and the amount of HV Bancorp stock to be contained in each plan. The stock-based incentive plan intends to purchase 4.0% of the pro forma shares to be outstanding, including merger shares, in the open market after receiving shareholder approval. HV Bancorp also intends to adopt a stock option plan that will contain 10.0% of the pro forma shares to be outstanding, including merger shares. Pursuant to an application of the Black-Scholes option pricing model, the stock options are assumed to have a value of $3.33 per option. The option value is assumed to be expensed over the five year vesting period for the options and 25% of the option expense is assumed to be deductible for income tax purposes. The stock option plan would be subject to shareholder approval. Adjustments to record estimated stock-based incentive plan expense and stock option plan expense will be recorded as incurred. The estimated expense for the stock-based equity incentive plan assuming gross proceeds of $13.2 million is $190,000 pretax for the year ended June 30, 2013. The estimated expense for the stock option plan assuming gross proceeds of $13.2 million is $158,000 pretax for the year ended June 30, 2013. Stock-based incentive plan shares are assumed to vest over 5 years on a straight-line basis. Taxes are calculated on an assumed marginal rate of 34%.

Interest income to be earned on the net proceeds of the offering will be recorded as incurred. Since these estimates are speculative, they are not reflected in the calculations of pro forma income. The estimated interest income assuming net cash proceeds of $10.0 million from the offering are invested at an average pretax yield of 1.41 percent for the year ended June 30, 2013 would be approximately $140,000 on a pre-tax basis. The yield utilized approximates the yield on a five year U.S. Treasury security as of June 30, 2013.

(3) ESOP loan with a balance of $1.4 million and an amortization period of 25 years straight line. ESOP loan is assumed to be funded internally, so no interest expense is recorded on the consolidated income statement for HV Bancorp. ESOP expense thus reflects only the amortization of principal for the period shown.

(4) Assumes a marginal tax rate of 34.0%, that reflects the effective tax rate of HV Bancorp on a combined basis with Victory Bancorp operating as a commercial bank.

(5) Reflects the impact of the purchase accounting fair value adjustments related to the acquisition of Victory Bancorp for the year.

(6) Adjustment to interest income is the amortization of the $1.3 million yield premium fair value adjustment for acquired loans resulting from the application of purchase accounting using the level yield method over the assumed life of the underlying loans, including prepayment assumptions. Adjustments to record estimated interest income to be foregone as a result of funding the cash portion of the merger consideration and the expenses of the merger will be recorded as incurred. Because they are non-recurring, these expenses are not reflected in the pro forma financial statements. The estimated reduction in interest income assuming funding requirements of $0.4 million for the merger and related expenses, assuming such cash costs were funded with investments yielding 1.41% for the year ended June 30, 2013 would be approximately $3,000. The yield approximates the yield on the five year U.S. Treasury security on June 30, 2013.

Amortization of yield component of fair value adjustment to loans	$	(541	)
(Reduction in interest income)

189

(7) Adjustment to interest expense includes the amortization or accretion of the fair value adjustments on the time deposit portfolio and the borrowings portfolio and the additional interest interest expense incurred on the subordinated debentures issued at the minimum and midpoint of the offering range in conjunction with the exchange of the Victory Bancorp Series E convertible preferred stock with an interest rate of 8.5% annually. The deposit fair value adjustment of $263,000 is amortized into interest expense based on the level yield method over an approximate eight year period. The borrowings fair value adjustment is accreted into interest expense based on the level yield method over an approximate five year period.

Accretion of time deposit premium from purchase accounting	$	147
Amortization of borrowings discount from purchase accounting		(4	)
Interest costs on newly issued subordinated debt		—
Adjustment to interest expense	$	143

(8) HV Bancorp expects that the merger with Victory Bancorp will provide the pro forma institution with opportunities to earn additional revenue. The adjustments do not reflect these expected benefits.

(9) Adjustments to non-interest expense include the amortization of the core deposit intangible established by HV Bancorp as a result of the merger. The core deposit intangible is assumed to be amortized over the expected life of Victory Bancorp’s acquired core deposit base on an accelerated basis. The expected life of the core deposit base is assumed to approximate 11 years, and the amortization method is assumed to be the double declining balance method. The conversion of HV Bancorp from a state-chartered savings institution to a state-chartered commercial bank will result in an increased expense in the form of a state shares tax based on the book value of the combined institution. The increase in the Pennsylvania shares tax has been calculated based on the additional equity subject to the shares tax resulting from the charter conversion of HV Bancorp and the Offering. The reduction in depreciation expense is based on the assumed fair value adjustment of the fixed assets of Victory Bancorp a reduction of $477,000, which is assumed to be amortized over a 20 year period. The adjustments also do not include any merger related expenses, all of which are assumed to be one-time non-recurring expenses. The adjustments also do not include transaction expenses that may be incurred by HV Bancorp after the closing of the merger and conversion. These expenses may include legal and accounting fees and any other similar expenses. Any such transaction expenses would generally increase non-interest expense on a pre-tax basis and are expected to be non-recurring. HV Bancorp expects that the merger with Victory Bancorp will provide the pro forma merged institution with opportunities to realize reduced operating expenses. The adjustments do not reflect these expected benefits.

Amortization of core deposit intangible	$	(129	)
Increased Pennsylvania shares tax		(130	)
Reduced depreciation for fixed assets		24
Adjustment to non-interest expense	$	(236	)

(10) Income tax computed at an effective rate of 34% for all merger adjustments

(11) Reflects the elimination of all cash dividends on Victory Bancorp Series E convertible preferred stock. Remaining preferred dividends reflect cash dividends paid on the $3.431 million of Series F preferred stock at an annual rate of 1%, which remains after the merger and conversion.

(12) Earnings per share calculated using the following share information which is assumed to be the same for the entire period:

	HV Bank Historical		Offering Adjustments (a)			HV Bancorp Pro Forma As Converted		Plus: Victory Bancorp Historical		Plus: Merger Shares Issued to Victory Bancorp Shareholders		Less: Elimination of existing Victory Bancorp Common Shares			HV Bancorp Pro Forma Consolidated
Basic EPS		N/A		1,186,028			1,186,028		1,025,464		1,046,804		(1,025,464	)		2,232,832
Diluted EPS		N/A		1,186,028			1,186,028		1,025,464		1,046,804		(1,025,464	)		2,232,832
(a) Shares sold in the offering				1,322,500
Less: shares to be acquired by the ESOP				(142,158	)
Plus: ESOP shares allocated or committed to be released				5,686
Weighted average shares outstanding				1,186,028

190

Analysis of Pro Forma Outstanding Shares of HV Bancorp Common Stock

Offering Range	Total Shares Outstanding			Shares Sold In the Offering			Shares Issued to Victory Bancorp Stockholders(1)			Cash Issued in Connection with the Merger(2)
	(#)			(#)			(#)			($000)
Minimum		1,650,485			850,000			800,485		$	2,159
Midpoint		1,941,748			1,000,000			941,748		$	746
Maximum		2,196,804			1,150,000			1,046,804		$	361
Supermax		2,369,304			1,322,500			1,046,804		$	361
Outstanding Percentage of Shares
Minimum		100.00	%		51.50	%		48.50	%		N/A
Midpoint		100.00	%		51.50	%		48.50	%		N/A
Maximum		100.00	%		52.35	%		47.65	%		N/A
Supermax		100.00	%		55.82	%		44.18	%		N/A

(1) At the minimum and midpoint of the offering range, assumes that 19% of the Victory Bancorp Series E convertible preferred stock is converted to Victory Bancorp subordinated debt, prior to closing of the merger. The remaining shares of Victory Bancorp Series E convertible preferred stock are converted to Victory Bancorp common shares prior to closing of the merger and exchanged for HV Bancorp common shares based on the exchange ratio. At the maximum and maximum, as adjusted of the offering range, assumes that none of the Victory Bancorp Series E shares are converted to Victory Bancorp subordinated debt, prior to closing of the merger, and all Victory Bancorp Series E shares are converted to Victory Bancorp common shares prior to closing of the merger and exchanged for HV Bancorp common shares based on the exchange ratio.

(2) Cash amount includes cash consideration paid to Victory Bancorp common shareholders at the minimum and midpoint of the offering range in an amount to maintain a pro forma HV Bancorp shareholder ownership of 48.5% of outstanding common shares, along with HV Bancorp and Victory Bancorp tax-deductible and non-tax deductible merger-related expenses.

Additional Pro Forma Data

The following tables show information about HV Bank’s and Victory Bancorp’s historical combined consolidated net income and stockholders’ equity prior to the offering and merger and HV Bancorp’s pro forma consolidated net income and stockholders’ equity following the offering and merger. The information provided illustrates our consolidated pro forma net income and stockholders’ equity based on the sale of common stock at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively. The actual net proceeds from the sale of the common stock cannot be determined until the offering is completed. Net proceeds indicated in the following tables are based upon the assumptions described in “Pro Forma Unaudited Condensed Consolidated Financial Statement Giving Effect to the Conversion and Acquisition.”

• HV Bancorp will sell in the offering 850,000 shares of common stock (at the minimum of the offering range) and 1,322,500 shares of common stock (at the maximum, as adjusted, of the offering range);

• In connection with the merger with Victory Bancorp, HV Bancorp will issue to Victory Bancorp shareholders 800,485 shares of common stock (at the minimum of the offering range) and 1,046,804 shares of common stock (at the maximum, as adjusted, of the offering range);

• In connection with the merger with Victory Bancorp, 19% of the Victory Series E preferred stock is exchanged for Victory Bancorp subordinated debt at the minimum of the offering range, and zero percent of the Victory Series E preferred stock is exchanged for Victory Bancorp subordinated debt at the maximum, as adjusted, of the offering range;

• In connection with the merger with Victory Bancorp, the merger consideration will include $1.8 million of cash at the minimum of the offering range. No cash will be included as part of the merger consideration at the maximum, as adjusted, of the offering range;

• HV Bancorp’s employee stock ownership plan will purchase, with a loan from HV Bancorp, a number of shares equal to 6.0% of the total number of outstanding shares of HV Bancorp, which includes shares sold in the offering and shares issued in the merger to Victory Bancorp shareholders;

• total expenses of the offering, including fees paid to Griffin Financial Group, will range from $1.0 million at the minimum of the offering range to $1.1 million at the maximum, as adjusted of the offering range;

• 120,000 shares of common stock will be purchased by HV Bancorp’s executive officers and directors, and their associates; and

• Griffin Financial Group will receive fees equal to 1.5% and 5.5% of the aggregate purchase price of the shares of common stock sold in the subscription and syndicated offerings, respectively, excluding any shares purchased by any employee benefit plans, shares purchased by any of HV Bancorp’s directors, officers or employees or members of their immediate families, and shares issued in the merger.

In addition, the expenses of the offering and the merger may vary from those estimated, and the fees paid to Griffin Financial Group will vary from the amounts estimated if the amount of shares of HV Bancorp common stock sold varies from the amounts assumed above or based on the actual amount of share sold in the subscription/community offering and a syndicated offering, if necessary. These items, net of income tax effects, are shown as a reduction in stockholders’ equity in the following tables, but are not shown as a reduction in net income for the periods shown in the following tables.

Consolidated pro forma net income for the six months ended December 31, 2013 and the year ended June 30, 2013 has been calculated as if the offering were completed at the beginning of each period, and the net proceeds had been invested at 1.75% for the six months ended December 31, 2013 and 1.41% for the year ended June 30, 2013, which represents the U.S. Treasury five-year bill rate at the respective dates.

191

Pro forma after-tax investment returns of 1.16% and 0.93% were used for the six months ended December 31, 2013 and the year ended June 30, 2013, respectively, after giving effect to a combined federal and state income tax rate of 34%. The actual rate experienced by HV Bancorp may vary. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the number of shares of common stock indicated in the tables.

When reviewing the following tables, you should consider the following:

• The final column gives effect to a 15% increase in the offering range, which may occur without any further notice if Feldman Financial increases its appraisal to reflect the results of this offering, changes in our financial condition or results of operations, regulatory considerations or changes in market conditions after the offering begins. See “The Conversion and Stock Offering—How We Determined the Offering Range and the $10.00 Purchase Price;”

• Since funds on deposit at HV Bank may be withdrawn to purchase shares of common stock, the amount of funds available for investment will be reduced by the amount of withdrawals for stock purchases. The pro forma tables do not reflect withdrawals from deposit accounts;

• Historical per share amounts have been computed as if the shares of common stock expected to be issued in the offering had been outstanding at the beginning of the period covered by the table. However, neither historical nor pro forma stockholders’ equity has been adjusted to reflect the investment of the estimated net proceeds from the sale of the shares in the offering, the additional employee stock ownership plan expense or the future expense related to the proposed stock-based incentive plans;

• Pro forma stockholders’ equity (“book value”) represents the difference between the stated amounts of our assets and liabilities. Book value amounts do not represent fair market values of intangible assets, or amounts available for distribution to stockholders, in the unlikely event of liquidation. The amounts shown do not reflect the federal income tax consequences of the restoration to income of HV Bank’s special bad debt reserves for income tax purposes, which would be required in the unlikely event of liquidation. See “Regulation and Supervision—Federal and State Taxation;”

• The amounts shown as pro forma stockholders’ equity per share do not represent possible future price appreciation of our common stock; and

• The pro forma tables do not reflect the impact of the new expenses that we expect to incur as a result of operating as a public company.

The following consolidated pro forma data, which are based on HV Bank’s and Victory Bancorp’s equity at December 31, 2013 and June 30, 2013 and net income for the six months ended December 31, 2013 and the year ended June 30, 2013, may not represent the actual financial effects of the offering or our operating results after the offering and merger. The consolidated pro forma data rely exclusively on the assumptions outlined above and the notes to the pro forma tables. The consolidated pro forma data do not represent the fair market value of our common stock, the current fair market value of our assets or liabilities, or the amount of money that would be available for distribution to stockholders if we were to be liquidated after the offering.

We are offering our common stock on a best efforts basis. We must issue a minimum of 850,000 shares in the offering and in connection with the merger to complete the offering.

192

PRO FORMA TABLE (6 Mths December 31, 2013)

	Minimum 850,000 $10.00 per share			Midpoint 1,000,000 $10.00 per share			Maximum 1,150,000 $10.00 per share			Maximum As Adjusted 1,322,500 $10.00 per share
Gross proceeds of offering	$	8,500		$	10,000		$	11,500		$	13,225
Fair value of shares issued in merger(1)	$	8,005		$	9,417		$	10,468		$	10,468
Pro forma value	$	16,505		$	19,417		$	21,968		$	23,693
Gross proceeds of offering	$	8,500		$	10,000		$	11,500		$	13,225
Less: estimated expenses	$	(973	)	$	(1,016	)	$	(1,060	)	$	(1,115	)
Estimated net proceeds	$	7,527		$	8,984		$	10,440		$	12,110
Less: common stock acquired by employee stock ownership plan	$	(990	)	$	(1,165	)	$	(1,318	)	$	(1,422	)
Less: common stock to be acquired by equity incentive plan	$	(660	)	$	(777	)	$	(879	)	$	(948	)
Net investable proceeds from offering	$	5,877		$	7,042		$	8,243		$	9,740
Funds required to effect the merger(2)	$	(2,159	)	$	(746	)	$	(361	)	$	(361	)
Consolidated pro forma net income
Pro forma net income
Historical combined including merger adjustments	$	301		$	301		$	315		$	315
Pro forma income on net investable proceeds	$	34		$	41		$	48		$	56
Pro forma impact of funding the merger	$	(12	)	$	(4	)	$	(2	)	$	(2	)
Pro forma employee stock ownership plan adjustments(3)	$	(13	)	$	(15	)	$	(17	)	$	(19	)
Pro forma restricted stock award expense(4)	$	(44	)	$	(51	)	$	(58	)	$	(63	)
Pro forma stock option expense(5)	$	(51	)	$	(59	)	$	(67	)	$	(72	)
Pro forma net income	$	215		$	213		$	219		$	215
Pro forma net income per share
Historical combined	$	0.20		$	0.17		$	0.16		$	0.14
Pro forma income on net investable proceeds	$	0.02		$	0.02		$	0.02		$	0.03
Pro forma impact of funding the merger	$	(0.01	)	$	—		$	—		$	—
Pro forma employee stock ownership plan adjustments(3)	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.01	)
Pro forma restricted stock award expense(4)	$	(0.03	)	$	(0.03	)	$	(0.03	)	$	(0.03	)
Pro forma stock option expense(5)	$	(0.03	)	$	(0.03	)	$	(0.03	)	$	(0.03	)
Pro forma net income per share	$	0.14		$	0.12		$	0.11		$	0.10
Offering price as a multiple of pro forma net income per share		35.71			41.67			45.45			50.00
Number of shares used to calculate pro forma net income per share(6)		1,553,437			1,827,573			2,067,632			2,229,989
Pro forma stockholders’ equity@12/31/2013
Pro forma stockholders’ equity (book value)
Historical combined including merger adjustments (pre-offering)	$	21,536		$	22,948		$	23,999		$	23,999
Estimated net proceeds	$	7,527		$	8,984		$	10,440		$	12,110
Less: common stock acquired by employee stock ownership plan(3)	$	(990	)	$	(1,165	)	$	(1,318	)	$	(1,422	)
Less: common stock acquired by equity incentive plan(4)	$	(660	)	$	(777	)	$	(879	)	$	(948	)
Pro forma stockholders’ equity	$	27,413		$	29,990		$	32,242		$	33,739
Intangible assets(7)	$	(834	)	$	(834	)	$	(1,002	)	$	(1,002	)
Pro forma tangible stockholders equity	$	26,579		$	29,156		$	31,240		$	32,737
Less: SBLF Preferred Stock		(3,431	)		(3,431	)		(3,431	)		(3,431	)
Pro forma tangible common stockholders equity	$	23,148		$	25,725		$	27,809		$	29,306
Pro forma stockholders’ equity per share:
Historical combined including merger adjustments	$	13.05		$	11.82		$	10.92		$	10.13
Estimated net proceeds	$	4.56		$	4.62		$	4.76		$	5.11
Less: common stock acquired by employee stock ownership plan(3)	$	(0.60	)	$	(0.60	)	$	(0.60	)	$	(0.60	)
Less: common stock acquired by equity incentive plan(4)	$	(0.40	)	$	(0.40	)	$	(0.40	)	$	(0.40	)
Pro forma stockholders’ equity per share	$	16.61		$	15.44		$	14.68		$	14.24
Intangible assets(7)	$	(0.51	)	$	(0.43	)	$	(0.46	)	$	(0.42	)
Pro forma tangible stockholders’ equity per share	$	16.10		$	15.01		$	14.22		$	13.82
Less: SBLF Preferred Stock equity per share	$	(2.08	)	$	(1.77	)	$	(1.56	)	$	(1.45	)
Pro forma tangible common stockholders equity	$	14.02		$	13.24		$	12.66		$	12.37
Offering price as a percentage of pro forma equity per share		60.20	%		64.77	%		68.12	%		70.22	%
Offering price as a percentage of pro forma tangible equity per share		62.11	%		66.62	%		70.32	%		72.36	%
Offering price as a percentage of pro forma tangible common equity per share		71.33	%		75.53	%		78.99	%		80.84	%
Shares used for pro forma stockholders equity per share(8)		1,650,485			1,941,748			2,196,804			2,369,304

193

⁽¹⁾  Reflects the issuance of shares to Victory Bancorp shareholders in the merger.

⁽²⁾  For the purposes of this presentation, the funds required to effect the merger with Victory Bancorp, pre-tax, which are expected to be paid upon consummation of the offering and merger (which are to occur simultaneously) or shortly thereafter, are reflected as an adjustment for purposes of the pro forma net income and pro forma net income per share information. Funds required to effect the merger include the cash portion of the merger consideration and one-time transaction costs of $361,000 on a pre-tax basis.

⁽³⁾  Assumes that the employee stock ownership plan will acquire a number of shares of stock equal to 6.0% of the shares outstanding, including shares issued in connection with the merger (99,029, 116,505, 131,808 and 142,158 shares at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively). The ESOP will borrow the funds to acquire these shares from the net offering proceeds retained by HV Bancorp. The amount of this borrowing has been reflected as a reduction from gross proceeds to determine estimated net investable proceeds. HV Bank intends to make contributions to the employee stock ownership plan in amounts at least equal to the principal and interest requirement of the debt. Interest income that HV Bancorp will earn on the loan will offset a portion of the compensation expense recorded by HV Bank as it contributes to the employee stock ownership plan. As the debt is paid down, shares will be released for allocation to participants’ accounts and shareholders’ equity will be increased.

The adjustment to pro forma net income for the employee stock ownership plan reflects the after-tax compensation expense associated with the plan. Applicable accounting principles require that compensation expense for the employee stock ownership plan be based upon shares committed to be released and that unallocated shares be excluded from earnings per share computations. An equal number of shares (4.0% of the total, based on a 25-year loan) will be released each year over the term of the loan. The valuation of shares committed to be released will be based upon the average market value of the shares during the year, which, for purposes of this calculation, was assumed to be equal to the $10.00 per share purchase price. If the average market value per share is greater than $10.00 per share, total employee stock ownership plan expense would be greater. See “Management of HV Bancorp and HV Bank—Tax-Qualified Benefit Plans—Employee Stock Ownership Plan.”

⁽⁴⁾  Assumes that HV Bancorp will purchase in the open market a number of shares of stock equal to 4% of the shares outstanding, including shares issued to Victory Bancorp shareholders in the merger (66,019, 77,670, 87,872 and 94,772 shares at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively), that will be reissued as restricted stock awards under one or more stock-based benefit plans to be adopted following the offering. Purchases will be funded with cash on hand at HV Bancorp or with dividends paid to HV Bancorp by HV Bank. The cost of these shares has been reflected as a reduction of gross proceeds to determine estimated net investable proceeds. In calculating the pro forma effect of the restricted stock awards, it is assumed that the required stockholder approval has been received, that the shares used to fund the awards were acquired at the beginning of the respective period and that the shares were acquired at the $10.00 per share purchase price. The issuance of authorized but unissued shares of common stock instead of shares repurchased in the open market would dilute the ownership interests of existing stockholders by approximately 3.85%.

The adjustment to pro forma net income for the restricted stock awards reflects the after-tax compensation expense associated with the awards. It is assumed that the fair market value of a share of HV Bancorp common stock was $10.00 at the time the awards were made, that shares of restricted stock issued under the stock-based benefit plan vest 20% per year, that compensation expense is recognized on a straight-line basis over each vesting period so that 20% of the value of the shares awarded was an amortized expense during each year, and that the combined federal and state income tax rate was 34%. If the fair market value per share is greater than $10.00 per share on the date shares are awarded under the stock-based benefit plan, total stock-based benefit plan expense would be greater.

⁽⁵⁾  The adjustment to pro forma net income for stock options reflects the after-tax compensation expense associated with the stock options that may be granted under the stock-based benefit plan to be adopted following the offering. If the stock-based benefit plan is approved by stockholders, a number of shares equal to

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10% of the number of shares outstanding, including shares issued in connection with the merger (165,049, 194,175, 219,680 and 236,930 shares at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively), will be reserved for future issuance upon the exercise of stock options that may be granted under the plan. We will follow Financial Accounting Standards Board Accounting Standards Codification Topic 718 — Compensation — Stock Compensation, to account for stock options issued. This standard requires compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements over the period the employee is required to provide services for the award. The cost will be measured based on the fair value of the equity instruments issued. Applicable accounting standards do not prescribe a specific valuation technique to be used to estimate the fair value of employee stock options. Using the Black-Scholes option-pricing formula, the options are assumed to have a value of $3.33 for each option, based on the following assumptions: exercise price, $10.00; trading price on date of grant, $10.00; dividend yield, 0%; expected life, 10 years; expected volatility, 15.82%; and risk-free interest rate, 3.04%. Because there currently is no market for HV Bancorp common stock, the assumed expected volatility is based on the SNL Index for all publicly traded thrifts. The dividend yield is assumed to be 0% because there is no history of dividend payments and the Board of Directors has not expressed an intention to commence dividend payments upon completion of the offering. It is assumed that stock options granted under the stock-based benefit plan vest 20% per year, that compensation expense is recognized on a straight-line basis over each vesting period so that 20% of the value of the options awarded is an amortized expense during each year, that 25% of the options awarded are non-qualified options and that the combined federal and state income tax rate is 34%. We plan to use the Black-Scholes option-pricing formula; however, if the fair market value per share is different than $10.00 per share on the date options are awarded under the stock-based benefit plan, or if the assumptions used in the option-pricing formula are different from those used in preparing this pro forma data, the value of the stock options and the related expense would be different. The issuance of authorized but unissued shares of common stock to satisfy option exercises instead of shares repurchased in the open market would dilute the ownership interests of existing stockholders by approximately 9.09%.

⁽⁶⁾  Per share income data is based on the number of shares sold in the offering, shares issued in the merger, and shares to be allocated or distributed under HV Bancorp’s employee stock ownership plan and stock-based benefit plan for the period presented. For the six months ended December 31, 2013, the shares outstanding for purposes of computing earnings per share have been calculated as follows:

	850,000 Shares at Minimum of Offering Range			1,000,000 Shares at Midpoint of Offering Range			1,150,000 Shares at Maximum of Offering Range			1,322,500 Shares at Maximum, as Adjusted of Offering Range
Shares issued in the offering		850,000			1,000,000			1,150,000			1,322,500
Shares issued in the merger		800,485			941,748			1,046,804			1,046,804
Total shares issued		1,650,485			1,941,748			2,196,804			2,369,304
Less ESOP shares		(99,029	)		(116,305	)		(131,808	)		(142,158	)
Plus shares subject to release		1,981			2,330			2,636			2,843
Pro forma shares for EPS		1,553,437			1,827,573			2,067,632			2,229,989

⁽⁷⁾  Includes $140,000 of goodwill and $694,000 of core deposit intangible at the minimum and midpoint of the offering range and $308,000 of goodwill and $694,000 of core deposit intangibles at the maximum and maximum, as adjusted of the offering range, resulting from the merger with Victory Bancorp.

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⁽⁸⁾  Includes the following:

Shares issued in the offering	850,000	1,000,000	1,150,000	1,322,500
Shares issued in the merger	800,485	941,748	1,046,804	1,046,804
Shares used for pro forma stockholders’ equity per share	1,650,485	1,941,748	2,196,804	2,369,304

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PRO FORMA TABLE (June 30, 2013)

	Minimum 850,000 $10.00 per share			Midpoint 1,000,000 $10.00 per share			Maximum 1,150,000 $10.00 per share			Maximum As Adjusted 1,322,500 $10.00 per share
Gross proceeds of offering	$	8,500		$	10,000		$	11,500		$	13,225
Fair value of shares issued in merger(1)	$	8,005		$	9,417		$	10,468		$	10,468
Pro forma value	$	16,505		$	19,417		$	21,968		$	23,693
Gross proceeds of offering	$	8,500		$	10,000		$	11,500		$	13,225
Less: estimated expenses	$	(973	)	$	(1,016	)	$	(1,060	)	$	(1,115	)
Estimated net proceeds	$	7,527		$	8,984		$	10,440		$	12,110
Less: common stock acquired by employee stock ownership plan	$	(990	)	$	(1,165	)	$	(1,318	)	$	(1,422	)
Less: common stock to be acquired by equity incentive plan	$	(660	)	$	(777	)	$	(879	)	$	(948	)
Net investable proceeds from offering	$	5,877		$	7,042		$	8,243		$	9,740
Funds required to effect the merger(2)	$	(2,159	)	$	(746	)	$	(361	)	$	(361	)
Consolidated pro forma net income
Pro forma net income
Historical combined including merger adjustments	$	1,304		$	1,304		$	1,332		$	1,332
Pro forma income on net investable proceeds	$	55		$	66		$	77		$	91
Pro forma impact of funding the merger	$	(20	)	$	(7	)	$	(3	)	$	(3	)
Pro forma employee stock ownership plan adjustments(3)	$	(26	)	$	(31	)	$	(35	)	$	(38	)
Pro forma restricted stock award expense(4)	$	(87	)	$	(103	)	$	(116	)	$	(125	)
Pro forma stock option expense(5)	$	(101	)	$	(118	)	$	(134	)	$	(144	)
Pro forma net income	$	1,125		$	1,111		$	1,121		$	1,113
Pro forma net income per share
Historical combined	$	0.84		$	0.71		$	0.64		$	0.60
Pro forma income on net investable proceeds	$	0.04		$	0.04		$	0.04		$	0.04
Pro forma impact of funding the merger	$	(0.01	)	$	—		$	—		$	—
Pro forma employee stock ownership plan adjustments(3)	$	(0.02	)	$	(0.02	)	$	(0.02	)	$	(0.02	)
Pro forma restricted stock award expense(4)	$	(0.06	)	$	(0.06	)	$	(0.06	)	$	(0.06	)
Pro forma stock option expense(5)	$	(0.07	)	$	(0.06	)	$	(0.06	)	$	(0.06	)
Pro forma net income per share	$	0.72		$	0.61		$	0.54		$	0.50
Offering price as a multiple of pro forma net income per share		13.89			16.39			18.52			20.00
Number of shares used to calculate pro forma net income per share(6)		1,555,417			1,829,903			2,070,268			2,232,832
Pro forma stockholders’ equity
Pro forma stockholders’ equity (book value)
Historical combined including merger adjustments (pre-offering)	$	21,721		$	23,133		$	24,184		$	24,184
Estimated net proceeds	$	7,527		$	8,984		$	10,440		$	12,110
Less: common stock acquired by employee stock ownership plan(3)	$	(990	)	$	(1,165	)	$	(1,318	)	$	(1,422	)
Less: common stock acquired by equity incentive plan(4)	$	(660	)	$	(777	)	$	(879	)	$	(948	)
Pro forma stockholders’ equity	$	27,598		$	30,175		$	32,427		$	33,924
Intangible assets(7)	$	(1,293	)	$	(1,293	)	$	(1,461	)	$	(1,461	)
Pro forma tangible stockholders equity	$	26,305		$	28,882		$	30,966		$	32,463
Less: SBLF Preferred Stock	$	(3,431	)	$	(3,431	)	$	(3,431	)	$	(3,431	)
Pro forma tangible common stockholders equity	$	22,874		$	25,451		$	27,535		$	29,032
Pro forma stockholders’ equity per share:
Historical combined including merger adjustments	$	13.16		$	11.91		$	11.01		$	10.21
Estimated net proceeds	$	4.56		$	4.62		$	4.75		$	5.11
Less: common stock acquired by employee stock ownership plan(3)	$	(0.60	)	$	(0.60	)	$	(0.60	)	$	(0.60	)
Less: common stock acquired by equity incentive plan(4)	$	(0.40	)	$	(0.40	)	$	(0.40	)	$	(0.40	)
Pro forma stockholders’ equity per share	$	16.72		$	15.53		$	14.76		$	14.32
Intangible assets(7)	$	(0.78	)	$	(0.67	)	$	(0.67	)	$	(0.62	)
Pro forma tangible stockholders’ equity per share	$	15.94		$	14.87		$	14.09		$	13.70
Less: SBLF Preferred Stock equity per share	$	(2.08	)	$	(1.77	)	$	(1.56	)	$	(1.45	)
Pro forma tangible common stockholders equity	$	13,86		$	13.10		$	12.53		$	12.25
Offering price as a percentage of pro forma equity per share		59.81	%		64.35	%		67.75	%		69.83	%
Offering price as a percentage of pro forma tangible equity per share		62.74	%		67.25	%		70.97	%		72.99	%
Offering price as a percentage of pro forma tangible common equity per share		72.15	%		76.34	%		79.81	%		81.63	%
Shares used for pro forma stockholders equity per share(8)		1,650,485			1,941,748			2,196,804			2,369,304

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⁽¹⁾  Reflects the issuance of shares to Victory Bancorp shareholders in the merger.

⁽²⁾  For the purposes of this presentation, the funds required to effect the merger with Victory Bancorp, pre-tax, which are expected to be paid upon consummation of the offering and merger (which are to occur simultaneously) or shortly thereafter, are reflected as an adjustment for purposes of the pro forma net income and pro forma net income per share information. Funds required to effect the merger include the cash portion of the merger consideration and one-time transaction costs of $361,000 on a pre-tax basis.

⁽³⁾  Assumes that the employee stock ownership plan will acquire a number of shares of stock equal to 6.0% of the shares outstanding, including shares issued in connection with the merger 99,029, 116,505, 131,808 and 142,158 shares at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively). The ESOP will borrow the funds to acquire these shares from the net offering proceeds retained by HV Bancorp. The amount of this borrowing has been reflected as a reduction from gross proceeds to determine estimated net investable proceeds. HV Bank intends to make contributions to the employee stock ownership plan in amounts at least equal to the principal and interest requirement of the debt. Interest income that HV Bancorp will earn on the loan will offset a portion of the compensation expense recorded by HV Bank as it contributes to the employee stock ownership plan. As the debt is paid down, shares will be released for allocation to participants’ accounts and shareholders’ equity will be increased.

The adjustment to pro forma net income for the employee stock ownership plan reflects the after-tax compensation expense associated with the plan. Applicable accounting principles require that compensation expense for the employee stock ownership plan be based upon shares committed to be released and that unallocated shares be excluded from earnings per share computations. An equal number of shares 4.0% of the total, based on a 25-year loan) will be released each year over the term of the loan. The valuation of shares committed to be released will be based upon the average market value of the shares during the year, which, for purposes of this calculation, was assumed to be equal to the $10.00 per share purchase price. If the average market value per share is greater than $10.00 per share, total employee stock ownership plan expense would be greater. See “Management of HV Bancorp and HV Bank—Tax-Qualified Benefit Plans—Employee Stock Ownership Plan.”

⁽⁴⁾  Assumes that HV Bancorp will purchase in the open market a number of shares of stock equal to 4% of the shares outstanding, including shares issued to Victory Bancorp shareholders in the merger 66,017, 77,670, 87,872 and 94,772 shares at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively), that will be reissued as restricted stock awards under one or more stock-based benefit plans to be adopted following the offering. Purchases will be funded with cash on hand at HV Bancorp or with dividends paid to HV Bancorp by HV Bank. The cost of these shares has been reflected as a reduction of gross proceeds to determine estimated net investable proceeds. In calculating the pro forma effect of the restricted stock awards, it is assumed that the required stockholder approval has been received, that the shares used to fund the awards were acquired at the beginning of the respective period and that the shares were acquired at the $10.00 per share purchase price. The issuance of authorized but unissued shares of common stock instead of shares repurchased in the open market would dilute the ownership interests of existing stockholders by approximately 3.85%.

The adjustment to pro forma net income for the restricted stock awards reflects the after-tax compensation expense associated with the awards. It is assumed that the fair market value of a share of HV Bancorp common stock was $10.00 at the time the awards were made, that shares of restricted stock issued under the stock-based benefit plan vest 20% per year, that compensation expense is recognized on a straight-line basis over each vesting period so that 20% of the value of the shares awarded was an amortized expense during each year, and that the combined federal and state income tax rate was 34%. If the fair market value per share is greater than $10.00 per share on the date shares are awarded under the stock-based benefit plan, total stock-based benefit plan expense would be greater.

⁽⁵⁾  The adjustment to pro forma net income for stock options reflects the after-tax compensation expense associated with the stock options that may be granted under the stock-based benefit plan to be adopted following the offering. If the stock-based benefit plan is approved by stockholders, a number of shares equal to

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10% of the number of shares outstanding, including shares issued in connection with the merger (165,049, 194,175, 219,680 and 236,930 shares at the minimum, midpoint, maximum and maximum, as adjusted of the offering range, respectively), will be reserved for future issuance upon the exercise of stock options that may be granted under the plan. We will follow Financial Accounting Standards Board Accounting Standards Codification Topic 718—Compensation—Stock Compensation, to account for stock options issued. This standard requires compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements over the period the employee is required to provide services for the award. The cost will be measured based on the fair value of the equity instruments issued. Applicable accounting standards do not prescribe a specific valuation technique to be used to estimate the fair value of employee stock options. Using the Black-Scholes option-pricing formula, the options are assumed to have a value of $3.33 for each option, based on the following assumptions: exercise price, $10.00; trading price on date of grant, $10.00; dividend yield, 0%; expected life, 10 years; expected volatility, 15.82%; and risk-free interest rate, 3.04%. Because there currently is no market for HV Bancorp common stock, the assumed expected volatility is based on the SNL Index for all publicly traded thrifts. The dividend yield is assumed to be 0% because there is no history of dividend payments and the Board of Directors has not expressed an intention to commence dividend payments upon completion of the offering. It is assumed that stock options granted under the stock-based benefit plan vest 20% per year, that compensation expense is recognized on a straight-line basis over each vesting period so that 20% of the value of the options awarded is an amortized expense during each year, that 25% of the options awarded are non-qualified options and that the combined federal and state income tax rate is 34%. We plan to use the Black-Scholes option-pricing formula; however, if the fair market value per share is different than $10.00 per share on the date options are awarded under the stock-based benefit plan, or if the assumptions used in the option-pricing formula are different from those used in preparing this pro forma data, the value of the stock options and the related expense would be different. The issuance of authorized but unissued shares of common stock to satisfy option exercises instead of shares repurchased in the open market would dilute the ownership interests of existing stockholders by approximately 9.09%.

⁽⁶⁾  Per share income data is based on the number of shares sold in the offering, shares issued in the merger, and shares to be allocated or distributed under HV Bancorp’s employee stock ownership plan and stock-based benefit plan for the period presented. For the year ended June 30, 2013, the shares outstanding for purposes of computing earnings per share have been calculated as follows:

	850,000 Shares at Minimum of Offering Range			1,000,000 Shares at Midpoint of Offering Range			1,150,000 Shares at Maximum of Offering Range			1,322,500 Shares at Maximum, as Adjusted of Offering Range
Shares issued in the offering		850,000			1,000,000			1,150,000			1,322,500
Shares issued in the merger		800,485			941,748			1,046,804			1,046,804
Total shares issued		1,650,485			1,941,748			2,196,804			2,369,304
Less ESOP shares		(99,029	)		(116,505	)		(131,808	)		(142,158	)
Plus shares subject to release		3,961			4,660			5,272			5,686
Pro forma shares for EPS		1,555,417			1,829,903			2,070,268			2,232,832

⁽⁷⁾  Includes $401,000 of goodwill and $694,000 of core deposit intangibles at the minimum and midpoint of the offering range and $569,000 of goodwill and $694,000 of core deposit intangibles at the maximum and maximum as adjusted of the offering range resulting from the merger with Victory Bancorp.

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⁽⁸⁾  Includes the following:

Shares issued in the offering	850,000	1,000,000	1,150,000	1,322,500
Shares issued in the merger	800,485	941,748	1,046,804	1,046,804
Shares used for pro forma stockholders’ equity per share	1,650,485	1,941,748	2,196,804	2,369,304

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RESTRICTIONS ON ACQUISITION OF HV BANCORP AND HV BANK

Although the Board of Directors of HV Bancorp is not aware of any effort that might be made to obtain control of HV Bancorp or HV Bank after the conversion, the Board of Directors believes that it is appropriate to include certain provisions as part of HV Bancorp’s articles of incorporation to protect the interests of HV Bancorp and its shareholders from takeovers which our Board of Directors might conclude are not in the best interests of HV Bank, HV Bancorp or HV Bancorp’s shareholders.

The following discussion is a general summary of the material provisions of HV Bancorp’s articles of incorporation and bylaws, HV Bank’s articles of incorporation and bylaws and certain other regulatory provisions that may be deemed to have an “anti-takeover” effect. The following description of certain of these provisions is necessarily general and, with respect to provisions contained in HV Bancorp’s articles of incorporation and bylaws and HV Bank’s stock articles of incorporation and bylaws, reference should be made in each case to the document in question, each of which is part of HV Bank’s application for conversion as filed with the Federal Reserve Board, the FDIC and the Department of Banking and HV Bancorp’s registration statement filed with the Securities and Exchange Commission. See “Where You Can Find More Information.”

HV Bancorp’s Articles of Incorporation and Bylaws

HV Bancorp’s articles of incorporation and bylaws contain a number of provisions relating to corporate governance and rights of shareholders that might discourage future takeover attempts. As a result, shareholders who might desire to participate in such transactions may not have an opportunity to do so. In addition, these provisions will also render the removal of the Board of Directors or management of HV Bancorp more difficult.

Directors. The Board of Directors will be divided into three classes. The members of each class will be elected for a term of three years and only one class of directors will be elected annually. Thus, it would take at least two annual elections to replace a majority of our Board of Directors. Further, the bylaws impose notice and information requirements in connection with the nomination by shareholders of candidates for election to the Board of Directors or the proposal by shareholders of business to be acted upon at an annual meeting of shareholders.

Restrictions on Call of Special Meetings. Except as otherwise required by law, and subject to the rights of the holders of any class or series of preferred stock, special meetings of shareholders may be called by the Board of Directors of HV Bancorp pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office, or upon written request of holders of not less than one-fifth of all shares entitled to vote.

Prohibition of Cumulative Voting. The articles of incorporation prohibit cumulative voting for the election of directors.

Limitation of Voting Rights. The articles of incorporation provide that in no event will any person who owns more than 10.0% of the then-outstanding shares of common stock, be entitled or permitted to vote any of the shares of common stock held in excess of the 10.0% limit.

Restrictions on Removing Directors from Office. The articles of incorporation provide that directors may be removed only for cause, and only by the affirmative vote of the holders of not less than a majority of the total votes eligible to be cast by holders of HV Bancorp capital stock at a duly called meeting, after giving effect to the limitation on voting rights discussed above in “—Limitation of Voting Rights.”

Authorized but Unissued Shares. After the conversion, HV Bancorp will have authorized but unissued shares of common and preferred stock. See “Description of HV Bancorp Capital Stock.” The articles of incorporation authorize 10,000,000 shares of common stock and 2,000,000 shares of serial preferred stock. HV Bancorp is authorized to issue preferred stock from time to time in one or more series subject to applicable provisions of law, and the Board of Directors is authorized to fix the designations, and relative preferences, limitations, voting rights, if any, including without limitation, offering rights of such shares (which could be multiple or as a separate class). In the event of a proposed merger, tender offer or other attempt to gain control of HV Bancorp that the Board of Directors does not approve, it might be possible for the Board of Directors to

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authorize the issuance of a series of preferred stock with rights and preferences that would impede the completion of the transaction. An effect of the possible issuance of preferred stock therefore may be to deter a future attempt to gain control of HV Bancorp. Other than the possible exchange of shares of Victory Bancorp Series E and Series F preferred stock for shares of HV Bancorp preferred stock, the Board of Directors has no present plan or understanding to issue any preferred stock.

Amendments to Articles of Incorporation and Bylaws. Pennsylvania law provides that, subject to limited exceptions, the amendment or repeal of any provision of our articles of incorporation requires the approval at least a majority of the shares of common stock entitled to vote on the matter, after giving effect to the limitation on voting rights discussed above in “—Limitation of Voting Rights.” Notwithstanding the above, our articles of incorporation provide that if a proposed amendment, repeal or modification is not approved by at least 80% of the total number of our authorized directors, approval by at least 75% of the outstanding capital stock eligible to vote is generally required to amend the following provisions, after giving effect to the limitation on voting rights discussed above in “—Limitation of Voting Rights”:

• The limitation on voting rights of persons who directly or indirectly own more than 10.0% of the outstanding shares of common stock;

• The ability of shareholders to act by unanimous written consent;

• The ability of the Board of Directors or one-fifth of the shareholders to call a special meeting;

• The division of the Board of Directors into three staggered classes;

• The ability of the Board of Directors to fill vacancies on the board;

• The inability to deviate from the manner prescribed in the bylaws by which shareholders nominate directors and bring other business before meetings of shareholders;

• The requirement that at least a majority of shareholders must vote to remove directors, and can only remove directors for cause;

• The ability of the Board of Directors to amend and repeal the bylaws;

• The ability of shareholders to amend and repeal the bylaws, and supermajority with requirements with respect to certain bylaw amendments;

• The ability of the Board of Directors to evaluate a variety of factors in evaluating offers to purchase or otherwise acquire HV Bancorp; and

• The ability of shareholders to approve certain corporate actions.

The bylaws may be amended by the affirmative vote of a majority of the total number of our authorized directors, assuming no vacancies. The bylaws may also be amended by the shareholders upon the affirmative vote of the holders of at least a majority of the voting power of all of the outstanding shares entitled to vote.

Change in Control Regulations

The Bank Holding Company Act requires the prior approval of the Federal Reserve Board for a bank holding company to acquire substantially all the assets of a bank or to acquire direct or indirect ownership or control of more than 5% of any class of the voting shares of any bank, bank holding company or savings association, or to increase any such non-majority ownership or control of any bank, bank holding company or savings association, or to merge or consolidate with any bank holding company.

The Bank Holding Company Act prohibits a bank holding company from acquiring a direct or indirect interest in or control of more than 5% of any class of the voting shares of a company that is not a bank or a bank holding company and from engaging directly or indirectly in activities other than those of banking, managing or controlling banks or furnishing services to its banking subsidiaries, except that it may engage in and may own shares of companies engaged in certain activities the Federal Reserve Board has determined to be so closely related to banking or managing or controlling banks as to be proper incident thereto.

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DESCRIPTION OF HV BANCORP CAPITAL STOCK

The common stock of HV Bancorp represents nonwithdrawable capital, is not an account of any type, and is not insured by the FDIC or any other government agency.

General

HV Bancorp is authorized to issue 12,000,000 shares of capital stock, of which 10,000,000 shares shall be common stock having a par value of $0.01 per share and 2,000,000 shares shall be serial preferred stock having a par value of $.01 per share. Each share of HV Bancorp’s common stock has the same relative rights as, and is identical in all respects with, each other share of common stock. Upon payment of the purchase price for the common stock, as required by the plan of conversion, all stock will be duly authorized, fully paid and nonassessable. HV Bancorp will not issue any shares of preferred stock in the offering.

Common Stock

Dividends. HV Bancorp can pay dividends if, as and when declared by its Board of Directors. The payment of dividends by HV Bancorp is limited by law and applicable regulation. See “Our Dividend Policy.” The holders of common stock of HV Bancorp will be entitled to receive and share equally in dividends declared by the Board of Directors of HV Bancorp. If required, HV Bancorp will issue preferred stock in exchange for Victory Bancorp’s Series E convertible preferred stock in the merger with Victory Bancorp. The holders of HV Bancorp preferred stock may have a priority over the holders of the common stock with respect to dividends.

Voting Rights. After the offering, the holders of common stock of HV Bancorp will possess exclusive voting rights in HV Bancorp. They will elect HV Bancorp’s Board of Directors and act on other matters as are required to be presented to them under Pennsylvania law or as are otherwise presented to them by the Board of Directors. Except as discussed in “Restrictions on Acquisition of HV Bancorp and HV Bank,” each holder of common stock will be entitled to one vote per share and will not have any right to cumulate votes in the election of directors. Any person who beneficially owns more than 10% of the then-outstanding shares of HV Bancorp’s common stock, however, will not be entitled or permitted to vote any shares of common stock held in excess of the 10% limit. If HV Bancorp issues preferred stock, holders of HV Bancorp preferred stock may also possess voting rights. See “Restrictions on Acquisition of HV Bancorp and HV Bank” for additional information regarding voting rights.

Liquidation. If there is any liquidation, dissolution or winding up of HV Bank, HV Bancorp, as the sole holder of HV Bank’s capital stock, would be entitled to receive all of HV Bank’s assets available for distribution after payment or provision for payment of all debts and liabilities of HV Bank, including all deposit accounts and accrued interest. Upon liquidation, dissolution or winding up of HV Bancorp, the holders of its common stock would be entitled to receive all of the assets of HV Bancorp available for distribution after payment or provision for payment of all its debts and liabilities. HV Bancorp will, if required, issue preferred stock to holders of Victory Bancorp’s Series E convertible preferred stock. Holders of HV Bancorp preferred stock may have a priority over the holders of the common stock upon liquidation or dissolution.

Preemptive Rights; Redemption. Holders of the common stock of HV Bancorp will not be entitled to preemptive rights with respect to any shares that may be issued. The common stock cannot be redeemed.

Restrictions on Acquisition of HV Bancorp and HV Bank. Certain provisions of HV Bancorp’s articles of incorporation may be deemed to have an anti-takeover effect, as described in “Restrictions on Acquisition of HV Bancorp and HV Bank” on page [—].

Preferred Stock

In connection with the acquisition of Victory Bancorp, HV Bancorp will, if required, issue Series A preferred stock in exchange for Victory Bancorp Series E convertible preferred stock. In addition, HV Bancorp will issue to the Treasury Series B preferred stock in exchange for Victory Bancorp’s currently outstanding Series F preferred stock. See “The Merger—Consideration to be Received in the Merger.” HV Bancorp has no other current plans to issue any preferred stock.

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Preferred stock may be issued with designations, powers, preferences and rights as the Board of Directors may from time to time determine. The Board of Directors can, without shareholder approval, issue preferred stock with voting, dividend, liquidation and conversion rights that could dilute the voting strength of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in control.

DESCRIPTION OF VICTORY BANCORP CAPITAL STOCK

General

We are authorized to issue 10,000,000 shares of common stock, $1.00 par value and 2,000,000 shares of preferred stock, par value $1.00. As of December 31, 2013, we had 1,025,464 shares of common stock and 26,158 shares of Series E convertible preferred stock outstanding and 3,431 shares of Series F preferred stock outstanding. Our board of directors may at any time, without additional approval of the holders of preferred stock or common stock, issue additional authorized shares of preferred stock or common stock.

Each share of our common stock has the same relative rights as, and is identical in all respects with, each other share of common stock.

Common Stock

Voting Rights. Each holder of shares of common stock is entitled to one vote per share held on any matter submitted to a vote of shareholders. There are no cumulative voting rights in the election of directors.

Dividends. Holders of shares of common stock are entitled to receive dividends when and as declared by the board of directors out of funds legally available therefore. Our ability to pay dividends will be dependent on our earnings and financial condition and subject to certain restrictions imposed by state and federal laws.

No dividend will be declared or paid during any calendar year on the common stock unless and until there has been paid in full (or set apart for purposes of such payment) to the holders of our preferred stock, accrued and unpaid dividends on such shares of preferred stock, through the date on which we propose to pay the cash dividend on the common stock. See “—Preferred Stock” below.

No Preemptive or Conversion Rights. Holders of shares of our common stock do not have preemptive rights to purchase additional shares of our common stock and have no conversion or redemption rights.

Calls and Assessments. All of the issued and outstanding shares of our common stock are non-assessable and non-callable.

Liquidation Rights. In the event of our liquidation, dissolution or winding-up, the holders of shares of our common stock shall be entitled to receive, in cash or in kind, our assets available for distribution remaining after payment or provision for payment of our debts and liabilities and distributions or provision for distributions to holders of our Series E convertible preferred stock and any other preferred stock that may be issued and outstanding having preference over the common shares.

Preferred Stock

Our board of directors, without shareholder approval, is empowered to authorize the issuance, in one or more series, of shares of preferred stock at such times, for such purposes and for such consideration as it may deem advisable. The board of directors is also authorized to fix before the issuance thereof the designation, voting, conversion, preference and other relative rights, qualifications and limitations of any such series of preferred stock. Accordingly, our board of directors, without shareholder approval, may authorize the issuance of one or more series of preferred stock with voting and conversion rights which could adversely affect the voting power of the holders of common stock and, under certain circumstances, discourage an attempt by others to gain control of us.

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The creation and issuance of any additional series of preferred stock, and the relative rights, designations and preferences of such series, if and when established, will depend on, among other things, our future capital needs, then existing market conditions and other factors that, in the judgment of our board of directors, might warrant the issuance of preferred stock.

We have two classes of preferred stock outstanding: Series E convertible preferred stock and Series F preferred stock. See “The Merger” for a discussion of the impact of the merger on our outstanding preferred stock.

Series E Convertible Preferred Stock. The Series E convertible preferred stock consist of up to 50,000 shares, par value $1.00 per share, having a liquidation preference of $100 per share. The holders of the Series E convertible preferred stock have no preemptive rights.

We have not issued any class or series of our capital stock the terms of which provide that such class or series will rank senior to the Series E convertible preferred stock as to payment of dividends or distribution of assets upon our liquidation, dissolution or winding-up, without the approval of the holders of at least a majority of the shares of our Series E convertible preferred stock then outstanding and any class or series of Parity Securities (defined below) then outstanding, voting together as a single class, with each series or class having a number of votes proportionate to the aggregate liquidation preference of the outstanding shares of such class or series. See “—Voting Rights.” We may, however, from time to time, without notice to or consent from holders of the Series E convertible preferred stock, create and issue Parity Securities and Junior Securities (defined below).

Ranking

The Series E convertible preferred stock, with respect to dividend rights and rights upon our liquidation, winding-up or dissolution, rank:

• senior to our common stock and each other class of capital stock or series of preferred stock established after the original issue date of the Series E convertible preferred stock (the “Issue Date”) by our board of directors, the terms of which do not expressly provide that such class or series ranks senior to or on parity with the Series E convertible preferred stock as to dividend rights or rights upon our liquidation, winding-up or dissolution (collectively referred to as “Junior Securities”);

• on parity with the Series F preferred stock and any other class of capital stock or series of preferred stock established after September 22, 1011 (the “Issue Date”) by our board of directors, the terms of which expressly provide that such class or series will rank on parity with the Series E convertible preferred stock as to dividend rights or rights upon our liquidation, winding-up or dissolution (collectively referred to as “Parity Securities”); and

• junior to each class of capital stock or series of preferred stock established after the Issue Date by our board of directors and approved by a majority of the holders of our Series E convertible preferred stock and our Parity Securities, voting as a single class, the terms of which expressly provide that such class or series will rank senior to the Series E convertible preferred stock as to dividend rights or rights upon our liquidation, winding-up or dissolution (collectively referred to as “Senior Securities”).

The rights of the holders of Series E convertible preferred stock are subordinate to the rights of our general creditors, including depositors.

Dividends

Dividends on the shares of the Series E convertible preferred stock are not be mandatory. Holders of shares of our Series E convertible preferred stock are entitled to receive non-cumulative, quarterly cash dividends that will be payable on the last day of February, May, August and November of each year (each a “Dividend Payment Date”),

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beginning on the first quarter following the sale of the shares. Each period from and including a Dividend Payment Date (or the date of issuance of the Series E convertible preferred stock) to but excluding the following Dividend Payment Date is hereafter referred to as a “Dividend Period.” Dividends on the shares of Series E convertible preferred stock accrue at an annual rate of 7.0% per share. However, dividends are payable only if declared by our Board of Directors in its sole discretion, out of funds legally available for dividend payments. Dividends that are not declared for a Dividend Payment Date do not accrue on the Series E convertible preferred stock. Unless dividends have been declared and paid on the Series E convertible preferred stock, no dividends may be declared or paid on our common stock. See “—Limitation on Dividends” below.

If declared, quarterly dividends for each full Dividend Period will be $1.75 per share. We compute dividends payable on the Series E convertible preferred stock for any period greater or less than a full Dividend Period on the basis of a 360-day year consisting of twelve 30-day months. Dividends payable on the Series E convertible preferred stock for each full Dividend Period will be computed by dividing the per annum dividend rate by four, and multiplying the result by the stated value per share of $100, the product of which will be rounded to the fifth digit after the decimal point (if the sixth digit to the right of the decimal point is five or greater, the fifth digit will be rounded up by one).

Limitation on Dividends

So long as any share of Series E convertible preferred stock remains outstanding, (1) no cash dividend will be declared and paid or set aside for payment and no distribution will be declared and made or set aside for payment on any Junior Securities (other than a dividend payable solely in shares of Junior Securities) and (2) no shares of Junior Securities will be repurchased, redeemed, or otherwise acquired for consideration by us, directly or indirectly (other than as (a) a result of a reclassification of Junior Securities for or into other Junior Securities, or the exchange or conversion of one share of Junior Securities for or into another share of Junior Securities, (b) repurchases in support of our employee benefit and compensation programs and (c) through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Securities), unless, in each case, the full dividends for the most recent Dividend Payment Date on all outstanding shares of the Series E convertible preferred stock and Parity Securities have been paid or declared and a sum sufficient for the payment of those dividends has been set aside.

Except as provided below, for so long as any share of Series E convertible preferred stock remains outstanding, we may not declare, pay, or set aside for payment dividends on any Parity Securities for any period unless we have paid in full, or declared and set aside payment in full, in respect of all dividends for the then-current Dividend Period for all outstanding shares of Series E convertible preferred stock. To the extent that we declare dividends on the Series E convertible preferred stock and on any Parity Securities, but do not make full payment of such declared dividends, we must allocate the dividend payments on a pro rata basis among the holders of the shares of Series E convertible preferred stock and the holders of any such Parity Securities. For purposes of calculating the pro rata allocation of partial dividend payments, we will allocate those payments so that the respective amounts of those payments bear the same ratio to each other as all accrued and unpaid dividends per share on the Series E convertible preferred stock and all Parity Securities bear to each other.

Redemption

The shares of Series E convertible preferred stock are redeemable at our option and, with the prior approval of the Federal Reserve, if required, in whole or in part, at any time or from time to time, out of funds legally available for payment, on or after the third anniversary of the Issue Date at the cash redemption price of $100 per share of Series E convertible preferred stock, plus declared and unpaid dividends, if any, from any and all Dividend Payment Dates preceding the date fixed for redemption. In addition, prior to December 11, 2019, unless we have redeemed all of the Series F preferred stock or the U.S. Treasury has transferred all of the Series F preferred stock to third parties, the consent of the U.S. Treasury will be required for us to redeem the Series E convertible preferred stock. The shares of Series E convertible preferred stock may be converted at any time prior to redemption at the option of the holder. See “—Optional Conversion Right” below.

If fewer than all of the outstanding shares of Series E convertible preferred stock are to be redeemed, we will select those to be redeemed pro rata, or by lot, or in any other manner as our board of directors may determine.

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On and after the date fixed for redemption, provided that the redemption price has been paid or provided for, dividends will no longer be declared on the Series E convertible preferred stock called for redemption. These shares will no longer be deemed to be outstanding, and the holders of these shares will have no rights as shareholders, except the right to receive the amount payable on redemption, without interest, upon surrender of the shares of Series E convertible preferred stock to be redeemed.

Should we redeem any shares of Series E convertible preferred stock, notice of redemption will be given by first-class mail, postage prepaid, mailed not less than 30 days nor more than 60 days before the redemption date, to the holders of record of the shares of Series E convertible preferred stock to be redeemed as their addresses appear on our stock register.

Optional Conversion Right

Each share of the Series E convertible preferred stock may be converted at any time, at the option of the holder, into 19.7 shares of our common stock (which reflects an initial conversion price of $5.07 per share of common stock, to the extent the initial conversion price is increased above $5.07 per share, you will receive a corresponding decrease in the number of shares of our common stock upon conversion) plus cash in lieu of fractional shares, subject to anti-dilution adjustments (such rate or adjusted rate, the “Conversion Rate”). The Conversion Rate and the corresponding conversion price in effect at any given time are referred to as the “Applicable Conversion Rate” and the “Applicable Conversion Price,” respectively, and will be subject to adjustment as described below. The Applicable Conversion Price at any given time will be computed by dividing $100 by the Applicable Conversion Rate at such time.

If the conversion date is on or prior to the record date for any declared dividend for the Dividend Period in which you elect to convert, you will not receive any declared dividends for that Dividend Period. If the conversion date is after the record date for any declared dividend and prior to the corresponding Dividend Payment Date, you will receive that dividend on the relevant Dividend Payment Date if you were the holder of record on the record date for that dividend.

Adjustments to the Conversion Price

The conversion price will be subject to adjustment if, after the issue date, any of the following events occur:

• we subdivide or combine our common stock;

• we subdivide or combine our Series E convertible preferred stock; or

• we reclassify, exchange or substitute the common stock issuable upon conversion into the same or different number of shares of any other class or classes of capital stock.

With respect to the first bullet point, in the event the outstanding shares of common stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise) into a greater number of shares of common stock, the Applicable Conversion Price in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of common stock shall be combined into a lesser number of shares of common stock, the Applicable Conversion Price in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.

With respect to the second bullet point, in the event the outstanding shares of Series E convertible preferred stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise) into a greater number of shares of Series E convertible preferred stock, the dividend rate, original issue price and liquidation preference of the Series E convertible preferred stock in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Series E convertible preferred stock shall be combined into a lesser number of shares of Series E convertible preferred stock,

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the dividend rate, original issue price and liquidation preference of the Series E convertible preferred stock in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.

With respect to the third bullet point, if the common stock issuable upon conversion of Series E convertible preferred stock shall be changed into the same or a different number of shares of any other class or classes of capital stock, whether by capital reorganization, reclassification or others (other than a subdivision or combination of shares provided for above), then, in any such event, in lieu of the number of shares of common stock which the holders would otherwise have been entitled to receive, each holder of Series E convertible preferred stock shall have the right thereafter to convert such shares of Series E convertible preferred stock into a number of shares of such other class or classes of capital stock which a holder of the number of shares of common stock deliverable upon conversion of Series E convertible preferred stock immediately before that change would have been entitled to receive in such reorganization or reclassification, all subject to further adjustment as provided herein with respect to such other shares.

Upon the occurrence of each adjustment or readjustment of the Applicable Conversion Price, we, at our expense, will promptly compute such adjustment or readjustment in accordance with the terms set forth in our articles of incorporation and furnish to each holder of Series E convertible preferred stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. Upon written request of any holder of Series E convertible preferred stock, at any time, we will provide a certificate setting forth (i) adjustments and readjustments, (ii) the Applicable Conversion Price at the time in effect, (iii) the number of shares of common stock and amount, if any, of other property which at the time would be received upon the conversion of Series E convertible preferred stock.

Business Combinations

In the event of any reclassification of our outstanding shares of common stock (other than a change in par value), or in the event of any consolidation, merger or share exchange of Victory Bancorp with or into another entity or any merger or consolidation of another entity with or into Victory Bancorp, other than a consolidation, merger or share exchange in which Victory Bancorp is the resulting or surviving entity and which does not result in any reclassification of the outstanding common stock (other than a change in par value), or in the event of any sale, lease or other disposition to another entity of all or substantially all of our assets, other than to one or more of our subsidiaries (any of the foregoing considered a business combination) each share of the Series E convertible preferred stock then outstanding shall be convertible, at the option of the holder, into the kind and amount of securities (of Victory Bancorp or another issuer), cash and other property receivable upon such reclassification or business combination by a holder of the number of shares of common stock into which such shares of the Series E convertible preferred stock could have been converted immediately prior to such reclassification or business combination, after giving effect to any adjustment event. These provisions apply to successive reclassifications or business combinations. The right of a holder of Series E convertible preferred stock to convert the holder’s shares of Series E convertible preferred stock into common stock prior to the effective date of a reclassification or business combination shall not be affected by this provision. Holders of Series E convertible preferred stock shall have no right to vote with respect to such reclassification or business combination, except as specifically required by Pennsylvania law. See “—Voting Rights.”

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Fractional Shares

No fractional shares of our common stock will be issued to holders of the Series E convertible preferred stock upon conversion. In lieu of any fractional shares of common stock otherwise issuable in respect of the aggregate number of shares of the Series E convertible preferred stock of any holder that are converted, that holder will be entitled to receive an amount in cash (computed to the nearest cent) equal to the same fraction of the market value per share of our common stock determined as of the effective date of conversion based upon the closing pricing of our common stock on such date as reported by a national listing exchange or over-the-counter listing service, if our common stock is so listed or quoted at such time. In the absence of such listing, the book value of our common stock will be substituted for market value in determining such cash payment.

If more than one share of the Series E convertible preferred stock is surrendered for conversion at one time by or for the same holder, the number of full shares of common stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series E convertible preferred stock so surrendered.

Liquidation Rights

In the event that we voluntarily or involuntarily liquidate, dissolve or wind up, the holders of Series E convertible preferred stock at the time outstanding will be entitled to receive liquidating distributions in the amount of $100 per share of Series E convertible preferred stock, plus an amount equal to any declared but unpaid dividends thereon, out of assets legally available for distribution to our shareholders, before any distribution of assets is made to the holders of our common stock or any other Junior Securities. After payment of the full amount of such liquidating distributions, the holders of Series E convertible preferred stock will not be entitled to any further participation in any distribution of assets by us, and will have no right or claim to any of our remaining assets.

In the event that our assets available for distribution to shareholders upon any liquidation, dissolution or winding-up of our affairs, whether voluntary or involuntary, are insufficient to pay in full the amounts payable with respect to all outstanding shares of the Series E convertible preferred stock and the corresponding amounts payable on any Parity Securities, the holders of Series E convertible preferred stock and the holders of such other Parity Securities will share ratably in any distribution of our assets in proportion to the full respective liquidating distributions to which they would otherwise be respectively entitled.

For such purposes, our consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into us, or the sale of all or substantially all of our property or business, will not be deemed to constitute our liquidation, dissolution, or winding-up.

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Voting Rights

The holders of our Series E convertible preferred stock have no voting rights except as required by Pennsylvania law and as set forth in our articles of incorporation.

Miscellaneous

We have reserved and keep available out of the authorized and unissued shares of our common stock, solely for issuance upon the conversion of the Series E convertible preferred stock, that number of shares of common stock as shall from time to time be issuable upon the conversion of all the Series E convertible preferred stock then outstanding. Any shares of the Series E convertible preferred stock converted into shares of our common stock or otherwise reacquired by us shall resume the status of authorized and unissued preferred shares, undesignated as to series, and shall be available for subsequent issuance.

Series F Preferred Stock. On September 22, 2011 we entered into a Purchase Agreement with the Treasury, pursuant to which we issued and sold to the Treasury 3,431 shares of our Series F preferred stock having a liquidation preference of $1,000 per share (the “Liquidation Amount”), for proceeds of $3,431,000. The Purchase Agreement was entered into, and the Series F preferred stock was issued, pursuant to the Treasury’s Small Business Lending Fund Program, a $30 billion fund established under the Small Business Jobs Act of 2010 that encourages lending to small businesses by providing capital to qualified community banks with assets of less than $10 billion. A portion of the proceeds were used to redeem preferred stock that we previously issued to the United States Department of the Treasury under the CPP. The remaining proceeds were contributed to the Bank as additional capital for future growth.

The dividend rate on the Series F preferred stock is calculated as a percentage of the aggregate Liquidation Amount of the outstanding Series F preferred stock, and is based on changes in the level of Qualifying Small Business Lending (“QSBL”) (as defined in the Purchase Agreement) by Victory Bancorp. Based upon the increase in our level of QSBL over the baseline level calculated under the terms of the Purchase Agreement, the dividend rate for the initial dividend period, which is from the date of issuance through December 31, 2011, was set at approximately 1.0%. for the 2^nd throught the 10^th calendar quarters, the annual dividend rate may be adjusted to between 1% and 5%, to reflect the amount of change in our level of QSBL. For the 11^th calendar quarter through 4.5 years after issuance, the dividend rate will be fixed at between 1% and 7% based upon the increase in QSBL as compared to the baseline. After 4.5 years from issuance, the dividend rate will increase to 9%. The dividend rate was 1.00% at December 31, 2013 and December 31, 2012.

The Series F preferred shares are non-voting, other than class voting rights on matters that could adversely affect the shares. The preferred shares are redeemable at any time, with Treasury, Federal Reserve and FDIC approval.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock will be Registrar and Transfer Company.

REGISTRATION REQUIREMENTS

In connection with the conversion and offering, we will register our common stock with the Securities and Exchange Commission under Section 12(b) of the Securities Exchange Act of 1934 and, upon such registration, HV Bancorp and the holders of its common stock will become subject to the proxy solicitation rules, reporting requirements and restrictions on common stock purchases and sales by directors, officers and greater than 10.0% shareholders, the annual and periodic reporting and certain other requirements of the Securities Exchange Act of 1934. Under the plan of conversion and reorganization, HV Bancorp has undertaken that it will not terminate such registration for a period of at least three years following the offering.

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LEGAL AND TAX OPINIONS

The legality of our common stock has been passed upon for us by Stark & Stark, Yardley, Pennsylvania. The federal tax consequences of the stock offering have been opined upon by Jones Walker LLP. BDO USA, LLP has opined upon by the state tax consequences of the stock offering. The federal income tax consequences of the merger with Victory Bancorp will be opined upon for HV Bancorp by Jones Walker LLP and for Victory Bancorp by Kilpatrick Townsend & Stockton LLP. Stark & Stark, Jones Walker LLP, Kilpatrick Townsend & Stockton LLP and BDO USA, LLP have consented to the references to their opinions in this prospectus. Certain legal matters will be passed upon for Griffin Financial Group by Stevens  & Lee, P.C.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

HV Bank

On July 8, 2013, the Audit Committee of the Board of Trustees of HV Bank accepted the withdrawal of ParenteBeard LLC as its independent certified public accountants due to the transition of key personnel to BDO USA, LLP.

ParenteBeard LLC’s reports on HV Bank’s Financial Statements as of June 30, 2012 and for the years ended June 30, 2012 and 2011, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.

During the years ended June 30, 2012 and 2011 and through July 8, 2013, there were no disagreements with ParenteBeard LLC on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of ParenteBeard LLC would have caused them to make a reference thereto in their reports on the consolidated financial statements for such years. During the years ended June 30, 2012 and 2011 and through July 8, 2013 there were no reportable events described in Item 304(a) (1) (v) of Regulation S-K. We have provided ParenteBeard LLC with a copy of the disclosure contained in this prospectus, which was received by ParenteBeard LLC on             , 2014. HV Bank has received a letter from ParenteBeard LLC stating that it agrees with our disclosure on this matter, which letter is filed as an exhibit to this Registration Statement.

Effective July 8, 2013, the Audit Committee of HV Bank’s Board of Directors approved the engagement of BDO USA, LLP as its independent registered public accounting firm. During the year ended June 30, 2013 and through July 8, 2013, HV Bank did not consult with BDO USA, LLP regarding any of the matters or events set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.

Victory Bancorp

On July 22, 2013, the Audit Committee of the Board of Directors of Victory Bancorp engaged BDO USA, LLP as its independent auditors due to the transition of certain key personnel from its prior independent auditor, ParenteBeard LLC.

ParenteBeard LLC’s reports on Victory Bancorp’s Financial Statements as of December 31, 2012 and for the years ended December 31, 2012 and 2011, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.

During the years ended December 31, 2012 and 2011 and through July 22, 2013, there were no disagreements with ParenteBeard LLC on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of ParenteBeard LLC would have caused them to make a reference thereto in their reports on the consolidated financial statements for such years. During the years ended December 31, 2012 and 2011 and through July 22, 2013 there were no reportable events described in Item 304(a) (1) (v) of Regulation S-K. We have provided ParenteBeard LLC with a copy of the disclosure contained in this prospectus, which was received by ParenteBeard LLC on             , 2014. Victory Bancorp has received a letter from ParenteBeard LLC stating that it agrees with our disclosure on this matter, which letter is filed as an exhibit to this registration statement.

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Effective July 22, 2013, the Audit Committee of Victory Bancorp’s Board of Directors approved the engagement of BDO USA, LLP as its independent auditors. Through July 22, 2013, Victory Bancorp did not consult with BDO USA, LLP regarding any of the matters or events set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.

EXPERTS

The Financial Statements of HV Bank as of and for the year ended June 30, 2013, appearing elsewhere in this prospectus, have been included herein and in the registration statement in reliance upon the report of BDO USA, LLP, an independent registered public accounting firm, which is included herein and upon the authority of said firm as experts in accounting and auditing.

The Financial Statements of HV Bank as of and for the year ended June 30, 2012, appearing elsewhere in this prospectus, have been included herein and in the registration statement in reliance upon the report of ParenteBeard LLC, an independent registered public accounting firm, which is included herein and upon the authority of said firm as experts in accounting and auditing.

The Consolidated Financial Statements of Victory Bancorp and subsidiary as of and for the year ended December 31, 2013, appearing elsewhere in this prospectus, have been so included herein and in the registration statement in reliance on the report of BDO USA, LLP, as its independent auditors, which is included herein and upon the authority of said firm as experts in accounting and auditing.

The Consolidated Financial Statements of Victory Bancorp and subsidiary as of and for the year ended December 31, 2012, appearing elsewhere in this prospectus, have been so included herein and in the registration statement in reliance on the report of ParenteBeard LLC, as its independent auditors, which is included herein and upon the authority of said firm as experts in accounting and auditing.

Feldman Financial has consented to the publication herein of the summary of its appraisal report to HV Bancorp setting forth its opinion as to the estimated pro forma market value of the shares of common stock upon completion of the conversion and offering and its letter with respect to subscription rights.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933, as amended, that registers the common stock offered in the stock offering. This prospectus forms a part of the registration statement. The registration statement, including the exhibits, contains additional relevant information about us and our common stock. The rules and regulations of the Securities and Exchange Commission allow us to omit certain information included in the registration statement from this prospectus. You may read and copy the registration statement at the Securities and Exchange Commission’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the Securities and Exchange Commission’s public reference rooms. The registration statement also is available to the public from commercial document retrieval services and at the Internet website maintained by the Securities and Exchange Commission at http://www.sec.gov.

HV Bancorp has filed an application for approval of the plan of conversion with the FDIC and the Department of Banking. This prospectus omits certain information contained in the application. The application may be inspected, without charge, at the offices of the FDIC, 550 17th Street, NW, Washington, D.C. 20429 and at the offices of the Regional Director of the FDIC’s Northeastern Division at 350 Fifth Avenue, Suite 1200, New York, New York 10118.

A copy of the plan of conversion and each of HV Bank’s and HV Bancorp’s charter or articles of incorporation, respectively, and bylaws are available without charge from HV Bank.

212

The appraisal report of Feldman Financial has been filed as an exhibit to our registration statement and to our application to the Department of Banking and the FDIC. Portions of the appraisal report were filed electronically with the Securities and Exchange Commission and are available on its website as described above. The entire appraisal report is available at the public reference room of the Securities and Exchange Commission and the offices of the FDIC as described above.

213

Index to Financial Statements of

Huntingdon Valley Bank

	Page
Report of Independent Registered Public Accounting Firm		F-2-3
Financial Statements
Statements of Financial Condition		F-4
Statements of Income		F-5
Statements of Comprehensive Income (Loss)		F-6
Statements of Changes in Equity		F-7
Statements of Cash Flows		F-8
Notes to Financial Statements		F-9

All financial statement schedules have been omitted as the required information either is not applicable or is included in the financial statements or related notes.

Index to Consolidated Financial Statements of

The Victory Bancorp, Inc.

	Page
Independent Auditor’s Report		F-60
Independent Auditor’s Report		F-62
Consolidated Financial Statements		F-62
Consolidated Balance Sheets		F-63
Consolidated Statements of Income		F-64
Consolidated Statements of Comprehensive Income		F-65
Consolidated Statements of Stockholders’ Equity		F-66
Consolidated Statements of Cash Flows		F-67
Notes to Consolidated Financial Statements		F-68

All financial statement schedules have been omitted as the required information either is not applicable or is included in the financial statements or related notes.

F-1

Independent Registered Public Accounting Firm Report

Board of Trustees

Huntingdon Valley Bank

We have audited the accompanying statement of financial condition of Huntingdon Valley Bank as of June 30, 2013 and the related statements of income, comprehensive income (loss), changes in equity, and cash flows for the year ended June 30, 2013. These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audit. The financial statements of the Bank as of June 30, 2012 and for the year then ended were audited by other auditors whose report, dated September 24, 2012, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Bank is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and schedules. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Huntingdon Valley Bank at June 30, 2013, and the results of its operations and its cash flows for the year ended June 30, 2013, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/ BDO USA, LLP

September 30, 2013

F-2

Report of Independent Registered Public Accounting Firm

Board of Trustees

Huntingdon Valley Bank

We have audited the accompanying statement of financial condition of Huntingdon Valley Bank (the “Bank”) as of June 30, 2012, and the related statements of income, comprehensive income (loss), changes in equity and cash flows for the year then ended. The Bank’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Bank as of June 30, 2012, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ ParenteBeard LLC

Pittsburgh, Pennsylvania

September 30, 2013

F-3

Huntingdon Valley Bank

Statements of Financial Condition

(in thousands)

	December 31,			June 30,			June 30,
	2013			2013			2012
	(unaudited)
Assets
Cash and due from banks	$	21,679		$	3,668		$	7,069
Interest-bearing deposits with banks		1,219			3,405			3,942
Cash and cash equivalents		22,898			7,073			11,011
Investment securities available-for-sale, at fair value		46,239			47,375			48,504
Investment securities held-to-maturity (fair value of $4,905 at December 31, 2013, $4,310 at June 30, 2013 and $606 at June 30, 2012)		5,020			4,432			606
Loans held for sale		3,745			9,293			16,393
Loans receivable, net of allowance for loan losses of $485 at December 31, 2013, $581 at June 30, 2013 and $474 at June 30, 2012		75,789			74,572			69,614
Bank-owned life insurance		3,617			3,559			3,443
Restricted investment in bank stock		910			779			761
Premises and equipment, net		1,793			1,886			2,094
Accrued interest receivable		587			557			563
Prepaid federal income taxes		83			83			40
Deferred income taxes		1,421			1,206			352
Prepaid expenses		253			239			617
Real estate owned		566			2,199			1,824
Other assets		502			120			92
Total Assets	$	163,423		$	153,373		$	155,914
Liabilities and Equity
Liabilities
Deposits	$	140,631		$	133,540		$	133,717
Advances from the Federal Home Loan Bank		7,000			3,000			3,000
Securities sold under agreements to repurchase		3,759			4,031			5,204
Advances from borrowers for taxes and insurance		709			1,078			1,130
Deferred gain on sale - leaseback of building		367			375			391
Other liabilities		696			783			845
Total Liabilities		153,162			142,807			144,287
Equity
Retained earnings		11,502			11,447			11,324
Accumulated other comprehensive (loss) income		(1,241	)		(881	)		303
Total Equity		10,261			10,566			11,627
Total Liabilities and Equity	$	163,423		$	153,373		$	155,914

See accompanying notes to financial statements.

F-4

Huntingdon Valley Bank

Statements of Income

(in thousands)

	Six Months Ended					Years Ended
	December 31,					June 30,
	2013			2012		2013			2012
	(unaudited)
Interest Income
Interest and fees on loans	$	1,961		$	2,030	$	3,946		$	4,397
Interest and dividends on investments:
Taxable		187			145		297			478
Nontaxable		86			34		107			49
Interest on mortgage-backed securities and collateralized mortgage obligations		289			338		601			584
Interest on interest-bearing deposits		22			22		43			37
Total Interest Income		2,545			2,569		4,994			5,545
Interest Expense
Interest on deposits		404			496		938			1,148
Interest on advances from the Federal
Home Loan Bank		29			23		40			57
Interest on securities sold under agreements to repurchase		2			2		4			6
Total Interest Expense		435			521		982			1,211
Net interest income		2,110			2,048		4,012			4,334
(Credit) Provision for Loan Losses		(31	)		80		120			178
Net interest income after (credit) provision for loan losses		2,141			1,968		3,892			4,156
Non-Interest Income
Fees for customer services		108			119		235			216
Increase in cash surrender value of bank owned life insurance		58			60		116			118
Gain on sale of loans, net		1,002			930		1,686			1,773
Gain/(loss) on sale of available-for-sale securities		(2	)		334		592			528
Other		36			50		71			114
Total Non-Interest Income		1,202			1,493		2,700			2,749
Non-Interest Expense
Salaries and employee benefits		1,514			1,562		3,210			2,754
Occupancy		475			522		1,023			1,131
Federal deposit insurance premiums		70			68		159			137
Data processing related operations		236			248		633			573
Real estate owned expense		186			167		386			688
Professional fees		286			173		404			292
Other expenses		485			480		696			528
Total Non-Interest Expense		3,252			3,220		6,511			6,103
Income before income taxes		91			241		81			802
Total Income Tax (Benefit) Expense		36			72		(42	)		(110	)
Net Income	$	55		$	169	$	123		$	912

See accompanying notes to financial statements.

F-5

Huntingdon Valley Bank

Statements of Comprehensive Income (Loss)

(in thousands)

	Six Months Ended						Years Ended
	December 31,						June 30,
	2013			2012			2013			2012
	(unaudited)
Comprehensive Income (Loss), Net of Taxes
Net Income	$	55		$	169		$	123		$	912
Other comprehensive (loss) income, net of tax
Unrealized (loss) gain on available-for-sale securities (pre-tax $($183), $366, ($1,417) and $745, respectively)		(361	)		(96	)		(835	)		483
Reclassification for (gains) losses included in income (pre-tax $2, ($334), ($592)and ($528), respectively)		1			137			(349	)		(311	)
Other comprehensive (loss) income		(360	)		41			(1,184	)		172
Comprehensive (Loss) Income	$	(305	)	$	210			(1,061	)	$	1,084

See accompanying notes to financial statements.

F-6

Huntingdon Valley Bank

Statements of Changes in Equity

(in thousands)

	Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance, June 30, 2011	$	10,412		$	131		$	10,543
Net income		912			—			912
Other comprehensive income		—			172			172
Balance, June 30, 2012		11,324			303			11,627
(Unaudited)
Net income		169			—			169
Other comprehensive income		—			41			41
Balance, December 31, 2012		11,493			344			11,837
Net income		(46	)		—			(46	)
Other comprehensive loss		—			(1,225	)		(1,225	)
Balance, June 30, 2013		11,447			(881	)		10,566
(Unaudited)
Net income		55			—			55
Other comprehensive loss		—			(360	)		(360	)
Balance, December 31, 2013 (unaudited)	$	11,502		$	(1,241	)	$	10,261

See accompanying notes to financial statements.

F-7

Huntingdon Valley Bank

Statements of Cash Flows

(in thousands)

	Six Months Ended December 31,						Years Ended June 30,
	2013			2012			2013			2012
	(unaudited)
Cash Flows from Operating Activities
Net income	$	55		$	169		$	123		$	912
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		125			142			304			351
Impairment of real estate owned		75			(162	)		273			260
Amortization of deferred loan fees		(29	)		(35	)		(48	)		(48	)
Net amortization of securities premiums and discounts		293			503			1,018			479
Loss on sale of real estate owned		6			16			13			30
Increase in value of bank owned life insurance		(58	)		(60	)		(116	)		(118	)
Loans held for sale:
Originations, net of prepayments		(35,909	)		(46,772	)		(90,034	)		(142,530	)
Proceeds from sales		42,253			56,603			98,820			133,536
Gain on sales		(1,002	)		(930	)		(1,686	)		(1,773	)
(Gain) loss on sale of available-for-sale securities		2			(334	)		(592	)		(528	)
(Credit) provision for loan losses		(31	)		80			120			178
(Benefit) for deferred income taxes		36			(21	)		(29	)		(412	)
Amortization of deferred gain on sale-leaseback transaction		(8	)		(8	)		(16	)		(16	)
(Increase) decrease in:
Accrued interest receivable		(30	)		16			6			(45	)
Prepaid federal income taxes		—			40			(43	)		297
Prepaid and other assets		(197	)		105			350			120
Other liabilities		(87	)		(64	)		(62	)		(226	)
Net cash provided by (used in) operating activities		5,494			9,288			8,401			(9,533	)
Cash Flows from Investing Activities
Net (Increase) decrease in loans receivable		(1,223	)		(3,080	)		(5,974	)		6,553
Activity in available-for-sale securities:
Proceeds from sales		347			15,326			32,373			30,096
Maturities and repayments		2,428			3,946			8,077			3,282
Purchases		(2,538	)		(22,567	)		(41,744	)		(58,380	)
Activity in held to maturity securities:
Maturities and repayments		8			—			—			5,994
Purchases		(596	)		(1,900	)		(3,838	)		(608	)
(Purchase) redemptions of restricted investment in bank stock		(131	)		7			(19	)		155
Proceeds from sale of real estate owned		1,618			462			284			1,320
Purchases of premises and equipment		(32	)		(47	)		(96	)		(148	)
Net cash used in investing activities		(119	)		(7,853	)		(10,937	)		(11,736	)
Cash Flows from Financing Activities
Net (decrease) increase in deposits		7,091			4,075			(177	)		9,531
Net (decrease) increase in advances from borrowers for taxes and insurance		(369	)		(357	)		(52	)		86
Net (decrease) increase in securities sold under agreements to repurchase		(272	)		(1,053	)		(1,173	)		501
Proceeds from borrowings from FHLB		4,000			4,500			3,000			—
Repayment of borrowings from FHLB		—			(4,500	)		(3,000	)		—
Net cash provided by (used in) by financing activities		10,450			2,665			(1,402	)		10,118
Increase (Decrease) in Cash and Cash Equivalents		15,825			4,100			(3,938	)		(11,151	)
Cash and Cash Equivalents, beginning of year		7,073			11,011			11,011			22,162
Cash and Cash Equivalents, end of year	$	22,898		$	15,111		$	7,073		$	11,011
Supplementary Disclosure of Cash Flow Information
Cash paid during the year for interest	$	438		$	523		$	990		$	1,223
Cash paid during the year for income taxes	$	—		$	30			—		$	30
Supplementary Schedule of Noncash Investing Activities
Transfer from loans to real estate owned	$	66		$	—		$	944		$	1,602

See accompanying notes to financial statements.

F-8

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

1. Summary of Significant Accounting Policies

The following is a description of the significant accounting policies of Huntingdon Valley Bank (the “Bank”). The Bank follows accounting standards set by the Financial Accounting Standards Board (“FASB”). The FASB sets accounting principles generally accepted in the United States of America (“US GAAP”) that are followed to ensure consistent reporting of financial condition, results of operations, and cash flows.

The Bank has evaluated subsequent events through the date of issuance of the financial data included herein.

Nature of Business

The Bank is a Pennsylvania mutual savings bank, organized in 1871, and currently provides residential and commercial loans and mortgages to its general service area (Montgomery, Bucks and Philadelphia Counties of Pennsylvania) as well as offering a wide variety of savings, checking and certificate of deposit accounts to its retail and business customers.

Effective July 1, 2003, the Bank, a federally chartered mutual savings association regulated by the Office of Thrift Supervision, converted to a Pennsylvania-chartered mutual savings bank, regulated by the Pennsylvania Department of Banking and the Federal Deposit Insurance Corporation (FDIC). After the conversion, the Bank's deposits continue to be insured by the FDIC. Should the Bank fail to maintain its status as "well capitalized", it could be subject to formal corrective actions by its primary banking regulator. Refer to Note 8, Regulatory Capital.

Basis of Financial Statement Presentation

The accounting and reporting policies of the Bank conform to accounting principles generally accepted in the United States of America and predominant practices within the banking industry.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Bank considers cash and cash equivalents to include cash, amounts due from banks, and interest-bearing deposits with banks with original maturities of three months or less.

Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, other-than-temporary impairments of securities, other real estate owned, and the valuation of deferred tax assets.

F-9

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Investment Securities

Management determines the appropriate classification of securities at the time of purchase.

Securities that management has both the positive intent and ability to hold to maturity are classified as securities held-to-maturity and are carried at cost, adjusted for amortization of premium or accretion of discount using the interest method.

Securities that may be sold prior to maturity for asset/liability management purposes, or that may be sold in response to changes in interest rates, to changes in prepayment risk, to increase regulatory capital or other similar factors, are classified as securities available-for-sale and carried at fair value with any adjustments to fair value, after tax, reported as a separate component of retained earnings.

Interest and dividends on securities, including the amortization of premiums and the accretion of discounts, are reported in interest and dividends on securities using the interest method. Gains and losses on the sale of available-for-sale securities are recorded on the trade date and are calculated using the specific-identification method.

Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other-than-temporary would be reflected in the Statement of Income. In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) the intent and ability of the Bank to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value and (4) whether the Bank intends to sell the security or if it is more likely than not that the Bank will be required to sell the security before the recovery of its amortized cost basis.

For debt securities where the Bank has determined that other-than-temporary impairment exists and the Bank does not intend to sell the security or if it is not more likely than not that the Bank will be required to sell the security before recovery of its amortized cost basis, the impairment is separated into the amount that is credit-related and the amount due to all other factors. The credit-related impairment is recognized in the statement of income, and is the difference between an investment's amortized cost basis and the present value of expected future cash flows discounted at the investment's effective interest rate. The non-credit related loss is recognized in other comprehensive income, net of income tax benefit. For debt securities classified as held-to-maturity, the amount of noncredit-related impairment is recognized in other comprehensive income (loss) and is accreted over the remaining life of the debt security as an increase in the carrying value of the investment.

Mortgage Banking Activities and Mortgage Loans Held for Sale

Residential mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value calculated on an aggregate basis. Fair value is determined based on quoted market prices for the same or similar loans. Gains and losses are recognized upon delivery to the purchaser of said loans. Direct loan origination costs and fees are deferred at origination and are included in gains and losses upon sales of the loans. The Bank does not generally retain servicing on the loans sold.

F-10

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Loans Receivable

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans.

The loans receivable portfolio is segmented into consumer, commercial, and construction loans. Consumer loans consist of the following classes: residential mortgage, home equity, and other consumer. Commercial loans consist of the following classes: commercial and commercial mortgage.

The accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal.

Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time, generally six months, and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments.

Allowance for Loan Losses

The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely.

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Bank’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

F-11

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class including commercial loans not considered impaired, as well as smaller balance homogeneous loans, such as residential mortgage, home equity, HELOC and consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors.

These qualitative risk factors include:

1. Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.

2. National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans.

3. Nature and volume of the portfolio and terms of loans.

4. Volume and severity of past due, classified and nonaccrual loans as well as and other loan modifications.

5. Existence and effect of any concentrations of credit and changes in the level of such concentrations.

6. Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

Consumer loans are secured by the borrower’s residential real estate in either a first or second lien position. Consumer loans have varying loan rates depending on the financial condition of the borrower and the loan to value ratio. Other consumer loans are collateralized by certificate of deposits held by the Bank and present minimal risk.

The Bank makes construction loans to finance the construction of residential and commercial structures. These loans are made to individuals or commercial customers and are typically secured by the land and structure(s) under construction.

The Bank also makes commercial loans for real estate development and other business purposes required by the customer base. The Bank’s credit policies determine advance rates against the different forms of collateral that can be pledged against commercial loans. Typically, the majority of loans will be limited to a percentage of their underlying collateral values such as real estate values, equipment, eligible accounts receivable and inventory. Individual loan advance rates may be higher or lower depending upon the financial strength of the borrower and/or term of the loan. The assets financed through commercial loans are used within the business for its ongoing operation. Repayment of these kinds of loans generally comes from the cash flow of the business or the ongoing conversions of assets. Commercial mortgage loans include long-term loans financing commercial properties. Repayment of this kind of loan is dependent upon either the ongoing cash flow of the borrowing entity or the resale of or lease of the subject property. Commercial mortgage loans typically require a loan to value ratio of not greater than 80% and vary in terms.

F-12

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

A loan is considered 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 determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. 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. Impairment is measured on a loan by loan basis for commercial real estate loans, commercial other, and commercial construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent.

An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of substantially all of the Bank’s impaired loans are measured based on the estimated fair value of the loan’s collateral.

For commercial loans secured by real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

For commercial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Bank does not separately identify individual residential mortgage loans, home equity loans and other consumer loans for impairment disclosures, unless such loans have been modified and accounted for as a troubled debt restructuring.

Loans whose terms are modified are classified as troubled debt restructurings if the Bank grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a temporary reduction in interest rate or an extension of a loan’s stated maturity date. Non-accrual troubled debt restructurings are generally restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification. Loans classified as troubled debt restructurings are designated as impaired.

F-13

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for commercial loans or when credit deficiencies arise, such as delinquent loan payments, for commercial and consumer loans. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified special mentions have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass.

In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses and may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

Bank-Owned Life Insurance

The Bank invests in bank-owned life insurance policies (BOLI) as a mechanism for funding various employee benefit costs. The Bank is the beneficiary of these policies that insure the lives of certain of its current and former officers. The Bank recognizes the cash surrender value under the insurance policies as an asset in the statement of financial condition. Changes in the cash surrender value are recorded in Non-interest income in the Statement of Income.

Restricted Investment in Bank Stock

Restricted investment in bank stocks, which represents required investments in the common stock of correspondent banks, is carried at cost, and consists of common stock of the Atlantic Central Bankers Bank (ACBB) and Federal Home Loan Bank of Pittsburgh (FHLB) stock totaling $910,000, $779,000 and $761,000 at December 31, 2013 (unaudited) and June 30, 2013 and June 30, 2012, respectively.

Premises and Equipment

Property and equipment are recorded at cost less accumulated depreciation. Depreciation is charged to operations on the straight-line method over the estimated useful lives of the assets or, in the case of leasehold improvements, the expected lease period, if shorter. When disposal of fixed assets occurs, the related cost and accumulated depreciation are removed from the asset accounts, and the gain or loss from these disposals is reflected in earnings. The estimated useful lives are as follows:

F-14

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	Years
Land improvements		40
Buildings		15 to 40
Leasehold improvements		5 to 15
Furniture and office equipment		3 to 10

Interest is normally expensed as incurred, except when incurred in conjunction with the construction of major capital additions and then it is capitalized as part of the asset. Maintenance and repairs are expensed as incurred.

Real Estate Owned

Real estate owned are comprised of property acquired through a foreclosure proceeding or acceptance of a deed-in-lieu of foreclosure and loans classified as in-substance foreclosure. A loan is classified as in-substance foreclosure when the Bank has taken possession of the collateral regardless of whether formal proceedings take place. Foreclosed assets initially are recorded at fair value, net of estimated selling costs, at the date of foreclosure establishing a new cost basis. After foreclosure, valuations are periodically performed by management and the assets are carried at the lower of cost or fair value minus estimated costs to sell. Revenues and expenses from operations and changes in the valuation allowance are included in other expenses. In addition, any gain or loss realized upon disposal is included in other or expense.

The following is a roll forward of activity at December 31, 2013 and 2012 (unaudited) and June 30, 2013 and 2012:

	December 31,						June 30,
(Dollars in thousands)	2013			2012			2013			2012
	(unaudited)			(unaudited)
Balance at beginning of period	$	2,199		$	1,824		$	1,824		$	1,832
Properties transferred in		66			—			945			1,602
Impairment recovery		76			187			—			—
Proceeds from properties sold		(1,618	)		(462	)		(284	)		(1,320	)
Loss on sales of properties		(6	)		(16	)		(13	)		(30	)
Valuation reserves		(151	)		(25	)		(273	)		(260	)
Balance at end of year	$	566		$	1,508		$	2,199		$	1,824

F-15

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Securities Sold Under Agreements to Repurchase

The Bank enters into sales of securities under agreements to repurchase. Reverse repurchase agreements are treated as financings, with the obligation to repurchase securities sold reflected as a liability in the statement of financial condition. The securities underlying the agreements remain in the asset accounts.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Bank accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment.

As of December 31, 2013 (unaudited) and June 30, 2013 and 2012, the Bank had no material unrecognized tax benefits or accrued interest and penalties. The Bank's policy is to account for interest as a component of interest expense and penalties as a component of other expense. Federal and state tax years 2010 through 2012 were open for examination as of December 31, 2013.

Transfer of Financial Assets

Transfers of financials assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Bank, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Bank does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

F-16

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Fair Value Measurements

Fair value of financial instruments is estimated using relevant market information and other assumptions. As more fully disclosed in Note 11, fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassification

Certain immaterial amounts in the 2012 financial statements have been reclassified to conform to the 2013 presentation. The reclassifications did not impact the Bank’s financial condition or results of operations.

2. Investment Securities

Investment securities available-for-sale at December 31, 2013 (unaudited) and June 30, 2013 and 2012 were comprised of the following:

	December 31, 2013
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
(unaudited)
U.S. Governmental securities	$	7,102	$	21	$	(161	)	$	6,962
Corporate notes		9,591		—		(533	)		9,058
Collateralized mortgage obligations - agency residential		17,575		5		(751	)		16,829
Mortgage-backed securities - agency residential		9,251		10		(517	)		8,744
Municipal securities		4,075		6		(185	)		3,896
Bank CDs		749		3		(2	)		750
	$	48,343	$	45	$	(2,149	)		46,239

F-17

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	June 30, 2013
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Governmental securities	$	6,221	$	21	$	(120	)	$	6,122
Corporate notes		9,597		5		(484	)		9,118
Collateralized mortgage obligations - agency residential		19,267		22		(447	)		18,842
Mortgage-backed securities - agency residential		8,966		33		(348	)		8,651
Municipal securities		4,069		—		(182	)		3,887
Bank CDs		749		6		—			755
	$	48,869	$	87	$	(1,581	)	$	47,375

	June 30, 2012
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Governmental securities	$	7,334	$	136	$	(1	)	$	7,469
Corporate notes		6,281		5		(51	)		6,235
Collateralized mortgage obligations - agency residential		22,561		247		(67	)		22,741
Mortgage-backed securities - agency residential		10,184		226		(1	)		10,409
Municipal securities		1,379		23		(2	)		1,400
Bank CDs		250		—		—			250
	$	47,989	$	637	$	(122	)	$	48,504

Investment securities held-to-maturity at December 31, 2013 (unaudited) and June 30, 2013 and 2012 were comprised of the following:

	December 31, 2013
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
(unaudited)
Municipal securities	$	5,020	$	3	$	(118	)	$	4,905
	$	5,020	$	3	$	(118	)	$	4,905

F-18

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	June 30, 2013
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Municipal securities	$	4,432	$	—	$	(122	)	$	4,310
	$	4,432	$	—	$	(122	)	$	4,310

	June 30, 2012
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Municipal securities	$	606	$	1	$	(1	)	$	606
	$	606	$	1	$	(1	)	$	606

The scheduled maturities of securities available-for-sale and held-to-maturity at December 31, 2013 (unaudited) and June 30, 2013 were as follows:

	December 31, 2013
	Available for sale				Held to maturity
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
(unaudited)
Due in one year or less	$	1,002	$	991	$	253	$	254
Due from one to five years		2,482		2,469		1,620		1,607
Due from five to ten years		9,689		9,174		2,551		2,464
Due after ten years		35,170		33,605		596		580
	$	48,343	$	46,239	$	5,020	$	4,905

	June 30, 2013
	Available for sale				Held to maturity
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	—	$	—	$	—	$	—
Due from one to five years		3,202		3,152		1,262		1,255
Due from five to ten years		9,449		8,957		3,170		3,055
Due after ten years		36,218		35,266		—		—
	$	48,869	$	47,375	$	4,432	$	4,310

F-19

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Securities with a fair value of $4.5 million, $4.9 million and $3.5 million at December 31, 2013 (unaudited) and June 30, 2013 and 2012, respectively, were pledged to secure public deposits and for other purposes as required by law.

Proceeds from the sale of available-for-sale securities for the six months ended December 31, 2013 (unaudited) were $347,000. Gross realized gains on such sales were approximately $1,000 and gross realized losses on such sales were approximately $(3,000). Proceeds from the sale of available-for-sale securities for the six months ended December 31, 2012 (unaudited) were $15.3 million. Gross realized gains on such sales were $354,000 and gross realized losses on such sales were $(20,000).

Proceeds from the sale of available-for-sale securities for the year ended June 30, 2013 were $32.4 million. Gross realized gains on such sales were $615,000 and gross realized losses on such sales were $(23,000). Proceeds from the sale of available-for-sale securities for the year ended June 30, 2012 were $30.1 million. Gross realized gains on such sales were $540,000 and gross realized losses on such sales were $(12,000).

The following table summarizes the unrealized loss positions of securities available-for-sale and held-to-maturity at December 31, 2013 (unaudited) and June 30, 2013 are as follows:

	December 31, 2013
	Less than 12 Months					12 Months or Longer					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
(unaudited)
Available-for-sale:
U.S. Governmental securities	$	3,603	$	(117	)	$	446	$	(44	)	$	4,049	$	(161	)
Corporate notes		8,079		(485	)		979		(48	)		9,058		(533	)
Collateralized mortgage obligations		10,026		(446	)		5,750		(305	)		15,776		(751	)
Mortgage-backed securities		4,883		(327	)		3,034		(190	)		7,917		(517	)
Municipal securities		1,904		(103	)		1,140		(82	)		3,044		(185	)
Bank CD’s		248		(2	)		—		—			248		(2	)
	$	28,743	$	(1,480	)	$	11,349	$	(669	)	$	40,092	$	(2,149	)
Held-to-maturity:
Municipal securities	$	1,815	$	(48	)	$	2,034	$	(70	)	$	3,972	$	(118	)
	$	1,815	$	(48	)	$	2,034	$	(70	)	$	3,972	$	(118	)

F-20

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	June 30, 2013
	Less than 12 Months					12 Months or Longer					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Available-for-sale:
U.S. Governmental securities	$	3,525	$	(120	)	$	—	$	—		$	3,525	$	(120	)
Corporate notes		8,368		(484	)		—		—			8,368		(484	)
Collateralized mortgage obligations		14,262		(414	)		2,184		(33	)		16,446		(447	)
Mortgage-backed securities		7,434		(348	)		—		—			7,434		(348	)
Municipal securities		3,887		(182	)		—		—			3,887		(182	)
	$	37,476	$	(1,548	)	$	2,184	$	(33	)	$	39,660	$	(1,581	)
Held–to-maturity:
Municipal securities	$	3,846	$	(121	)	$	209	$	(1	)	$	4,055	$	(122	)
	$	3,846	$	(121	)	$	209	$	(1	)	$	4,055	$	(122	)

At December 31, 2013 and June 30, 2013, the investment portfolio included fourteen and twelve U.S. Government Securities, with total market values of $7.0 million and $6.1 million, respectively. Of these securities, eight and seven were in an unrealized loss position as of December 31, 2013 and June 30, 2013, respectively. These securities are zero risk weighted for capital purposes and are guaranteed for repayment of principal and interest. As of December 31, 2013 and June 30, 2013, management found no evidence of OTTI on any of the U.S. Governmental securities held in the investment securities portfolio and the Bank has no intentions to sell the securities before a recovery of the cost has occurred.

At December 31, 2013 and June 30, 2013, the investment portfolio included nineteen Corporate Securities with total market values of $9.1 million at the end of each period. Of these securities, nineteen and seventeen were in an unrealized loss position as of December 31, 2013 and June 30, 2013, respectively. These bonds were purchased and, as of December 31, 2013 and June 30, 2013, continue to maintain investment grade ratings. As of December 31, 2013 and June 30, 2013, management found no evidence of OTTI on any of the Corporate Securities held in the investment securities portfolio and the Bank has no intentions to sell the securities before a recovery of the cost has occurred.

At December 31, 2013 and June 30, 2013, the investment portfolio included forty-three and forty- four Collateralized Mortgage Obligations (CMOs) with total market values of $16.8 million and $18.8 million, respectively. Of these securities, thirty-nine and thirty-eight were in an unrealized loss position as of December 31, 2013 and June 30, 2013, respectively. The CMO portfolio is comprised of 100% agency (FHLMC, FNMA and GNMA) investment grade bonds. As of December 31, 2013 and June 30, 2013, management found no evidence of OTTI on any of the CMOs held in the investment securities portfolio and the Bank has no intentions to sell the securities before a recovery of the cost has occurred.

F-21

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

At December 31, 2013 and June 30, 2013, the investment portfolio included twenty-six and twenty-five Mortgage Backed Securities (MBS) with a total market value of $8.7 million at the end of each period. Of these securities, sixteen and fourteen were in an unrealized loss position as of December 31, 2013 and June 30, 2013, respectively. The MBS portfolio is comprised of 100% agency (FHLMC, FNMA and GNMA) investment grade bonds. As of December 31, 2013 and June 30, 2013, management found no evidence of OTTI on any of the MBS held in the investment securities portfolio and the Bank has no intentions to sell the securities before a recovery of the cost has occurred.

At December 31, 2013 and June 30, 2013, the investment portfolio included twenty-eight and twenty-six Municipal Securities with a total market value of $8.8 million and $8.2 million, respectively. Of these securities, twenty and twenty-five were in an unrealized loss position as of December 31, 2013 and June 30, 2013, respectively. These bonds are concentrated in Pennsylvania and were purchased and, as of December 31, 2013 and June 30, 2013, continue to maintain investment grade ratings. Each of the municipal securities is reviewed quarterly for impairment. Research on each issuer is completed to ensure the financial stability of the municipal entity. As of June 30, 2013, management found no evidence of OTTI on any of the Municipal securities held in the investment securities portfolio and the Bank has no intentions to sell the securities before a recovery of the cost has occurred.

The following table summarizes the unrealized loss positions of securities available-for-sale and held-to-maturity at June 30, 2012 are as follows:

	June 30,2012
	Less than 12 Months					12 Months or Longer				Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available-for-sale:
U.S. Governmental securities	$	713	$	(1	)	$	—	$	—	$	713	$	(1	)
Corporate notes		5,206		(51	)		—		—		5,206		(51	)
Collateralized mortgage obligations		6,146		(67	)		—		—		6,146		(67	)
Mortgage-backed securities		526		(1	)		—		—		526		(1	)
Municipal securities		469		(2	)		—		—		469		(2	)
	$	13,060	$	(122	)	$	—	$	—	$	13,060	$	(122	)
Held –to-maturity:
Municipal securities	$	213	$	(1	)	$	—	$	—	$	213	$	(1	)
	$	213	$	(1	)	$	—	$	—	$	213	$	(1	)

F-22

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

3. Loans Receivable

Loans receivable at December 31, 2013 (unaudited) and June 30, 2013 and 2012 were comprised of the following:

	December 31,			June 30,
(Dollars in thousands)	2013			2013			2012
	(unaudited)
Consumer:
Residential mortgage	$	54,906		$	53,375		$	45,412
Home equity and HELOC’s		8,143			9,053			10,535
Other consumer		42			72			126
Commercial:
Commercial real estate		12,433			11,954			12,824
Other commercial		787			775			188
Construction – residential		—			—			1,500
		76,311			75,229			70,585
Less:
Unearned discounts, origination and commitment fees		(37	)		(76	)		(161	)
Undisbursed portion of construction loan		—			—			(336	)
Allowance for loan losses		(485	)		(581	)		(474	)
		(522	)		(657	)		(971	)
	$	75,789			74,572		$	69,614

Overdraft deposits are reclassified as loans and are included in the total loans on the Statements of Financial Condition. Overdrafts were $12,000, $34,000 and $1,000 at December 31, 2013 (unaudited) and June 30, 2013 and 2012, respectively.

In the ordinary course of business, the Bank has granted loans to certain officers and trustees. All such loans and commitments to related parties were made under terms which are consistent with the Bank's normal lending policies. The amount outstanding at December 31, 2013 (unaudited) and June 30, 2013 and 2012 was $235,000, $291,000 and $406,000, respectively. Originations to related parties and repayments from related parties during the six months ended December 31, 2013 (unaudited) were $2,000 and $58,000, respectively. Originations to related parties and repayments from related parties during the year ended June 30, 2013 were $69,000 and $184,000, respectively. Originations to related parties and repayments from related parties during the year ended June 30, 2012 were $33,000 and $78,000, respectively.

F-23

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The following table summarizes the activity in the allowance for loan losses by loan class for the six months ended December 31, 2013 and 2012 and information in regards to the allowance for loan losses and the recorded investment in loans receivable by loan segment as of December 31, 2013 and 2012:

December 31, 2013
	Allowance for Loan Losses
(Dollars in thousands)	Beginning Balance		Charge- offs		Recoveries		Provisions			Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairments
(unaudited)
Consumer:
Residential mortgage	$	246	$	62	$	—	$	(3	)	$	181	$	—	$	181
Home equity and HELOC’s		21		—		—		(2	)		19		—		19
Other consumer		—		3		—		3			—		—		—
Commercial:
Commercial real estate		283		—		—		(10	)		273		72		201
Other commercial		13		—		—		(1	)		12		—		12
Construction - residential		—		—		—		—			—		—		—
Unallocated reserve		18		—		—		(18	)		—		—
	$	581	$	65	$	—	$	(31	)	$	485	$	72	$	413

F-24

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

December 31, 2012
	Allowance for Loan Losses
(Dollars in thousands)	Beginning Balance		Charge- offs		Recoveries		Provisions			Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairments
(unaudited)
Consumer:
Residential mortgage	$	162	$	—	$	—	$	77		$	239	$	—	$	239
Home equity and HELOC’s		24		—		—		(2	)		22		—		22
Other consumer		—		1		—		1			—		—		—
Commercial:
Commercial real estate		284		12		—		(46	)		226		116		110
Other commercial		3		—		—		50			53		45		8
Construction - residential		1		—		—		—			1		—		1
Unallocated reserve		—		—		—		—			—		—		—
	$	474	$	13	$	—	$	80		$	541	$	161	$	380

F-25

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The following table summarizes the activity in the allowance for loan losses by loan class for the year ended June 30, 2013 and 2012 and information in regards to the allowance for loan losses and the recorded investment in loans receivable by loan segment as of June 30, 2013 and 2012:

June 30, 2013
	Allowance for Loan Losses
(Dollars in thousands)	Beginning Balance		Charge- offs		Recoveries		Provisions			Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairments
Consumer:
Residential mortgage	$	162	$	—	$	—	$	84		$	246	$	62	$	184
Home equity and HELOC’s		24		—		—		(3	)		21		—		21
Other consumer		—		1		—		1			—		—		—
Commercial:
Commercial real estate		284		12		—		11			283		72		211
Other commercial		3		—		—		10			13		—		13
Construction - residential		1		—		—		(1	)		—		—		—
Unallocated reserve		—		—		—		18			18		—		18
	$	474	$	13	$	—	$	120		$	581	$	134	$	447

F-26

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

June 30, 2012
	Allowance for Loan Losses
(Dollars in thousands)	Beginning Balance		Charge- offs		Recoveries		Provisions			Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairments
Consumer:
Residential mortgage	$	161	$	12	$	—	$	13		$	162	$	1	$	161
Home equity and HELOC’s		30		—		—		(6	)		24		—		24
Other consumer		—		3		1		2			—		—		—
Commercial:
Commercial real estate		431		362		44		171			284		117		167
Other commercial		6		—		—		(3	)		3		—		3
Construction - residential		—		—		—		1			1		—		1
Unallocated reserve		—		—		—		—			—		—		—
	$	628	$	377		45	$	178		$	474	$	118	$	356

December 31, 2013
	Loans Receivables
(Dollars in thousands)	Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairment
(unaudited)
Consumer:
Residential mortgage	$	54,906	$	621	$	54,285
Home equity and HELOC’s		8,143		379		7,764
Other consumer		42		—		42
Commercial:
Commercial real estate		12,433		1,633		10,800
Other commercial		787		—		787
Construction - residential		—		—		—
	$	76,311	$	2,633	$	73,678

F-27

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	June 30, 2013
	Loans Receivables
(Dollars in thousands)	Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairment
Consumer:
Residential mortgage	$	53,375	$	564	$	52,811
Home equity and HELOC’s		9,053		198		8,855
Other consumer		72		—		72
Commercial:
Commercial real estate		11,954		1,290		10,664
Other commercial		775		—		775
Construction - residential		—		—		—
	$	75,229	$	2,052	$	73,177
	June 30, 2012
	Loans Receivables
(Dollars in thousands)	Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairment
Consumer:
Residential mortgage	$	45,412	$	623	$	44,789
Home equity and HELOC’s		10,535		223		10,312
Other consumer		126		—		126
Commercial:
Commercial real estate		12,824		2,857		9,967
Other commercial		188		—		188
Construction - residential		1,500		—		1,500
	$	70,585	$	3,703	$	66,882

F-28

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The following tables summarize information in regard to impaired loans by loan portfolio class as of December 31, 2013 and 2012 (unaudited) and June 30, 2013 and 2012:

	December 31, 2013
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Record Investment		Interest Income Recognized
(unaudited)
With no related allowance recorded
Consumer:
Residential mortgage	$	621	$	621	$	—	$	698	$	17
Home equity and HELOC’s		379		379		—		289		2
Other consumer		—		—		—		—		—
Commercial:
Commercial real estate		1,245		1,288		—		1,251		10
Other commercial		—		—		—		—		—
Construction - residential		—		—		—		—		—
		2,245		2,288		—		2,238		29
With an allowance recorded
Consumer:
Residential mortgage		—		—		—		63		—
Home equity and HELOC’s		—		—		—		—		—
Other consumer		—		—		—		—		—
Commercial:
Commercial real estate		388		388		72		389		1
Other commercial		—		—		—		—		—
Construction - residential		—		—		—		—		—
		388		388		72		452		1
	$	2,633	$	2,676	$	72	$	2,690	$	30

F-29

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	December 31, 2012
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Record Investment		Interest Income Recognized
(unaudited)
With no related allowance recorded
Consumer:
Residential mortgage	$	488	$	488	$	—	$	464	$	6
Home equity and HELOC’s		349		349		—		274		—
Other consumer		—		—		—		—		—
Commercial:
Commercial real estate		1,143		1,143		—		1,021		6
Other commercial		—		—		—		—		1
Construction - residential		—		—		—		—		—
		1,980		1,980		—		1,759		13
With an allowance recorded
Consumer:
Residential mortgage		—		—		—		312		—
Home equity and HELOC’s		—		—		—		—		—
Other consumer		—		—		—		—		—
Commercial:
Commercial real estate		349		349		116		879		—
Other commercial		250		250		45		125		—
Construction - residential		—		—		—		—		—
		599		599		161		1,316		—
	$	2,579	$	2,579	$	161	$	3,075	$	13

If these loans were performing under the original contractual rate, interest income on such loans would have increased approximately $29,000 and $23,000 for the six months ended December 31, 2013 and 2012, respectively.

F-30

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	June 30, 2013
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Record Investment		Interest Income Recognized
With no related allowance recorded
Consumer:
Residential mortgage	$	439	$	439	$	—	$	287	$	7
Home equity and HELOC’s		198		198		—		198		9
Other consumer		—		—		—		—		—
Commercial:
Commercial real estate		899		942		—		772		45
Other commercial		—		—		—		—		—
Construction - residential		—		—		—		—		—
		1,536		1,579		—		1,257		61
With an allowance recorded
Consumer:
Residential mortgage		125		125		62		125		12
Home equity and HELOC’s		—		—		—		—		—
Other consumer		—		—		—		—		—
Commercial:
Commercial real estate		391		391		72		291		14
Other commercial		—		—		—		—		—
Construction - residential		—		—		—		—		—
		516		516		134		416		26
	$	2,052	$	2,095	$	134	$	1,673	$	87

F-31

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	June 30, 2012
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Record Investment		Interest Income Recognized
With no related allowance recorded
Consumer:
Residential mortgage	$	—	$	—	$	—	$	—	$	—
Home equity and HELOC’s		223		223		—		94		8
Other consumer		—		—		—		—		—
Commercial:
Commercial real estate		1,450		1,450		—		1,450		24
Other commercial		—		—		—		—		—
Construction - residential		—		—		—		—		—
		1,673		1,673		—		1,544		32
With an allowance recorded
Consumer:
Residential mortgage		623		623		1		60		6
Home equity and HELOC’s		—		—		—		—		—
Other consumer		—		—		—		—		—
Commercial:
Commercial real estate		1,407		1,407		117		996		69
Other commercial		—		—		—		—		—
Construction - residential		—		—		—		—		—
		2,030		2,030		118		1,056		75
	$	3,703	$	3,703	$	118	$	2,600	$	107

If these loans were performing under the original contractual rate, interest income on such loans would have increased approximately $78,000 and $52,000 for the years ended June 30, 2013 and 2012, respectively.

The following table presents nonaccrual loans by classes of the loan portfolio as of December 31, 2013 (unaudited) and June 30, 2013 and 2012:

	December 31,		June 30,
(Dollars in thousands)	2013		2013		2012
	(unaudited)
Consumer:
Residential mortgage	$	957	$	564	$	623
Home equity and HELOC’s		379		198		222
Other consumer		—		—		—
Commercial:
Commercial real estate		679		683		1,600
Other commercial		—		—		—
Construction - residential		—		—		—
	$	2,015	$	1,445	$	2,445

F-32

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The following tables summarize the aggregate Pass and criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system as of December 31, 2013 (unaudited) and June 30, 2013 and 2012:

	December 31, 2013
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
(unaudited)
Consumer:
Residential mortgage	$	54,285	$	—	$	621	$	—	$	54,906
Home equity and HELOC’s		7,764		—		379		—		8,143
Other consumer		42		—		—		—		42
Commercial:
Commercial real estate		10,335		835		1,263		—		12,433
Other commercial		552		—		235		—		787
Construction - residential		—		—		—		—		—
	$	72,978	$	835	$	2,498	$	—	$	76,311

	June 30, 2013
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Consumer:
Residential mortgage	$	52,811	$	—	$	564	$	—	$	53,375
Home equity and HELOC’s		8,840		—		213		—		9,053
Other consumer		72		—		—		—		72
Commercial:
Commercial real estate		10,206		826		922		—		11,954
Other commercial		533		—		242		—		775
Construction - residential		—		—		—		—		—
	$	72,462	$	826	$	1,941	$	—	$	75,229

F-33

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	June 30, 2012
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Consumer:
Residential mortgage	$	44,790	$	—	$	622	$	—	$	45,412
Home equity and HELOC’s		10,313		—		222		—		10,535
Other consumer		126		—		—		—		126
Commercial:
Commercial real estate		9,967		1,079		1,778		—		12,824
Other commercial		188		—		—		—		188
Construction - residential		1,500		—		—		—		1,500
	$	66,884	$	1,079	$	2,622	$	—	$	70,585

The following tables present the segments of the loan portfolio summarized by aging categories as of December 31, 2013 (unaudited) and June 30, 2013 and 2012:

	December 31, 2013
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Loans Receivable >90 Days and Accruing
(unaudited)
Consumer:
Residential mortgage	$	254	$	—	$	957	$	1,211	$	53,695	$	54,906	$	—
Home equity and HELOC’s		12		—		379		391		7,752		8,143		—
Other consumer		8		—		—		8		34		42		—
Commercial:
Commercial real estate		—		—		529		529		11,904		12,433		—
Other commercial		150		—		—		150		637		787		—
Construction - residential		—		—		—		—		—		—		—
	$	424	$	—	$	1,865	$	2,289	$	74,022	$	76,311	$	—

F-34

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

June 30, 2013
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Loans Receivable >90 Days and Accruing
Consumer:
Residential mortgage	$	583	$	53	$	564	$	1,200	$	52,175	$	53,375	$	—
Home equity and HELOC’s		124		78		198		400		8,653		9,053		—
Other consumer		2		—		—		2		70		72		—
Commercial:
Commercial real estate		—		—		683		683		11,271		11,954		—
Other commercial		—		—		—		—		775		775		—
Construction - residential		—		—		—		—		—		—		—
	$	709	$	131	$	1,445	$	2,285	$	72,944	$	75,229	$	—

June 30, 2012
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Loans Receivable >90 Days and Accruing
Consumer:
Residential mortgage	$	528	$	145	$	623	$	1,296	$	44,116	$	45,412	$	—
Home equity and HELOC’s		69		—		222		291		10,244		10,535		—
Other consumer		42		—		—		42		84		126		—
Commercial:
Commercial real estate		102		—		1,343		1,445		11,379		12,824		—
Other commercial		—		—		—		—		188		188		—
Construction - residential		—		—		—		—		1,500		1,500		—
	$	741	$	145	$	2,188	$	3,074	$	67,511	$	70,585	$	—

F-35

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The Bank may grant a concession or modification for economic or legal reasons related to a borrower's financial condition that it would not otherwise consider resulting in a modified loan which is then identified as a troubled debt restructuring (“TDR”). The Bank may modify loans through rate reductions, extensions of maturity, interest only payments, or payment modifications to better match the timing of cash flows due under the modified terms with the cash flows from the borrowers' operations. Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. TDRs are considered impaired loans for purposes of calculating the Bank's allowance for loan losses.

The Bank may identify loans for potential restructure primarily through direct communication with the borrower and evaluation of the borrower's financial statements, revenue projections, tax returns, and credit reports. Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future.

As of December 31, 2013 and June 30 2013, the Bank had identified two loans as TDRs totaling $448,000 and $434,000, respectively. The two loans were restructured with rate modifications to lower the interest rate for a term of five years each. For the six months ending December 31, 2013, the Bank did not identify additional loans as TDRs. For the 6 months ending December 31, 2012 and for the year ended June 30, 2012, the Bank had not identified any loans as TDRs.

The following table details the Bank’s TDRs that are on an accrual status and a non-accrual status at December 31, 2013:

	As of December 31, 2013
(Dollars in thousands)	Number of Loans		Accrual Status		Non-Accrual Status		Total TDRs
(unaudited)
Commercial real estate		2	$	448	$	—	$	448
Total		2	$	448	$	—	$	448

At December 31, 2013 and June 30, 2013, all of the TDRs were in compliance with their restructured terms.

F-36

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The following table details the Bank’s TDRs that are on an accrual basis and a non-accrual status at June 30, 2013:

	As of June 30, 2013
(Dollars in thousands)	Number of Loans		Accrual Status		Non-Accrual Status		Total TDRs
(unaudited)
Commercial real estate		2	$	434	$	—	$	434
Total		2	$	434	$	—	$	434

4. Premises and Equipment

Premises and equipment are summarized by major classification at December 31, 2013 (unaudited) and June 30, 2013 and 2012 as follows:

	December 31,			June 30,
(Dollars in thousands)	2013			2013			2012
	(unaudited)
Land	$	334		$	334		$	334
Land improvements		477			477			477
Office buildings and improvements		711			711			706
Leasehold improvements		572			572			639
Furniture and equipment		2,494			2,462			2,678
Total cost		4,588			4,556			4,834
Accumulated depreciation		(2,795	)		(2,670	)		(2,740	)
	$	1,793		$	1,886		$	2,094

Depreciation expense for the six months ended December 31, 2013 and 2012 (unaudited) and the years ended June 30, 2013 and 2012 was $125,000, $142,000, $304,000 and $351,000, respectively.

During the year ended June 30, 2007, the Bank sold the building that housed its corporate offices and one of its branch offices. At the time of settlement, the Bank entered into an operating lease agreement for the branch office portion of the building. Due to the sale-leaseback nature of the transaction, the Bank deferred the $486,000 gain on the sale. The deferred gain is being amortized into income by the straight-line method over the term of the operating lease (29 years and 11 months) as a reduction of rental expense. The amount amortized for the six months ended December 31, 2013 and 2012 (unaudited) and the years ended June 30, 2013 and 2012 was $8,000, $8,000, $16,000, and $16,000, respectively.

F-37

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

5. Deposits

Deposits at December 31, 2013 (unaudited) and June 30, 2013 and 2012 consisted of the following:

	December 31,		June 30,
(Dollars in thousands)	2013		2013		2012
	(unaudited)
NOW accounts - interest bearing	$	28,975	$	26,390	$	24,512
NOW accounts - non-interest bearing		3,587		3,482		3,336
Money market deposit accounts		25,366		32,747		34,363
Passbook and statement accounts		30,077		18,959		16,640
Checking accounts		5,072		5,536		5,451
		93,077		87,114		84,302
Certificates of deposit		47,554		46,426		49,415
Total deposits	$	140,631	$	133,540	$	133,717

At December 31, 2013, scheduled maturities of certificates of deposit are as follows:

(Dollars in thousands)
2014		21,071
2015		12,983
2016		7,065
2017		4,382
2018		426
2019 and thereafter		1,627
	$	47,554

At June 30, 2013, scheduled maturities of certificates of deposit are as follows:

(Dollars in thousands)
2014	$	26,633
2015		6,862
2016		6,349
2017		4,644
2018		403
2019 and thereafter		1,535
	$	46,426

F-38

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Certificates of deposit in denominations of $100,000 or more were $22.6 million, $20.4 million and $20.6 million at December 31, 2013 (unaudited) and June 30, 2013 and 2012, respectively.

The Bank held deposits of approximately $3.7 million, $2.8 million and $4.1 million for related parties at December 31, 2013 (unaudited) and June 30, 2013 and 2012, respectively.

Interest expense on deposits for the six months ended December 31, 2013 and 2012 (unaudited) and the years ended June 30, 2013 and 2012 is summarized as follows:

	Six months Ended December 31,				Years Ended June 30,
(Dollars in thousands)	2013		2012		2013		2012
	(unaudited)		(unaudited)
NOW accounts	$	22	$	26	$	51	$	61
Money market deposits accounts		35		47		82		149
Passbook and statement accounts		29		22		40		47
Certificates of deposit		318		401		765		891
	$	404	$	496	$	938	$	1,148

6. Borrowings

Under terms of its collateral agreement with the Federal Home Loan Bank (“FHLB”), the Bank maintains otherwise unencumbered qualifying assets (principally qualifying 1-4 family residential mortgage loans and U.S. government agency, and mortgage-backed securities) in the amount of at least as much as its advances from the FHLB. The Bank's FHLB stock is also pledged to secure these advances.

The following table details the Bank’s fixed rate advances from the FHLB as of December 31, 2013, June 30, 2013 and June 30, 2012:

(Dollars in thousands)

(unaudited)

Maturity	Interest Rate			December 31, 2013		June 30, 2013		June 30, 2012
9/26/2017		0.93	%	$	3,000	$	3,000	$	—
7/14/2014		0.38	%		2,000		—		—
7/16/2015		0.57	%		1,000		—		—
7/16/2016		0.91	%		1,000		—		—
3/31/2014		2.14	%		—		—		1,500
7/01/2013		1.60	%		—		—		1,500
				$	7,000	$	3,000	$	3,000

F-39

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The Bank has short-term and long-term credit facilities with the FHLB with a maximum borrowing capacity of approximately $69.7 million. The maximum borrowing capacity changes as a function of the Bank's qualifying collateral assets and the amount of funds received may be reduced by additional required purchases of FHLB stock. No amounts were outstanding under these facilities as of December 31, 2013, June 30, 2013 and 2012.

The Bank also has available lines of credit of $3.0 million with ACBB and a line equal to 95% of fair value of collateral held by the Federal Reserve Bank (“FRB”), which was $5.4 million at December 31, 2013, $5.8 million as of June 30, 2013 and $4.6 million as of June 30, 2012. The Bank has not borrowed against its credit lines with ACBB and FRB for the six months ended December 31, 2013.The Bank had borrowed and repaid $1.0 million ACBB on a short term basis during fiscal year 2013. The Bank also borrowed and repaid $1.0 million FRB on a short term basis during fiscal year 2013. The Bank did not draw on these available lines of credit during fiscal year 2012.

7. Securities Sold Under Agreement to Repurchase

The Bank has entered into overnight repurchase agreements, which are collateralized by mortgage-backed securities and collateralized mortgage obligations, with a carrying value, including accrued interest, of $3.8 million, $4.0 million and $5.2 million at December 31, 2013 (unaudited) and June 30, 2013 and 2012, respectively. The fair value of the underlying collateral was $10.7 million, $7.5 million and $6.0 million at December 31, 2013 (unaudited) and June 30, 2013 and 2012, respectively.

The maximum balance of repurchase agreements outstanding at any month-end during the six months ended December 31, 2013, and for the years ended June 30, 2013 and 2012 were $6.0 million, $5.9 million and $7.6 million, respectively. The average balances outstanding for the six months ended December 31, 2013, and for the years ended June 30, 2013 and 2012 were $2.9 million, $4.2 million and $4.7 million, respectively. The weighted average interest rate of the repurchase agreements was 0.14%, 0.10% and 0.11% at December 31, 2013 (unaudited) and June 30, 2013 and 2012, respectively.

8. Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of: total risk-based capital and Tier I capital to risk-weighted assets (as defined in the regulations), Tier I capital to adjusted total assets (as defined), and tangible capital to adjusted total assets (as defined). As noted on the next page, the Bank meets all of the capital adequacy requirements to which it is subject.

F-40

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

As of March 2013, the most recent examination from the state regulators, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based, and Tier I leveraged ratios as disclosed in the following schedule. There are no conditions or events since the most recent notification that management believes has changed the Bank's category.

The following is a summary of the Bank’s actual capital amounts and ratios compared to the FDIC minimum capital adequacy requirements and the FDIC requirements for classification as a well-capitalized institution:

	Actual					Capital Adequacy Purposes						To Be Well Capitalized Under the Prompt Corrective Action Provision
(Dollars in thousands)	Amount		Ratio			Amount			Ratio			Amount			Ratio
As of December 31, 2013 (unaudited):
Total risk-based capital (to risk-weighted assets)	$	11,504		12.8	%	$	7,165	³		³8.0	%	$	8,956	³		³10.0	%
Tier I capital (to risk-weighted assets)		11,019		12.3			3,583	³		³4.0			5,374	³		³  6.0
Tier I capital (to average assets)		11,019		6.9			6,431	³		³4.0			8,039	³		³  5.0
As of June 30, 2013:
Total risk-based capital (to risk-weighted assets)	$	11,883		12.9	%	$	³7,361			³8.0	%	$	³9,202			³10.0	%
Tier I capital (to risk-weighted assets)		11,302		12.3			³3,681			³4.0			³5,521			³  6.0
Tier I capital (to average assets)		11,302		7.2			³6,249			³4.0			³7,782			³  5.0
As of June 30, 2012:
Total risk-based capital (to risk-weighted assets)	$	11,799		13.9	%	$	³6,798			³8.0	%	$	³8,497			³10.0	%
Tier I capital (to risk-weighted assets)		11,325		13.3			³3,399			³4.0			³5,098			³  6.0
Tier I capital (to average assets)		11,325		7.5			³5,981			³4.0			³7,476			³  5.0

F-41

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

As a licensed mortgagee, the Bank is subject to the rules and regulations of the Department of Housing and Urban Development (“HUD”), Federal Housing Authority (“FHA”) and state regulatory authorities with respect to originating, processing and selling loans. Those rules and regulations, among other things, require the maintenance of minimum net worth levels (which vary based on the portfolio of FHA loans originated by the Bank). Failure to meet the net worth requirements could adversely impact the ability to originate loans and access secondary markets. As of December 31, 2013 (unaudited) and June 30, 2013 and 2012, the Bank maintained the minimum required net worth levels.

9. Employee Benefits

The Bank maintains a retirement plan for all eligible employees, which allows participants to make contributions by salary reduction pursuant to Section 401(k) of the Internal Revenue Code. Participants can contribute up to 15% of their compensation, as defined, to the plan. The Bank's contribution to the Plan is discretionary and will be determined on a yearly basis. The Bank did not contribute to the Plan during the six months ended December 31, 2013 and 2012 (unaudited) and the years ended June 30, 2013 and June 30, 2012.

10. Income Taxes

The benefit for income taxes for the six months ended December 31, 2013 and 2012 (unaudited) and the years ended June 30, 2013 and 2012 consisted of the following:

	Six months Ended December 31,					Years Ended June 30,
(Dollars in thousands)	2013		2012			2013			2012
	(unaudited)		(unaudited)
Current:
Federal	$	—	$	93		$	(13	)	$	302
Deferred:
Federal		36		(21	)		(29	)		(412	)
State		—		—			—			—
		36		(21	)		(29	)		(412	)
Total income tax benefit	$	36	$	72		$	(42	)	$	(110	)

F-42

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The benefit for income taxes for the six months ended December 31, 2013 and 2012 (unaudited) and the years ended June 30, 2013 and 2012 differed from the federal income tax statutory rate due to the following:

	Six months Ended December 31,						Years Ended June 30,
(Dollars in thousands)	2013			2012			2013			2012
	(unaudited)			(unaudited)
Tax at statutory rate	$	31		$	82		$	27		$	273
State income tax expense, net of federal income tax expense		—			—			—			—
Bank-owned life insurance		(19	)		(7	)		(40	)		(40	)
Tax-exempt interest		(26	)		(10	)		(33	)		(17	)
Other, net		51			6			(1	)		9
Change in valuation allowance		(1	)		1			5			(335	)
	$	36		$	72		$	(42	)	$	(110	)

Deferred income taxes result from temporary differences in recording certain revenues and expenses for financial reporting purposes. The net deferred tax asset at December 31, 2013 (unaudited) and June 30, 2013 and 2012 consisted of the following:

	December 31,			June 30,
(Dollars in thousands)	2013			2013			2012
	(unaudited)
Deferred tax assets:
Allowance for loan losses	$	165		$	197		$	161
Non-accrual interest		25			16			9
Depreciation		3			3			-
Deferred income		125			128			133
Accrued expenses		68			53			60
Capital loss carryover		208			208			208
Capitalized expenses		45			87			152
Unrealized loss on securities		864			613			—
Minimum tax credit carryover		190			107			49
State net operating loss carryover		72			71			66
Charitable contribution carryover		3			2			—
		1,768			1,485			838
Valuation allowance		(280	)		(279	)		(274	)
Gross deferred tax assets		1,488			1,206			564

F-43

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Deferred tax liabilities:
Interest rate lock commitment fair value adjustment		67
Net unrealized gain on securities		—		—		212
Gross deferred tax liabilities		67		—		212
Net deferred tax assets	$	1,421	$	1,206	$	352

Included in the table above is the effect of certain temporary differences, related to capital losses and state net operating losses, for which no deferred tax expense or benefit was recognized. The realizability of deferred tax assets is dependent upon a variety of factors, including the generation of future taxable income, the existence of taxes paid and recoverable, the reversal of deferred tax liabilities, and tax planning strategies. Based upon these and other factors, management believes it is more likely than not that the Bank will realize only certain benefits of the remaining net deferred tax assets. Therefore, a valuation allowance has been established on a portion of the deferred tax assets since the Bank believes it is more likely than not that they will be unable to realize deferred tax assets related to capital losses and state net operating loss carryforwards.

For state income tax purposes, the Bank has approximately $410,000 of state net operating losses (NOL) as of December 31, 2013 (unaudited) and June 30, 2013. The Bank has established a valuation allowance for this item of $73,000 and $71,000 as of December 31, 2013 (unaudited) and June 30, 2013, respectively; since it is more likely than not that the tax benefits related to such items will not be realized. The Bank’s state NOL can be carried forward three years before it expires and cannot be carried back. The Bank has a capital carry loss over in the amount of $611,000, which will expire on June 30, 2014 if not utilized. Since it is more likely than not that the capital loss carryover will not be utilized, a full valuation allowance has been established on this deferred tax asset. The Bank has AMT credits of $190,000 and $107,000 as of December 31, 2013 (unaudited) and June 30, 2013, respectively, which have an indefinite life.

Retained earnings include $1.7 million at December 31, 2013 (unaudited) and June 30, 2013 and 2012, for which no provision for federal income tax has been made. This amount represents deductions for bad debt reserves for tax purposes, which were only allowed to savings institutions that met certain criteria prescribed by the Internal Revenue Code of 1986, as amended. The Small Business Job Protection Act (the Act) eliminated the special bad debt deduction granted solely to thrifts. Under the terms of the Act, there would be no recapture of the pre-1988 (base year) reserves. However, these pre-1988 reserves would be subject to recapture under the rules of the Internal Revenue Code if the Bank pays a cash dividend in excess of earnings and profits, or liquidates.

11. Fair Value of Financial Instruments

The Bank uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with FASB ASC Topic 820, “Fair Value Measurement”, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Bank’s various financial

F-44

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The recent fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is determined at a reasonable point within the range that is most representative of fair value under current market conditions. Management uses its best judgment in estimating the fair value of the Bank’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Bank could have realized in sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective year ends, and have not been reevaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year end.

In accordance with this guidance, the Bank groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1 - Valuation is based unadjusted on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 - Valuation is based on inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on 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 for substantially the full term of the asset or liability.

Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.

F-45

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Assets measured at fair value on a recurring basis at December 31, 2013 (unaudited) and June 30, 2013 are summarized below:

	December 31, 2013
(Dollars in thousands)	Level 1		Level 2		Level 3		Total
(unaudited)
Investment securities available for sale:
U.S. governmental securities	$	—	$	6,962	$	—	$	6,962
Corporate notes		—		9,058		—		9,058
Collateralized mortgage obligations - agency residential		—		16,829		—		16,829
Mortgage-backed securities - agency residential		—		8,744		—		8,744
Municipal securities		—		3,896		—		3,896
Bank CDs		—		750		—		750
	$	—	$	46,239	$	—	$	42,239

	June 30, 2013
(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Investment securities available for sale:
U.S. governmental securities	$	—	$	6,122	$	—	$	6,122
Corporate notes		—		9,118		—		9,118
Collateralized mortgage obligations - agency residential		—		18,842		—		18,842
Mortgage-backed securities - agency residential		—		8,651		—		8,651
Municipal securities		—		3,887		—		3,887
Bank CDs		—		755		—		755
	$	—	$	47,375	$	—	$	47,375

F-46

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Assets measured at fair value on a recurring basis at June 30, 2012 are summarized below:

	June 30, 2012
(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Investment securities available for sale:
U.S. governmental securities	$	—	$	7,469	$	—	$	7,469
Corporate notes		—		6,235		—		6,235
Collateralized mortgage obligations - agency residential		—		22,741		—		22,741
Mortgage-backed securities - agency residential		—		10,409		—		10,409
Municipal securities		—		1,400		—		1,400
Bank CDs		—		250		—		250
	$	—	$	48,504	$	—	$	48,504

There were no liabilities measured at fair value on a recurring basis as of December 31, 2013, June 30, 2013 and June 30, 2012, respectively.

For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2013 (unaudited) and June 30, 2013 and 2012 are as follows:

F-47

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	December 31, 2013
(Dollars in thousands)	Level 1		Level 2		Level 3		Total
(unaudited)
Impaired loans	$	—	$	—	$	316	$	316
Real estate owned		—		—		566		566
	$	—	$	—	$	882	$	882

	June 30, 2013
(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Impaired loans	$	—	$	—	$	383	$	383
Real estate owned		—		—		2,199		2,199
	$	—	$	—	$	2,582	$	2,582

	June 30, 2012
(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Impaired loans	$	—	$	—	$	364	$	364
Real estate owned		—		—		1,824		1,824
	$	—	$	—	$	2,188	$	2,188

The following tables presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Bank has utilized Level 3 inputs to determine fair value:

	Balances as of December 31, 2013 Qualitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)	Fair Value		Valuation Techniques	Unobservable Input	Range (Weighted Average)
(unaudited)
Impaired loans	$	316	Appraisal of collateral (1)	Liquidation expenses		12.6% to 14.8% (13.0%)
Other real estate owned	$	566	Appraisal of collateral (1)	Liquidation expenses		5.8% to 8.0% (6.9%)

F-48

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

	Balances as of June 30, 2013 Qualitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)	Fair Value		Valuation Techniques	Unobservable Input	Range (Weighted Average)
Impaired loans	$	382	Appraisal of collateral (1)	Liquidation expenses		12.3% to 14.8% (12.8%)
Other real estate owned	$	2,199	Appraisal of collateral (1)	Liquidation expenses		6.0% to 13.7% (10.6%)

⁽¹⁾  Appraisals may be discounted for qualitative factors such as age of appraisal, interior condition of the property, and liquidation expenses. Fair value may also be based on negotiated settlements with the borrowers.

The estimated fair values of the Bank's financial instruments, whether carried at cost or fair value, at December 31, 2013 (unaudited) and June 30, 2013 and 2012 are as follows:

					Fair Value Measurements at December 31, 2013
(Dollars in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
(unaudited)
Assets:
Cash and cash equivalents	$	22,898	$	22,898	$	22,898	$	—	$	—
Investment securities available-for-sale		46,239		46,239		—		46,239		—
Investment securities held-to-maturity		5,020		4,905		—		4,905		—
Loans held for sale		3,745		3,866		—		3,866		—
Loans receivable, net		75,789		77,775		—		—		77,775
Restricted investment in bank stock		910		910		—		—		910
Accrued interest receivable		587		587		—		587		—

F-49

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

					Fair Value Measurements at December 31, 2013
(Dollars in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
(unaudited)
Liabilities:
Deposits	$	140,631	$	140,838	$	—	$	140,838	$	—
Advances from the FHLB		7,000		7,047		—		7,047		—
Securities sold under agreements to repurchase		3,759		3,759				3,759
Off-balance sheet:
Commitments to extend credit	$	—	$	—	$	—	$	—	$	—

					Fair Value Measurements at June 30, 2013
(Dollars in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Assets:
Cash and cash equivalents	$	7,073	$	7,073	$	7,073	$	—	$	—
Investment securities available-for-sale		47,375		47,375		—		47,375		—
Investment securities held-to-maturity		4,432		4,310		—		4,310		—
Loans held for sale		9,293		9,496		—		9,496		—
Loans receivable, net		74,572		74,258		—		—		74,258
Restricted investment in bank stock		779		779		—		—		779
Accrued interest receivable		557		557		—		557		—

F-50

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

					Fair Value Measurements at June 30, 2013
(Dollars in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Liabilities:
Deposits	$	133,540	$	132,177	$	—	$	132,177	$	—
Advances from the FHLB		3,000		2,889		—		2,889		—
Securities sold under agreements to repurchase		4,031		4,031		—		4,031		—
Off-balance sheet:
Commitments to extend credit	$	—	$	—	$	—	$	—	$	—

	June 30, 2012
(Dollars in thousands)	Carrying Value		Fair Value
Assets:
Cash and cash equivalents	$	11,011	$	11,011
Investment securities available-for-sale		48,504		48,504
Investment securities held-to-maturity		606		606
Loans held for sale		16,393		16,555
Loans receivable, net		69,614		69,641
Restricted investment in bank stock		761		761
Accrued interest receivable		563		563
Liabilities:
Deposits	$	133,717	$	133,548
Advances from the FHLB		3,000		3,036
Securities sold under agreements to repurchase		5,204		5,204
Off-balance sheet:
Commitments to extend credit	$	—	$	—

F-51

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

The following information should not be interpreted as an estimate of the fair value of the entire Bank since a fair value calculation is only provided for a limited portion of the Bank’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Bank’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Bank’s financial instruments at December 31, 2013 (unaudited) and June 30, 2013 and 2012:

Cash and Cash Equivalents

These short-term assets are valued at their face value, which approximate fair value.

Investments (Available for Sale and Held to Maturity)

Where quoted prices are available in an active market for identical instruments, investment securities are classified within Level 1 of the valuation hierarchy. Level 1 investment securities include highly liquid U.S. Treasury securities and most equity securities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Examples of such instruments, which would generally be classified within Level 2 of the valuation hierarchy, include certain Mortgage Backed Securities (MBS). In cases where there is limited activity or less transparency around inputs to the valuation, investment securities are classified within Level 3 of the valuation hierarchy. Investment securities classified within Level 3 include certain equity securities that do not have readily available market prices, certain municipal bonds, certain Asset Backed Securities (ABS), and other less liquid investment securities.

Loans Held for Sale

The fair value of the Bank's loans held for sale are generally determined using a pricing model based on current market information obtained from external sources, including interest rates, and bids or indications provided by market participants on specific loans that are actively marketed for sale. The Bank's loans held for sale are primarily residential mortgage loans and are generally classified in Level 2 due to the observable pricing data. Loans held for sale are carried at the lower of cost or estimated fair value.

Impaired Loans

Impaired loans include those collateral-dependent loans and leases for which the practical expedient under ASC 310-40 was applied, resulting in a fair value adjustment to the loans. Impaired loans are evaluated and valued at the time the loan is identified as impaired, at the lower of cost or fair value. Fair value is measured based on the value of the collateral securing these loans less cost to sell and is classified at Level 3 in the fair value hierarchy. The fair value of collateral is based on appraisals performed by qualified licensed appraisers hired by the Bank.

F-52

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Loan Receivable, Net

Fair values are estimated for portfolios of loans with similar financial characteristics. For loans that reprice frequently, the carrying value approximates fair value. The fair value of other type of loans is estimated by discounting expected cash flows using the current rates at which similar loans would be made to borrowers with comparable credit ratings and for similar remaining maturities.

Restricted Investment in Bank Stock

The stock is carried at cost which approximates fair value and considers the limited marketability of such securities.

Real Estate Owned (Cost or Fair Value)

Real estate properties acquired through, or in lieu of, foreclosure are held for sale and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. These assets are included in Level 3 fair value based upon the lowest level of input that is significant to the fair value measurements.

Accrued Interest Receivable

The carrying amount of accrued interest receivable approximates their respective fair values.

Deposits

The fair value of demand deposits, savings accounts, and money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposit is estimated discounting the contractual cash flows. The discount rate is estimated using the rates currently offered for deposits with comparable remaining maturities.

Advances from the FHLB

The fair value of advances is estimated based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for borrowings with comparable terms, credit, and remaining maturities.

Securities Sold Under Agreements to Repurchase

The fair value of securities sold under agreements to repurchase is estimated based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for borrowings with comparable terms, credit, and remaining maturities.

F-53

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Commitments to Extend Credit

The majority of the Bank’s commitments to extend credit carry current market interest rates if converted to loans. Because commitments to extend credit are generally unassignable by either the Bank or the borrower, they only have value to the Bank and the borrower. The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties.

12. Commitments and Contingencies

The Bank is involved in various legal actions arising in the normal course of business. Management, after taking into consideration legal counsel’s evaluation of such actions, is of the opinion that the outcome of these matters will not have a material adverse effect on the financial position, operating results, or equity of the Bank.

The Bank is party to certain financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments are entered into in the normal course of business and include commitments to extend credit and letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet. The Bank's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. In the opinion of management, market risk (interest rate changes) associated with these instruments is nominal.

Open mortgage loan commitments granted to loan applicants at December 31, 2013 (unaudited), June 30, 2013 and 2012 are $4.8 million, $6.3 million and $3.9 million, respectively. Open commercial loan commitments granted to loan applicants at December 31, 2013 (unaudited) and June 30, 2013 and 2012 are $625,000, $1.3 million and $-0-, respectively.

The undisbursed portion of open-ended home equity lines of credit at December 31, 2013 (unaudited) and June 30, 2013 and 2012 are $7.5 million, $8.2 million and $9.2 million, respectively. The undisbursed portion of open-ended commercial and commercial real estate lines of credit at December 31, 2013 (unaudited) and June 30, 2013 and 2012 are $410,000, $438,000 and $414,000, respectively.

There were no outstanding performance standby letters of credit at December 31, 2013 (unaudited) and June 30, 2013 and 2012.

In the normal course of business, the Bank sells loans in the secondary market. As is customary in such sales, the Bank provides indemnification to the buyer under certain circumstances. This indemnification may include the obligation to repurchase loans or refund fees by the Bank, under certain circumstances. In most cases, repurchases and losses are rare, and no provision is made for losses at the time of sale. When repurchases and losses are probable and reasonably estimable, a provision is made in the financial statements for such estimated losses.

F-54

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Residential mortgage loans serviced for others at December 31, 2013 (unaudited) and June 30, 2013 and 2012 are $8.6 million, $8.8 million and $9.7 million, respectively.

The Bank is required to maintain certain average reserve balances as established by the Federal Reserve Bank Board. The amounts of this reserve balance for the reserve computation period, which included December 31, 2013 (unaudited) and June 30, 2013 and 2012, were $553,000, $579,000 and $682,000, respectively, which were satisfied through the restriction of vault cash held at the Bank's branches. No additional reserves were required to be maintained at the Federal Reserve Bank of Philadelphia in excess of the required $25,000 clearing balance requirement.

In connection with the operation of certain branch and administrative offices, the Bank has entered into operating leases for periods ranging from 1 to 30 years. Total rental expense for the six months ended December 31, 2013 and 2012 (unaudited) and the years ended June 30, 2013 and 2012 were $198,000, $214,000, $410,000 and $443,000, respectively. As of December 31, 2013, future minimum lease payments under such operating leases are:

(Dollars in thousands)
2014	$	339
2015		162
2016		123
2017		98
2018		53
Thereafter		1,223
	$	1,998

As of June 30, 2013, future minimum lease payments under such operating leases are:

(Dollars in thousands)
2014	$	400
2015		254
2016		122
2017		134
2018		53
Thereafter		1,238
	$	2,201

13. Concentrations

At December 31, 2013 (unaudited) and June 30, 2013 and 2012, the Bank's lending activities are concentrated in Southeastern Pennsylvania, with the largest concentration in Montgomery, Bucks and Philadelphia Counties. The performance of the Bank's loan portfolio is affected by economic conditions in the borrowers' geographic region.

F-55

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

Mortgage loans held for sale were sold to investors that made up over ten percent of gain on sale of loans as follows:

(Dollars in thousands)	Number of Investors		Percentage of Mortgages Sold
December 31, 2013 (unaudited)		3		76	%
June 30, 2013		4		92	%
June 30, 2012		3		82	%

F-56

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

14. Recent Accounting Pronouncements

New Accounting Standards

In January 2014, the FASB issued ASU 2014-04, "Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure". The objective of the amendments in this ASU is to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The amendments in this ASU clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. For entities other than public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. An entity can elect to adopt the amendments in this ASU using either a modified retrospective transition method or a prospective transition method. Under the modified retrospective transition method, an entity should apply the amendments in this ASU by means of a cumulative-effect adjustment to residential consumer mortgage loans and foreclosed residential real estate properties existing as of the beginning of the annual period for which the amendments are effective. Assets reclassified from real estate to loans as a result of adopting the amendments in this ASU should be measured at the carrying value of the real estate at the date of adoption. Assets reclassified from loans to real estate as a result of adopting the amendments in this ASU should be measured at the lower of the net amount of loan receivable or the real estate's fair value less costs to sell at the time of adoption. For prospective transition, an entity should apply the amendments in this ASU to all instances of an entity receiving physical possession of residential real estate property collateralized by consumer mortgage loans that occur after the date of adoption. Early adoption is permitted. The adoption of ASU 2014-04 is not expected to have a significant impact on the Bank’s financial statements.

F-57

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). Currently there is diversity in practice in the presentation of unrecognized tax benefits. The aim of ASU 2013-11 is to provide guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, similar tax loss, or tax credit carryforward exists. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except for circumstances outlined in ASU 2013-11. For public companies ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The adoption of ASU 2013-04 is not expected to have a significant impact on the Bank’s consolidated financial statements.

15. Subsequent Events

On December 12, 2013, The Victory Bancorp, Inc. (“Victory Bancorp”), The Victory Bank (“Victory Bank”), Huntingdon Valley Bank (“HV Bank”), and HV Bancorp, Inc. (“HV Bancorp”), a new corporation in formation to facilitate the mutual-to-stock conversion of HV Bank, entered into an Agreement and Plan of Reorganization (the “Merger Agreement”).

Subject to the terms and conditions of the Merger Agreement, Victory Bancorp will be merged with and into HV Bancorp, with HV Bancorp as the surviving entity (the “Merger”). Upon effectiveness of the Merger, each outstanding share of Victory Bancorp capital stock will be converted into the right to receive shares of HV Bancorp capital stock.

The Merger Agreement contains customary representations, warranties and covenants of Victory Bancorp and HV Bancorp, including, among others, covenants by Victory Bancorp to conduct its business in the usual, regular and ordinary course during the interim period between the execution of the Merger Agreement and completion of the Merger and to call a meeting of Victory Bancorp shareholders to consider approval of the Merger, and covenants by HV Bancorp and HV Bank to take all reasonable steps necessary to complete the conversion of HV Bank from the mutual to the stock form of organization.

Consummation of the Merger is subject to various conditions, including completion of the conversion of HV Bank from the mutual to the stock form of organization, which conversion will require the approval of the members of HV Bank and completion of a registered public offering of shares of HV Bancorp common stock in a subscription offering and, if necessary, a community offering and/or syndicated community offering. Completion of the Merger is also conditioned on the approval of the Merger Agreement by Victory Bancorp’s shareholders, the receipt of required regulatory approvals, the delivery of a customary legal opinion as to the federal tax treatment of the Merger, and other customary conditions for transactions such as the Merger.

The Merger is presently expected to close in the second quarter of 2014.

On January 22, 2014, HV Bank became aware of a defalcation with a maximum exposure of approximately $332,000. This amount is based on the results of management’s preliminary investigation. HV Bank determined the defalcation was a result of unauthorized activities of an employee (non officer) of HV Bank and a single customer’s accounts. The employee has been

F-58

Huntingdon Valley Bank

Notes to Financial Statements

Six Months Ended December 31, 2013 and 2012 (Unaudited) and

Years Ended June 30, 2013 and 2012

terminated. Although the investigation is ongoing, there does not appear to be any losses which include the involvement of any other employee. HV Bank believes that the defalcation does not include any other customer accounts. The appropriate governmental authorities have been notified, and HV Bank is cooperating fully with respect to the authorities’ investigation.

HV Bank maintains insurance coverage for this type of risk with a deductible of $50,000. Management currently expects that this claim will constitute a covered loss, and as such the total estimated loss should not exceed $50,000 on a pre-tax basis.

Management is vigorously evaluating the impact of this incident on its current internal controls and procedures and has implemented changes to address the issues raised by this event.

F-59

	Tel: 717-233-8800	320 Market Street, 6th Floor
	Fax: 717-233-8801	Harrisburg, PA 17101
	www.bdo.com

Independent Auditor’s Report

Board of Directors

The Victory Bancorp, Inc.

Limerick, Pennsylvania

We have audited the accompanying consolidated financial statements of The Victory Bancorp, Inc. and its subsidiary, which comprise the consolidated balance sheet as of December 31, 2013, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

F-60

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Victory Bancorp, Inc. and its subsidiary as of December 31, 2013, and the results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Harrisburg, Pennsylvania

March 27, 2014

F-61

Consolidated Financial Statements

Independent Auditors’ Report

Board of Directors

The Victory Bancorp, Inc.

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of The Victory Bancorp, Inc. and subsidiary (the “Company”), which comprise the consolidated balance sheet as of December 31, 2012, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Victory Bancorp, Inc. and subsidiary as of December 31, 2012 and the results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ ParenteBeard LLC

Pittsburgh, Pennsylvania

March 22, 2013

F-62

The Victory Bancorp, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

December 31,	2013			2012
Assets
Cash and due from banks	$	809		$	3,171
Federal funds sold		1,580			2,406
Cash and cash equivalents		2,389			5,577
Securities available-for-sale		1,901			4,885
Loans receivable, net of allowance for loan losses of $1,660 at December 31, 2013 and $1,338 at December 31, 2012		129,337			109,158
Premises and equipment, net		3,960			3,868
Restricted investment in bank stocks		627			508
Accrued interest receivable		425			394
Bank owned life insurance		1,306			1,259
Other assets		1,374			1,647
Total Assets	$	141,319		$	127,296
Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Non-interest bearing	$	17,433		$	15,741
Interest-bearing		102,693			96,597
Total deposits		120,126			112,338
Borrowings		7,665			2,000
Accrued interest payable and other liabilities		570			406
Total Liabilities		128,361			114,744
Stockholders’ Equity
Preferred stock, $1 par value; authorized 2,000,000 shares:
Series E non-cumulative, convertible, $100 liquidation value 26,158 shares issued and outstanding; total liquidation value $2,616		2,616			2,616
Series F cumulative, non-convertible, $1 liquidation value 3,431 shares issued and outstanding: total liquidation value $3,431		3,431			3,431
Common stock, $1 par value; authorized 10,000,000 shares; issued and outstanding 1,025,464 shares		1,025			1,025
Surplus		9,221			9,221
Accumulated deficit		(3,356	)		(3,848	)
Accumulated other comprehensive income		21			107
Total Stockholders’ Equity		12,958			12,552
Total Liabilities and Stockholders’ Equity	$	141,319		$	127,296

See accompanying notes to consolidated financial statements.

F-63

The Victory Bancorp, Inc.

Consolidated Statements of Income

(in thousands)

Years Ended December 31,	2013			2012
Interest Income
Interest and fees on loans	$	6,734		$	5,581
Interest on investment securities		102			114
Other interest income		3			12
Total Interest Income		6,839			5,707
Interest Expense
Deposit		998			1,070
Borrowings		32			4
Total Interest Expense		1,030			1,074
Net interest income		5,809			4,633
Provision for Loan Losses		348			472
Net Interest Income After Provision for Loan Losses		5,461			4,161
Non-Interest Income
Service charges and activity fees		145			140
Net gains on sales of loans		680			123
Net gains on sale of investments		45			—
Other income		99			106
Total Non-Interest Income		969			369
Non-Interest Expenses
Salaries and employee benefits		2,842			2,307
Occupancy and equipment		409			368
Legal and professional fees		545			260
Advertising and promotion		122			98
Loan expenses		80			33
Data processing costs		579			461
Supplies, printing and postage		91			78
Telephone		30			22
Entertainment		105			77
Mileage and tolls		47			37
Insurance		65			36
FDIC insurance premiums		83			102
Dues and subscription		46			37
Shares tax		91			82
Other		112			59
Total Non-Interest Expense		5,247			4,057
Income before income tax (expense) benefit		1,183			473
Income Tax (Expense) Benefit		(473	)		1,060
Net income		710			1,533
Preferred Stock Dividends		218			217
Net Income Available to Common Stockholders	$	492		$	1,316

See accompanying notes to consolidated financial statements.

F-64

The Victory Bancorp, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

Years Ended December 31,	2013			2012
Net Income	$	710		$	1,533
Other Comprehensive (Loss) Income
Unrealized holding gain (loss) arising on securities available-for-sale		(85	)		216
Reclassification adjustment for gains included in net income		(45	)		—
Tax effect		44			(55	)
Other comprehensive (loss) income		(86	)		161
Total Comprehensive Income	$	624		$	1,694

See accompanying notes to consolidated financial statements.

F-65

The Victory Bancorp, Inc.

Consolidated Statements of Stockholders’ Equity

(in thousands)

	Preferred Stock		Common Stock		Surplus		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
Balance, January 1, 2012	$	6,047	$	1,025	$	9,221	$	(5,164	)	$	(54	)	$	11,075
Net income		—		—		—		1,533			—			1,533
Other comprehensive income		—		—		—		—			161			161
Cash dividends on preferred stock		—		—		—		(217	)		—			(217	)
Balance, December 31, 2012		6,047		1,025		9,221		(3,848	)		107			12,552
Net income		—		—		—		710			—			710
Other comprehensive loss		—		—		—		—			(86	)		(86	)
Cash dividends on preferred stock		—		—		—		(218	)		—			(218	)
Balance, December 31, 2013	$	6,047	$	1,025	$	9,221	$	(3,356	)	$	21		$	12,958

See accompanying notes to consolidated financial statements.

F-66

The Victory Bancorp, Inc.

Consolidated Statements of Cash Flows

(in thousands)

Years Ended December 31,	2013			2012
Cash Flows from Operating Activities
Net income	$	710		$	1,533
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		348			472
Depreciation and amortization		311			252
Deferred income taxes (benefit)		473			(1,060	)
Net amortization of investment securities		34			31
Realized gains on sale of investment securities		(45	)		—
Earnings on bank owned life insurance		(47	)		(52	)
Net realized gains on sale of loans held for sale		(680	)		(123	)
Origination of loans held for sale		(7,182	)		(1,534	)
Proceeds from sale of loans held for sale		7,862			1,657
Net gain on sale of real estate owned		(14	)		—
Increase in accrued interest receivable		(31	)		(107	)
Decrease in FDIC prepaid assessment		—			66
Increase in other assets		(156	)		(26	)
Increase (decrease) in accrued interest payable		7			(1	)
Increase in other liabilities		157			124
Net Cash Provided by Operating Activities		1,747			1,232
Cash Flows from Investing Activities
Activity in available-for-sale securities:
Purchases		—			(1,623	)
Proceeds from maturities, calls and principal pay downs		730			687
Proceeds from sale of investment securities		2,135			—
Net increase in loans		(20,670	)		(25,171	)
Proceeds from the sale of real estate owned		157			—
Purchase of restricted investment in bank stocks		(119	)		(121	)
Purchases of premises and equipment		(403	)		(266	)
Net Cash Used in Investing Activities		(18,170	)		(26,494	)
Cash Flows from Financing Activities
Net increase in deposits		7,788			16,685
Cash dividends on preferred stock		(218	)		(217	)
Proceeds from long-term borrowing		4,665			—
Net proceeds from short-term borrowing		1,000			2,000
Net Cash Provided by Financing Activities		13,235			18,468
Net decrease in cash and cash equivalents		(3,188	)		(6,794	)
Cash and Cash Equivalents, Beginning		5,577			12,371
Cash and Cash Equivalents, Ending	$	2,389		$	5,577
Supplementary Cash Flows Information
Interest paid	$	1,023		$	1,075
Supplementary Schedule of Noncash Investing and Financing Activities
Other real estate acquired in settlement of loans	$	143		$	—

See accompanying notes to consolidated financial statements.

F-67

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements of The Victory Bancorp, Inc. (the “Corporation”) are prepared on the accrual basis and include the accounts of The Victory Bancorp, Inc. and its wholly-owned subsidiary, The Victory Bank (the “Bank”). All significant intercompany accounts and transactions have been eliminated from the accompanying consolidated financial statements.

Organization and Nature of Operations

The Victory Bancorp, Inc. is a registered bank holding company, which owns 100% of the outstanding capital stock of The Victory Bank. The Corporation was incorporated under the laws of the State of Pennsylvania in 2009 for the purpose of serving as The Victory Bank’s holding company. The holding company structure provides flexibility for growth through expansion of core business activities and access to varied capital raising operations. The Corporation’s primary business activity consists of ownership of all of the outstanding stock of The Victory Bank. As of December 31, 2013, the Corporation had 321 stockholders of record.

The Bank is a Pennsylvania chartered commercial bank which was chartered in January 2008. The Bank operates a full-service commercial and consumer banking business in Montgomery County, Pennsylvania. The Bank’s focus is on small- and middle-market commercial and retail customers. The Bank originates secured and unsecured commercial loans, commercial mortgage loans, consumer loans and construction loans and does not make subprime loans. The Bank also offers revolving credit loans, small business loans and automobile loans. The Bank offers a variety of deposit products, including demand and savings deposits, regular savings accounts, investment certificates and fixed-rate certificates of deposit. As a state-chartered bank, the Bank is subject to regulation of the Pennsylvania Department of Banking and Federal Deposit Insurance Corporation.

Subsequent Events

In preparing these consolidated financial statements, the Bank evaluated the events and transactions that occurred from December 31, 2013 through March 27, 2014, the date these consolidated financial statements were available for issuance.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the fair value of financial instruments, the determination of other-than-temporary impairment of investment securities and the valuation of deferred tax assets.

F-68

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Significant Group Concentrations of Credit Risk

Most of the Bank’s activities are with customers located within Montgomery County, Pennsylvania. Note 4 discusses the types of lending that the Bank engages in. Although the Bank has a diversified loan portfolio, its borrowers’ ability to honor their contracts is influenced by the economy of Montgomery County and the surrounding areas.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks and federal funds sold, all of which mature within ninety days. Generally, federal funds are sold for one day periods.

Securities

Management determines the appropriate classification of debt investment securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Securities that management has the positive intent and ability to hold until maturity are classified as held-to-maturity and are carried at their remaining unpaid principal balance, net of unamortized premiums, or unaccreted discounts. At December 31, 2013 and 2012, the Corporation had no investment securities classified as held-to-maturity.

Securities that will be held for indefinite periods of time, including securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity and changes in the availability of and the yield of alternative investments are classified as available-for-sale. These securities are carried at fair value, which is determined by obtaining quoted market prices or matrix pricing. Unrealized gains and losses are excluded from earnings and are reported in other comprehensive income (loss). Realized gains and losses are recorded on the trade date and are determined using the specific identification method. Premiums are amortized and discounts are accreted using the interest method over the estimated remaining term of the underlying security.

Management evaluates securities for other-than-temporary impairment on at least an annual basis, and more frequently when economic or market concerns warrant such evaluation. Declines in fair value of debt securities below their cost that are deemed to be other-than-temporary are separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive income (loss). In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) whether or not management intends to sell or expects that it is more likely than not that it will be required to sell the debt security prior to any anticipated recovery in fair value.

F-69

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

U.S. Small Business Association (SBA) Lending Activities

The Bank originates loans to customers in its primary market area under an SBA program that generally provides for SBA guarantees of up to 90 percent of each loan. The Bank generally sells the guaranteed portion of its SBA loans to a third party and retains the servicing, holding the nonguaranteed portion in its portfolio. When the guaranteed portion of an SBA loan is sold, the premium received on the sale and the present value of future cash flows of the servicing assets are recognized in income.

SBA mortgage servicing assets are recognized separately when rights are acquired through the sale of the SBA guaranteed portion. These mortgage servicing rights are initially measured at fair value at the date of sale and a gain is recognized equal to the fair value of MSRs on the date of sale. To determine the fair value of mortgage servicing rights (MSRs), the Bank uses market prices for comparable mortgage servicing contracts, when available, or alternatively, uses a valuation model that calculates the present value of estimated future net servicing income. In using this valuation method, the Bank incorporates assumptions that market participants would use in estimating future net servicing income, which includes estimates of the cost to service, the discount rate, custodial earnings rate, an inflation rate, ancillary income, prepayment speeds, default rates, late fees and losses.

These MSRs are amortized in proportion to, and over the period of, the estimated net servicing income or net servicing loss and measured for impairment based on fair value at each reporting date. The amortization of the MSRs is analyzed periodically and is adjusted to reflect changes in prepayment rates and other estimates.

Serviced loans sold to others are not included in the accompanying consolidated balance sheet. Income (losses) and fees collected for loan servicing are included in non-interest income.

Loans Receivable

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Corporation is generally amortizing these amounts over the contractual life of the loan. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method.

The loans receivable portfolio is segmented into commercial and consumer loans. Commercial loans consist of the following classes: commercial term, commercial mortgage, commercial line, and construction. Consumer loans consist of the following classes: home equity and other consumer.

F-70

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

The Bank’s credit policies determine advance rates against the different forms of collateral that can be pledged against commercial term, line and mortgage loans. Typically, the majority of loans will be limited to a percentage of their underlying collateral values such as real estate values, equipment, eligible accounts receivable and inventory. Individual loan advance rates may be higher or lower depending upon the financial strength of the borrower and/or term of the loan. The assets financed through commercial loans are used within the business for its ongoing operation. Repayment of these kinds of loans generally comes from the cash flow of the business or the ongoing conversions of assets. Commercial mortgage loans include long-term loans financing commercial properties. Repayment of this kind of loan is dependent upon either the ongoing cash flow of the borrowing entity or the resale of or lease of the subject property. Commercial mortgage loans typically require a loan to value ratio of not greater than 80% and vary in terms.

Construction lending is generally considered to involve high risk due to the concentration of principal in a limited number of loans and borrowers and the effects of general economic conditions on developers and builders. Moreover, a construction loan can involve additional risks because of the inherent difficulty in estimating both a property’s value at completion of the project and the estimated cost (including interest) of the project. The nature of these loans is such that they are generally difficult to evaluate and monitor.

Home equity loans are secured by the borrower’s residential real estate in either a first or second lien position. Residential mortgages and home equity loans have varying loan rates depending on the financial condition of the borrower and the loan to value ratio. Risks associated with home equity loans in second lien positions are greater than those in first position due to the subordinate nature of the loans.

Other consumer loans include installment loans, car loans, and overdraft lines of credit. The majority of these loans are unsecured. Risks associated with other consumer loans tend to be greater due to unsecured position or the rapidly depreciating nature of the underlying assets.

For all classes of loans receivable, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments.

F-71

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Allowance for Loan Losses

The allowance for loan losses (“allowance”) represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The allowance is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. No portion of the allowance is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses.

The allowance is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Corporation’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class including commercial loans not considered impaired, as well as smaller balance homogeneous loans, such as home equity and other consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These qualitative risk factors include:

1. Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.

2. National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans.

3. Nature and volume of the portfolio and terms of loans.

4. Volume and severity of past due, classified and nonaccrual loans as well as and other loan modifications.

5. Existence and effect of any concentrations of credit and changes in the level of such concentrations.

6. Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

F-72

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

A loan is considered impaired when, based on current information and events, it is probable that the Corporation 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 determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. 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. Impairment is measured on a loan by loan basis for commercial term, commercial mortgage, commercial line and commercial construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent.

An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of substantially all of the Corporation’s impaired loans are measured based on the estimated fair value of the loan’s collateral.

For commercial loans secured by real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

For commercial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Corporation does not separately identify individual, home equity loans and other consumer loans for impairment disclosures, unless such loans are the subject of a troubled debt restructuring agreement.

Loans whose terms are modified are classified as troubled debt restructurings if the Corporation grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a temporary reduction in interest rate or an extension of a loan’s stated maturity date at a below market interest rate based on the credit risk associated with the loan. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification. Loans classified as troubled debt restructurings are designated as impaired.

F-73

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated quarterly for commercial loans or when credit deficiencies arise, such as delinquent loan payments, for commercial and consumer loans. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans criticized special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass.

Banking regulatory agencies, as an integral part of their examination process, periodically review the Corporation’s allowance for loan losses and may require the Corporation to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

Transfers of Financial Assets

Transfers of financial assets, including loan and loan participation sales, are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Corporation, put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership; (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Corporation does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Bank Premises and Equipment

Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on the straight-line method over the estimated useful lives of the related assets. Amortization of leasehold improvements is recorded over the shorter of the estimated useful life or lease term.

Restricted Investment in Bank Stocks

Restricted investment in bank stocks, which represents required investments in the common stock of correspondent banks, is carried at cost, and consists of common stock of the Atlantic Central Bankers Bank (ACBB) and Federal Home Loan Bank of Pittsburgh (FHLB) stocks totaling $627,000 and $508,000 at December 31, 2013 and 2012, respectively.

F-74

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Income Taxes

Current income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the current period taxable income. The Corporation determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities, net operating loss carryforwards, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense (benefit) results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Corporation accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appears or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment.

The Corporation evaluates the carrying amount of its deferred tax assets on a quarterly basis or more frequently, if necessary, in accordance with the guidance provided in Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 740 (ASC 740), in particular, applying the criteria set forth therein to determine whether it is more likely than not (i.e., a likelihood of more than 50%) that some portion, or all, of the deferred tax asset will not be realized within its life cycle, based on the weight of available evidence. If management makes a determination based on the available evidence that it is more likely than not that some portion or all of the deferred tax assets will not be realized in future periods, a valuation allowance is calculated and recorded. These determinations are inherently subjective and dependent upon estimates and judgments concerning management’s evaluation of both positive and negative evidence.

In conducting the deferred tax asset analysis, the Corporation believes it is important to consider the unique characteristics of an industry or business. In particular, characteristics such as business model, level of capital and reserves held by financial institutions and their ability to absorb potential losses are important distinctions to be considered for bank holding companies like the Corporation. Most importantly, it is also important to consider that net operating losses for federal income tax purposes can generally be carried forward for a period of twenty years. In order to realize deferred tax assets, the Corporation must generate sufficient taxable income in such future years.

F-75

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

In assessing the need for a valuation allowance, the Corporation carefully weighed both positive and negative evidence currently available. Judgment is required when considering the relative impact of such evidence. The weight given to the potential effect of positive and negative evidence must be commensurate with the extent to which it can be objectively verified. A cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome. As a result of continued profitability and taxable income in recent years, the Corporation has concluded that no valuation allowance is required for the deferred tax assets at December 31, 2013.

The Corporation recognizes interest and penalties on income taxes, if any, as a component of the provision for income taxes. There were no interest and penalties recognized during the years ended December 31, 2013 or 2012.

Federal and state tax returns for the years 2010 through 2012 are open for examination as of December 31, 2013.

Comprehensive Income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of stockholders’ equity section of the consolidated balance sheet, such items along with net income are components of comprehensive income.

Fair Value of Financial Instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 15. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates.

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Corporation has entered into off-balance sheet financial instruments consisting of commitments to extend credit. Such financial instruments are recorded in the consolidated balance sheet when they are funded.

Employee Benefit Plan

The Bank has established a 401(k) plan (“the Plan”). Under the Plan, all employees are eligible to contribute the maximum allowed by the Internal Revenue Code of 1986, as amended. The Bank may make discretionary matching contributions. For the years ended December 31, 2013 and 2012, expense attributable to the Plan amounted to approximately $53,000 and $50,000, respectively.

F-76

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Share-Based Compensation

The Bank follows the provisions of ASC 718-10, Compensation – Stock Compensation. This standard requires the Bank to recognize the cost of employee and organizer services received in share-based payment transactions and measure the cost based on the grant-date fair value of the award. The cost will be recognized over the period during which the employee or organizer is required to provide service in exchange for the award.

The stock compensation accounting guidance requires that compensation cost for all stock awards be calculated and recognized over the employee’s service period, generally defined as the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. A Black-Scholes model is used to estimate the fair value of stock options, while the fair value of the Corporation’s common stock at the date of grant is used for restricted stock awards.

2. Restrictions on Cash and Due from Banks

In return for services obtained through correspondent banks, the Bank is required to maintain non-interest bearing cash balances in those correspondent banks. At December 31, 2013 and 2012, compensating balances approximated $150,000.

3. Securities Available-for-Sale

The amortized cost and fair value of securities as of December 31, 2013 and 2012 is summarized as follows (in thousands):

December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Residential mortgage-backed securities	$	1,869	$	32	$	—		$	1,901
	$	1,869	$	32	$	—		$	1,901
December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Residential mortgage-backed securities	$	2,614	$	92	$	(11	)	$	2,695
Corporate financial institution bond		2,109		83		(2	)		2,190
	$	4,723	$	175	$	(13	)	$	4,885

Residential mortgage-backed securities are comprised of FHLMC and GNMA pass through certificates at December 31, 2013 and 2012.

F-77

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

The unrealized losses and related fair value of investment securities available-for-sale with unrealized losses less than 12 months and those with unrealized losses 12 months or longer as of December 31, 2012 are as follows (in thousands):

December 31, 2012	Less than 12 Months					12 Months or More					Total
			Unrealized					Unrealized					Unrealized
	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
Residential mortgage-backed securities	$	244	$	(11	)	$	—	$	—		$	244	$	(11	)
Corporate bonds		—		—			498		(2	)		498		(2	)
	$	244	$	(11	)	$	498	$	(2	)	$	742	$	(13	)

There were no individual securities in an unrealized loss position as of December 31, 2013 and there was one investment security in an unrealized loss position greater than 12 months and one investment security in an unrealized loss position less than 12 months as of December 31, 2012. The unrealized loss positions at December 31, 2012 are the result of interest rate changes and do not represent other than temporary impairment of investment securities.

The amortized cost and fair value of securities as of December 31, 2013 and 2012, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the securities may be called without any penalties (in thousands).

	2013				2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or under	$	—	$	—	$	—	$	—
Due after one year through five years		—		—		2,109		2,190
Due after five years through ten years		—		—		—		—
Due after ten years		1,869		1,901		2,614		2,695
	$	1,869	$	1,901	$	4,723	$	4,885

No securities at December 31, 2013 and 2012 were pledged to collateralize municipal deposits.

F-78

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

4. Loans Receivable

The composition of loans receivable at December 31, 2013 and 2012 is as follows (in thousands):

	2013			2012
Commercial term	$	19,784		$	21,999
Commercial mortgage		66,644			46,820
Commercial line		12,833			13,398
Construction		9,332			8,030
Home equity		10,725			10,523
Consumer		11,664			9,661
Total loans		130,982			110,431
Deferred fees, net		15			65
Allowance for loan losses		(1,660	)		(1,338	)
Net Loans	$	129,337		$	109,158

Allowance for Loan Losses and Recorded Investment in Financial Receivables

The following tables summarize the activity in the allowance for loan losses by loan class for the year ended December 31, 2013 and information in regards to the allowance for loan losses and the recorded investment in loans receivable by loan class as of December 31, 2013 (in thousands):

	Allowance for Loan Losses
	Beginning Balance		Charge- offs			Recoveries		Provisions			Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairment
Commercial term	$	248	$	(33	)	$	—	$	(12	)	$	203	$	58	$	145
Commercial mortgage		297		—			—		126			423		—		423
Commercial line		131		—			7		(48	)		90		—		90
Construction		62		—			—		9			71		—		71
Home equity		65		—			—		1			66		—		66
Consumer		60		—			—		11			71		—		71
Unallocated		475		—			—		261			736		—		736
	$	1,338	$	(33	)	$	7	$	348		$	1,660	$	58	$	1,602

F-79

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

	Loans Receivables
	Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairment
Commercial term	$	19,784	$	186	$	19,598
Commercial mortgage		66,644		261		66,383
Commercial line		12,833		—		12,833
Construction		9,332		—		9,332
Home equity		10,725		—		10,725
Consumer		11,664		50		11,614
	$	130,982	$	497	$	130,485

The following tables summarize the activity in the allowance for loan losses by loan class for the year ended December 31, 2012 and information in regards to the allowance for loan losses and the recorded investment in loans receivable by loan class as of December 31, 2012 (in thousands):

	Allowance for Loan Losses
	Beginning Balance		Charge-offs			Recoveries		Provisions			Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairment
Commercial term	$	132	$	(14	)	$	—	$	130		$	248	$	77	$	171
Commercial mortgage		228		—			—		69			297		25		272
Commercial line		164		—			6		(39	)		131		—		131
Construction		35		—			—		27			62		—		62
Home equity		57		—			—		8			65		—		65
Consumer		93		(204	)		—		171			60		—		60
Unallocated		369		—			—		106			475		—		475
	$	1,078	$	(218	)	$	6	$	472		$	1,338	$	102	$	1,236

	Loans Receivables
	Ending Balance		Ending Balance: Individually Evaluated for Impairment		Ending Balance: Collectively Evaluated for Impairment
Commercial term	$	21,999	$	279	$	21,720
Commercial mortgage		46,820		1,350		45,470
Commercial line		13,398		—		13,398
Construction		8,030		—		8,030
Home equity		10,523		—		10,523
Consumer		9,661		50		9,611
	$	110,431	$	1,679	$	108,752

F-80

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Impaired Loans

The following table summarizes information in regards to impaired loans by loan portfolio class as of December 31, 2013 and for the year then ended (in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial term	$	128	$	296	$	—
Commercial mortgage		261		261		—
Commercial line		—		—		—
Construction		—		—		—
Home equity		—		—		—
Consumer		50		205		—
With an allowance recorded:
Commercial term	$	58	$	59	$	58
Commercial mortgage		—		—		—
Commercial line		—		—		—
Construction		—		—		—
Home equity		—		—		—
Consumer		—		—		—
Total:
Commercial term	$	186	$	355	$	58
Commercial mortgage		261		261		—
Commercial line		—		—		—
Construction		—		—		—
Home equity		—		—		—
Consumer		50		205		—
			Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial term			$	154	$	—
Commercial mortgage				479		—
Commercial line				—		—
Construction				—		—
Home equity				—		—
Consumer				50		—
With an allowance recorded:
Commercial term			$	73	$	—
Commercial mortgage				—		—
Commercial line				—		—
Construction				—		—
Home equity				—		—
Consumer				—		—
Total:
Commercial term			$	227	$	—
Commercial mortgage				479		—
Commercial line				—		—
Construction				—		—
Home equity				—		—
Consumer				50		—

F-81

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

The following table summarizes information in regards to impaired loans by loan portfolio class as of December 31, 2012 and for the year then ended (in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial term	$	161	$	302	$	—
Commercial mortgage		1,089		1,089		—
Commercial line		—		—		—
Construction		—		—		—
Home equity		—		—		—
Consumer		50		205		—
With an allowance recorded:
Commercial term	$	118	$	119	$	77
Commercial mortgage		261		261		25
Commercial line		—		—		—
Construction		—		—		—
Home equity		—		—		—
Consumer		—		—		—
Total:
Commercial term	$	279	$	421	$	77
Commercial mortgage		1,350		1,350		25
Commercial line		—		—		—
Construction		—		—		—
Home equity		—		—		—
Consumer		50		205		—
			Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial term			$	165	$	—
Commercial mortgage				218		48
Commercial line				—		—
Construction				—		—
Home equity				—		—
Consumer				10		4
With an allowance recorded:
Commercial term			$	125	$	—
Commercial mortgage				249		13
Commercial line				—		—
Construction				—		—
Home equity				—		—
Consumer				—		—
Total:
Commercial term			$	290	$	—
Commercial mortgage				467		61
Commercial line				—		—
Construction				—		—
Home equity				—		—
Consumer				10		4

F-82

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Loans Receivable on Nonaccrual Status

The following table presents nonaccrual loans by classes of the loan portfolio as of December 31, 2013 and 2012 (in thousands):

	2013		2012
Commercial term	$	186	$	279
Commercial mortgage		261		1,350
Commercial line		—		—
Construction		—		—
Home equity		—		—
Consumer		50		50
	$	497	$	1,679

Interest income recognized on loans on non–accrual status during the years ended December 31, 2013 and 2012 was $–0– and $65,000, respectively. Additional interest income that would have been recognized on non–accrual loans, had the loans been performing in accordance with the original terms of their contracts totaled approximately $33,000 and $27,000 for the years ended December 31, 2013 and 2012, respectively.

Credit Quality Indicators

The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Bank’s internal risk rating system as of December 31, 2013 and 2012 (in thousands):

December 31, 2013	Pass		Special Mention		Substandard		Doubtful		Total
Commercial term	$	17,515	$	2,083	$	186	$	—	$	19,784
Commercial mortgage		66,099		284		261		—		66,644
Commercial line		11,555		1,278		—		—		12,833
Construction		9,332		—		—		—		9,332
Home equity		10,725		—		—		—		10,725
Consumer		11,614		—		50		—		11,664
	$	126,840	$	3,645	$	497	$	—	$	130,982
December 31, 2012	Pass		Special Mention		Substandard		Doubtful		Total
Commercial term	$	21,720	$	—	$	279	$	—	$	21,999
Commercial mortgage		45,470		1,207		143		—		46,820
Commercial line		13,398		—		—		—		13,398
Construction		8,030		—		—		—		8,030
Home equity		10,523		—		—		—		10,523
Consumer		9,611		—		50		—		9,661
	$	108,752	$	1,207	$	472	$	—	$	110,431

F-83

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Age Analysis of Past Due Loans Receivables

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past due status as of December 31, 2013 and 2012 (in thousands):

December 31, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivables		Loans Receivable >90 Days and Accruing
Commercial term	$	—	$	52	$	186	$	238	$	19,546	$	19,784	$	—
Commercial mortgage		844		100		261		1,205		65,439		66,644		—
Commercial line		27		148		—		175		12,658		12,833		—
Construction		—		—		—		—		9,332		9,332		—
Home equity		—		—		—		—		10,725		10,725		—
Consumer		—		—		50		50		11,614		11,664		—
	$	871	$	300	$	497	$	1,668	$	129,314	$	130,982	$	—
December 31, 2012	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivables		Loans Receivable >90 Days and Accruing
Commercial term	$	—	$	—	$	279	$	279	$	21,720	$	21,999	$	—
Commercial mortgage		—		12		1,338		1,350		45,470		46,820		—
Commercial line		—		212		—		212		13,186		13,398		—
Construction		—		—		—		—		8,030		8,030		—
Home equity		—		—		—		—		10,523		10,523		—
Consumer		—		—		50		50		9,611		9,661		—
	$	—	$	224	$	1,667	$	1,891	$	108,540	$	110,431	$	—

Modifications

The Corporation may grant a concession or modification for economic or legal reasons related to a borrower's financial condition that it would not otherwise consider resulting in a modified loan which is then identified as a troubled debt restructuring (TDR). The Corporation may modify loans through rate reductions, below market rates, extensions of maturity, interest only payments, or payment modifications to better match the timing of cash flows due under the modified terms with the cash flows from the borrowers' operations. Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. TDRs are considered to be impaired loans for purposes of calculating the Corporation's allowance for loan losses and presentation of loans.

F-84

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

The Corporation identifies loans for potential restructure primarily through direct communication with the borrower and evaluation of the borrower's financial statements, revenue projections, tax returns, and credit reports. Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future.

There were no troubled debt restructurings or defaults within twelve months of restructuring during the years ended December 31, 2013 and 2012.

Loan Sales

The Corporation originates and sells loans secured by the SBA. The Bank retains the unguaranteed portion of the loan and the servicing on the loans sold and receives a fee based upon the principal balance outstanding. During the years ended December 31, 2013 and 2012, the Bank sold loans held for sale for total proceeds of $7,862,000 and $1,657,000, respectively. The loan sales resulted in realized gains of approximately $680,000 and $123,000 for the years ended December 31, 2013 and 2012, respectively. SBA loans held for sale at December 31, 2013 and 2012 amounted to $-0-.

Loans serviced for others are not included in the accompanying consolidated balance sheets. The risks inherent in the servicing assets relate primarily to changes in prepayments that result from shifts in interest rates. The unpaid principal balances of loans serviced for others were approximately $13,287,313 and $6,922,000 at December 31, 2013 and 2012, respectively. The following summarizes the activity pertaining to mortgage servicing rights using the amortization method for the years ended December 31, 2013 and 2012 (in thousands):

	2013			2012
Balance, beginning	$	143		$	139
Additions		150			20
Disposals		—			—
Amortization		(26	)		(16	)
Balance, Ending	$	267		$	143

F-85

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

5. Bank Premises and Equipment

The components of premises and equipment at December 31, 2013 and 2012 are as follows (in thousands):

	Estimated Useful Lives		2013			2012
Leasehold improvements		10 -20 years	$	926		$	734
Computer equipment and software		3 - 5 years		700			650
Automobiles		3 years		163			146
Bank unique equipment		5 years		182			164
Furniture, fixtures and equipment		3 - 10 years		277			205
Building		40 years		1,687			1,687
Land				1,200			1,200
				5,135			4,786
Accumulated depreciation				(1,175	)		(918	)
			$	3,960		$	3,868

Depreciation and amortization expense charged to operations amounted to approximately $311,000 and $252,000 for the years ended December 31, 2013 and 2012, respectively.

6. Deposits

The components of deposits at December 31, 2013 and 2012 are as follows (in thousands):

	2013		2012
Demand, non-interest bearing	$	17,433	$	15,741
Demand interest bearing		6,084		9,296
Money market accounts		14,242		10,891
Savings accounts		59,576		53,424
Time, $100,000 and over		14,153		13,222
Time, other		8,638		9,764
	$	120,126	$	112,338

Included in money market deposits are brokered deposits of approximately $2,427,000 and $1,771,000 at December 31, 2013 and 2012, respectively.

F-86

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

At December 31, 2013, the scheduled maturities of time deposits are as follows (in thousands):

Years ending December 31,
2014	$	12,882
2015		2,890
2016		2,021
2017		2,825
Thereafter		2,173
	$	22,791

Included in time deposits are brokered deposits of approximately $-0- and $1,646,000 at December 31, 2013 and 2012, respectively.

7. Borrowings

The Bank has a $1,500,000 unsecured federal funds overnight line of credit with a correspondent bank. Borrowings on the line of credit at December 31, 2013 and 2012 were $-0-.

The Bank is a member of the Federal Home Loan Bank of Pittsburgh (FHLB). At December 31, 2013, the Bank has a total borrowing capacity with the FHLB of $52.4 million. FHLB advances at December 31, 2013 totaled $7,665,000 of which $4,665,000 was long term with a weighted-average interest rate of 1.30% maturing through 2018 and $3,000,000 was short-term with a weighted-average interest rate of 0.25%.

FHLB advances at December 31, 2012 totaled $2,000,000 which were short-term with a weighted-average interest rate of 0.25%.

Long-term debt at December 31, 2013 consists of the following FHLB advances (in thousands):

	Amount		Weighted Average Rate
Fixed rate advances maturing:
2016	$	3,000		1.06	%
2018		1,665		1.73	%
	$	4,665

Advances from the FHLB are secured by FHLB stock and certain assets of the Corporation.

F-87

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

8. Lease Commitments and Total Rental Expense

The Corporation has an operating lease agreement for its Wyomissing Loan Production office. Future minimum lease payments under the non-cancellable lease agreement are as follows as of December 31, 2013 (in thousands):

2014	$	12,000
2015		4,000

The Corporation has entered into an operating lease agreement for its administrative office that commenced April 1, 2013. Future minimum lease payments under the non-cancellable lease agreement are as follows (in thousands):

2014	$	19,000
2015		50,000
2016		60,000
2017		60,000
2018		15,000

Rent expense for leases for the years ended December 31, 2013 and 2012 was approximately $50,000 and $21,000, respectively.

9. Stockholders’ Equity

The Corporation is authorized to issue 50,000 shares of Series E Preferred Stock, par value of $1 per share. Holders of the shares are entitled to receive a quarterly non-cumulative dividend at an annual rate of 7.0% if and when declared by the Corporation’s Board of Directors. Non-cumulative dividends are payable quarterly on the Series E Preferred Stock, beginning January 1, 2011. During the years ended December 31, 2013 and 2012, the Corporation issued no shares of Series E Preferred Stock.

On September 22, 2011, the Corporation entered into a Purchase Agreement with the Treasury, pursuant to which the Corporation issued and sold to the Treasury 3,431 shares of its Preferred Stock, Series F, having a liquidation preference of $1,000 per share (the “Liquidation Amount”), for proceeds of $3,431,000. The Purchase Agreement was entered into, and the Preferred Stock, Series F was issued, pursuant to the Treasury’s Small Business Lending Fund program, a $30 billion fund established under the Small Business Jobs Act of 2010 that encourages lending to small businesses by providing capital to qualified community banks with assets of less than $10 billion. A portion of the proceeds were used to redeem the Preferred Stock, Series A through Series D previously issued to the United States Department of the Treasury under the CPP. The remaining proceeds were contributed to the Bank as additional capital for future growth.

F-88

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

The Series F Preferred Stock, qualifies as Tier 1 capital for the Corporation. The dividend rate is calculated as a percentage of the aggregate Liquidation Amount of the outstanding Preferred Stock, Series F and is based on changes in the level of Qualifying Small Business Lending (“QSBL”) (as defined in the Purchase Agreement) by the Corporation. Based upon the increase in the Corporation’s level of QSBL over the baseline level calculated under the terms of the Purchase Agreement, the dividend rate for the initial dividend period, which was from the date of issuance through December 31, 2011, was set at approximately 1.0%. For the 2nd through 10th calendar quarters, the annual dividend rate may be adjusted to between 1% and 5%, to reflect the amount of change in the Corporation’s level of QSBL. For the 11th calendar quarter through 4.5 years after issuance, the dividend rate will be fixed at between 1% and 7% based upon the increase in QSBL as compared to the baseline. After 4.5 years from issuance, the dividend rate will increase to 9%. The dividend rate was 1.00% at December 31, 2013 and 2012.

The Series F Preferred shares are non-voting, other than class voting rights on matters that could adversely affect the shares. The preferred shares are redeemable at any time, with Treasury, Federal Reserve and FDIC approval.

10. Federal Income Taxes

The components of income tax expense for the years ended December 31, 2013 and 2012 are as follows (in thousands):

	2013			2012
Current	$	—		$	—
Deferred		(473	)		1,060
	$	(473	)	$	1,060

F-89

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

The components of the net deferred tax asset at December 31, 2013 and 2012 are as follows (in thousands):

	2013			2012
Deferred tax assets:
Allowance for loan losses	$	489		$	372
Organization and start-up costs		160			177
Nonqualified stock options		21			21
Net operating loss carryforwards		483			1,145
Cash basis conversion		117			—
Other		1			1
Total tax assets		1,271			1,716
Deferred tax liabilities:
Cash basis conversion		—			(87	)
Deferred loan costs		(144	)		(136	)
Servicing asset		(91	)		(49	)
Unrealized gain on available-for-sale securities		(11	)		(55	)
Other		(109	)		(44	)
Total deferred tax liabilities		(355	)		(371	)
Net Deferred Tax Asset, Included in Other Assets	$	916		$	1,345

The income tax provision for financial reporting purposes differs from the amount computed by applying the statutory income tax rate of 34% to income before income taxes. The difference relates primarily to the impact of non-taxable income and non-deductible merger expenses.

The Bank has net operating loss carryforwards available for federal income tax purposes of approximately $1,422,000 which expire through 2030.

11. Transactions with Executive Officers, Directors and Principal Stockholders

The Corporation has had, and may be expected to have in the future, banking transactions in the ordinary course of business with its executive officers, directors, principal stockholders, their immediate families and affiliated companies (commonly referred to as related parties), on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others. There were loans receivable from related parties totaling approximately $2,683,000 and $2,246,000 at December 31, 2013 and 2012, respectively. Loans originated for related parties totaled $644,000 and payments received were approximately $207,000 for the years ended December 31, 2013. Deposits of related parties totaled approximately $1,968,000 and $3,140,000 as of December 31, 2013 and 2012, respectively.

F-90

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

12. Share-Based Compensation

Organizers of the Bank were issued a total of 100,000 “organizer warrants” for their efforts during the organization and start-up of the Bank. These warrants were immediately exercisable, expired in 10 years and enabled the warrant holder to purchase one share of common stock at $10.00 per share for each warrant exercised. At December 31, 2013, there were 100,000 warrants outstanding, which expire in 2018.

In 2008, the Board of Directors adopted the 2008 Stock Option Plan (“2008 Plan”), which was approved by the Board of Directors on March 18, 2008, and was approved by the shareholders on May 28, 2008.

The 2008 Plan enables the Board of Directors to grant stock options to employees, directors, consultants, and other individuals who provide services to the Bank. The shares subject to or related to options under the 2008 Plan are authorized and unissued shares of the Corporation. The maximum number of shares that may be subject to options under the 2008 Plan is 205,092, all of which may be issued as incentive stock options and as non-qualified stock options. Incentive stock options are subject to limitations under Section 422 of the Internal Revenue Code. The Corporation has reserved, for the purposes of the 2008 Plan, out of its authorized and unissued shares, such number of shares. The 2008 Plan will terminate ten years from stockholder approval. Options may not be granted with an exercise price that is less than 100% of the fair market value of the Corporation’s common stock on the date of grant. Options may not be granted with a term longer than 10 years. However, any incentive stock option granted to any employee who, at the time such option is granted, owns more than 10% of the voting power of all classes of shares of the Corporation, its parent or of a subsidiary may not have a term of more than five years. Options will vest and be exercisable at such time or times and subject to such terms and conditions as determined by the Board of Directors. Generally, options will vest over a vesting period of approximately equal percentages each year over an initial term no shorter than three years. In 2009, 4,000 incentive stock options were issued under the 2008 Plan and no non-qualified stock options were issued under the 2008 Plan. No options were granted during the years ended December 31, 2013 and 2012. At December 31, 2013 and 2012, there are 30,679 shares available for grant under the 2008 Plan.

There were no stock options grants or forfeitures during the years ended December 31, 2013 and 2012. At December 31, 2013, the weighted average remaining contractual term of stock options outstanding was 5 years with an aggregate intrinsic value of $-0- and at December 31, 2012, the weighted average remaining contractual term of stock options outstanding was 6 years with an aggregate intrinsic value of $-0-.

There were no organizer warrants granted during the years ended December 31, 2013 and 2012. The fair value of the warrants granted in 2008 was $2.96, which were expensed upon issuance as no future services were required by the recipients.

The fair value of each option granted during 2009 was estimated at $3.91 on the date of grant using the Black-Scholes option-pricing model.

F-91

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

In 2013, the Board of Directors adopted the 2013 Equity Incentive Plan (“2013 Plan”), which was approved by the Board of Directors on March 19, 2013, and was approved by the shareholders on May 14, 2013. Under the 2013 Plan 228,000 shares were available to be issued in the form of performance awards that can be settled in stock or cash, restricted stock and restricted stock units, incentive stock options, non-qualified stock options, and stock appreciation rights. During the year ending December 31, 2013, no shares were issued.

13. Financial Instruments with Off-Balance Sheet Risk

The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet.

The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

The Corporation had the following off-balance sheet financial instruments whose contract amounts represent credit risk at December 31, 2013 and 2012 (in thousands):

	2013		2012
Unfunded commitments under lines of credit	$	22,736	$	18,927
Unfunded commitments under letters of credit		73		515

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include personal or commercial real estate, accounts receivable, inventory and equipment. The liability associated with these commitments is not material at December 31, 2013.

14. Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly additional discretionary-actions by regulators that, if undertaken, could have a direct material effect on the Bank’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings and other factors.

F-92

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets, and of Tier 1 capital to average assets. Management believes, as of December 31, 2013, that the Bank meets all capital adequacy requirements to which it is subject.

The Federal Deposit Insurance Corporation requires that the Bank maintain a ratio of Tier 1 leverage capital to total assets of at least 8% during the first seven years of operation. Under these guidelines, the Bank is considered “well capitalized” as of December 31, 2013 and 2012.

The Bank’s actual capital amounts and ratios at December 31, 2013 and 2012 are presented below (dollar amounts in thousands):

December 31, 2013	Actual					For Capital Adequacy Purposes					To be Well Capitalized under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total capital (to risk weighted assets)	$	13,292		10.20	%	$	³10,423	³	8.00	%	$	³13,029		³10.0	%
Tier 1 capital (to risk weighted assets)		11,663		8.95	%		³  5,211	³	4.00	%		³  7,817		³  6.0	%
Tier 1 capital (to average assets)		11,663		8.20	%		³  5,687	³	4.00	%		³  7,109		³  5.0	%
December 31, 2012	Actual					For Capital Adequacy Purposes					To be Well Capitalized under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total capital (to risk weighted assets)	$	11,721		10.32	%	$	³9,090	³	8.00	%	$	³11,362		³10.0	%
Tier 1 capital (to risk weighted assets)		10,383		9.14	%		³4,545	³	4.00	%		³  6,817		³  6.0	%
Tier 1 capital (to average assets)		10,383		8.50	%		³4,889	³	4.00	%		³  6,111		³  5.0	%

The Bank is subject to certain restrictions on the amount of dividends that it may declare due to regulatory considerations.

15. Fair Value Measurements

Management uses its best judgment in estimating the fair value of the Corporation’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Corporation could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year end.

F-93

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Determination of Fair Value

The Corporation uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the Topic 820 Fair Value Measurements and Disclosures fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Corporation’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instruments.

Current fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within

Fair Value Hierarchy

The Corporation groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1 - Valuation is based on unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 - Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on 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 for substantially the full term of the asset or liability.

Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.

F-94

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2013 and 2012 are as follows (in thousands):

December 31, 2013	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Residential mortgage-backed securities	$	1,901	$	—	$	1,901	$	—
	$	1,901	$	—	$	1,901	$	—
December 31, 2012	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Residential mortgage-backed securities	$	2,695	$	—	$	2,695	$	—
Corporate financial institution bond		2,190		—		2,190		—
	$	4,885	$	—	$	4,885	$	—

Residential mortgage backed securities are comprised of FHLMC and GNMA pass through certificates at December 31, 2013 and 2012.

The Corporation’s available-for-sale investment securities, which include corporate financial institution bonds and mortgage-backed securities, are reported at fair value. These securities are valued by an independent third party (“Preparer”). The Preparer’s evaluations are based on market data. They utilize evaluated pricing models that vary by asset and incorporate available trade, bid and other market information. For securities that do not trade on a daily basis, their evaluated pricing applications apply available information such as benchmarking and matrix pricing. The market inputs normally sought in the evaluation of securities include benchmark yields, reported trades, broker/dealer quotes (only obtained from market makers or broker/dealers recognized as market participants), issuer spreads, two-sided markets, benchmark securities, bid, offers and reference data. For certain securities additional inputs may be used or some market inputs may not be applicable. Inputs are prioritized differently on any given day based on market conditions.

F-95

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Assets and liabilities measured at fair value on a non-recurring basis at December 31, 2013 and 2012 are summarized below (in thousands):

December 31, 2013	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	78	$	—	$	—	$	78
December 31, 2012	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	489	$	—	$	—	$	489

The Bank generally measures impairment for loans based on the fair value of the loan’s collateral. Fair value is determined based upon independent third-party appraisals of the properties or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Corporation has utilized Level 3 inputs to measure fair value at December 31, 2013 and 2012 (dollars in thousands):

December 31, 2013	Total		Valuation Technique	Unobservable Input	Range (Weighted Average)
Impaired loans	$	78	Appraisal of collateral	Appraisal discounts		0-10%(10)	%
				Liquidation expenses		0-10%(0)	%
December 31, 2012	Total		Valuation Technique	Unobservable Input	Range (Weighted Average)
Impaired loans	$	448	Appraisal of collateral	Appraisal discounts		0-10%(10)	%
		—		Liquidation expenses		0-10%(0)	%
Impaired loans		41	Sales price	Liquidation expenses		0	%
	$	489

F-96

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

The following information should not be interpreted as an estimate of the fair value of the entire Corporation since a fair value calculation is only provided for a limited portion of the Corporation’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Corporation’s disclosures and those of other companies may not be meaningful. In addition to the fair value methods for available-for-sale securities and impaired loans, previously disclosed, the following methods and assumptions were used to estimate the fair values of the Corporation’s financial instruments at December 31, 2013 and 2012:

Cash and Cash Equivalents (Carried at Cost)

The carrying amounts reported in the balance sheet for cash and short-term instruments approximate those assets’ fair values.

Mortgage Servicing Asset (Carried Lower of Cost or Fair Value)

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

Loans (Carried at Cost)

The fair values of loans are estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.

Impaired loans are those in which the Bank has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

Other Real Estate Owned (OREO)

OREO assets are originally recorded at fair value upon transfer of the loans to OREO. Subsequently, OREO assets are carried at the lower of carrying value or fair value. The fair value of OREO is based on independent appraisals less selling costs. Appraised values may be discounted based upon management’s historical knowledge and changes in the market conditions from the time of the appraisal. Because of the high degree of judgment required in estimating the fair value of OREO and because of the relationship between fair value and general economic conditions, the Corporation considers fair values of OREO to be highly sensitive to market conditions. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

F-97

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Restricted Investments in Bank Stock (Carried at Cost)

The carrying amount of restricted investments in bank stock approximates fair value, and considers the limited marketability of such securities.

Accrued Interest Receivable and Payable (Carried at Cost)

The carrying amount of accrued interest receivable and accrued interest payable approximates its fair value.

Deposits (Carried at Cost)

The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Short-Term Borrowings (Carried at Cost)

The carrying amounts of short-term borrowings approximate fair value.

Long-Term Debt (Carried at Cost)

Fair values of FHLB advances are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturity. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party.

Off-Balance Sheet Financial Instruments (Disclosed at Cost)

Fair values for the Corporation’s off-balance sheet financial instruments (lending commitments and lines of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties’ credit standing. The resulting amounts were immaterial at December 31, 2013 and 2012 and, therefore, not disclosed.

F-98

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

The fair values, and related carrying amounts, of the Corporation’s financial instruments were as follows at December 31, 2013 and 2012 (in thousands):

	2013				2012
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Cash and cash equivalents	$	2,389	$	2,389	$	5,577	$	5,577
Securities available- for-sale		1,901		1,901		4,885		4,885
Restricted investments in bank stocks		627		627		508		508
Loans, net		129,337		130,531		109,158		109,845
Mortgage servicing asset		267		272		143		144
Accrued interest receivable		425		425		394		394
Liabilities
Deposits		120,126		120,331		112,338		113,387
Short term borrowings		3,000		3,000		2,000		2,000
Long-term debt		4,665		4,534		—		—
Accrued interest payable		24		24		17		17
Off Balance Sheet Asset (Liability)
Commitments to extend credit		—		—		—		—
Standby letters of credit		—		—		—		—

16. Pending Merger

On December 12, 2013, the Corporation, the Bank, Huntingdon Valley Bank (“HV Bank”), and HV Bancorp, Inc. (“HV Bancorp”), a new corporation in formation to facilitate the mutual-to-stock conversion of HV Bank, entered into an Agreement and Plan of Reorganization (the “Merger Agreement”).

Subject to the terms and conditions of the Merger Agreement, the Corporation and Bank will be merged with and into HV Bancorp, with HV Bancorp as the surviving entity (the “Merger”). Upon effectiveness of the Merger, each outstanding share of the Corporation’s capital stock will be converted into the right to receive shares of HV Bancorp capital stock.

The Merger Agreement contains customary representations, warranties and covenants of the Corporation and HV Bancorp, including, among others, covenants by the Corporation to conduct its business in the usual, regular and ordinary course during the interim period between the execution of the Merger Agreement and completion of the Merger and to call a meeting of the Corporation’s shareholders to consider approval of the Merger, and covenants by HV Bancorp and HV Bank to take all reasonable steps necessary to complete the conversion of HV Bank from the mutual to the stock form of organization.

F-99

The Victory Bancorp, Inc.

Notes to Consolidated Financial Statements

Consummation of the Merger is subject to various conditions, including completion of the conversion of HV Bank from the mutual to the stock form of organization, which conversion will require the approval of the members of HV Bank and completion of a registered public offering of shares of HV Bancorp common stock in a subscription offering and, if necessary, a community offering and/or syndicated community offering. Completion of the Merger is also conditioned on the approval of the Merger Agreement by the Corporation’s shareholders, the receipt of required regulatory approvals, the delivery of a customary legal opinion as to the federal tax treatment of the Merger, and other customary conditions for transactions such as the Merger.

F-100

You should rely only on the information contained in this document or that to which we have referred you. We have not authorized anyone to provide you with information that is different. This document does not constitute an offer to sell, or the solicitation of an offer to buy, any of the securities offered hereby to any person in any jurisdiction in which such offer or solicitation would be unlawful. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of common stock. Delivery of this document and the sales of shares made hereunder does not mean otherwise.

HV BANCORP, INC.

(Proposed Holding Company for Huntingdon Valley Bank)

Up to 3,131,277 Shares of Common Stock

Common Stock

PROSPECTUS

Griffin Financial Group LLC

                              , 2014

Dealer Prospectus Delivery Obligation

Until the later of                              , 2014 or 25 days after commencement of the offering, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 13.  Other Expenses of Issuance and Distribution

The following table sets forth the various estimated expenses to be incurred in connection with the sale and distribution of the shares of common stock being registered hereby, all of which will be borne by us (except any underwriting discounts and commissions and expenses incurred for brokerage, accounting, tax or legal services or any other expenses incurred in disposing of the shares).

Registrant’s Legal Fees and Expenses	$	200,000
Marketing Agent Fees and Expenses (1)		216,000
Marketing Agent Legal Fees and Expenses		75,000
Registrant’s Accounting Fees and Expenses		144,000
Proxy Agent, Conversion Agent and Data Processing		30,000
Appraisal Fees and Expenses		69,000
Business Plan Fees and Expenses		53,000
Pro Forma and Purchase Accounting Analysis Fees and Expenses		30,000
Printing Fees and Expenses		105,000
Filing Fees (Pennsylvania Department of Banking, NASDAQ, SEC and FINRA)		50,000
Miscellaneous Expenses		46,000
Total Expenses	$	1,018,000

(1) HV Bancorp, Inc. has retained Griffin Financial Group LLC to assist in the sale of common stock on a best efforts basis in the offering. Fees are estimated at the midpoint of the offering range.

Item 14.  Indemnification of Directors and Officers

Directors, officers and employees of HV Bancorp and HV Bank may be entitled to benefit from indemnification provisions in the Pennsylvania Business Corporation Law of 1988 (the “PBCL”), HV Bancorp’s articles of incorporation and federal regulations applicable to HV Bancorp and HV Bank. The general effect of these provisions.

Article VI of HV Bancorp’s Bylaws provides as follows:

6.1 Persons Covered. Subject to, and in accordance with, the provisions of this Article VI, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, including actions by or in the right of the Corporation, whether civil, criminal, administrative, or investigative, by reason of the fact that such person is or was a director, officer, employee, fiduciary, trustee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, fiduciary, trustee, or agent of another corporation, partnership, joint venture, trust, or other enterprise.

6.2 Derivative Actions.

(a) In the case of a threatened, pending, or completed action or suit by or in the right of the Corporation against a person named in Section 6.1 by reason of such person holding a position named in Section 6.1, the Corporation shall indemnify such person if such person satisfies the standard in Section 6.2(b), for expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of the action or suit.

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(b) In the case of a threatened, pending, or completed action or suit by or in the right of the Corporation, a person named in Section 6.1 shall be indemnified only if:

(1) such person is successful on the merits or otherwise; or

(2) such person acted in good faith in the transaction that is the subject of the suit or action, and in a manner reasonably believed to be in, or not opposed to, the best interests of the Corporation. However, such person shall not be indemnified in respect of any claim, issue, or matter as to which such person has been adjudged liable to the Corporation unless (and only to the extent that) the court of common pleas or the court in which the suit was brought shall determine, upon application, that despite the adjudication of liability but in view of all the circumstances, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper.

6.3 Third-Party Actions.

(a) In case of a threatened, pending, or completed suit, action, or proceeding (whether civil, criminal, administrative, or investigative), other than a suit by or in the right of the Corporation, together hereafter referred to as a third-party action, against a person named in Section 6.1 by reason of such person holding a position named in Section 6.1, the Corporation shall indemnify such person if such person satisfies the standard in Section 6.3(b), for amounts actually and reasonably incurred by such person in connection with the defense or settlement of the third-party action, including, but not limited to (i) expenses (including attorneys’ fees), (ii) amounts paid in settlement, (iii) judgments, and (iv) fines.

(b) In case of a third-party action, a person named in Section 6.1 shall be indemnified only if:

(1) such person is successful on the merits or otherwise; or

(2) such person acted in good faith in the transaction that is the subject of the third-party action and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, such person had no reasonable cause to believe such person’s conduct was unlawful. The termination of a third-party action by judgment, order, settlement, conviction, or upon a pleas of nolo contendere or its equivalent shall not, in itself, create a presumption that the person failed to satisfy the standard of this Section 6.3(b).

6.4 Determination That Standard Has Been Met. A determination that the standard of either Section 6.2(b) or 6.3(b) has been satisfied may be made by a court, or, except as stated in the second sentence of Section 6.2(b), the determination may be made by:

(1) the Board of Directors by a majority vote of a quorum consisting of directors of the Corporation who were not parties to the action, suit, or proceeding;

(2) if such a quorum is not obtainable or if obtainable and a majority of a quorum of disinterested directors so directs, by independent legal counsel in a written opinion; or

(3) the shareholders of the Corporation.

6.5 Proration. Anyone making a determination under Section 6.4 may determine that a person has met the standard as to some matters but not as to others, and may reasonably prorate amounts to be indemnified.

6.6 Advancement of Expenses. Reasonable expenses incurred by a director, officer, employee, or agent of the Corporation in defending a civil or criminal action, suit, or proceeding described in Section 6.1 may be paid by the Corporation in advance of the final disposition of such action, suit, or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that the person is not entitled to be indemnified by the Corporation.

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6.7 Other Rights. The indemnification and advancement of expenses provided by or pursuant to this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any insurance or other agreement, vote of shareholders or directors, or otherwise, both as to actions in their official capacity and as to actions in another capacity while holding an office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such person.

6.8 Insurance. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VI.

6.9 Security Fund; Indemnity Agreements. By action of the Board of Directors (notwithstanding their interest in the transaction), the Corporation may create and fund a trust fund or fund of any nature, and may enter into agreements with its officers, directors, employees, and agents for the purpose of securing or insuring in any manner its obligation to indemnify or advance expenses provided for in this Article VI.

6.10 Modification. The duties of the Corporation to indemnify and to advance expenses to any person as provided in this Article VI shall be in the nature of a contract between the Corporation and each such person, and no amendment or repeal of any provision of this Article VI, and no amendment or termination of any trust fund or other fund created pursuant to Section 6.9 hereof, shall alter to the detriment of such person the right of such person to the advancement of expenses or indemnification related to a claim based on an act or failure to act which took place prior to such amendment, repeal, or termination.

6.11 Proceedings Initiated by Indemnified Persons. Notwithstanding any other provision in this Article VI, the Corporation shall not indemnify a director, officer, employee, or agent for any liability incurred in an action, suit, or proceeding initiated by (which shall not be deemed to include counter-claims or affirmative defenses) or participated in as an intervenor or amicus curiae by the person seeking indemnification unless such initiation of or participation in the action, suit, or proceeding is authorized, either before or after its commencement, by the affirmative vote of a majority of the directors then in office.

6.12 Savings Clause. If this Article VI or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director, officer, employee, and agent of the Corporation as to costs, charges, and expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement with respect to any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article VI that shall not have been invalidated and to the fullest extent permitted by applicable law.

If the laws of the Commonwealth of Pennsylvania are amended to permit further indemnification of the directors, officers, employees, and agents of the Corporation, then the Corporation shall indemnify such persons to the fullest extent permitted by law. Any repeal or modification of this Article VI by the Board of Directors or the shareholders of the Corporation shall not adversely affect any right or protection of a director, officer, employee, or agent existing at the time of such repeal or modification.

Item 15.  Recent Sales of Unregistered Securities.

Not applicable.

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Item 16.  Exhibits and Financial Statement Schedules

Exhibit Number	Exhibit Title
1	Form of Agency Agreement by and among HV Bancorp, Inc., Huntingdon Valley Bank and Griffin Financial Group LLC
2.1	Plan of Conversion of Huntingdon Valley Bank
2.2	Agreement and Plan of Merger by and among HV Bancorp, Inc., Huntingdon Valley Bank and the Victory Bancorp, Inc.
3.1	Articles of Incorporation of HV Bancorp, Inc.
3.2	Bylaws of HV Bancorp, Inc.
4.0	Specimen Common Stock Certificate of HV Bancorp, Inc.
5.1	Opinion of Stark & Stark as to the legality of the securities being registered
8.1	Form of Federal Tax Opinion with respect to the conversion of Jones Walker LLP*
8.2	Form of State Tax Opinion with respect to the conversion of BDO USA, LLP*
8.3	Form of Federal Tax opinion of Jones Walker LLP with respect to the Agreement and Plan of Merger*
8.4	Form of Federal Tax Opinion of Kilpatrick Stockton & Townsend LLP with respect to the Agreement and Plan of Merger*
10.1	Existing Employment Agreement between Huntingdon Valley Bank and Travis J. Thompson
10.2	Existing Employment Agreement between The Victory Bank and Joseph W. Major
10.3	Existing Employment Agreement between The Victory Bank and Richard L. Graver
10.4	Existing Employment Agreement between The Victory Bank and Robert H. Schultz
10.5	Existing Employment Agreement between The Victory Bank and Eric B. Offner
10.6	Existing Change in Control Severance Agreement between The Victory Bank and Saul R. Rivkin
10.7	Bonus arrangement between Huntingdon Valley Bank and Charles S. Hutt
10.8	Form of Employment Agreement by and between HV Bancorp, Inc., Victory Bank and each of Travis J. Thompson and Joseph W. Major
10.9	Form of Employment Agreement by and between HV Bancorp, Inc., Victory Bank and each of Joseph C. O’Neil, Jr., Richard L. Graver, Robert H Schultz, Eric B. Offner, Charles S. Hutt and Mary Ann Murtha
10.10	Form of Change in Control Severance Agreement by and between The Victory Bancorp, Inc., Victory Bank and Saul S. Rivkin
10.11	Form of HV Bancorp Employee Stock Ownership Plan
16.1	Letter of ParenteBeard LLC regarding change in accountants for Huntingdon Valley Bank
16.2	Letter of ParenteBeard LLC regarding change in accountants for The Victory Bancorp, Inc.
23.1	Consent of BDO USA, LLP with respect to Huntingdon Valley Bank
23.2	Consent of ParenteBeard LLC with respect to Huntingdon Valley Bank
23.3	Consent of BDO USA, LLP with respect to The Victory Bancorp, Inc.
23.4	Consent of ParenteBeard LLC with respect to The Victory Bancorp, Inc.
23.5	Consent of Stark & Stark (included in Exhibit 5.1)
23.6	Consent of Jones Walker LLP (included in Exhibits 8.1 and 8.3)*
23.7 23.8	Consent of Kilpatrick Townsend & Stockton LLP (included in Exhibit 8.4)* Consent of Feldman Financial Advisors, Inc.
24	Power of Attorney (set forth on signature page)
99.1	Appraisal Agreement between HV Bank and Feldman Financial Advisors, Inc.
99.2	Letter of Feldman Financial Advisors, Inc. with respect to Subscription Rights
99.3	Appraisal Report of Feldman Financial Advisors, Inc.
99.4	Marketing Materials*
99.5	Stock Order and Certification Form*
99.6	Business Plan Agreement with RP Financial, LC.
99.7	Pro Forma and Purchase Accounting Analysis Agreement with RP Financial, LC.

*To be filed by amendment.

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Item 17.  Undertakings

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the forgoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(5) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

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(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Huntingdon Valley, Commonwealth of Pennsylvania, on May 12, 2014.

HV BANCORP, INC.
By:	/s/ Travis J. Thompson
Travis J. Thompson President & Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below constitutes and appoints Travis J. Thompson and Joseph C. O’Neill, Jr., and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and ratifying and confirming all that such attorneys-in-fact and agents, or either of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on May 12, 2014.

Signature	Title
/s/ Travis J. Thompson Travis J. Thompson	President, Chief Executive Officer and Chairman of the Board (Principal Executive Officer)
/s/ Joseph C. O’Neill, Jr. Joseph C. O’Neill, Jr.	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ Carl Hj. Asplundh, Jr. Carl Hj. Asplundh, Jr.	Director

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Signature	Title
/s/ Scott W. Frogatt Scott W. Froggatt	Director
/s/ Donald A. Gordon Donald A. Gordon	Director
/s/ Joseph F. Spanier Joseph F. Spanier	Director
/s/ Joseph F. Kelly Joseph F. Kelly	Director

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EX-1

Exhibit 1

HV BANCORP, INC.

(a Pennsylvania Corporation)

Up to 1,150,000 Shares

(Subject to Increase Up to 1,322,500 Shares)

COMMON STOCK ($0.01 Par Value)

Subscription Price $10.00 Per Share

AGENCY AGREEMENT

                    , 2014

Griffin Financial Group LLC

607 Washington Street

Reading, PA 19603

Ladies and Gentlemen:

HV Bancorp, Inc., a Pennsylvania corporation (the “Company”), and Huntingdon Valley Bank, a Pennsylvania chartered savings bank (the “Bank”), hereby confirm jointly and severally their agreement with Griffin Financial Group LLC (the “Agent”), as follows:

Section 1. The Offering. On October 16, 2013, the Board of Directors of the Bank adopted a Plan of Conversion (the “Plan”) pursuant to which the Bank will convert from a Pennsylvania-chartered mutual savings bank to a Pennsylvania-chartered stock savings bank (the “Conversion”) in accordance with applicable federal law, Pennsylvania law and the applicable rules and regulations of the Federal Deposit Insurance Corporation (the “FDIC”) and the Pennsylvania Department of Banking and Securities (the “Department of Banking”). The Board of Directors of the Bank approved and ratified the Plan, as amended and restated, on December 12, 2013. In connection with the Conversion, the Company, a newly formed Pennsylvania corporation, will offer shares of the Company’s stock, par value $0.01 per share (the “Common Stock”) in (i) a subscription offering (the “Subscription Offering”) and, if necessary, (ii) a direct community offering (the “Community Offering”) and, if necessary (iii) a syndicated community offering (the “Syndicated Community Offering” and, together with the Subscription Offering and the Community Offering, the “Offering”). The shares of Common Stock to be sold by the Company in the Offering are hereinafter called the “Shares” or “Conversion Shares.” The Company, the Bank and their subsidiaries are sometimes referred to as the “HVB Parties” herein.

In the Subscription Offering, non-transferable rights to subscribe for between 850,000 and 1,150,000 shares (subject to an increase up to 1,322,500 shares) of Common Stock will be granted (the “Subscription Rights”), in the following order of priority: (1) the Bank’s depositors with account balances of at least $50.00 as of the close of business on September 30, 2012 (“Eligible Account Holders”); (2) the Bank’s tax-qualified employee benefit plans; (3) the Bank’s depositors with account balances of at least $50.00 as of the close of business on                     , 2014, other than Directors and Officers of the Bank and their Associates (“Supplemental Eligible Account Holders”); and (4) the Bank’s members as of                     , 2014 (the “Other Member Record Date”) who were not able to subscribe for Shares under categories (1) or (3). The Company may offer shares of Common Stock for which subscriptions have not been received in the Subscription Offering in the Community Offering, with preference given (i) first to natural persons residing in Montgomery, Bucks and Philadelphia Counties, Pennsylvania, and (ii) then to the general public. In the event a Community Offering is held, it may be held at any time during or immediately after the Subscription Offering. Depending on market conditions, shares not subscribed for in the Subscription Offering or purchased in the Community Offering may be offered in

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the Syndicated Community Offering to selected members of the general public through a syndicate of registered broker-dealers managed by the Agent which are members of the National Association of Securities Dealers, Inc.

It is acknowledged that the number of Shares to be sold in the Offering may be increased or decreased as described in the Prospectus (as hereinafter defined); that the purchase of Shares in the Offering is subject to maximum and minimum purchase limitations as described in the Prospectus; and that the Company may reject, in whole or in part, any subscription received in the Community Offering and Syndicated Community Offering.

Simultaneously with or immediately following the completion of the Offering, the Company will acquire The Victory Bancorp, Inc., a Pennsylvania corporation (“Victory Bancorp”), in a merger transaction (the “Merger”) pursuant to an Agreement and Plan of Reorganization (together with the exhibits and schedules thereto, the “Merger Agreement”) dated as of December 12, 2013. Victory Bancorp is the holding company for The Victory Bank, a Pennsylvania chartered commercial bank (“Victory Bank”). The Merger will be accomplished in accordance with the laws of the United States and the laws of the Commonwealth of Pennsylvania and the applicable regulations of the FDIC, the Department of Banking and the Board of Governors of the Federal Reserve System (the “FRB”), which laws and regulations are collectively referred to as the “Merger Regulations,” and together with the FDIC and Department of Banking regulations governing the Offering, the “Conversion Regulations.” Pursuant to the terms of the Merger Agreement, upon consummation of the Merger, each outstanding share of Victory Bancorp common stock (the “Victory Common Stock”) will be converted into the right to receive 0.6794 shares of Company Common Stock, (the Company Common Stock to be issued in exchange for Victory Common Stock being referred to herein as the “Merger Shares”); provided, however, that in no event will the number of shares of Company Common Stock owned by Victory shareholders immediately after the effective date of the Merger, including shares purchased by Victory shareholders in the Offering, exceed 48.5% of the total shares of Company Common Stock outstanding after the effective date of the Merger. Immediately prior to the effective time of the Merger, each outstanding option to purchase Victory Common Stock will be canceled and each outstanding warrant to purchase Victory Common Stock will be exchanged for a cash payment from the Company equal to $0.54 per share of each warrant.

Although the Offering and the Merger are separate and distinct transactions, the Merger will not occur unless the Offering is completed; however, the Offering will proceed whether or not the Merger occurs. The Conversion and the Merger are collectively referred to herein as the “Reorganization.” The Reorganization will not be consummated until all conditions to the consummation of both the Offering and the Merger have been satisfied or waived. In the event the Merger Agreement is terminated, the Offering will be consummated, subject to receipt of necessary regulatory and member approvals. Victory Bancorp, Victory Bank and their subsidiaries are sometimes referred to as the “Victory Parties” herein.

The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”) a Registration Statement on Form S-1 (File No. 333-            ) in order to register the Shares under the Securities Act of 1933, as amended (the “Securities Act”), and has filed such amendments thereto as have been required to the date hereof (the “Registration Statement”). The prospectus, as amended, included in the Registration Statement at the time it initially became effective is hereinafter called the “Prospectus,” except that if any prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the regulations of the Commission under the Securities Act differing from the prospectus included in the Registration Statement at the time it initially becomes effective, the term “Prospectus” shall refer to the prospectus filed pursuant to Rule 424(b) or (c) from and after the time said prospectus is filed with the Commission and shall include any supplements and amendments thereto from and after their dates of effectiveness or use, respectively.

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The Registration Statement also contains a proxy statement/prospectus to be used to solicit proxies of Victory Bancorp stockholders with respect to the approval of the Merger and the issuance of the Merger Shares. The proxy statement/prospectus, as amended, on file with the Commission at the time the Registration Statement became effective is hereinafter called the “Proxy Statement/Prospectus,” except that if any proxy statement/prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the regulations of the Commission under the Securities Act differing from the proxy statement/prospectus included in the Registration Statement at the time it initially becomes effective, the term “Proxy Statement/Prospectus” shall refer to the proxy statement/prospectus filed pursuant to Rule 424(b) or (c) from and after the time said proxy statement/prospectus is filed with the Commission and shall include any supplements and amendments thereto from and after their dates of effectiveness or use, respectively.

The following applications have been filed in connection with the Conversion: (i) an Application on Form FRY-3 (the “Holding Company Application”) for Election Under Section      of the Bank Holding Company Act of 1956 (the “BHCA”) has been filed with the FRB; (ii) a notice of intent to convert to stock form (the “FDIC Conversion Notice”) has been filed with the FDIC; and (iii) an application to convert to stock form (the “Pennsylvania Conversion Application”) has been filed with the Department of Banking. The Holding Company Application, the FDIC Conversion Notice and the Pennsylvania Conversion Application are referred to herein as the “Conversion Applications.” The FDIC Conversion Notice and Pennsylvania Conversion Application include, among other things, the Plan.

The following applications have been filed in connection with the Merger: (i) a letter application (the “Pennsylvania Merger Application”) has been filed with the Department of Banking; (ii) an Interagency Bank Merger Act Application (the “FDIC BMA Application”) has been filed with the FDIC; and (iii) a Notice of Acquisition of Victory Bancorp and Victory Bank (the “FRB Merger Notice”) has been filed with the FRB. The Pennsylvania Merger Application, the FDIC BMA Application and the FRB Merger Notice are referred to herein as the “Merger Applications” and, together with the Conversion Applications, the “Reorganization Applications.”

Concurrently with the execution of this Agreement, the Company is delivering to the Agent copies of the Prospectus, dated                     , 2014 to be used in the Subscription Offering and Community Offering (if any) and, if necessary, will deliver copies of the Prospectus and any prospectus supplement for use in the Syndicated Community Offering and/or Public Offering, as defined in the Prospectus. Such Prospectus contains information with respect to the Bank, the Company, Victory Bancorp, Victory Bank, the Common Stock, the Offering and the Merger.

Section 2. Appointment of Agent. Subject to the terms and conditions of this Agreement, the HVB Parties hereby appoint the Agent as their financial advisor and marketing agent to utilize its best efforts to solicit subscriptions for the Shares and to advise and assist the HVB Parties with respect to the sale of the Shares in the Offering.

On the basis of the representations and warranties of the HVB Parties contained in, and subject to the terms and conditions of, this Agreement, the Agent accepts such appointment and agrees to consult with and advise the HVB Parties as to the matters set forth in the letter agreement (the “Letter Agreement”), dated June 25, 2013, between the Bank and the Agent (a copy of which is attached hereto as Exhibit A ). It is acknowledged by the HVB Parties that the Agent shall not be obligated to purchase any Shares and shall not be obligated to take any action which is inconsistent with any applicable law, regulation, decision or order. Except as set forth in Section 13 hereof, the appointment of the Agent to provide services hereunder shall terminate upon consummation of the Offering.

If selected broker-dealers are used to assist in the sale of Shares in the Syndicated Community Offering, the HVB Parties hereby, subject to the terms and conditions of this Agreement, appoint the

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Agent to manage such broker-dealers in the Syndicated Community Offering. On the basis of the representations and warranties of the HVB Parties contained in, and subject to the terms and conditions of, this Agreement, the Agent accepts such appointment and agrees to manage the selling group of broker-dealers in the Syndicated Community Offering.

Section 3. Refund of Purchase Price. In the event that the Reorganization is not consummated for any reason, including but not limited to the inability to sell a minimum of 850,000 Shares during the Offering (including any permitted extension thereof) or such other minimum number of Shares as shall be established consistent with the Plan and the Conversion Regulations, this Agreement shall be terminated and any persons who have subscribed for or ordered any of the Shares shall have refunded to them the full amount which has been received from such person, together with interest, if applicable, as provided in the Prospectus. Upon termination of this Agreement, neither the Agent nor the HVB Parties shall have any obligation to the other except that (i) the HVB Parties shall remain liable for any amounts due pursuant to Sections 4, 9, 11 and 12 hereof, unless the transaction is not consummated due to the breach by the Agent of a warranty, representation or covenant; and (ii) the Agent shall remain liable for any amount due pursuant to Sections 11 and 12 hereof, unless the transaction is not consummated due to the breach by the HVB Parties of a warranty, representation or covenant.

Section 4. Fees. In addition to the expenses specified in Section 9 hereof, as compensation for the Agent’s services under this Agreement, the Agent has received or will receive the following fees from the HVB Parties:

(a) A non-refundable retainer fee of $40,000, paid in four equal monthly installments commencing on June 25, 2013 upon execution of the Letter Agreement.

(b) A success fee for sales of the Shares in the Subscription Offering and Community Offering of one and one-half percent (1.5%) of the dollar amount of the Shares sold in the Subscription Offering and Community Offering, excluding (i) additional Shares sold pursuant to Section 4(c) below, (ii) Shares purchased by the Bank’s officers, directors or employees (or members of their immediate families), (iii) Shares purchased by any tax-qualified or non-qualified employee benefit plans of the Bank, and (iv) Shares purchased by the shareholders of Victory Bancorp, which shall be paid at the Closing Time (as defined in Section 5. For purposes of this Agreement, “immediate family” includes an officer’s, director’s or employee’s spouse, siblings, parents and children who live in the same house with the officer, director or employee.

(c) If any of the Shares remain unsubscribed for after the Subscription Offering and Community Offering, at the request of the Company, the Agent will form a group of approved broker-dealer firms (the “Assisting Brokers”) in accordance with Section 2 for purposes of the Syndicated Community Offering. The fees payable by the Company pursuant to this Section 4(c) will be equal to five and one-half percent (5.5%) of the aggregate dollar amount of the Shares sold in the Syndicated Community Offering. Of such fee, the Agent will receive one percent (1.0%) of the aggregate dollar amount of the Shares sold pursuant to this Section 4(c) as a management fee, and the HVB Parties will pay the remainder to the Assisting Brokers, which may include the Agent, in amounts relating to the number of Shares sold by such Assisting Brokers pursuant to this Section 4(c). All such fees payable under this Section 4(c) shall be in addition to all fees payable under Section 4(a) and 4(b) and shall be paid at the Closing Time (as defined in Section 5). A sample Assisting Brokers Agreement is attached hereto as Exhibit B.

In the event that the Company is required to resolicit subscribers for Shares in the Subscription Offering and Community Offering and the Agent is required to provide significant additional services in connection with such a resolicitation, the HVB Parties and the Agent shall mutually agree to the dollar

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amount of additional compensation due to the Agent, if any. Until any agreement called for by this paragraph is reached, the Agent shall not incur any expenses relating to any resolicitation in an amount that would cause the total expenses incurred by the Agent that are reimbursable by the Company or the Bank pursuant to Section 9 hereof to be greater than those permitted without the prior written consent of the Company or the Bank, which consent shall not be unreasonably withheld.

If this Agreement is terminated in accordance with the provisions of Section 3, 10 or 14 hereof and the sale of the Shares is not consummated, the Agent shall not be entitled to receive the fees set forth in Sections 4(b)-(c), but the Agent will be entitled to retain the non-refundable retainer fee of $40,000 and the HVB Parties will reimburse the Agent for its reasonable expenses pursuant to Section 9 hereof.

Section 5. Closing. If the minimum number of Shares required to be sold in the Offering on the basis of the most recently updated Appraisal (as defined in Section 6(o)) are subscribed for at or before the termination date of the Offering (which may be extended), and the other conditions (including those in Section 10) to the completion of the Reorganization are satisfied, the Company agrees to issue the Shares and the Merger Shares at the Closing Time (as hereinafter defined) against payment therefore by the means authorized by the Plan and to deliver certificates evidencing ownership of the Shares and the Merger Shares in such authorized denominations and registrations directly to the purchasers thereof or as instructed as promptly as possible after the Closing Time. The closing (the “Closing”) shall be held at the offices of special counsel to the HVB Parties, or at such other place as shall be agreed upon among the HVB Parties and the Agent, at 10:00 a. m., Eastern Time, on the business day selected by the HVB Parties, which business day shall be no less than two business days following the giving of prior notice by the Company to the Agent or at such other time as shall be agreed upon by the HVB Parties and the Agent. At the Closing, the HVB Parties shall deliver to the Agent by wire transfer in same-day funds the commissions, fees, and expenses owing to the Agent as set forth in Sections 4 and 9 hereof and the opinions required hereby and other documents deemed reasonably necessary for the Agent shall be executed and delivered to effect the sale of the Shares as contemplated hereby and pursuant to the terms of the Prospectus. The Company shall notify the Agent when funds shall have been received for the minimum number of shares of the Common Stock. The hour and date upon which the Company shall release the Shares for delivery in accordance with the terms hereof is referred to herein as the “Closing Time.”

Section 6. Representations and Warranties of the HVB Parties. The HVB Parties jointly and severally represent and warrant to the Agent that, except as disclosed in the Prospectus:

(a) The Bank and the Company have all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue and sell the Shares as provided herein and as described in the Prospectus, subject to the various limitations and required approvals described therein. Subject to the receipt of regulatory approval, the consummation of the Offering, the execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of the Bank and the Company as of the Closing Time. This Agreement has been validly executed and delivered by the Company and the Bank, and is a valid, legal and binding obligation of the Company and the Bank enforceable in accordance with its terms, except to the extent, if any, that the provisions of Sections 11 and 12 hereof may be unenforceable as against public policy, and except to the extent that such enforceability may be limited by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of creditors’ rights generally, or the rights of creditors of savings institutions insured by the FDIC (including the laws relating to the rights of the contracting parties to equitable remedies).

(b) The Plan has been approved by the Department of Banking and the FDIC.

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(c) The Registration Statement was declared effective by the Commission on                     , 2014; and no stop order has been issued with respect thereto and no proceedings therefore have been initiated or, to the best knowledge of the HVB Parties, threatened by the Commission. At the time the Registration Statement, including the Prospectus and Proxy Statement/Prospectus contained therein (including any amendment or supplement thereto), became effective, the Registration Statement complied as to form in all material respects with the Securities Act, the Exchange Act and the regulations promulgated thereunder and the Registration Statement, including the Prospectus and Proxy Statement/Prospectus contained therein (including any amendment or supplement thereto), any Blue Sky Application or any Sales Information (as such terms are defined in Section 11 hereof) authorized by the HVB Parties for use in connection with the Offering, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and at the time any Rule 424(b) or (c) Prospectus or Proxy Statement/Prospectus was filed with the Commission and at the Closing Time referred to in Section 5, the Registration Statement, including the Prospectus and Proxy Statement/Prospectus contained therein (including any amendment or supplement thereto), and any Blue Sky Application or any Sales Information authorized by the HVB Parties for use in connection with the Offering, will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 6 shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the HVB Parties by the Agent expressly regarding the Agent for use under the captions “Market for Common Stock of HVB Bancorp” and “The Conversion and Stock Offering—Marketing and Distribution; Compensation” or written statements or omissions from any sales information or information filed pursuant to state securities or blue sky laws or regulations regarding the Agent.

(d) At the time of filing the Registration Statement relating to the Offering and at the date hereof, the Company was not, and is not, an ineligible issuer, as defined in Rule 405. At the time of the filing of the Registration Statement and at the time of the use of any issuer free writing prospectus, as defined in Rule 433(h), the Company met the conditions required by Rules 164 and 433 for the use of a free writing prospectus. If required to be filed, the Company has filed with the Commission any issuer free writing prospectus related to the offered Shares at the time it is required to be filed under Rule 433 and, if not required to be filed, will retain such free writing prospectus in the Company’s records pursuant to Rule 433(g). If any issuer free writing prospectus is used after the date hereof in connection with the offering of the Shares the Company will file or retain such free writing prospectus as required by Rule 433.

(e) As of the Applicable Time, neither (i) the Issuer-Represented General Free Writing Prospectus(es) issued at or prior to the Applicable Time and the Statutory Prospectus, all considered together (collectively, the “General Disclosure Package”), nor (ii) any individual Issuer-Represented Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Prospectus included in the Registration Statement relating to the offered Shares or any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent specifically for use therein. As used in this paragraph and elsewhere in this Agreement:

1. “Applicable Time” means each and every date when a potential purchaser submitted a subscription or otherwise committed to purchase Shares.

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2. “Statutory Prospectus,” as of any time, means the Prospectus relating to the offered Shares that is included in the Registration Statement relating to the offered Shares immediately prior to that time, including any document incorporated by reference therein.

3. “Issuer-Represented Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433(h), relating to the offered Shares that is required to be filed with the Commission by the Company or required to be filed with the Commission. The term does not include any writing exempted from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the Securities Act, without regard to Rule 172 or Rule 173.

4. “Issuer-Represented General Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is intended for general distribution to prospective investors.

5. “Issuer-Represented Limited-Use Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is not an Issuer-Represented General Free Writing Prospectus. The term Issuer-Represented Limited-Use Free Writing Prospectus also includes any “bona fide electronic road show,” as defined in Rule 433, that is made available without restriction pursuant to Rule 433(d)(8)(ii) or otherwise, even though not required to be filed with the Commission.

(f) Each Issuer-Represented Free Writing Prospectus, as of its date of first use and at all subsequent times through the completion of the Offering and sale of the offered Shares or until any earlier date that the Company notified or notifies Agent (as described in the next sentence), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement relating to the offered Shares, including any document incorporated by reference therein that has not been superseded or modified. If at any time following the date of first use of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement relating to the offered Shares or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company has notified or will promptly notify Agent so that any use of such Issuer-Represented Free-Writing Prospectus may cease until it is amended or supplemented, and the Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the HVB Parties by Agent specifically for use therein.

(g) The FDIC Conversion Notice, including the Prospectus, was approved by the FDIC on                     , 2014, and at all times subsequent thereto until the Closing Time, the FDIC Conversion Notice, including the Prospectus, did and will comply as to form in all material respects with the Conversion Regulations and any other applicable rules and regulations of the FDIC (except as modified or waived by the FDIC). At the time of the approval and at all times subsequent thereto until the Closing Time, the FDIC Conversion Notice, including the Prospectus (including any amendment or supplement thereto), did not and does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that representations or warranties in this subsection (g) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the HVB Parties by Agent expressly regarding Agent for use in Prospectus contained in the Prospectus under the captions “Market for Common Stock of HVB Bancorp” and “The Conversion and Stock Offering—Marketing and Distribution; Compensation” or written statements or omissions from any sales information or information filed pursuant to state securities or blue sky laws or regulations regarding the Agent.

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(h) The Pennsylvania Conversion Application, including the Prospectus, was approved by the Department of Banking on                     , 2014, and at all times subsequent thereto until the Closing Time, the Pennsylvania Conversion Application, including the Prospectus, did and will comply as to form in all material respects with the Conversion Regulations and any other applicable rules and regulations of the Department of Banking (except as modified or waived by the Department of Banking). At the time of the approval and at all times subsequent thereto until the Closing Time, the Pennsylvania Conversion Application, including the Prospectus (including any amendment or supplement thereto), did not and does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that representations or warranties in this subsection (h) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the HVB Parties by Agent expressly regarding Agent for use in Prospectus contained in the Prospectus under the captions “Market for Common Stock of HVB Bancorp” and “The Conversion and Stock Offering—Marketing and Distribution; Compensation” or written statements or omissions from any sales information or information filed pursuant to state securities or blue sky laws or regulations regarding the Agent.

(i) The Holding Company Application, including the Prospectus, was approved by the FRB on                     , 2014, and at all times subsequent thereto until the Closing Time, the Holding Company Application, including the Prospectus, did and will comply as to form in all material respects with the applicable rules and regulations of the FRB (except as modified or waived by the FRB). At the time of the approval and at all times subsequent thereto until the Closing Time, the Holding Company Application, including the Prospectus (including any amendment or supplement thereto), did not and does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that representations or warranties in this subsection (i) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the HVB Parties by Agent expressly regarding Agent for use in Prospectus contained in the Prospectus under the captions “Market for Common Stock of HVB Bancorp” and “The Conversion and Stock Offering—Marketing and Distribution; Compensation” or written statements or omissions from any sales information or information filed pursuant to state securities or blue sky laws or regulations regarding the Agent.

(j) The FDIC BMA Application was approved by the FDIC on                     , 2014, and at all times subsequent thereto until the Closing Time, the FDIC BMA Application did and will comply as to form in all material respects with the applicable rules and regulations of the FDIC (except as modified or waived by the FDIC). At the time of the approval and at all times subsequent thereto until the Closing Time, the FDIC BMA Application (including any amendment or supplement thereto), did not and does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(k) The Pennsylvania Merger Application was approved by the Department of Banking on                     , 2014, and at all times subsequent thereto until the Closing Time, the Pennsylvania Merger Application did and will comply as to form in all material respects with the applicable rules and regulations of the Department of Banking (except as modified or waived by the Department of Banking). At the time of the approval and at all times subsequent thereto until the Closing Time, the Pennsylvania Merger Application (including any amendment or supplement thereto), did not

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and does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(l) The Company received confirmation from the FRB that no application would be required and that the FRB Merger Notice filed with the FRB on                     , 2014, was all that was required to be filed with the FRB in connection with the Merger. The FRB Merger Notice did and will comply as to form in all material respects with the applicable regulations of the FRB (except as modified or waived by the FRB). At the time of the filing of the FRB Merger Notice and at all times subsequent thereto until the Closing Time, the FRB Merger Notice (including any amendment or supplement thereto), did not and does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(m) No order has been issued by the Commission, the FDIC, the Department of Banking, or any other federal or state regulatory authority, preventing or suspending the use of the Prospectus or the Proxy Statement/Prospectus and no action by or before any such government entity to revoke any approval, authorization or order of effectiveness related to the Offering is pending or, to the best knowledge of the HVB Parties, threatened.

(n) The Plan has been duly adopted by the Board of Directors of the Bank. To the best knowledge of the HVB Parties, no person has, or at the Closing Time will have, sought to obtain review of the final action of the FDIC or the Department of Banking in approving the Plan, the Offering, the FDIC Conversion Notice or the Holding Company Application pursuant to any statute or regulation.

(o) Feldman Financial Advisors, Inc. (the “Appraiser”), which prepared the appraisal of the aggregate pro forma market value of the Company and the Bank on which the Offering was based (the “Appraisal”), has advised the HVB Parties in writing that it is independent with respect to each of the HVB Parties within the meaning of the Conversion Regulations.

(p) BDO USA, LLP, which certified the financial statements of the Bank as of June 30, 2013 and for the year ended June 30, 2013 filed as part of the Registration Statement, the Holding Company Application and the FDIC Conversion Notice, has advised the HVB Parties that it is an independent registered public accounting firm within the meaning of the Code of Ethics of the American Institute of Certified Public Accountants (the “AICPA”), that it is registered with the Public Company Accounting Oversight Board (“PCAOB”) and that it is, with respect to each of the HVB Parties, an independent certified public accountant within the meaning of 12 C.F.R. Section 563c.3 and under the Securities Act and the Regulations promulgated thereunder. Parente Beard LLC, which certified the financial statements of the Bank as of June 30, 2012 and for the years ended June 30, 2012 and 2011 filed as part of the Registration Statement, the Holding Company Application and the FDIC Conversion Notice, has advised the HVB Parties that it is an independent public accounting firm within the meaning of the Code of Ethics of the American Institute of Certified Public Accountants (the “AICPA”), that it is registered with the Public Company Accounting Oversight Board (“PCAOB”) and that it is, with respect to each of the HVB Parties, an independent certified public accountant within the meaning of 12 C.F.R. Section 563c.3 and under the Securities Act and the Regulations promulgated thereunder. BDO USA, LLP, which certified the financial statements of Victory Bancorp and its subsidiaries as of December 31, 2013 and for the year ended December 31, 2013 included in the Registration Statement, the Holding Company Application and the FDIC Conversion Notice has advised Victory Bancorp and Victory Bank that it is an independent public accounting firm within the meaning of the Code of Ethics of the American Institute of Certified Public Accountants (the “AICPA”), that it is registered with the Public Company Accounting Oversight Board (“PCAOB”) and that it is, with respect to each of the Victory Parties, an independent certified

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public accountant within the meaning of 12 C.F.R. Section 563c.3 and under the Securities Act and the Regulations promulgated thereunder. Parente Beard LLC, which certified the financial statements of Victory Bancorp and its subsidiaries as of December 31, 2012 and for the years ended December 31, 2012 and 2011 filed as part of the Registration Statement, the Holding Company Application and the FDIC Conversion Notice, has advised the Victory Parties that it is an independent public accounting firm within the meaning of the Code of Ethics of the American Institute of Certified Public Accountants (the “AICPA”), that it is registered with the Public Company Accounting Oversight Board (“PCAOB”) and that it is, with respect to each of the HVB Parties, an independent certified public accountant within the meaning of 12 C.F.R. Section 563c.3 and under the Securities Act and the Regulations promulgated thereunder.

(q) The consolidated financial statements and the notes thereto which are included in the Registration Statement and which are a part of the Prospectus present fairly the consolidated financial condition and retained earnings of the Bank, the Company, Victory Bancorp and Victory Bank as of the dates indicated and the results of operations and cash flows for the periods specified. The financial statements comply in all material respects with the applicable accounting requirements of Title 12 of the Code of Federal Regulations, Regulation S-X of the Commission and accounting principles generally accepted in the United States of America (“GAAP”) applied on a consistent basis during the periods presented except as otherwise noted therein, and present fairly in all material respects the information required to be stated therein. The other financial, statistical and pro forma information and related notes included in the Prospectus present fairly the information shown therein on a basis consistent with the audited and unaudited financial statements included in the Prospectus, and as to the pro forma adjustments, the adjustments made therein have been properly applied on the basis described therein.

(r) Since the respective dates as of which information is given in the Registration Statement, including the Prospectus, other than as disclosed therein: (i) there has not been any material adverse change in the financial condition or in the earnings, capital, properties or business affairs of any of the HVB Parties or of the HVB Parties considered as one enterprise or of any of the Victory Parties considered as one enterprise, whether or not arising in the ordinary course of business; (ii) there has not been any material change in total assets of the Company, the Bank, Victory Bancorp or Victory Bank, any material increase in the aggregate amount of loans past due ninety (90) days or more, or any real estate acquired by foreclosure or loans characterized as “in substance foreclosure”; nor has any of the Company, the Bank, Victory Bancorp or Victory Bank issued any securities or incurred any liability or obligation for borrowings other than in the ordinary course of business; and (iii) there have not been any material transactions entered into by any of the HVB Parties or the Victory Parties, other than those in the ordinary course of business. The capitalization, liabilities, assets, properties and business of the HVB Parties and the Victory Parties conform in all material respects to the descriptions thereof contained in the Prospectus and none of the HVB Parties or the Victory Parties has any material liabilities of any kind, contingent or otherwise, except as disclosed in Registration Statement or the Prospectus.

(s) The Company is a corporation duly organized and in good standing under the laws of the Commonwealth of Pennsylvania, with corporate authority to own its properties and to conduct its business as described in the Prospectus, and is qualified to transact business and in good standing in each jurisdiction in which the conduct of business requires such qualification unless the failure to qualify in one or more of such jurisdictions would not have a material adverse effect on the financial condition, earnings, capital, properties or business affairs of the HVB Parties. The Company has obtained all licenses, permits and other governmental authorizations required for the conduct of its business, except those that individually or in the aggregate would not materially adversely affect the financial condition, earnings, capital, assets, properties or business of the HVB Parties taken as a whole; and all such licenses, permits and governmental authorizations are in full force and effect, and the Company is in compliance therewith in all material respects.

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(t) The Bank is a duly organized and validly existing mutual savings bank chartered under the laws of the Commonwealth of Pennsylvania, duly authorized to conduct its business as described in the Prospectus; the activities of the Bank are permitted by the rules, regulations and practices of the Department of Banking and the FDIC; the Bank has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not materially adversely affect the financial condition of the HVB Parties taken as a whole; all such licenses, permits and other governmental authorizations are in full force and effect and the Bank is in good standing under the laws of the Commonwealth of Pennsylvania. The Bank does not own equity securities or any equity interest in any other business enterprise except as otherwise described in the Prospectus. The Bank is not authorized to issue any shares of capital stock. Upon completion of the Conversion, all of the outstanding shares of capital stock of the Bank will be owned by the Company free and clear of all liens and encumbrances, and there will be no outstanding options, warrants, or other rights to acquire any shares of capital stock of the Bank.

(u) Upon completion of the Offering, the only subsidiary of the Company will be the Bank. The Bank has no subsidiaries. Except as set forth in the Prospectus, none of the Company or the Bank, directly or indirectly, controls any other corporation, limited liability company, partnership, joint venture, association, trust or other business organization.

(v) Victory Bancorp is a corporation duly organized and in good standing under the laws of the Commonwealth of Pennsylvania, with corporate authority to own its properties and to conduct its business as described in the Prospectus, and is qualified to transact business and in good standing in each jurisdiction in which the conduct of business requires such qualification unless the failure to qualify in one or more of such jurisdictions would not have a material adverse effect on the financial condition, earnings, capital, properties or business affairs of the Victory Parties. Victory Bancorp has obtained all licenses, permits and other governmental authorizations required for the conduct of its business, except those that individually or in the aggregate would not materially adversely affect the financial condition, earnings, capital, assets, properties or business of the Victory Parties taken as a whole; and all such licenses, permits and governmental authorizations are in full force and effect, and Victory Bancorp is in compliance therewith in all material respects.

(w) Victory Bank is a duly organized and validly existing Pennsylvania chartered bank in stock form, duly authorized to conduct its business as described in the Prospectus; the activities of Victory Bank are permitted by the rules, regulations and practices of the Department of Banking and the FDIC; Victory Bank has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not materially adversely affect the financial condition of the Victory Parties taken as a whole; all such licenses, permits and other governmental authorizations are in full force and effect and Victory Bank is in good standing under the laws of the Commonwealth of Pennsylvania; all of the issued and outstanding capital stock of Victory Bank is duly and validly issued and fully paid and nonassessable; and Victory Bancorp directly owns all of such capital stock free and clear of any mortgage, pledge, lien, encumbrance, claim or restriction. Victory Bank does not own equity securities or any equity interest in any other business enterprise except as otherwise described in the Prospectus.

(x) The only subsidiary of Victory Bancorp is Victory Bank. Except as set forth in the Prospectus, none of Victory Bancorp or Victory Bank, directly or indirectly, controls any other corporation, limited liability company, partnership, joint venture, association, trust or other business organization.

(y) Each of the Bank and Victory Bank is a member of the Federal Home Loan Bank of Pittsburgh (“FHLB of Pittsburgh”); the deposit accounts of the Bank and Victory Bank are insured by the

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FDIC up to applicable limits. Upon consummation of the Conversion and Reorganization, the Bank will establish a liquidation account for the benefit of the Bank’s depositors, in accordance with the Plan and the requirements of applicable Conversion Regulations.

(z) [Intentionally Omitted].

(aa) Upon consummation of the Offering, the authorized, issued and outstanding equity capital of the Company will be within the range set forth in the Prospectus under the caption “Capitalization” and no shares of Common Stock have been or will be issued and outstanding prior to the Closing Time; the shares of Common Stock to be subscribed for in the Offering and the Merger Shares have been duly and validly authorized for issuance and, when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and the Prospectus (or issued to shareholders of Victory Bancorp with respect to the Merger Shares, respectively), will be duly and validly issued and fully paid and nonassessable; the issuance of the Shares is not subject to preemptive rights, except for the Subscription Rights granted pursuant to the Plan; and the terms and provisions of the shares of Common Stock will conform in all material respects to the description thereof contained in the Prospectus. Upon issuance of the Shares, good title to the Shares and the Merger Shares will be transferred from the Company to the purchasers of Shares against payment therefore (or issued to shareholders of Victory Bancorp with respect to the Merger Shares) in the Offering as set forth in the Plan and the Prospectus.

(bb) None of the Bank, the Company, Victory Bancorp or Victory Bank are in violation of their respective charters or their respective bylaws, or in material default in the performance or observance of any obligation, agreement, covenant, or condition contained in any contract, lease, loan agreement, indenture or other instrument to which they are a party or by which they, or any of their respective properties, may be bound which would result in a material adverse change in the condition (financial or otherwise), earnings, capital, properties or assets. The consummation of the transactions herein contemplated will not (i) conflict with or constitute a breach of, or default under, the charter or bylaws of the Bank, the Company, Victory Bancorp or Victory Bank, or materially conflict with or constitute a material breach of, or default under, any material contract, lease or other instrument to which any of the HVB Parties or Victory Parties has a beneficial interest, or any applicable law, rule, regulation or order that is material to the financial condition of the Company, the Bank, Victory Bancorp or Victory Bank; (ii) violate any authorization, approval, judgment, decree, order, statute, Rule or regulation applicable to the HVB Parties or the Victory Parties except for such violations which would not have a material adverse effect on the financial condition and results of operations of the HVB Parties or the Victory Parties; or (iii) result in the creation of any material lien, charge or encumbrance upon any property of the HVB Parties or the Victory Parties.

(cc) No material default exists, and no event has occurred which with notice or lapse of time, or both, would constitute a material default on the part of any of the HVB Parties or the Victory Parties, in the due performance and observance of any term, covenant or condition of any indenture, mortgage, deed of trust, note, bank loan or credit agreement or any other material instrument or agreement to which any of the HVB Parties or the Victory Parties is a party or by which any of them or any of their respective properties is bound or affected in any respect which, in any such case, is material to the HVB Parties or the Victory Parties individually or considered as one enterprise, and such agreements are in full force and effect; and no other party to any such agreements has instituted or, to the best knowledge of the HVB Parties or the Victory Parties, threatened any action or proceeding wherein any of the HVB Parties or the Victory Parties is alleged to be in default thereunder under circumstances where such action or proceeding, if determined adversely to any of the HVB Parties or the Victory Parties, would have a material adverse effect upon the HVB Parties or the Victory Parties individually or considered as one enterprise.

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(dd) The HVB Parties and Victory Parties have good and marketable title to all assets that are material to the businesses of the HVB Parties and the Victory Parties and to those assets described in the Prospectus as owned by them, free and clear of all material liens, charges, encumbrances, restrictions or other claims, except such as are described in the Prospectus or which do not have a material adverse effect on the businesses of the HVB Parties or the Victory Parties taken as a whole; and all of the leases and subleases which are material to the businesses of the HVB Parties or the Victory Parties, as described in the Registration Statement or Prospectus, are in full force and effect.

(ee) None of the HVB Parties or the Victory Parties are in material violation of any directive from the Commission, the FDIC, the Department of Banking, the FRB or any other agency to make any material change in the method of conducting their respective businesses; the HVB Parties and the Victory Parties have conducted and are conducting their respective businesses so as to comply in all respects with all applicable statutes and regulations (including, without limitation, regulations, decisions, directives and orders of the Commission, the FDIC, the Department of Banking, and the FRB), except where the failure to so comply would not reasonably be expected to result in any material adverse change in the financial condition, results of operations, capital, properties or business affairs of the HVB Parties considered as one enterprise or the Victory Parties considered as one enterprise and there is no charge, investigation, action, suit or proceeding before or by any court, regulatory authority or governmental agency or body pending or, to the best knowledge of any of the HVB Parties or the Victory Parties, threatened, that would reasonably be expected to materially and adversely affect the Offering, the performance of this Agreement, or the consummation of the transactions contemplated in the Plan or the Merger Agreement as described in the Registration Statement, or which would reasonably be expected to result in any material adverse change in the financial condition results of operations, capital, properties or business affairs of the HVB Parties considered as one enterprise or the Victory Parties considered as one enterprise.

(ff) The HVB Parties have received an opinion of their special counsel, Jones Walker LLP, with respect to the federal income tax consequences of the Offering and the Merger, as described in the Registration Statement and the Prospectus; and the facts and representations upon which such opinion is based are truthful, accurate and complete, and none of the HVB Parties will take any action inconsistent therewith.

(gg) The HVB Parties and the Victory Parties have timely filed or received extensions to file all required federal and state tax returns, have paid all taxes that have become due and payable in respect of such returns, except where permitted to be extended, have made adequate reserves for similar future tax liabilities, and no deficiency has been asserted with respect thereto by any taxing authority.

(hh) No approval, authorization, consent or other order of any regulatory or supervisory or other public authority is required for the execution and delivery by the HVB Parties of this Agreement, the completion of the transactions contemplated by the Merger Agreement and the Plan, or the issuance of the Shares, except for the approval of the FDIC, the Department of Banking and the Commission (which have been received) and any necessary qualification, notification, or registration or exemption under the securities or blue sky laws of the various states in which the Shares are to be offered.

(ii) None of the HVB Parties has: (i) issued any securities within the last 18 months (except for (a) notes to evidence bank loans or other liabilities in the ordinary course of business or as described in the Prospectus, and (b) securities issued to the Company in connection with the Bank’s reorganization into a stock savings bank); (ii) had any dealings with respect to sales of securities within the 12 months prior to the date hereof with any member of the Financial Industry Regulatory Authority (“FINRA”), or any person related to or associated with such member, other than discussions and meetings relating to the Offering and purchases and sales of U.S. government and agency and other securities in the ordinary

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course of business; (iii) entered into a financial or management consulting agreement except for the Letter Agreement and as contemplated hereunder; or (iv) engaged any intermediary between Agent and the HVB Parties in connection with the Offering, and no person is being compensated in any manner for such services.

(jj) Neither the HVB Parties nor, to the best knowledge of the HVB Parties, any employee of the HVB Parties, has made any payment of funds of the HVB Parties as a loan to any person for the purchase of Shares, except for the Company’s loan to the ESOP, the proceeds of which will be used to purchase Shares, or has made any other payment of funds prohibited by law, and no funds have been set aside to be used for any payment prohibited by law.

(kk) The Bank and Victory Bank comply in all material respects with the applicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and the regulations and rules thereunder.

(ll) The HVB Parties and the Victory Parties have not relied upon Agent or its counsel for any legal, tax or accounting advice in connection with the Conversion, the Merger, or the Offering.

(mm) The records of Eligible Account Holders, Supplemental Eligible Account Holders and Other Members are accurate and complete in all material respects.

(nn) The HVB Parties and the Victory Parties comply in all material respects with all laws, rules and regulations relating to environmental protection, and none of them has been notified or is otherwise aware that any of them is potentially liable, or is considered potentially liable, under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or any other Federal, state or local environmental laws and regulations; no action, suit, regulatory investigation or other proceeding is pending, or to the knowledge of the HVB Parties or the Victory Parties, threatened against the HVB Parties or the Victory Parties relating to environmental protection, nor do the HVB Parties or the Victory Parties have any reason to believe any such proceedings may be brought against any of them; and no disposal, release or discharge of hazardous or toxic substances, pollutants or contaminants, including petroleum and gas products, as any of such terms may be defined under federal, state or local law, has occurred on, in, at or about any facilities or properties owned or leased by any of the HVB Parties or the Victory Parties or, to the knowledge of the HVB Parties or the Victory Parties, in which the HVB Parties or the Victory Parties have a security interest.

(oo) All of the loans represented as assets on the most recent financial statements or selected financial information of the Bank, the Company, Victory Bancorp and Victory Bank included in the Prospectus meet or are exempt from all requirements of federal, state and local law pertaining to lending, including, without limitation, truth in lending (including the requirements of Regulations Z and 12 C.F.R. Part 226), real estate settlement procedures, consumer credit protection, equal credit opportunity and all disclosure laws applicable to such loans, except for violations which, if asserted, would not result in a material adverse effect on the financial condition, results of operations or business of the HVB Parties taken as a whole or the Victory Parties taken as a whole.

(pp) None of the HVB Parties are required to be registered as an investment company under the Investment Company Act of 1940.

Any certificates signed by an officer of any of the HVB Parties and delivered to Agent or its counsel that refer to this Agreement shall be deemed to be a representation and warranty by the HVB Parties to Agent as to the matters covered thereby with the same effect as if such representation and warranty were set forth herein.

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Section 7. Representations and Warranties of the Agent. The Agent represents and warrants to the HVB Parties that:

(a) The Agent is a limited liability company and is validly existing and in good standing under the laws of the Commonwealth of Pennsylvania with full power and authority to provide the services to be furnished to the HVB Parties.

(b) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein have been duly and validly authorized by all necessary limited liability company action on the part of the Agent, and each of this Agreement and the Letter Agreement is the legal, valid and binding agreement of the Agent, enforceable in accordance with its terms, except to the extent, if any, that the provisions of Section 11 and 12 hereof may be unenforceable as against public policy, and except to the extent that such enforceability may be limited by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of creditors’ rights generally or general equity principles.

(c) Each of the Agent and its employees, agents and representatives who shall perform any of the services hereunder shall have, and until the Offering are consummated or terminated shall maintain, all licenses, approvals and permits necessary to perform such services and shall comply in all material respects with all applicable laws and regulations in connection with the performance of such services.

(d) No action, suit, charge or any proceeding before the Commission, the NASD, any state securities commission or any court is pending, or to the knowledge of the Agent threatened, against the Agent which, if determined adversely to the Agent, would have a material adverse effect upon the ability of the Agent to perform its obligations under this Agreement.

(e) The Agent is registered as a broker/dealer pursuant to Section 15(b) of the Exchange Act and is a member of FINRA.

(f) Any funds received in the Offering by the Agent from prospective purchasers of the Shares will be delivered by the Agent to                     , as escrow agent (the “Escrow Agent”) for deposit in the escrow account established under the Escrow Agreement dated                     , 201     (the “Escrow Agreement”), by noon of the next business day after receipt by the Agent, together with a written account of each purchaser which sets forth, among other things, the name and address of the purchaser, the number of Shares subscribed for, and the amount paid therefor. Any checks received by the Agent that are made payable to any party other than the Escrow Agent shall be returned to the purchaser who submitted the check and not accepted. The Agent shall require any selected dealers agreements with Assisting Brokers to include provisions requiring such Assisting Brokers to comply with Rule 15c2-4 under the Exchange Act.

Section 8. Covenants of the HVB Parties. The HVB Parties hereby jointly and severally covenant with the Agent as follows:

(a) The Company will not, at any time after the date the Registration Statement is declared effective, file any amendment or supplement to the Registration Statement without providing Agent and its counsel an opportunity to review such amendment or file any amendment or supplement to which amendment Agent or its counsel shall reasonably object.

(b) The Company represents and agrees that, unless it obtains the prior consent of Agent and Agent represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the offered Shares that would constitute an “issuer free writing prospectus,” as defined in Rule 433, or that would constitute a “free writing prospectus,” as defined in

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Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and Agent is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping. The Company need not treat any communication as a free writing prospectus if it is exempt from the definition of prospectus pursuant to Clause (a) of Section 2(a)(10) of the Securities Act without regard to Rule 172 or 173.

(c) The HVB Parties will not, at any time after the date any of the Reorganization Applications are approved, file any amendment or supplement to any Reorganization Application without providing Agent and its counsel an opportunity to review such amendment or supplement or file any amendment or supplement to which amendment or supplement Agent or its counsel shall reasonably object.

(d) The HVB Parties will use their best efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission and any post-effective amendment to the FDIC Conversion Notice or Pennsylvania Conversion Application to be approved by the FDIC or Department of Banking, and will immediately upon receipt of any information concerning the events listed below notify Agent (i) when the Registration Statement, as amended, has become effective; (ii) when the FDIC Conversion Notice as amended, has been approved by the FDIC; (iii) when the Pennsylvania Conversion Application, as amended, has been approved by the Department of Banking; (iv) of the receipt of any comments from the Commission, the FDIC, the Department of Banking or any other governmental entity with respect to the Offering or the transactions contemplated by this Agreement; (v) of any request by the Commission, the FDIC, the Department of Banking or any other governmental entity for any amendment or supplement to the Registration Statement, the FDIC Conversion Notice, or the Pennsylvania Conversion Application or for additional information; (vi) of the issuance by the Commission, the FDIC, the Department of Banking or any other governmental entity of any order or other action suspending the Offering or the use of the Registration Statement or the Prospectus or any other filing of the HVB Parties under the Conversion Regulations or other applicable law, or the threat of any such action; or (vii) of the issuance by the Commission, the FDIC, the Department of Banking or any governmental entity of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose. The HVB Parties will make every reasonable effort to prevent the issuance by the Commission, the FDIC, the Department of Banking or any governmental entity of any order referred to in (vi) and (vii) above and, if any such order shall at any time be issued, to obtain the lifting thereof at the earliest possible time.

(e) The HVB Parties will deliver to Agent and to its counsel conformed copies of each of the following documents, with all exhibits: (i) the Registration Statement, as originally filed and each amendment or supplement thereto; (ii) the Holding Company Application, as originally filed and each amendment or supplement thereto; (iii) the Pennsylvania Conversion Application, as originally filed and each amendment or supplement thereto; (iv) the FDIC Conversion Notice, as originally filed and each amendment or supplement thereto; (v) the Pennsylvania Merger Application, as originally filed and each amendment or supplement thereto; (vi) the FDIC BMA Application, as originally filed and each amendment or supplement thereto; and (vii) the FRB Merger Notice, as originally filed and each amendment or supplement thereto. Further, the HVB Parties will deliver such additional copies of the foregoing documents to counsel to Agent as may be required for any NASD filings. In addition, the HVB Parties will also deliver to Agent such number of copies of the Prospectus, as amended or supplemented, as Agent may reasonably request.

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(f) The HVB Parties will comply in all material respects with any and all terms, conditions, requirements and provisions with respect to the Offering and the transactions contemplated thereby imposed by the Commission, by applicable state law and regulations, and by the Securities Act, the Exchange Act, and the rules and regulations of the Commission promulgated under such statutes, to be complied with prior to or subsequent to the Closing Time; and when the Prospectus is required to be delivered, the HVB Parties will comply in all material respects, at their own expense, with all material requirements imposed upon them by the FDIC or the Department of Banking, the Conversion Regulations (except as modified or waived in writing by the FDIC or Department of Banking), the Commission, by applicable state law and regulations and by the Securities Act, the Exchange Act and the rules and regulations of the Commission promulgated under such statutes, in each case as from time to time in force, so far as necessary to permit the continuance of sales or dealing in shares of Common Stock during such period in accordance with the provisions hereof and the Prospectus.

(g) [Intentionally Omitted].

(h) Each of the HVB Parties will inform Agent of any event or circumstances of which it is or becomes aware as a result of which the Registration Statement and/or Prospectus, as then supplemented or amended, would include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading. If it is necessary, in the reasonable opinion of counsel for the HVB Parties, to amend or supplement the Registration Statement or the Prospectus in order to correct such untrue statement of a material fact or to make the statements therein not misleading in light of the circumstances existing at the time of their use, the HVB Parties will, at their expense, prepare, file with the Commission, the FDIC, and the Department of Banking, and furnish to Agent, a reasonable number of copies of an amendment or amendments of, or a supplement or supplements to, the Registration Statement and the Prospectus (in form and substance reasonably satisfactory to counsel for Agent after a reasonable time for review) which will amend or supplement the Registration Statement and/or the Prospectus so that as amended or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time, not misleading. For the purpose of this subsection, each of the HVB Parties will furnish such information with respect to itself as Agent may from time to time reasonably request.

(i) Pursuant to the terms of the Plan, the Company will endeavor in good faith, in cooperation with Agent, to register or to qualify the Shares for offer and sale or to exempt such Shares from registration and to exempt the Company and its officers, directors and employees from registration as broker-dealers, under the applicable securities laws of the jurisdictions in which the Offering will be conducted; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation to do business in any jurisdiction in which it is not so qualified. In each jurisdiction where any of the Shares shall have been registered or qualified as above provided, the Company will make and file such statements and reports in each year as are or may be required by the laws of such jurisdictions.

(j) The Company will not sell or issue, contract to sell or otherwise dispose of, for a period of 90 days after the date hereof, without Agent’s prior written consent, which consent shall not be unreasonably withheld, any shares of Common Stock other than in connection with any plan or arrangement described in the Prospectus.

(k) For the period of three years from the date of this Agreement, the Company will furnish to Agent upon request (i) a copy of each report of the Company furnished to or filed with the Commission under the Exchange Act or any national securities exchange or system on which any class of securities of the Company is listed or quoted, (ii) a copy of each report of the Company mailed to holders of Common

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Stock or non-confidential report filed with the Commission, the FDIC, the Department of Banking, the FRB or any other supervisory or regulatory authority or any national securities exchange or system on which any class of the securities of the Company is listed or quoted, (iii) each press release and material news item and article released by the Company and/or Bank, and (iv) from time-to-time, such other publicly available information concerning the HVB Parties as Agent may reasonably request; provided, however, that any information or documents available on the Commission’s Electronic Data Gathering, Analysis and Retrieval System shall be considered furnished for purposes of this Section 8(k).

(l) The HVB Parties will use the net proceeds from the sale of the Common Stock in the manner set forth in the Prospectus under the caption “Use Of Proceeds.”

(m) The Company will distribute the Prospectus or other offering materials in connection with the offering and sale of the Common Stock only in accordance with the Conversion Regulations, the Securities Act and the Exchange Act and the rules and regulations promulgated under such statutes, and the laws of any state in which the shares are qualified for sale.

(n) Prior to the Closing Time, the Company shall register its Common Stock under Section 12(g) of the Exchange Act, as amended, and will request that such registration statement be effective upon completion of the Offering. The Company shall maintain the effectiveness of such registration for not less than three years or such shorter period as permitted by the FDIC and the Department of Banking.

(o) For so long as the Common Stock is registered under the Exchange Act, the Company will furnish to its stockholders after the end of each fiscal year, in the time periods prescribed by applicable law and regulations, such reports and other information as are required to be furnished to its stockholders under the Exchange Act (including consolidated financial statements of the Company and its subsidiaries, certified by independent public accountants).

(p) The Company will report the use of proceeds of the Offering in accordance with Rule 463 under the Securities Act.

(q) The HVB Parties will maintain appropriate arrangements for depositing all funds received from persons mailing subscriptions for or orders to purchase Shares on [an interest bearing basis at the rate] [a noninterest bearing basis as] described in the Prospectus until the Closing Time and satisfaction of all conditions precedent to the release of the Company’s obligation to refund payments received from persons subscribing for or ordering Shares in the Offering, in accordance with the Plan as described in the Prospectus, or until refunds of such funds have been made to the persons entitled thereto or withdrawal authorizations canceled in accordance with the Plan and as described in the Prospectus. The HVB Parties will maintain, together with Agent, such records of all funds received to permit the funds of each subscriber to be separately insured by the FDIC (to the maximum extent allowable) and to enable the HVB Parties to make the appropriate refunds of such funds in the event that such refunds are required to be made in accordance with the Plan and as described in the Prospectus.

(r) The HVB Parties will take such actions and furnish such information as are reasonably requested by Agent in order for Agent to ensure compliance with Rule 2790 of the NASD and all related rules.

(s) The HVB Parties will conduct their businesses in compliance in all material respects with all applicable federal and state laws, rules, regulations, decisions, directives and orders including, all decisions, directives and orders of the Commission, the FDIC, the Department of Banking, and the FRB.

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(t) The Company and the Bank shall comply with any and all terms, conditions, requirements and provisions with respect to the Offering and the transactions contemplated thereby imposed by the FDIC, the Department of Banking, the FRB, the BHCA, the Commission, the Securities Act, the Conversion Regulations, the Exchange Act and the regulations promulgated by the Commission pursuant to the Exchange Act to be complied with subsequent to the Closing Time. The Company will comply with all provisions of all undertakings contained in the Registration Statement.

(u) The HVB Parties will not amend the Plan without notifying Agent prior thereto.

(v) The Company shall provide Agent with any information necessary to carry out the allocation of the Shares in the event of an oversubscription, and such information shall be accurate and reliable in all material respects.

(w) The Company will not deliver the Shares until the HVB Parties have satisfied or caused to be satisfied each condition set forth in Section 10 hereof, unless such condition is waived in writing by Agent.

(x) Immediately upon completion of the sale by the Company of the Shares contemplated by the Plan and the Prospectus, (i) all of the issued and outstanding shares of capital stock of the Bank shall be owned by the Company, (ii) the Company shall have no direct subsidiaries other than the Bank, and (iii) the Offering shall have been effected in accordance with all applicable statutes, regulations, decisions and orders; and all terms, conditions, requirements and provisions with respect to the Offering (except those that are conditions subsequent) imposed by the Commission, the FDIC, the Department of Banking, or any other governmental agency, if any, shall have been complied with by the HVB Parties in all material respects or appropriate waivers shall have been obtained and all notice and waiting periods shall have been satisfied, waived or elapsed.

(y) On or before the Closing Time, the HVB Parties will have completed all conditions precedent to the Offering specified in the Plan and the offer and sale of the Shares will have been conducted in all material respects in accordance with the Plan, the Conversion Regulations (except as modified or waived in writing by the FDIC or the Department of Banking) and with all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Offering imposed upon any of the HVB Parties by the Commission, the FDIC, the Department of Banking, or any other regulatory authority and in the manner described in the Prospectus.

Section 9. Payment of Expenses. Whether or not the Reorganization is completed or the sale and exchange of the Shares by the Company is consummated, the HVB Parties will pay for all their expenses incident to the performance of this Agreement, including without limitation: (a) the preparation and filing of the Reorganization Applications; (b) the preparation, printing, filing, delivery and mailing of the Registration Statement, including the Prospectus and the Proxy Statement/Prospectus, and all documents related to the Offering; (c) all filing fees and expenses in connection with the qualification or registration of the Shares for offer and sale by the Company or the Bank under the securities or “Blue Sky” laws, including without limitation filing fees, reasonable legal fees and disbursements of counsel in connection therewith, and in connection with the preparation of a blue sky law survey; (d) the filing fees of the NASD related to the Agent’s fairness filing under NASD Rule 2710; (e) fees and expenses related to the preparation of the independent appraisal; (f) fees and expenses related to auditing and accounting services; (g) all expenses relating to advertising, temporary personnel, investor meetings and the stock information center; and (h) transfer agent fees and costs of preparation and distribution of stock certificates. The HVB Parties also agree to reimburse Agent for reasonable out-of-pocket expenses, including legal fees and expenses, incurred by Agent in connection with the services hereunder. Agent will not incur legal fees (excluding counsel’s out-of-pocket expenses) in excess of $75,000 without the

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approval of the Bank. The Agent will not incur reimbursable direct out-of-pocket expenses in excess of $20,000 without prior approval of the Bank. In the event that the Agent incurs any expenses on behalf of the HVB Parties, the HVB Parties will pay or reimburse the Agent for such expenses regardless of whether the Conversion is successfully completed, and such reimbursements will not be included in the expense limitations set forth in this paragraph. Not less than two days prior to the Closing Time, the Agent will provide the Bank with a detailed accounting of all reimbursable expenses to be paid at the Closing.

Section 10. Conditions to the Agent’s Obligations. The Company, the Bank and the Agent agree that the issuance and sale of the Shares and all obligations of the Agent hereunder are subject to the accuracy of the representations and warranties of the Company and the Bank contained herein as of the date hereof and the Closing Time, to the accuracy of the statements of officers and directors of the Company and the Bank made pursuant to the provisions hereof, to the performance by the Company and the Bank of their obligations hereunder, and to the following further conditions:

(a) The Registration Statement shall have been declared effective by the Commission and the Prospectus contained in the FDIC Conversion Notice and the Holding Company Application shall have been approved by the FDIC and the Department of Banking for mailing prior to the commencement of the Offering, and no stop order or other action suspending the effectiveness of the Registration Statement shall have been issued under the Securities Act or proceedings therefore initiated or, to any of the HVB Parties’ best knowledge, threatened by the Commission or any state authority and no order or other action suspending the authorization for use of the Prospectus or the consummation of the Offering shall have been issued or proceedings therefore initiated or, to any of the HVB Parties’ best knowledge, threatened by the Commission, the FDIC, the Department of Banking, the FRB or any other governmental body.

(b) At the Closing Time, the Agent shall have received:

(1) The favorable opinion, dated as of the Closing Time, of Jones Walker LLP acceptable to Agent in form and substance satisfactory to counsel for Agent, as set forth in Exhibit C.

(2) The letter of Jones Walker LLP in form and substance to the effect that during the preparation of the Registration Statement and the Prospectus, Jones Walker LLP participated in conferences with certain officers of and other representatives of the HVB Parties, counsel to Agent, representatives of the independent public accounting firm for the HVB Parties and representatives of Agent at which the contents of the Registration Statement and the Prospectus and related matters were discussed and has considered the matters required to be stated therein and the statements contained therein and, although (without limiting the opinions provided pursuant to Section 10(b)(1)) Jones Walker LLP has not independently verified the accuracy, completeness or fairness of the statements contained in the Registration Statement and Prospectus, on the basis of the foregoing, nothing has come to the attention of Jones Walker LLP that caused Jones Walker LLP to believe that the Registration Statement at the time it was declared effective by the Commission and as of the date of such letter or that the General Disclosure Package as of the Closing Time, contained or contains any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that counsel need express no comment or opinion with respect to the financial statements, schedules and other financial and statistical data included, or statistical or appraisal methodology employed, in the Registration Statement, Prospectus or General Disclosure Package).

(3) The favorable opinion, dated as of the Closing Time, of Kilpatrick Townsend & Stockton, LLP, counsel for the Victory Parties, acceptable to Agent in form and substance satisfactory to counsel for Agent, as set forth in Exhibit D.

(4) The favorable opinion, dated as of the Closing Time, of Stevens & Lee, P.C., counsel for Agent, as set forth in Exhibit E; such opinion may rely, as to matters of fact, upon certificates of officers and directors of the HVB Parties delivered pursuant hereto or as such counsel may reasonably request and upon the opinion of Jones Walker LLP.

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(c) Concurrently with the execution of this Agreement, Agent shall receive a letter from (i) BDO USA, LLP, dated the date hereof and addressed to Agent, such letter confirming that BDO USA, LLP is a firm of independent public accountants within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants, the Securities Act and the regulations promulgated thereunder and 12 C.F.R. Section 571.2(c)(3), and no information concerning its relationship with or interests in the HVB Parties is required by Item 13 of the Registration Statement, and stating in effect that in BDO USA, LLP’s opinion the financial statements of the Bank included in the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Securities Act, the Exchange Act and the related published rules and regulations of the Commission thereunder and the Conversion Regulations and generally accepted accounting principles consistently applied; (ii) stating in effect that, on the basis of certain agreed upon procedures (but not an audit examination in accordance with generally accepted auditing standards) consisting of a reading of the minutes of the meetings of the Board of Directors of the HVB Parties, the Audit Committee of the Bank, a review of the unaudited interim financial information as of and for the interim period ending                     , 2014 and the latest available unaudited quarterly financial statements of the Bank prepared by the Bank which shall be in accordance with Statement on Auditing Standards No. 100, and consultations with officers of the Bank responsible for financial and accounting matters, nothing came to their attention which caused them to believe that: (A) such unaudited financial statements and financial information included in the section titled “Recent Developments” are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included in the Prospectus; or (B) during the period from the date of the Recent Developments information included in the Prospectus to a date not more than three business days prior to the date of the Prospectus there was any increase in non-performing loans, special mention loans, borrowings (defined as advances from the FHLB of Pittsburgh, securities sold under agreements to repurchase and any other form of debt other than deposits) of the Bank or decrease in assets, deposits, loan losses allowances or retained earnings of the Bank or there was any decrease in net income, non-interest income, tax expense or net interest income of the Bank or any increase in non-interest expense for the number of full months commencing immediately after the Recent Developments period and ended on the last month-end prior to the date of the Prospectus as compared to the corresponding period in the preceding year, which was material to the financial position or results of operations of the HVB Parties; and (iii) stating that, in addition to the audit examination referred to in its opinion included in the Prospectus and the performance of the procedures referred to in clause (ii) of this subsection (c), they have compared with the general accounting records of the Bank, which are subject to the internal controls of the accounting system of the Bank and other data prepared by the HVB Parties directly from such accounting records, to the extent specified in such letter, such amounts and/or percentages set forth in the Prospectus as Agent may reasonably request, and they have found such amounts and percentages to be in agreement therewith (subject to rounding).

(d) Concurrently with the execution of this Agreement, Agent shall receive a letter from (i) BDO USA, LLP, dated the date hereof and addressed to Agent, such letter confirming that BDO USA, LLP is a firm of independent public accountants within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants, the Securities Act and the regulations promulgated thereunder and 12 C.F.R. Section 571.2(c)(3), and no information concerning its relationship with or interests in the Victory Parties is required by Item 13 of the Registration Statement, and stating in effect that in BDO USA, LLP’s opinion the financial statements of Victory Bancorp included in the Prospectus covered by BDO USA, LLP’s opinion therein comply as to form in all material respects with the applicable accounting requirements of the Securities Act, the Exchange Act and the related published

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rules and regulations of the Commission thereunder and the Conversion Regulations and generally accepted accounting principles consistently applied; (ii) stating in effect that, on the basis of certain agreed upon procedures (but not an audit examination in accordance with generally accepted auditing standards) consisting of a reading of the minutes of the meetings of the Board of Directors of the Victory, the Audit Committee of Victory Bank, a review of the unaudited interim financial information as of and for the interim period ending                     , 2014 and the latest available unaudited quarterly financial statements of Victory Bancorp prepared by Victory Bancorp which shall be in accordance with Statement on Auditing Standards No. 100, and consultations with officers of Victory Bancorp responsible for financial and accounting matters, nothing came to their attention which caused them to believe that: (A) such unaudited financial statements and financial information included in the section titled “Recent Developments” are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included in the Prospectus; or (B) during the period from the date of the Recent Developments information included in the Prospectus to a date not more than three business days prior to the date of the Prospectus there was any increase in non-performing loans, special mention loans, borrowings (defined as advances from the FHLB of Pittsburgh, securities sold under agreements to repurchase and any other form of debt other than deposits) of Victory Bancorp or decrease in assets, deposits, loan losses allowances or retained earnings of Victory Bancorp or there was any decrease in net income, non-interest income, tax expense or net interest income of Victory Bancorp or any increase in non-interest expense for the number of full months commencing immediately after the Recent Developments period and ended on the last month-end prior to the date of the Prospectus as compared to the corresponding period in the preceding year, which was material to the financial position or results of operations of the Victory Parties; and (iii) stating that, in addition to the audit examination referred to in its opinion included in the Prospectus and the performance of the procedures referred to in clause (ii) of this subsection (d), they have compared with the general accounting records of Victory Bancorp, which are subject to the internal controls of the accounting system of Victory Bancorp and other data prepared by the Victory Parties directly from such accounting records, to the extent specified in such letter, such amounts and/or percentages set forth in the Prospectus as Agent may reasonably request, and they have found such amounts and percentages to be in agreement therewith (subject to rounding).

(e) At the Closing Time, Agent shall receive a letter from BDO USA, LLP dated as of the Closing Time, addressed to Agent, confirming the statements made in the letters delivered by it pursuant to subsections (c) and (d) of this Section 10, the “specified date” referred to in clause (ii)(B) of such subsections to be a date specified in such letter, which shall not be more than three (3) business days prior to the Closing Time.

(f) At the Closing Time, counsel to Agent shall have been furnished with such documents and opinions as counsel for Agent may require for the purpose of enabling them to advise Agent with respect to the issuance and sale of the Common Stock as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations and warranties, or the fulfillment of any of the conditions herein contained.

(g) At the Closing Time, Agent shall receive a certificate of the Chief Executive Officer and Chief Financial Officer of each of the HVB Parties, dated the Closing Time, without personal liability to the effect that: (i) they have examined the Prospectus and at the time the Prospectus became authorized for final use, the Prospectus did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) there has not been, since the respective dates as of which information is given in the Prospectus, any material adverse change in the financial condition or in the earnings, capital, properties, business prospects or business affairs of the HVB Parties, considered as one enterprise, or the Victory Parties, considered as one enterprise, whether or not arising in the ordinary

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course of business; (iii) the representations and warranties contained in Section 6 of this Agreement are true and correct with the same force and effect as though made at and as of the Closing Time; (iv) each of the HVB Parties and the Victory Parties has complied in all material respects with all material agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time in this Agreement, the Merger Agreement and any approvals or orders issued by the FDIC, the Department of Banking, or the FRB with respect to the Merger or the Conversion including the conditions contained in this Section 10; (v) no stop order has been issued or, to the best of their knowledge, is threatened, by the Commission or any other governmental body; (vi) no order suspending the Offering, or the effectiveness of the Registration Statement has been issued and to the best of their knowledge, no proceedings for any such purpose have been initiated or threatened by the FDIC, the Department of Banking, the Commission, or any other federal or state authority; (vii) to the best of their knowledge, no person has sought to obtain regulatory or judicial review of the action of the FDIC or the Department of Banking in approving the Plan or to enjoin the Offering.

(h) At the Closing Time, Agent shall receive a letter from the Appraiser, dated as of the Closing Time, (i) confirming that said firm is independent of the HVB Parties and is experienced and expert in the area of corporate appraisals within the meaning of the Conversion Regulations, (ii) stating in effect that the Appraisal complies in all material respects with the applicable requirements of the Conversion Regulations, and (iii) further stating that its opinion of the aggregate pro forma market value of the HVB Parties, as converted, expressed in the Appraisal as most recently updated, remains in effect.

(i) None of the HVB Parties or Victory Parties shall have sustained, since the date of the latest audited financial statements included in the Registration Statement and Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Registration Statement and the Prospectus, and since the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been any material change, or any development involving a prospective material change in, or affecting the general affairs of, management, financial position, retained earnings, long-term debt, stockholders’ equity or results of operations of any of the HVB Parties or the Victory Parties, otherwise than as set forth or contemplated in the Registration Statement and the Prospectus, the effect of which, in any such case described above, is in Agent’s reasonable judgment sufficiently material and adverse as to make it impracticable or inadvisable to proceed with the Offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus.

(j) Prior to and at the Closing Time: (i) in the reasonable opinion of Agent there shall have been no material adverse change in the financial condition or in the earnings, capital, properties of the HVB Parties, considered as one enterprise, or the Victory Parties, considered as one enterprise, from and as of the latest dates as of which such condition is set forth in the Prospectus, except as referred to therein; (ii) there shall have been no material transaction entered into by the HVB Parties, independently or considered as one enterprise, or the Victory Parties, independently or considered as one enterprise, from the latest date as of which the financial condition of the HVB Parties and Victory Parties is set forth in the Prospectus, other than transactions referred to or contemplated therein; (iii) none of the HVB Parties or the Victory Parties shall have received from the FDIC, the Department of Banking, or the FRB any direction (oral or written, other than directions applicable to all Pennsylvania chartered banks or savings banks) to make any material change in the method of conducting their business with which it has not complied in all material respects (which direction, if any, shall have been disclosed to Agent) and which would reasonably be expected to have a material and adverse effect on the condition (financial or otherwise) or on the earnings, capital or properties of the HVB Parties, considered as one enterprise, or the Victory Parties, considered as one enterprise; (iv) none of the HVB Parties or the Victory Parties shall have been in default (nor shall an event have occurred which, with notice or lapse of time or both, would

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constitute a default) under any provision of any agreement or instrument relating to any material outstanding indebtedness; (v) no action, suit or proceeding, at law or in equity or before or by any federal or state commission, board or other administrative agency, shall be pending or, to the knowledge of the HVB Parties or the Victory Parties, threatened against any of the HVB Parties or Victory Parties or affecting any of their properties wherein an unfavorable decision, ruling or finding would reasonably be expected to have a material and adverse effect on the financial condition or on the earnings, capital, properties or business affairs of the HVB Parties, considered as one enterprise, or the Victory Parties, considered as one enterprise; and (vi) the Shares shall have been qualified or registered for offering and sale under the securities or “blue sky” laws of the jurisdictions requested by Agent.

(k) At or prior to the Closing Time, Agent shall receive (i) a copy of the order from the Commission declaring the Registration Statement effective; (ii) a copy of the letters from the FDIC approving the FDIC Conversion Notice and the FDIC BMA Application; (iii) a copy of the letters from the Department of Banking approving the Pennsylvania Conversion Application and the Pennsylvania Merger Application; (iv) a copy of the letter from the FRB approving the Holding Company Application; (v) a copy of the letter from the FRB approving the FRB Merger Notice; (vi) copies of certificates of existence for each of the HVB Parties, (vii) a certificate from the FDIC evidencing the Bank’s insurance of accounts, (viii) a certificate of the FHLB of Pittsburgh evidencing the Bank’s membership therein, and (ix) any other documents that Agent shall reasonably request.

(l) Subsequent to the date hereof, there shall not have occurred any of the following: (i) a suspension or limitation in trading in securities generally on the New York Stock Exchange or American Stock Exchange or in the over-the-counter market, or quotations halted generally on the Nasdaq Stock Market, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required by either of such exchanges or FINRA or by order of the Commission or any other governmental authority other than temporary trading halts (A) imposed as a result of intraday changes in the Dow Jones Industrial Average, (B) lasting no longer than until the regularly scheduled commencement of trading on the next succeeding business-day, and (C) which, when combined with all other such halts occurring during the previous five business days, total less than three; (ii) a general moratorium on the operations of commercial banks or other federally-insured financial institutions or general moratorium on the withdrawal of deposits from commercial banks or other federally-insured financial institutions declared by either federal or state authorities; (iii) the engagement by the United States in hostilities which have resulted in the declaration, on or after the date hereof, of a national emergency or war; or (iv) a material decline in the price of equity or debt securities in the United States financial markets or elsewhere if the effect of any of (i) through (iv) herein, in Agent’s reasonable judgment, makes it impracticable or inadvisable to proceed with the offering or the delivery of the Shares on the terms and in the manner contemplated in the Registration Statement and the Prospectus.

(m) All such opinions, certificates, letters and documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to Agent and of counsel for Agent. Any certificate signed by an officer of the Company or the Bank and delivered to Agent or to counsel for Agent shall be deemed a representation and warranty by the Company or the Bank, as the case may be, to Agent as to the statements made therein. If any condition to Agent’s obligations hereunder to be fulfilled prior to or at the Closing Time is not fulfilled, Agent may terminate this Agreement (provided that if this Agreement is so terminated but the sale of Shares is nevertheless consummated, Agent shall be entitled to the compensation provided for in Section 4 hereof) or, if Agent so elects, may waive any such conditions which have not been fulfilled or may extend the time of their fulfillment.

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Section 11. Indemnification.

(a) The HVB Parties jointly and severally agree to indemnify and hold harmless the Agent, its officers, directors, agents, attorneys, and employees and each person, if any, who controls the Agent within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses, subject to the limitation set forth in the last sentence of paragraph (c) below), joint or several, that the Agent or any of such officers, directors, agents, attorneys, employees and controlling Persons (collectively, the “Related Persons”) may suffer or to which the Agent or the Related Persons may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the Agent and any Related Persons upon written demand for any reasonable expenses (including reasonable fees and disbursements of counsel) incurred by the Agent or any Related Persons in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of the allocation of the Shares in accordance with (x) the Plan generally and (y) the records or other information provided to the Agent by the HVB Parties, or their agents; (ii) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the Prospectus (or any amendment or supplement thereto), any Issuer-Represented Free Writing Prospectus, the Applications, or any blue sky application, or other instrument or document of the HVB Parties or based upon written information supplied by any of the HVB Parties filed in any state or jurisdiction to register or qualify any or all of the Shares under the securities laws thereof (collectively, the “Blue Sky Applications”), or any application or other document, advertisement, or communication (“Sales Information”) prepared, made or executed by or on behalf of any of the HVB Parties with its consent or based upon written information furnished by or on behalf of any of the HVB Parties, whether or not filed in any jurisdiction, in order to qualify or register the Shares under the securities laws thereof, (iii) arise out of or are based upon the omission or alleged omission to state in any of the foregoing documents or information, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (iv) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), the Prospectus (or any amendment or supplement thereto), any Issuer-Represented Free Writing Prospectus, the Applications, any Blue Sky Applications or Sales Information or other documentation distributed in connection with the Offering; or (v) result from any claims made with respect to the accuracy, reliability and completeness of the records of Eligible Account Holders and Supplemental Eligible Account Holders or Other Depositors or for any denial or reduction of a subscription or order to purchase Common Stock, whether as a result of a properly calculated allocation pursuant to the Plan or otherwise, based upon such records; provided, however, that no indemnification is required under this paragraph (a) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue material statements or alleged untrue material statements in, or material omission or alleged material omission from, the Registration Statement (or any amendment or supplement thereto) or the Prospectus (or any amendment or supplement thereto), any Issuer-Represented Free Writing Prospectus, the Applications, the Blue Sky Applications or Sales Information or other documentation distributed in connection with the Conversion made in reliance upon and in conformity with written information furnished to the HVB Parties by the Agent or its representatives (including counsel) with respect to the Agent expressly for use in the Registration Statement (or any amendment or supplement thereto) or Prospectus (or any amendment or supplement thereto) under the captions “Market for Common Stock of HVB Bancorp” and “The Conversion and Stock Offering – Marketing and Distribution; Compensation”; provided further, that the HVB Parties will not be responsible for any loss, liability, claim, damage or expense to the extent a court of competent jurisdiction finds that they result primarily from material oral misstatements by the Agent to a purchaser of Shares which are not based upon information in the Registration Statement or Prospectus, or from actions taken or omitted to be taken by the Agent in bad faith or from the Agent’s gross negligence or

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willful misconduct, and the Agent agrees to repay to the HVB Parties any amounts advanced to it by the HVB Parties in connection with matters as to which it is found by a court of competent jurisdiction not to be entitled to indemnification hereunder.

(b) The Agent agrees to indemnify and hold harmless the HVB Parties, their directors and officers, agents, and employees and each person, if any, who controls any of the HVB Parties within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses, subject to the limitation set forth in the last sentence of paragraph (c) below), joint or several, which they, or any of them, may suffer or to which they, or any of them, may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the HVB Parties and any such persons upon written demand for any reasonable expenses (including fees and disbursements of counsel) incurred by them in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the Prospectus, any Issuer-Represented Free Writing Prospectus, the Applications or any Blue Sky Applications or Sales Information or are based upon the omission or alleged omission to state in any of the foregoing documents a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Agent’s obligations under this Section 11(b) shall exist only if and only to the extent that such untrue statement or alleged untrue statement was made in, or such material fact or alleged material fact was omitted from, the Applications, Registration Statement (or any amendment or supplement thereto), the Prospectus (or any amendment or supplement thereto), any Blue Sky Applications or Sales Information in reliance upon and in conformity with written information furnished to the HVB Parties by the Agent or its representatives (including counsel) expressly for use under the captions “Market for Common Stock of HVB Bancorp” and “The Conversion and Stock Offering – Marketing and Distribution; Compensation.”

(c) Each indemnified party shall give prompt written notice to each indemnifying party of any action, proceeding, claim (whether commenced or threatened), or suit instituted against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have on account of this Section 11, Section 12 or otherwise. An indemnifying party may participate at its own expense in the defense of such action. In addition, if it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume the defense of such action with counsel chosen by it reasonably acceptable to the indemnified parties that are defendants in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them that are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action, proceeding or claim, other than reasonable costs of investigation. In no event shall the indemnifying parties be liable for the fees and expenses of more than one separate firm of attorneys (unless an indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or in addition to those of other indemnified parties) for all indemnified parties in connection with any one action, proceeding or claim or separate but similar or related actions, proceedings or claims in the same jurisdiction arising out of the same general allegations or circumstances. The HVB Parties shall be liable for any settlement of any claim against the Agent (or its directors, officers, employees, affiliates or controlling persons), made with the consent of the HVB Parties, which consent shall not be unreasonably withheld. The HVB Parties shall not, without the written consent of the Agent, settle or compromise any claim against them based upon circumstances giving rise to an indemnification claim against the HVB Parties hereunder unless such settlement or compromise provides that the Agent and the other indemnified parties shall be unconditionally and irrevocably released from all liability in respect of such claim.

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(d) The agreements contained in this Section 11 and in Section 12 hereof and the representations and warranties of the HVB Parties set forth in this Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of the Agent or its officers, directors, controlling persons, agents, attorneys, or employees or by or on behalf of any of the HVB Parties or any officers, directors, controlling persons, agents, attorneys, or employees of any of the HVB Parties; (ii) delivery of and payment hereunder for the Shares; or (iii) any termination of this Agreement. To the extent required by law, Sections 11 and 12 hereof are subject to and limited by Section 23A of the Federal Reserve Act.

Section 12. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 11 is due in accordance with its terms but is found in a final judgment by a court to be unavailable from the HVB Parties or the Agent, the HVB Parties and the Agent shall contribute to the aggregate losses, claims, damages and liabilities of the nature contemplated by such indemnification in such proportion so that (i) the Agent is responsible for that portion represented by the percentage that the fees paid to the Agent pursuant to Section 4 of this Agreement (not including expenses) (the “Agent’s Fees”), less any portion of Agent’s Fees paid by Agent to Assisting Brokers, bear to the total proceeds received by the HVB Parties from the sale of the Shares in the Offering, net of all expenses of the Offering, except Agent’s Fees and (ii) the HVB Parties shall be responsible for the balance. If, however, the allocation provided above is not permitted by applicable law or if the indemnified party failed to give the notice required under Section 11 above, then each indemnifying party shall contribute to such amount paid or payable to such indemnified party in such proportion as is appropriate to reflect not only such relative fault of the HVB Parties on the one hand and the Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereof), but also the relative benefits received by the HVB Parties on the one hand and the Agent on the other from the Offering, as well as any other relevant equitable considerations. The relative benefits received by the HVB Parties on the one hand and the Agent on the other hand shall be deemed to be in the same proportion as the total proceeds from the Offering, net of all expenses of the Offering except Agent’s Fees, received by the HVB Parties bear, with respect to the Agent, to the total fees (not including expenses) received by the Agent less the portion of such fees paid by the Agent to Assisting Brokers. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the HVB Parties on the one hand or the Agent on the other and the parties relative intent, good faith, knowledge, access to information and opportunity to correct or prevent such statement or omission. The HVB Parties and the Agent agree that it would not be just and equitable if contribution pursuant to this Section 12 were determined by pro-rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 12. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or action, proceedings or claims in respect thereof) referred to above in this Section 12 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action, proceeding or claim. It is expressly agreed that the Agent shall not be liable for any loss, liability, claim, damage or expense or be required to contribute any amount which in the aggregate exceeds the amount paid (excluding reimbursable expenses) to the Agent under this Agreement less the portion of such fees paid by the Agent to Assisting Brokers. It is understood and agreed that the above-stated limitation on the Agent’s liability is essential to the Agent and that the Agent would not have entered into this Agreement if such limitation had not been agreed to by the parties to this Agreement. No person found guilty of any fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution with respect to any loss or

27

liability arising from such misrepresentation from any person who was not found guilty of such fraudulent misrepresentation. For purposes of this Section 12, each of the Agent’s and the HVB Parties’ officers and directors and each person, if any, who controls the Agent or any of the HVB Parties within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the HVB Parties and the Agent. Any party entitled to contribution, promptly after receipt of notice of commencement of any action, suit, claim or proceeding against such party in respect of which a claim for contribution may be made against another party under this Section 12, will notify such party from whom contribution may be sought, but the omission to so notify such party shall not relieve the party from whom contribution may be sought from any other obligation it may have hereunder or otherwise than under this Section 12.

Section 13. Survival. All representations, warranties and indemnities and other statements contained in this Agreement (and in Exhibit “A” to the Letter Agreement) or contained in certificates of officers of the HVB Parties or the Agent submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of the Agent or its controlling persons, or by or on behalf of the HVB Parties and shall survive the issuance of the Shares, and any legal representative, successor or assign of the Agent, any of the HVB Parties, and any indemnified person shall be entitled to the benefit of the respective agreements, indemnities, warranties and representations.

Section 14. Termination. Agent may terminate this Agreement by giving the notice indicated below in this Section at any time after this Agreement becomes effective as follows:

(a) In the event (i) the Plan is abandoned or terminated by the Bank or the Company; (ii) the Company fails to consummate the sale of the minimum number of Shares prior to                     , 2014 in accordance with the provisions of the Plan or as required by the Conversion Regulations and applicable law; (iii) the Agent terminates this relationship because there has been a material adverse change in the financial condition or operations of the HVB Parties considered as one enterprise since the date of the latest audited financial statements included in the Prospectus; or (iv) immediately prior to commencement of the Offering, the Agent terminates this relationship because in its opinion, which shall have been formed in good faith after reasonable determination and consideration of all relevant factors, there has been a failure to satisfactorily disclose all relevant information in the Prospectus or the existence of market conditions which might render the sale of the Shares inadvisable, this Agreement shall terminate and no party to this Agreement shall have any obligation to the other hereunder except as set forth in Sections 3, 4, 9, 11 and 12 hereof.

(b) If any of the conditions specified in Section 10 hereof shall not have been fulfilled when and as required by this Agreement, or by the Closing Time, or waived in writing by the Agent, this Agreement and all of the Agent’s obligations hereunder may be canceled by the Agent by notifying the Bank of such cancellation in writing at any time at or prior to the Closing Time, and any such cancellation shall be without liability of any party to any other party except as otherwise provided in Sections 3, 4, 9, 11 and 12 hereof.

(c) If Agent elects to terminate this Agreement as provided in this Section, the HVB Parties shall be notified by the Agent as provided in Section 15 hereof.

(d) If this Agreement is terminated in accordance with the provisions of this Agreement, the Agent shall retain non-refundable retainer fee earned and paid to it pursuant to Section 4 and the HVB Parties shall reimburse the Agent for its reasonable out-of-pocket expenses pursuant to Section 9.

Section 15. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of

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telecommunication. Notices to the Agent shall be directed to Griffin Financial Group LLC, 607 Washington Street, Reading, Pennsylvania 19603, Attention: Mark R. McCollom, Managing Director (with a copy to Stevens & Lee, P.C., 111 North 6^th Street, Reading, Pennsylvania 19601, Attention: Sunjeet S. Gill, Esq.); notices to the HVB Parties shall be directed to HV Bancorp, Inc., 3501 Masons Mill Road, Suite 401, Huntingdon Valley, Pennsylvania 19006, Attention: Travis J. Thompson, Esq., President and Chief Executive Officer, (with a copy to Jones Walker LLP, 499 South Capital Street, S.W., Suite 600, Washington, DC 20003-4013 Attention: Edward B. Crosland, Jr., Esq.).

Section 16. Parties. This Agreement shall inure to the benefit of and be binding upon the Agent and the HVB Parties, and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons, officers, directors, agents and employees referred to in Section 11 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provisions herein contained. It is understood and agreed that this Agreement is the exclusive agreement among the parties, supersedes any prior Agreement among the parties and may not be varied except by a writing signed by all parties, except for Exhibit “A” to the Letter Agreement, which is not hereby superseded.

Section 17. Partial Invalidity. In the event that any term, provision or covenant herein or the application thereof to any circumstance or situation shall be invalid or unenforceable, in whole or in part, the remainder hereof and the application of said term, provision or covenant to any other circumstance or situation shall not be affected thereby, and each term, provision or covenant herein shall be valid and enforceable to the full extent permitted by law.

Section 18. Construction. This Agreement shall be construed in accordance with the laws of the Commonwealth of Pennsylvania.

[SIGNATURE PAGE FOLLOWS]

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If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Agent a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Agent on the one hand, and the Company and the Bank on the other in accordance with its terms.

Very truly yours,
HVB BANCORP, INC.
By:
	Travis J. Thompson, Esq.
	President and Chief Executive Officer
HUNTINGDON VALLEY BANK
By:
	Travis J. Thompson, Esq.
	President and Chief Executive Officer
The foregoing Agency Agreement is hereby confirmed and accepted as of the date first set forth above.

GRIFFIN FINANCIAL GROUP LLC

By:

Name:

Title:

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EXHIBIT A

LETTER AGREEMENT

EXHIBIT B

ASSISTING BROKERS AGREEMENT

                    , 201  

Griffin Financial Group LLC

607 Washington Street

Reading, PA 19603

Gentlemen:

(1) General. We understand that Griffin Financial Group LLC (“Griffin”) is entering into this Agreement with us and other firms who may be offered the right to purchase as principal a portion of securities being distributed to the public. The terms and conditions of this Agreement shall be applicable to any public offering of securities (“Securities”) pursuant to a registration statement filed under the Securities Act of 1933 (the “Securities Act”) or exempt from registration thereunder (other than a public offering of Securities effected wholly outside the United States of America), wherein Griffin (acting for its own account or for the account of any underwriting or similar group or syndicate) is responsible for managing or otherwise implementing the sale of the Securities to selected dealers (“Selected Dealers”) and has informed us that such terms and conditions shall be applicable. Any such offering of Securities to us as a Selected Dealer is hereinafter called an “Offering.” In the case of any Offering in which you are acting for the account of any underwriting or similar group or syndicate (“Underwriters”), the terms and conditions of this Agreement shall be for the benefit of, and binding upon, such Underwriters, including, in the case of any Offering in which you are acting with others as representatives of Underwriters, such other representatives. The term “preliminary prospectus” means any preliminary prospectus relating to an Offering of Securities or any preliminary prospectus supplement together with a prospectus relating to an Offering of Securities; the term “Prospectus” means the prospectus, together with the final prospectus supplement, if any, relating to an Offering of Securities, filed pursuant to Rule 424(b) or Rule 424(c) under the Securities Act or any successor or similar rules.

This Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof and supersedes any prior oral or written agreements or understanding between the parties hereto or their predecessors with respect to the subject matter hereof.

(2) Conditions of Offering, Acceptance and Purchase. Any Offering will be subject to delivery of the Securities and their acceptance by you and any other Underwriters, may be subject to the approval of all legal matters by counsel and the satisfaction of other conditions, and may be made on the basis of reservation of Securities or an allotment against subscription. You will advise us by facsimile, e-mail, or other form of written communication (“Written Communication”) of the particular method and supplementary terms and conditions (including, without limitation, the information as to prices and offering date referred to in Section 3(c)) of any Offering in which we are invited to participate. To the extent such supplementary terms and conditions are inconsistent with any provision herein, such terms and conditions shall supersede any such provision. Unless otherwise indicated in any such Written Communication, acceptances and other communications by us with respect to any Offering should be sent to Griffin. You may close the subscription books at any time in your sole discretion without notice, and you reserve the right to reject any acceptance in whole or in part. Payment for Securities purchased by us is to be made at such office as you may designate, at the public offering price, or, if you shall so advise us, at such price less the concession to dealers or at the price set forth or indicated in a Written Communication, on such date as you shall determine, on one day’s prior notice to us, by wire transfer to a Griffin account, against delivery of certificates or other forms evidencing such Securities. If payment is made for Securities purchased by us at the public offering price, the concession to which we shall be entitled will be paid to us upon termination of the provisions of Section 3(c) with respect to such Securities.

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Unless we promptly give you written instructions otherwise, if transactions in the Securities may be settled through the facilities of The Depository Trust Company, delivery of Securities purchased by us will be made through such facilities if we are a member, or if we are not a member, settlement may be made through our ordinary correspondent who is a member.

(3) Representations, Warranties, and Agreements.

(a) Registered Offering. In the case of any Offering of Securities that are registered under the Securities Act (“Registered Offering”), you shall provide us with such number of copies of each preliminary prospectus, the Prospectus and any supplement thereto relating to each Registered Offering as we may reasonably request for the purposes contemplated by the Securities Act and the Securities Exchange Act of 1934 (the “Exchange Act”) and the applicable Rules and regulations of the Securities and Exchange Commission thereunder. We represent that we are familiar with Rule 15c2-8 under the Exchange Act relating to the distribution of preliminary and final prospectuses and agree that we will comply therewith. We agree to keep an accurate record of our distribution (including dates, number of copies, and persons to whom sent) of copies of the Prospectus or any preliminary prospectus (or any amendment or supplement to any thereof), and promptly upon request by you, to bring all subsequent changes to the attention of anyone to whom such material shall have been furnished. We agree to furnish to persons who receive a confirmation of sale a copy of the Prospectus filed pursuant to Rule 424(b) or Rule 424(c) under the Securities Act. We agree that in purchasing Securities in a Registered Offering we will rely upon no statements whatsoever, written or oral, other than the statements in the Prospectus delivered to us by you. We will not be authorized by the issuer or other seller of Securities offered pursuant to a Prospectus or by any Underwriter to give any information or to make any representation not contained in the Prospectus in connection with the sale of such Securities. We will not use any free writing prospectus, unless consented to by you or authorized expressly in writing to you by the issuer in the Registered Offering.

(b) Offering Pursuant to Offering Circular. In the case of any Offering of Securities, other than a Registered Offering, which is made pursuant to an offering circular or other document comparable to a prospectus in a Registered Offering, including, without limitation, an Offering of “exempted securities” as defined in Section 3(a)(2) of the Securities Act (an “Exempted Securities Offering”), you shall provide us with such number of copies of each preliminary offering circular, the final offering circular and any supplement thereto relating to each Offering as we may reasonably request. We agree that we will comply with the applicable federal and state laws, and the applicable rules and regulations of any regulatory body promulgated thereunder, governing the use and distribution of offering circulars by brokers or dealers. We agree that in purchasing Securities pursuant to an offering circular we will rely upon no statements whatsoever, written or oral, other than the statements in the final offering circular delivered to us by you. We will not be authorized by the issuer or other seller of Securities offered pursuant to an offering circular or by any Underwriter to give any information or to make any representation not contained in the offering circular in connection with the sale of such Securities.

(c) Offer and Sale to the Public. With respect to any Offering of Securities, you will inform us by a Written Communication of the public offering price, the selling concession, the reallowance (if any) to dealers, and the time when we may commence selling Securities to the public. After such public offering has commenced, you may change the public offering price, the selling concession, and the reallowance to dealers. With respect to each Offering of Securities, until the provisions of this Section 3(c) shall be terminated pursuant to Section 5, we agree to offer Securities to the public only at the public offering price, except that if a reallowance is in effect, a reallowance from the public offering price not in excess of such reallowance may be allowed as consideration for services rendered in distribution to dealers who are actually engaged in the investment banking or securities business, who execute the written agreement prescribed by Rule 2740 of the Rules of Conduct of the Financial Industry

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Regulatory Authority (“FINRA”) and who are either members in good standing of FINRA or foreign brokers or dealers not eligible for membership in FINRA who represent to us that they will promptly reoffer such Securities at the public offering price and will abide by the conditions with respect to foreign brokers and dealers set forth in Section 3(f) hereof.

(d) Stabilization and Overallotment. You may, with respect to any Offering, be authorized to over-allot in arranging sales to Selected Dealers, to purchase and sell Securities, any other securities of the issuer of the Securities of the same class and series and any other securities of such issuer that you may designate for long or short account, and to stabilize or maintain the market price of the Securities. We agree not to purchase and sell Securities for which an order from a client has not been received without your consent in each instance. We agree to advise you from time to time upon request, prior to the termination of the provisions of Section 3(c) with respect to any Offering, of the amount of Securities purchased by us hereunder remaining unsold and we will, upon your request, sell to you, for the accounts of the Underwriters, such amount of Securities as you may designate, at the public offering price thereof less an amount to be determined by you not in excess of the concession to dealers. In the event that prior to the later of (i) the termination of the provisions of Section 3(c) with respect to any Offering, or (ii) the covering by you of any short position created by you in connection with such Offering for your account or the account of one or more Underwriters, you purchase or contract to purchase for the account of any of the Underwriters, in the open market or otherwise, any Securities theretofore delivered to us, you reserve the right to withhold the above-mentioned concession to dealers on such Securities if sold to us at the public offering price, or if such concession has been allowed to us through our purchase at a net price, we agree to repay such concession upon your demand, plus in each case any taxes on redelivery, commissions, accrued interest, and dividends paid in connection with such purchase or contract to purchase.

(e) Open Market Transactions. We agree to abide by Regulation M under the Exchange Act and we agree not to bid for, purchase, attempt to purchase, or sell, directly or indirectly, any Securities, any other Reference Securities (as defined in Regulation M) of the issuer, or any other securities of such issuer as you may designate, except as brokers pursuant to unsolicited orders and as otherwise provided in this Agreement. If the Securities are common stock or securities convertible into common stock, we agree not to effect, or attempt to induce others to effect, directly or indirectly, any transactions in or relating to any stock of such issuer, except to the extent permitted by Rule 101 of Regulation M under the Exchange Act.

(f) FINRA. We represent that we are actually engaged in the investment banking or securities business and we are either (i) a member in good standing of FINRA, (ii) if not such a member, a foreign dealer not eligible for membership, or (iii) solely in connection with an Exempted Securities Offering, a bank, as defined in Section 3(a)(6) of the Exchange Act, that does not otherwise fall within provision (i) or (ii) of this sentence (a “Bank”). If we are a member as described in (i), we agree that in making sales of the Securities we will comply with all applicable interpretative materials and Conduct Rules of FINRA, including, without limitation, Conduct Rules 2740 (relating to Selling Concessions, Discounts and Other Allowances) and 2790 (relating to New Issues). If we are a foreign dealer as described in (ii), we agree not to offer or sell any Securities in the United States of America, its territories or its possessions or to persons who are citizens thereof or residents therein (other than through you), and in making sales of Securities outside the United States of America we agree to comply as though we were a member with Conduct Rules 2730 (relating to Securities Taken in Trade), 2740 (relating to Selling Concessions), 2750 (relating to Transactions with Related Persons) and 2790 (relating to New Issues) as though we were such a member and to comply with Conduct Rule 2420 (relating to Dealing with Non-Members) as it applies to a nonmember broker or dealer in a foreign country. In connection with an Exempted Securities Offering, if we are a Bank, we agree to also comply, as though we were a FINRA member, with the provision of Rules 2730, 2740 and 2750 of the Conduct Rules. We further represent,

B-3

by our participating in an Offering, that we have provided to you all documents and other information required to be filed with respect to us, any related person or any person associated with us or any such related person pursuant to the supplementary requirements of FINRA’s interpretation with respect to review of corporate financing as such requirements relate to such Offering.

We further agree that, in connection with any purchase of Securities from you that is not otherwise covered by the terms of this Agreement (whether you are acting as manager, as member of an underwriting syndicate or a selling group or otherwise), if a selling concession, discount or other allowance is granted to us, the preceding paragraph will be applicable.

(g) Relationship among Underwriters and Selected Dealers. You may buy Securities from or sell Securities to any Underwriter or Selected Dealer and, with your consent, the Underwriters (if any) and the Selected Dealers may purchase Securities from and sell Securities to each other at the public offering price less all or any part of the concession. We are not authorized to act as agent for you or any Underwriter or the issuer or other seller of any Securities in offering Securities to the public or otherwise. Nothing contained herein or in any Written Communication from you shall constitute the Selected Dealers partners with you or any Underwriter or with one another. If the Selected Dealers, among themselves or with the Underwriters, should be deemed to constitute a partnership for federal income tax purposes, then we elect to be excluded from the application of Subchapter K, Chapter 1, Subtitle A of the Internal Revenue Code of 1986 and agree not to take any position inconsistent with that election. We authorize you, in your discretion, to execute and file on our behalf such evidence of that election as may be required by the Internal Revenue Service. Neither you nor any Underwriter shall be under any obligation to us except for obligations assumed hereby or in any Written Communication from you in connection with any Offering. In connection with any Offering, we agree to pay our proportionate share of any tax, claim, demand, or liability asserted against us, and the other Selected Dealers or any of them, or against you or the Underwriters, if any, based on any claim that such Selected Dealers or any of them constitute an association, unincorporated business, or other separate entity, including in each case our proportionate share of any expense incurred in defending against any such tax, claim, demand, or liability.

(h) Blue Sky Laws. Upon application to you, you will inform us as to the jurisdictions in which you believe the Securities have been qualified for sale or are exempt under the respective securities or “blue sky” laws of such jurisdictions. We understand and agree that compliance with the securities or “blue sky” laws in each jurisdiction in which we shall offer or sell any of the Securities shall be our sole responsibility and that you assume no responsibility or obligations as to the eligibility of the Securities for sale or our right to sell the Securities in any jurisdiction.

(i) Compliance with Law. We agree that in selling Securities pursuant to any Offering (which agreement shall also be for the benefit of the issuer or other seller of such Securities), we will comply with the applicable provisions of the Securities Act and the Exchange Act, the applicable Rules and regulations of the Securities and Exchange Commission thereunder, the applicable Rules and regulations of FINRA, the applicable Rules and regulations of any securities exchange having jurisdiction over the Offering, and the applicable laws, rules and regulations specified in Section 3(c) hereof. Without limiting the foregoing, (a) we agree that, at all times since we were invited to participate in an Offering of Securities, we have complied with the provisions of Regulation M applicable to such Offering, in each case after giving effect to any applicable exemptions and (b) we represent that our incurrence of obligations hereunder in connection with any Offering of Securities will not result in the violation by us of Rule 15c3-1 under the Exchange Act, if such requirements are applicable to us. You shall have full authority to take such action as you may deem advisable in respect of all matters pertaining to any Offering. Neither you nor any Underwriter shall be under any liability to us, except for lack of good faith and for obligations expressly assumed by you in this Agreement; provided, however, that nothing in this sentence shall be deemed to relieve you from any liability imposed by the Securities Act.

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(j) Best Efforts Offering. If you communicate to us that a particular offering is being made on a best efforts basis, then the terms in this Section 3(j) apply and other inconsistent terms in this Agreement do not apply.

(i) The offering will be a best efforts offering. The offering also will be contingent and involve a closing only after receipt of necessary documentation from the issuer and satisfaction of other conditions, if any, specified in the prospectus or offering circular and the agency or engagement agreement with you and the issuer. The offering is designed to comply with applicable Commission rules, including Rules 15c2-4, 10b-9, and 15c6-1. See FINRA Notice to Members 98-4, 87-61 and 84-7.

(ii) We represent and agree that we shall take necessary steps to comply with Commission Rules 15c2-4, 10b-9 and 15c6-1, including, but not limited to, depositing funds in a complying special account if funds are received before all closing conditions have been met. We also represent that we are aware that those who purchase in this best efforts offering are subject to the investor purchase limitations described in the prospectus or offering circular.

(4) Indemnification. We agree to indemnify and hold harmless Griffin, the issuer of the Securities, each person, if any, who controls (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) Griffin or the issuer of the Securities, and their respective directors, officers and employees from and against any and all losses, liabilities, costs or claims (or actions in respect thereof) (collectively, “Losses”) to which any of them may become subject (including all reasonable costs of investigating, disputing or defending any such claim or action), insofar as such Losses arise out of or are in connection with the breach of any representation, warranty or agreement made by us herein.

If any claim, demand, action or proceeding (including any governmental investigation) shall be brought or alleged against an indemnified party in respect of which indemnity is to be sought against an indemnifying party, the indemnified party shall promptly notify the indemnifying party in writing, and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnified party may designate in such proceeding and shall pay the reasonable fees and expenses of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the reasonable fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to such indemnified party or (iii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is agreed that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate law firm (in addition to local counsel where necessary) for all such indemnified parties. Such firm shall be designated in writing by the indemnified party. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.

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The indemnity agreements contained in this Section and the representations and warranties by us in this Agreement shall remain operative and in full force and effect regardless of: (i) any termination of this Agreement, (ii) any investigation made by an indemnified party or on such party’s behalf or any person controlling an indemnified party or by or on behalf of the indemnifying party, its directors or officers or any person controlling the indemnifying party, and (iii) acceptance of and payment for any Securities.

(5) Termination; Supplements and Amendments. This Agreement may be terminated by either party hereto upon five business days’ written notice to the other party; provided that with respect to any Offering for which a Written Communication was sent and accepted prior to such notice, this Agreement as it applies to such Offering shall remain in full force and effect and shall terminate with respect to such Offering in accordance with the last sentence of this Section. This Agreement may be supplemented or amended by you by written notice thereof to us, and any such supplement or amendment to this Agreement shall be effective with respect to any Offering to which this Agreement applies after the date of such supplement or amendment. Each reference to “this Agreement” herein shall, as appropriate, be to this Agreement as so amended and supplemented. The terms and conditions set forth in Sections 3(c) and (e) with regard to any offering will terminate at the close of business on the thirtieth day after the date of the initial public offering of the Securities to which such Offering relates, but such terms and conditions, upon notice to us, may be terminated by you at any time.

(6) Successors and Assigns. This Agreement shall be binding on, and inure to the benefit of, the parties hereto and other persons specified or indicated in Section 1, and the respective successors and assigns of each of them.

(7) Governing Law. This Agreement and the terms and conditions set forth herein with respect to any Offering together with such supplementary terms and conditions with respect to such Offering as may be contained in any Written Communication from you to us in connection therewith shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania without regard to conflicts of laws principles.

[SIGNATURE PAGE FOLLOWS]

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By signing this Agreement we confirm that our subscription to, or our acceptance of any reservation of, any Securities pursuant to an Offering shall constitute (i) acceptance of and agreement to the terms and conditions of this Agreement (as supplemented and amended pursuant to Section 5) together with and subject to any supplementary terms and conditions contained in any Written Communication from you in connection with such Offering, all of which shall constitute a binding agreement between us and you, individually, or as representative of any Underwriters, (ii) in confirmation that our representations and warranties set forth in Section 3 are true and correct at that time and (iii) confirmation that our agreements set forth in Sections 2 and 3 have been and will be fully performed by us to the extent and at the times required thereby.

Very truly yours,

(Name of Firm)

By:

Confirmed, as of the date first above written.

GRIFFIN FINANCIAL GROUP LLC

By:

Execution Date:

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EXHIBIT C

FORM OF OPINION OF JONES WALKER, LLP

Exhibit C to Agency Agreement

The written opinion, dated as of the Closing Time, of Jones Walker, LLP to the effect that:

(i) The Company is a corporation duly organized and validly existing under the laws of the Commonwealth of Pennsylvania, with corporate power and authority to own its properties and to conduct its business as described in the Prospectus, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business requires such qualification and in which the failure to qualify would have a material adverse effect on the financial condition, earnings, capital, properties or business affairs of the HVB Parties.

(ii) The Bank is a duly organized and validly existing Pennsylvania chartered savings bank with full power and authority to own its properties and to conduct its business as described in the Prospectus and to enter into this Agreement and perform its obligations hereunder; the activities of the Bank as described in the Prospectus are permitted by the rules, regulations and practices of the FDIC.

(iii) The activities of the Bank described in the Prospectus are permitted under Pennsylvania law to a Pennsylvania chartered savings bank. To the best of such counsel’s knowledge, each of the Company and the Bank has obtained all licenses, permits, and other governmental authorizations that are material for the conduct of its business, all such licenses, permits and other governmental authorization are in full force and effect, and the Company and the Bank are complying therewith in all material respects.

(iv) The Bank is a member of the FHLB of Pittsburgh and the Bank is an insured depository institution under the provisions of the Federal Deposit Insurance Act, as amended, and to such counsel’s knowledge no proceedings for the termination or revocation of such insurance are pending or threatened.

(v) The authorized capital stock of the Bank consists of                  shares of common stock, and when issued pursuant to the Plan, such shares will be owned beneficially and of record solely by the Company free and clear of any security interest, mortgage, pledge, lien or encumbrance. All of the shares of the Bank, when issued to the Company, will have been duly authorized, validly issued and fully paid and nonassessable and will be exempt from registration under the Securities Act.

(vi) Except as set forth in the Prospectus, each of the HVB Subsidiaries is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, and each of the HVB Subsidiaries and is duly authorized to conduct its business as described in the Prospectus. The activities of each HVB Subsidiary as described in the Registration Statement and Prospectus are permitted to subsidiaries of a Pennsylvania chartered savings bank by the rules, regulations and practices of the FDIC and the Department of Banking, and, except as set forth in the Prospectus, all of the issued and outstanding capital stock of each HVB Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and, except as disclosed in the Prospectus, is owned by the Bank free and clear of any security interest, mortgage, pledge, lien, or encumbrance.

(vii) Upon consummation of the Offering, (a) the authorized, issued and outstanding capital stock of the Company will be within the range set forth in the Prospectus under the caption “Capitalization,” and no shares of Common Stock have been or will be issued and outstanding prior to the Closing Time; (b) the shares of Common Stock of the Company to be issued in the Offering and the Merger Shares will have been duly and validly authorized for issuance and sale; (c) the shares of Common Stock of the Company to be issued in the Offering, when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan, will be fully paid and nonassessable; (d) the Merger Shares, when issued and delivered by the Company pursuant to

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the Merger Agreement will be validly issued, fully paid and nonassessable; and (e) the issuance of the shares of Common Stock in the Offering and the Merger Shares is not subject to preemptive rights under the charter or bylaws of any of the HVB Parties, or arising or outstanding by operation of law or, to the best knowledge of such counsel, under any contract, indenture, agreement, instrument or other document, except for the subscription rights under the Plan.

(viii) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the HVB Parties; and this Agreement constitutes a valid, legal and binding obligation of each of the HVB Parties, enforceable in accordance with its terms, except to the extent that the provisions of Sections 11 and 12 hereof may be unenforceable as against public policy, and except to the extent that such enforceability may be limited by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of creditors’ rights generally, or the rights of creditors of savings institutions insured by the FDIC (including the laws relating to the rights of the contracting parties to equitable remedies).

(ix) The Plan has been duly adopted by the Board of Directors of the Bank and the Company in the manner required by the Conversion Regulations.

(x) The FDIC Conversion Notice has been approved by the FDIC, the Pennsylvania Conversion Application has been approved by the Department of Banking, the Holding Company Application has been approved by the FRB and the Prospectus has been authorized for use by the FDIC and the Department of Banking; subject to the satisfaction of any conditions set forth in such FDIC, Department of Banking or FRB approvals and clearance under applicable state securities laws, no further approval, registration, authorization, consent or other order of any federal or state regulatory agency, public board or body is required in connection with the execution and delivery of this Agreement, the offer, sale and issuance of the Shares and the consummation of the Offering.

(xi) The Registration Statement has become effective under the Securities Act, and no stop order suspending the effectiveness of the Registration Statement has been issued, and, to such counsel’s knowledge, no proceedings for that purpose have been instituted or threatened.

(xii) The Prospectus has been declared effective by the FDIC and the Department of Banking and no stop order suspending the effectiveness of the Prospectus has been issued by either the FDIC or the Department of Banking and, to such counsel’s knowledge, no proceedings for such purpose have been instituted or threatened by either the FDIC or the Department of Banking.

(xiii) The material tax consequences of the Offering are set forth in the Prospectus under the caption “The Conversion and Stock Offering—Material Income Tax Consequences.” The information in the Prospectus under the caption “The Conversion and Stock Offering—Material Income Tax Consequences” has been reviewed by such counsel and fairly describes such opinion rendered by such counsel to the HVB Parties with respect to such matters.

(xiv) The terms and provisions of the shares of Common Stock conform to the description thereof contained in the Registration Statement and the Prospectus, and the forms of certificates proposed to be used to evidence the shares of Common Stock are in due and proper form.

(xv) At the time the FDIC Conversion Notice was approved, the FDIC Conversion Notice (as amended or supplemented), including the Prospectus contained therein, complied as to form in all material respects with all applicable laws, rules and regulations and decisions and orders of the FDIC, except as modified or waived by the FDIC (other than the financial statements, notes to financial statements, financial tables and other financial and statistical data included therein and the appraisal

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valuation as to which counsel need express no opinion). To such counsel’s knowledge, no person has sought to obtain regulatory or judicial review of the final action of the FDIC approving the FDIC Conversion Notice.

(xvi) At the time the Pennsylvania Conversion Application was approved, the Pennsylvania Conversion Application (as amended or supplemented), including the Prospectus contained therein, complied as to form in all material respects with all applicable laws, rules and regulations and decisions and orders of the Department of Banking, except as modified or waived by the Department of Banking (other than the financial statements, notes to financial statements, financial tables and other financial and statistical data included therein and the appraisal valuation as to which counsel need express no opinion). To such counsel’s knowledge, no person has sought to obtain regulatory or judicial review of the final action of the Department of Banking approving the Pennsylvania Conversion Application.

(xvii) At the time the Holding Company Application was approved, the Holding Company Application (as amended or supplemented) including the Prospectus contained therein, complied as to form in all material respects with all applicable laws, rules and regulations and decisions and orders of the FRB, except as modified or waived by the FRB (other than the financial statements, notes to financial statements, financial tables and other financial and statistical data included therein and the appraisal valuation as to which counsel need express no opinion). To such counsel’s knowledge, no person has sought to obtain regulatory or judicial review of the final action of the FRB approving the Holding Company Application.

(xviii) At the time the Pennsylvania Merger Application was approved, the Pennsylvania Merger Application (as amended or supplemented) complied as to form in all material respects with the applicable laws, rules and regulations and decisions and orders of the Department of Banking, except as modified or waived by the Department of Banking. To such counsel’s knowledge, no person has sought to obtain regulatory or judicial review of the final action of the Department of Banking approving the Pennsylvania Merger Application.

(xix) At the time the FDIC BMA Application was approved, the FDIC BMA Application (as amended or supplemented) complied as to form in all material respects with the requirements of the applicable laws, rules and regulations and decisions and orders of the FDIC, except as modified or waived by the FDIC. To such counsel’s knowledge, no person has sought to obtain regulatory or judicial review of the final action of the FDIC approving the FDIC BMA Application.

(xx) At the time the FRB Merger Notice was approved, the FRB Merger Notice (as amended or supplemented) complied as to form in all material respects with the requirements of the applicable laws, rules and regulations and decisions and orders of the FRB, except as modified or waived by the FRB. To such counsel’s knowledge, no person has sought to obtain regulatory or judicial review of the final action of the FRB approving the FRB Merger Notice.

(xxi) At the time that the Registration Statement became effective the Registration Statement, including the Prospectus contained therein (as amended or supplemented) (other than the financial statements, notes to financial statements, financial tables or other financial and statistical data included therein or omitted therefrom and the appraisal valuation as to which counsel need express no opinion), complied as to form in all material respects with the requirements of the Securities Act and the rules and regulations promulgated thereunder.

(xxii) To such counsel’s knowledge, there are no legal or governmental proceedings pending, or threatened (i) asserting the invalidity of this Agreement or (ii) seeking to prevent the Offering.

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(xxiii) The information in the Prospectus under the captions “Our Dividend Policy,” “Regulation and Supervision,” “Federal and State Taxation,” “The Acquisition of Victory Bancorp,” “Restrictions on the Acquisition of HVB Bancorp and Huntingdon Valley Bank,” “Description of HVB Bancorp Capital Stock,” and “The Conversion and Stock Offering,” to the extent that it constitutes matters of law, summaries of legal matters, documents or proceedings, or legal conclusions, has been reviewed by such counsel and is accurate in all material respects (except as to the financial statements and other financial data included therein as to which such counsel need express no opinion).

(xxiv) None of the HVB Parties are required to be registered as an “investment company” as such term is defined in the Investment Company Act of 1940.

(xxv) None of the HVB Parties or the Victory Parties is currently in violation of its charter or its bylaws or, to such counsel’s knowledge, any material obligation, agreement, covenant or condition contained in any material contract, indenture, mortgage, loan agreement, note, lease or other instrument filed as an exhibit to, or incorporated by reference in, the Registration Statement, which violation would have a material adverse effect on the financial condition of the HVB Parties considered as one enterprise or the Victory Parties considered as one enterprise, or on the earnings, capital, properties or business affairs of the HVB Parties considered as one enterprise or the Victory Parties considered as one enterprise. In addition, the execution and delivery of and performance under this Agreement by the HVB Parties, the incurrence of the obligations set forth herein and the consummation of the transactions contemplated herein will not result in any material violation of the provisions of the charter or the bylaws of any of the HVB Parties or any material violation of any applicable law, act, regulation, or to such counsel’s knowledge, order or court order, writ, injunction or decree.

(xxvi) To such counsel’s knowledge, the Company and the Bank have conducted the Offering in accordance with the applicable regulations of the FDIC and Department of Banking, the Plan and the letters dated                      and                      approving the Reorganization Applications (which letters are the only such letters received by the Company and the Bank relating to the approval of the Reorganization Applications), and have satisfied all conditions precedent to the issuance of the Common Stock and the Merger Shares imposed upon them by the FDIC and the Department of Banking.

(xxvii) The Company and the Bank have the power and authority to consummate the transactions contemplated by the Merger Agreement.

(xxviii) The Merger Agreement has been duly authorized and approved by the Board of Directors of each of the Company and the Bank, and the Merger Agreement and the transactions contemplated thereby have been approved by the requisite vote of the Company and the Bank’s shareholders or members, as applicable, and duly authorized, executed and delivered by the Company and the Bank, and the Merger Agreement constitutes the valid and binding obligation of the Company and the Bank, enforceable in accordance with its terms subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity, whether applied in a court of law or a court of equity.

(xxix) All acts, required to be taken by or on the part of the Company and the Bank, including the approval of the Merger Agreement by the shareholders of the Company and the necessary approvals, consents, authorizations or notification required to be taken to consummate the transactions contemplated by the Merger Agreement, have been properly taken or obtained; neither the execution and delivery of the Merger Agreement nor the consummation of the transactions contemplated thereby, with or without the giving of notice or the lapse of time, or both, will (i) violate any provision of the charter or bylaws of the Company and the Bank; or (ii) to the actual knowledge of such counsel, except as specifically contemplated by the Merger Agreement, violate, conflict with, result in the material breach or termination

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of, constitute a material default under, accelerate the performance required by, or result in the creation of any material lien, charge or encumbrance upon any of the properties or assets of the Company and the Bank pursuant to any indenture, mortgage, deed of trust, or other agreement or instrument to which the Company and the Bank are a party or by which it or any of their properties or assets may be bound, or violate any statute, rule or regulation applicable to the Company and the Bank, which would have a Material Adverse Effect (as defined in Article      of the Merger Agreement) on the Company and the Bank; no consent, approval, authorization, order, registration or qualification of or with any court, regulatory authority or other governmental body, is required for the consummation by the Company and the Bank of the transactions contemplated by the Merger Agreement, other than those that have been obtained.

(xxx) To such counsel’s actual knowledge, there are no actions, suits, proceedings or investigations of any nature pending or threatened that challenge the validity or legality of the transactions contemplated by the Merger Agreement which seek or threaten to restrain, enjoin or prohibit or to obtain substantial damages in connection with the consummation of such transactions.

(xxxi) To such counsel’s actual knowledge, there is no legal impediment to the continued operation by the Company and the Bank of the properties and business of Victory Bancorp or Victory Bank in the ordinary course after the consummation of the transactions contemplated by the Merger Agreement.

(xxxii) All conditions set forth in Articles          and          of the Merger Agreement that relate to the Company and the Bank have been satisfied, all statutory waiting periods with respect to all regulatory and governmental approvals of the Merger received by the Company and the Bank have expired and, to such counsel’s actual knowledge, there are no facts or circumstances which would legally preclude the Company and the Bank from consummating the Merger pursuant to the Merger Agreement.

The opinion may be limited to matters governed by the laws of the United States and the Commonwealth of Pennsylvania. In rendering such opinion regarding Pennsylvania law, such counsel may rely on local counsel reasonably acceptable to Agent and its counsel. In addition, in rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the United States, to the extent such counsel deems proper and specified in such opinion, upon the opinion of other counsel of good standing, as long as such other opinion indicates that Agent may rely on the opinion, and (B) as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the HVB Parties and public officials, provided copies of any such opinion(s) or certificates of public officials are delivered to Agent together with the opinion to be rendered hereunder by special counsel to the HVB Parties. The opinion of such counsel for the HVB Parties shall state that it has no reason to believe that Agent is not justified in relying thereon.

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EXHIBIT D

FORM OF OPINION OF KILPATRICK TOWNSEND & STOCKTON, LLP

Exhibit D to Agency Agreement

The favorable opinion, dated as of the Closing Time, of Kilpatrick Townsend & Stockton, LLP, counsel for the Victory Parties, to the effect that:

(i) Victory Bancorp is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania, and Victory Bank is a Pennsylvania chartered commercial bank duly organized and in existence under the laws of the Commonwealth of Pennsylvania.

(ii) Victory Bancorp and Victory Bank have the power and authority to carry on their business as described in the Prospectus and to consummate the transactions contemplated by the Merger Agreement.

(iii) The Merger Agreement has been duly authorized and approved by the Board of Directors of each of Victory Bancorp and Victory Bank, and the Merger Agreement and the transactions contemplated thereby have been approved by the requisite vote of Victory Bancorp’s shareholders and duly authorized, executed and delivered by Victory Bancorp, and the Merger Agreement constitutes the valid and binding obligation of Victory Bancorp and Victory Bank, enforceable in accordance with its terms subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity, whether applied in a court of law or a court of equity.

(iv) All acts, required to be taken by or on the part of Victory Bancorp and Victory Bank, including the approval of the Merger Agreement by the shareholders of Victory Bancorp, and the necessary approvals, consents, authorizations or notification required to be taken to consummate the transactions contemplated by the Merger Agreement, have been properly taken or obtained; neither the execution and delivery of the Merger Agreement nor the consummation of the transactions contemplated thereby, with or without the giving of notice or the lapse of time, or both, will (i) violate any provision of the certificate of incorporation or bylaws of Victory Bancorp or Victory Bank; or (ii) to the knowledge of such counsel, except as specifically contemplated by the Merger Agreement, violate, conflict with, result in the material breach or termination of, constitute a material default under, accelerate the performance required by, or result in the creation of any material lien, charge or encumbrance upon any of the properties or assets of Victory Bancorp or Victory Bank pursuant to any indenture, mortgage, deed of trust, or other agreement or instrument to which Victory Bancorp or Victory Bank are a party or by which it or any of their properties or assets may be bound, or violate any statute, Rule or regulation applicable to Victory Bancorp or Victory Bank, which would have a Material Adverse Effect (as defined in Article I of the Merger Agreement) on Victory Bancorp; no consent, approval, authorization, order, registration or qualification of or with any court, regulatory authority or other governmental body, is required for the consummation by Victory Bancorp or Victory Bank of the transactions contemplated by the Merger Agreement other than those that have been obtained.

(v) To such counsel’s knowledge, there are no actions, suits, proceedings or investigations of any nature pending or threatened that challenge the validity or legality of the transactions contemplated by the Merger Agreement which seek or threaten to restrain, enjoin or prohibit or to obtain substantial damages in connection with the consummation of such transactions.

(vi) To such counsel’s knowledge, there is no legal impediment to the continued operation of the properties and business of Victory Bancorp or Victory Bank in the ordinary course after the consummation of the transactions contemplated by the Merger Agreement.

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(vii) All conditions set forth in Sections          and          of the Merger Agreement that relate to Victory Bancorp or Victory Bank have been satisfied, all statutory waiting periods with respect to all regulatory and governmental approvals of the Merger received by Victory Bancorp and Victory Bank have expired and, to such counsel’s knowledge, there are no facts or circumstances which would legally preclude Victory Bancorp from immediately consummating the Merger pursuant to the Merger Agreement.

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EXHIBIT E

FORM OF OPINION OF STEVENS & LEE, P.C.

Exhibit E to Agency Agreement

The favorable opinion, dated as of the Closing Time, of Stevens & Lee, P.C., counsel for the Agent, to the effect that:

(i) The Company is validly existing under the laws of the Commonwealth of Pennsylvania.

(ii) The Shares have been duly and validly authorized for issuance, and, when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan, will be fully paid and nonassessable.

(iii) The Agreement has been duly authorized, executed and delivered by the Company.

(iv) The Registration Statement is effective under the Securities Act, as amended, and, to such counsel’s knowledge, no stop order suspending effectiveness has been issued under the Securities Act and no proceedings therefor have been initiated or threatened by the Commission.

(v) The Registration Statement and the Prospectus comply as to form in all material respects with the requirements of the Securities Act and the applicable rules and regulations thereunder (except that we express no opinion as to the financial statements, notes to the financial statements, appraisal valuation information, schedules and other financial, tabular and statistical information included therein).

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EX-2.1

Exhibit 2.1

PLAN OF CONVERSION

ADOPTED ON

OCTOBER 16, 2013

APPROVED AND RATIFIED, AS AMENDED AND RESTATED, ON

DECEMBER 12, 2013

BY THE BOARD OF TRUSTEES OF

HUNTINGDON VALLEY BANK

HUNTINGDON VALLEY BANK

PLAN OF CONVERSION

FROM MUTUAL TO STOCK FORM OF ORGANIZATION

TABLE OF CONTENTS

		Page
1	General		1
2.	Definitions		3
3.	Regulatory and Voting Member Approvals		6
4.	Conversion Procedures		7
5.	Stock Offering		8
6.	Stock Articles of Incorporation and Bylaws		15
7.	Holding Company Articles of Incorporation		16
8.	Trustees of the Bank		16
9.	Stock Benefit Plans		16
10.	Contributions to Tax-Qualified Employee Plans		16
11.	Status of Deposit Accounts and Loans Subsequent to Conversion		16
12.	Liquidation Account		16
13.	Restrictions on Acquisition of the Bank		17
14.	Amendment or Termination of the Plan		18
15.	Expenses of the Conversion		18
16.	Tax Matters		18
17.	Extension of Credit for Purchase of Common Stock		18
18.	Registration Under Securities Exchange Act of 1934 and Market Making		18
19.	Conversion Stock Not Insured		18
20.	Interpretation		18
21.	Severability		19

1. General

All capitalized terms have the meanings ascribed to them in Section 2.

This Plan of Conversion provides for the conversion of Huntingdon Valley Bank from a Pennsylvania- chartered mutual savings bank to a Pennsylvania-chartered bank pursuant to the Pennsylvania Banking Code of 1965, as amended, and rules and regulations of the Department and the FDIC. As part of the Conversion, this Plan provides for the concurrent formation of the Holding Company that will own 100% of the common stock of the Bank. The Bank will register the Holding Company with the FRB.

The Board has considered the alternatives available to the Bank with respect to its corporate structure, and has determined that a mutual-to-stock conversion as described in this Plan will be in the best interests of the Bank and the communities in which the Bank operates. Restructuring the Bank into the capital stock form of organization will increase its capital base and enhance the Bank’s ability to expand its franchise and the range of products and services it offers. The Conversion will provide the Bank with greater flexibility to structure and finance the expansion of its operations, including the potential acquisition of other financial institutions. The Conversion will also provide the Bank and the Holding Company with the necessary capital to pay the cash portion of the merger consideration to the Acquiree Corporation’s stockholders pursuant to the Merger Agreement. The stock form of organization will also enable the Bank or the Holding Company to adopt stock-based incentive plans as a means of attracting, retaining and compensating management and other key personnel. The stock holding company form of organization will also offer the Bank greater organizational and operating flexibility, as well as broader investment powers.

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The Plan provides that non-transferable subscription rights to purchase Conversion Stock will be offered first to Eligible Account Holders as of the Eligibility Record Date, then to the Bank’s Tax-Qualified Employee Plans, then to Supplemental Eligible Account Holders as of the Supplemental Eligibility Record Date and then to Other Members in the respective priorities set forth in this Plan. Concurrently with, at any time during, or promptly after the Subscription Offering, and subject to availability after the satisfaction of subscription rights, an opportunity to subscribe may also be offered to the general public in a Community Offering with a preference given to natural persons residing in the Bank’s Local Community. The price of the Conversion Stock will be based upon an independent appraisal of the Bank and the Holding Company and will reflect its estimated pro forma market value, as converted and after consideration of the Merger.

Upon the Conversion, the legal existence of the Bank will not terminate, and the stock Bank will be the successor of the mutual Bank. All property of the mutual Bank, including its right, title and interest in and to all property of whatever kind and nature, whether real, personal, or mixed, and choses in action, and every right, privilege, interest and asset of every conceivable value or benefit then existing or pertaining to the Bank in mutual form, or which would inure to it, immediately by operation of law and without the necessity of any conveyance or transfer and without any further act or deed, will vest in the stock Bank. The stock Bank will have, hold, and enjoy the same in its own right as fully and to the same extent as the same was possessed, held and enjoyed by the mutual Bank. All pending actions and other judicial or administrative proceedings to which the Bank was a party will not be discontinued by reason of the Conversion, but may be prosecuted to final judgment or order in the same manner as if the Conversion had not been made and the stock Bank resulting from the Conversion may continue the actions in its name notwithstanding the Conversion. The Conversion shall not in any manner impair the claims of any creditors of the Bank nor any action or proceeding pending by or against the Bank, and the same may be prosecuted to judgment as if the Conversion had not taken place or the Bank, may be proceeded against or be substituted in any such causes of action in place of the pre-Conversion Bank.

All of the assets deemed to be nonconforming to the requirements, restrictions and limitations of the Pennsylvania Banking Code of 1965, as amended, shall either be in conformance with the law or eliminated from the assets of the Bank within a time period specified by the Department. Nothing in this paragraph shall be deemed to require the divestiture of any assets or cessation of any activity which the Department may consider to be “grandfathered” pursuant to applicable law.

Upon completion of the Conversion, the legal existence of the Bank shall not terminate but the stock Bank shall be a continuation of the entity of the mutual Bank and all property of the mutual Bank, including its right, title and interest in and to all property or whatever kind and nature, whether real, personal, or mixed, and things, and choses in action, and every right, privilege, interest and asset of every conceivable value or benefit then existing or pertaining to it, or which would inure to it, immediately by operation of law and without the necessity of any conveyance or transfer and without any further act or deed shall vest in the stock Bank. The stock Bank shall have, hold, and enjoy the same in its own right as fully and to the same extent as the same was possessed, held and enjoyed by the mutual Bank. The stock Bank at the time and the taking effect of the Conversion shall continue to have and succeed to all the rights, obligations and relations of the mutual Bank. All pending actions and other judicial or administrative proceedings to which the Bank was a party shall not be discontinued by reason of the Conversion, but may be prosecuted to final judgment or order in the same manner as if the Conversion had not been made and the stock Bank resulting from the Conversion may continue the actions in its name notwithstanding the Conversion. Upon effectiveness of the Conversion, each Person having a Deposit Account at the Bank prior to the Conversion will continue to have a Deposit Account, without further payment therefor, in the same amount and subject to the same terms and conditions (except for liquidation rights) as in effect prior to the Conversion. All of the Bank’s insured Deposit Accounts will continue to be insured by the FDIC to the extent provided by applicable law. Upon Conversion, each Person having a Deposit Account at the Bank prior to Conversion will continue to have a Deposit Account, without payment therefor, in the same amount and subject to the same terms and conditions (except for liquidation rights) as in effect prior to the Conversion. After Conversion, the Bank will succeed to all the rights, interests, duties and obligations of the Bank before Conversion. The Bank will continue to be a member of the Federal Home Loan Bank System, and all its insured savings deposits will continue to be insured by the FDIC to the extent provided by applicable law.

This Plan was initially proposed and adopted at a regular meeting of the Board of Trustees of the Bank held on October 16, 2013, and subsequently ratified and approved at a meeting of the Board of Trustees held on December 12, 2013, upon at least 10 days’ notice.

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This Plan must also be approved by the affirmative vote of at least a majority of the eligible votes of Voting Members. Each Voting Member will be entitled to cast one vote for each $100 or fraction thereof of deposits in the Bank on the Voting Record Date, provided that no Voting Member will be entitled to cast more than 1,000 votes. By approving the Plan, the Voting Members will also be approving all steps necessary and incidental to the formation of the Bank (in stock form), formation of the Holding Company and the Merger. The Conversion is also subject to approvals of the Department and the FDIC.

Immediately following completion of the Stock Offering, the Acquiree Corporation will merge with and into the Holding Company or a subsidiary of the Holding Company pursuant to the Merger Agreement. In connection with the Merger, the Holding Company will pay cash and issue stock to Acquiree Corporation’s stockholders, pursuant to the Merger Agreement. Pursuant to the Merger Agreement, the Bank and the Holding Company will expand their boards of directors by up to six members and will offer these newly created board positions to board members of the Acquiree Corporation. The Conversion is not subject to the completion of the Merger, and the Board of Trustees may proceed with the Conversion whether or not the Merger is consummated.

2. Definitions

Acting in Concert: the term “acting in concert” means (i) knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not pursuant to an express agreement; and (ii) a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. A person or company that acts in concert with another person or company (“other party”) shall also be deemed to be acting in concert with any person or company who is also acting in concert with that other party. A Tax-Qualified Employee Plan will not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated.

Acquiree Bank: The Victory Bank, Limerick, Pennsylvania.

Acquiree Corporation: The Victory Bancorp, Inc., Limerick, Pennsylvania.

Applications: The applications to be filed with the Department, the FDIC and the FRB by the Bank and by the Holding Company, in connection with the Conversion and the Merger.

Associate: The term “Associate,” when used to indicate a relationship with any Person, means (i) any corporation (other than the Holding Company, the Bank or a majority-owned subsidiary of the Holding Company) of which such Person is an officer, director or owner of more than 10% of the outstanding voting stock, (ii) any trust of which such Person is a trustee or substantial beneficiary, (iii) the parents, spouse, sisters, brothers, children or anyone married to one of the foregoing persons, and (iv) any partnership in which the person is a general or limited partner; provided, however, that any Tax-Qualified or Non-Tax-Qualified Employee Plan shall not be deemed to be an Associate of any Director or Officer of the Holding Company or the Bank.

Bank: Huntingdon Valley Bank, Huntingdon Valley, Pennsylvania, in its pre-Conversion mutual form or post-Conversion stock form, as indicated by the context in which it is used.

Board: The Board of Trustees of the Bank or the Board of Directors of the Holding Company, the Acquiree Bank or the Acquiree Corporation, as applicable.

Community Offering: The offering to the general public of any unsubscribed shares, which may be effected as provided in Section 5 hereof. The Community Offering may include a Syndicated Community Offering managed by one or more investment banking firms.

Control: The possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities of such Person, the ownership of voting securities of any company that possesses such power, or otherwise.

3

Conversion: The conversion and reorganization of the Bank to stock form pursuant to this Plan, and all steps incident or necessary thereto, including the formation of the Holding Company and the Stock Offering.

Conversion Stock: Shares of common stock that will be issued by the Holding Company as a part of the Conversion, including Merger Shares. Shares of Conversion Stock issued in the Conversion include shares of Conversion Stock issued in the Stock Offering and Merger Shares.

Department: The Department of Banking and Securities for the Commonwealth of Pennsylvania.

Deposit Account: Any deposit maintained at the Bank, including without limitation, savings, time, demand, negotiable orders of withdrawal (NOW), certificates of deposit, money market and passbook accounts, but excluding tax, insurance and other escrow accounts.

Director: A member of the Board of Directors of the Holding Company.

Eligibility Record Date: The close of business on September 30, 2012.

Eligible Account Holder: Any Person holding a Qualifying Deposit in the Bank on the Eligibility Record Date.

Employee: Any individual who is employed by the Bank on a substantially full-time basis.

ESOP: The Employee Stock Ownership Plan to be established by the Bank or the Holding Company.

Estimated Price Range: The range of the minimum and maximum aggregate values of the Conversion Stock determined by the Board of the Bank and the Board of the Holding Company. The Estimated Price Range will be based upon the estimated pro forma market value of the Conversion Stock as determined by the Independent Appraiser prior to the Subscription Offering as updated from time to time thereafter.

Exchange Act: The Securities Exchange Act of 1934, as amended.

FDIC: The Federal Deposit Insurance Corporation.

FRB: The Board of Governors of the Federal Reserve System.

Holding Company: The Pennsylvania or other state corporation which will own all of the outstanding common stock of the Bank upon completion of the Conversion.

Independent Appraiser: An appraiser retained by the Bank to prepare an appraisal of the pro forma market value of the Holding Company and the Bank, as converted and after consideration of the Merger.

Internal Revenue Code: The Internal Revenue Code of 1986, as amended.

Liquidation Account: The interest in the Bank received by Eligible Account Holders and Supplemental Eligible Account Holders in connection with the Conversion, as set forth in Section 12 of this Plan.

Local Community: The Pennsylvania counties of Montgomery, Bucks and Philadelphia.

Market Maker: A dealer (i.e., any Person who engages directly or indirectly as agent, broker or principal in the business of offering, buying, selling, or otherwise dealing or trading in securities issued by another Person) who, with respect to a particular security, (i) regularly publishes bona fide, competitive bid and offer quotations in a recognized inter-dealer quotation system; or (ii) furnishes bona fide competitive bid and offer quotations on request; and (iii) is ready, willing, and able to effect transactions in reasonable quantities at the dealer’s quoted prices with other brokers.

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Member. Any Person or entity that qualifies as a member of the mutual Bank pursuant to its Articles of Incorporation, Bylaws or Plan of Conversion.

Merger. The merger of the Acquiree Corporation with and into the Holding Company or a subsidiary of the Holding Company pursuant to which the Holding Company will issue stock and pay cash to the Acquiree Corporation’s stockholders.

Merger Agreement. The Agreement and Plan of Merger by and among the Holding Company, the Bank, and the Acquiree Corporation, dated as of December 12, 2013.

Merger Shares: Any shares of Conversion Stock issued to the stockholders of the Acquiree Corporation in consideration of the Merger.

Non-Tax-Qualified Employee Plan: Any stock option, bonus stock or restricted stock plan or other employee benefit plan that is not a “Tax-Qualified Employee Plan” and that is maintained by the Bank or the Holding Company for the benefit of Officers, Employees or Directors of the Bank or of the Holding Company, or any Affiliate of any of them.

Officer: An executive officer of the Holding Company or the Bank, including the Chief Executive Officer, President, Executive or Senior Vice Presidents in charge of principal business functions, Secretary, Treasurer and any other person performing similar functions.

Order Form: Any form to be used to purchase Conversion Stock in the Subscription Offering, the Community Offering or in the Syndicated Community Offering.

Other Member: Any Person who is a Member of the Bank pursuant to its Articles of Incorporation and Bylaws as of the Voting Record Date and who is not an Eligible Account Holder or a Supplemental Eligible Account Holder.

Person: An individual, a corporation, a partnership, an association, a joint-stock company, a trust, any unincorporated organization, or a government or political subdivision thereof.

Plan: This Plan of Conversion from Mutual to Stock Form of Organization of the Bank, including any amendment approved as provided in this Plan.

Public Offering: The offering for sale by the Underwriters to the general public of any shares of Conversion Stock not subscribed for in the Subscription Offering or the Community Offering. The Public Offering is an alternative to the Syndicated Community Offering.

Purchase Price: The price per share at which the Conversion Stock will be sold in accordance with the terms hereof. The Purchase Price will be determined by the Boards of Directors of the Bank and the Holding Company and fixed prior to the commencement of the Subscription Offering.

Qualifying Deposit: The aggregate balance of all Deposit Accounts of an Eligible Account Holder as of the Eligibility Record Date or a Supplemental Eligible Account Holder as of the Supplemental Eligibility Record Date, in each case provided such aggregate balance is not less than $50.

Resident and Residence: The terms “resident,” “residence,” “reside,” “resided” or “residing” as used herein with respect to any person means any person who occupied a dwelling within the Bank’s Local Community, has an intent to remain within the Local Community for a period of time, and manifests the genuineness of that intent by establishing an ongoing physical presence within the Local Community together with an indication that such presence within the Local Community is something other than merely transitory in nature. To the extent the Person is a corporation or other business entity, the principal place of business or headquarters must be in the Local Community. To the extent a person is a personal benefit plan, the circumstances of the beneficiary will apply with respect to this definition. In the case of all other benefit plans, the circumstances of the trustee will be examined for purposes of this definition. The Bank may utilize deposit or loan records or such other evidence provided to it to make a determination as to whether a person is a resident. In all cases, however, such a determination will be in the sole discretion of the Holding Company and the Bank.

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SEC: Securities and Exchange Commission.

Special Meeting: The Special Meeting of Voting Members called for the purpose of considering and voting upon the Plan of Conversion.

Stock Offering: The offering and issuance, pursuant to this Plan, of the Conversion Stock in the Subscription Offering, Community Offering, Syndicated Community Offering or Public Offering, as the case may be, excluding Merger Shares.

Subscription Offering: The offering of shares of Conversion Stock for subscription and purchase pursuant to Section 5 of the Plan.

Subscription Rights: Non-transferable, non-negotiable, personal rights of the Bank’s Eligible Account Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account Holders and Voting Members, to subscribe for shares of Conversion Stock in the Subscription Offering.

Supplemental Eligibility Record Date: The close of business on the last day of the calendar quarter preceding approval of the Plan by the Department and the FDIC.

Supplemental Eligible Account Holder: Any person holding a Qualifying Deposit (other than an Officer or Director of the Bank and their Associates) on the Supplemental Eligibility Record Date.

Syndicated Community Offering: The offering of Conversion Stock, following or concurrently with the Community Offering, through a syndicate of broker-dealers.

Tax-Qualified Employee Plans: Any defined benefit plan or defined contribution plan of the Bank or the Holding Company, such as the ESOP, which with its related trust meets the requirements to be “qualified” under Section 401 of the Internal Revenue Code.

Trustee: A member of the Board of Trustees of the Bank.

Underwriters: The investment banking firm or firms agreeing to purchase Conversion Stock in order to offer and sell such Conversion Stock in the Public Offering.

Voting Member: Any Person who at the close of business on the Voting Record Date is entitled to vote as a Member of the Bank pursuant to its Articles of Incorporation and Bylaws.

Voting Record Date: The date fixed by the Board as the date for determining Voting Members of the Bank entitled to notice of and to vote at the Special Meeting, which date shall not be more than 60 nor less than 20 days before the date of the Special Meeting.

3. Regulatory and Voting Member Approvals

The Bank will take all necessary steps to file an Application for Conversion, including the Plan and all requisite materials, with the Department and the FDIC. The Bank will post notice of the filing of the Application for Conversion in each of its offices and will cause to be published, in accordance with applicable regulatory requirements, a notice of its filing of the Application for Conversion with the Department and the FDIC. Copies of the Plan shall be made available for inspection by Members of the Bank at each office of the Bank at which deposits are received.

Following approval by the Department and the FDIC, the Plan will be submitted to a vote of the Voting Members at a Special Meeting called for that purpose.

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Upon approval of the Plan by a majority of the total votes eligible to be cast by the Voting Members, the Bank will take all other necessary steps pursuant to applicable laws and regulations to convert the Bank to stock form and to issue and sell the Conversion Stock in accordance with this Plan.

After all requisite actions, events and approvals provided for by this Plan have taken place or been received and the Bank shall have obtained satisfactory assurances that the proceeds of the sale of the Conversion Stock will be delivered against delivery of certificates for such shares of Conversion Stock, the Conversion shall be effected by the filing of Articles of Conversion and the Articles of Incorporation of the Bank with the Department of State of the Commonwealth of Pennsylvania. The effective date of the Conversion will be the date on which such filing is made with the Department of State and on which the closing of the sale of all shares of Conversion Stock occurs.

Unless the Articles of Conversion have been filed by the close of business on the 120^th calendar day after the date on which the Subscription Offering has expired, this Plan shall be automatically terminated without any action by the Trustees and the Conversion shall not be effected. The 120-day period may be extended with the prior approval of the Department.

The Board of the Bank intends to take all necessary steps to form the Holding Company. The Holding Company will make timely applications for any requisite regulatory approvals, including holding company applications with the Department and the FRB and a Registration Statement on Form S-1 with the SEC.

4. Conversion Procedures

The Conversion Stock will be offered for sale in the Subscription Offering to Eligible Account Holders, the Tax-Qualified Employee Plans, Supplemental Eligible Account Holders and Voting Members in the priorities set forth in Section 5.C of this Plan. The Subscription Offering may be commenced as early as the mailing of the Proxy Statement for the Special Meeting and must be commenced in time to complete the Conversion within the time period specified in Section 3. The Bank may, either concurrently with, at any time during, or promptly after the Subscription Offering, also offer the Conversion Stock to and accept orders from other Persons in a Community Offering with preferences given to natural persons residing in the Local Community; provided that the Bank’s Eligible Account Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account Holders and Other Members shall have the priority rights to subscribe for Conversion Stock set forth in Section 5 of this Plan. The Holding Company and the Bank may delay commencing the Subscription Offering in the event there exists unforeseen material adverse market or financial conditions. If the Subscription Offering commences prior to the Special Meeting, subscriptions will be accepted subject to the approval of the Plan at the Special Meeting.

The period for the Subscription Offering will be not less than 20 days nor more than 45 days and the period for the Community Offering will be not more than 45 days, unless extended by the Bank. If, upon completion of the Subscription Offering and any Community Offering, any shares of Conversion Stock remain available for sale, such shares may, if feasible, be offered for sale in a Syndicated Community Offering or sold to the Underwriters for resale to the general public in the Public Offering. If for any reason a Syndicated Community Offering or Public Offering of all shares not sold in the Subscription Offering and Community Offering cannot be effected, the Holding Company and the Bank will use their best efforts to obtain other purchasers, subject to regulatory approval. Completion of the sale of all shares of Conversion Stock not sold in the Subscription Offering and Community Offering is required within 45 days after termination of the Subscription Offering, subject to extension of such 45-day period by the Holding Company and the Bank with the approval of the Department and/or the FDIC, if required. The Holding Company and the Bank may jointly seek one or more extensions of such 45-day period if necessary to complete the sale of all shares of Conversion Stock. In connection with such extensions, subscribers and other purchasers will be permitted to increase, decrease or rescind their subscriptions or purchase orders to the extent required by the SEC, the FDIC and/or the Department in approving the extensions. Completion of the sale of all shares of Conversion Stock is required within 24 months after the date of the Special Meeting. The Bank may elect to pay fees on a per share basis to brokers who assist Persons in determining to purchase Conversion Stock in the Community Offering and Syndicated Community Offering.

The Bank will not knowingly lend funds or otherwise extend credit to any Person to purchase shares of the Conversion Stock.

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Upon the issuance of the Conversion Stock, the Holding Company will purchase from the Bank all of the capital stock of the Bank to be issued by the Bank in the Conversion in exchange for at least 50% of the proceeds of the Stock Offering.

5. Stock Offering

A. Total Number of Shares and Purchase Price of Conversion Stock

The total number of shares of Conversion Stock to be issued and sold in the Conversion will be determined jointly by the Board of the Holding Company and the Board of the Bank prior to the commencement of the Subscription Offering, subject to adjustment if necessitated by market or financial conditions prior to consummation of the Conversion. In particular, the total number of shares to be sold may be increased by up to 15% of the number of shares offered in the Subscription and Community Offering if the Estimated Price Range is increased subsequent to the commencement of the Subscription and Community Offering to reflect changes in market and financial conditions, demand for the shares, and regulatory considerations.

All shares of Conversion Stock offered for sale in the Subscription Offering, Community Offering, Syndicated Community Offering or Public Offering will be sold at a uniform price per share referred to in this Plan as the Purchase Price. The aggregate price for which all shares of Conversion Stock will be sold will be based on an independent appraisal of the estimated total pro forma market value of the Holding Company and the Bank. The appraisal will be performed in accordance with regulatory guidelines and will be made by an Independent Appraiser experienced in the area of thrift institution appraisals. The appraisal will include, among other things, an analysis of the historical and pro forma operating results and capital of the Bank and a comparison of the Holding Company, the Bank and the Conversion Stock with comparable thrift institutions and holding companies and their respective outstanding capital stock, and will consider the effect of the Merger.

Prior to the commencement of the Subscription and Community Offerings, an Estimated Price Range will be established, which range will vary within 15% above to 15% below the midpoint of such range. The number of shares of Conversion Stock to be issued and the Purchase Price per share may be increased or decreased by the Bank. In the event that the aggregate Purchase Price of the Conversion Stock to be issued in the Conversion is below the minimum of the Estimated Price Range, or materially above the maximum of the Estimated Price Range, resolicitation of purchasers may be required; provided that up to a 15% increase above the maximum of the Estimated Price Range will not be deemed material so as to require a resolicitation. In the event that the aggregate Purchase Price of the Conversion Stock is below the minimum of the Estimated Price Range or in excess of 15% above the maximum of the Estimated Price Range, and a resolicitation is required, such resolicitation shall be effected in such manner and within such time as the Bank shall establish, with the approval of the FDIC and/or the Department, if required. Based upon the independent appraisal, the Board of Directors of the Holding Company and the Board of Trustees of the Bank will jointly fix the Purchase Price. The total number of shares to be issued and sold by the Holding Company in the Conversion will be determined by dividing the estimated appraised aggregate pro forma market value of the Holding Company and the Bank, based on the independent appraisal, by the Purchase Price. If, following completion of the Subscription Offering and any Community Offering, a Syndicated Community Offering or a Public Offering is effected, the Purchase Price for each share of Conversion Stock in the Syndicated Community Offering or Public Offering will be the same as the Purchase Price in the Subscription and Community Offering. The price paid by the Underwriters for each share of Conversion Stock in the Public Offering will be the Purchase Price less a negotiated underwriting discount.

Notwithstanding the foregoing, no sale of Conversion Stock may be consummated unless, prior to such consummation, the Independent Appraiser confirms to the Bank, the Holding Company and to the Department and the FDIC that, to the best knowledge of the Independent Appraiser, nothing of a material nature has occurred which, taking into account all relevant factors, would cause the Independent Appraiser to conclude that the aggregate value of the Conversion Stock at the Purchase Price is incompatible with its estimate of the aggregate consolidated pro forma market value of the Holding Company and the Bank. If such confirmation is not received, the Bank may cancel the Subscription and Community Offerings and any Syndicated Community Offering or Public Offering, extend the Conversion, establish a new Estimated Price Range or hold a new Stock Offering, or take such other action as the Department and the FDIC may permit.

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B. Purchase by the Holding Company of the Stock of the Bank

Upon the consummation of the sale of all of the Conversion Stock, the Holding Company will purchase from the Bank all of the capital stock of the Bank to be issued by the Bank in the Conversion in exchange for at least 50% of the Conversion proceeds.

The Holding Company may retain up to 50% of the proceeds of the Conversion. The Conversion proceeds will provide economic strength to the Holding Company and the Bank for the future in a highly competitive and regulated environment, and would facilitate expansion through acquisitions, diversification into other related businesses and for other business and investment purposes, including the payment of dividends and future repurchases of Conversion Stock.

C. Subscription Rights

Non-transferable Subscription Rights to purchase shares will be issued without payment therefor to Eligible Account Holders, the Tax-Qualified Employee Plans, Supplemental Eligible Account Holders and Voting Members as set forth below.

1. Preference Category No. 1: Eligible Account Holders

Each Eligible Account Holder will receive non-transferable Subscription Rights to subscribe for shares of Conversion Stock in an amount equal to the greater of the maximum purchase limitations established for the Community Offering, one-tenth of one percent (.10%) of the total number of shares issued in the Stock Offering, or 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be issued in the Stock Offering by a fraction, the numerator of which is the amount of the Qualifying Deposit of the Eligible Account Holder and the denominator is the total amount of Qualifying Deposits of all Eligible Account Holders, in each case as of the Eligibility Record Date. If sufficient shares are not available, shares will be allocated first to permit each subscribing Eligible Account Holder to purchase to the extent possible 100 shares, and thereafter among each subscribing Eligible Account Holder whose order remains unfilled pro rata in the same proportion as his or her Qualifying Deposit bears to the total Qualifying Deposits of all subscribing Eligible Account Holders whose subscriptions remain unsatisfied.

Non-transferable Subscription Rights to purchase Conversion Stock received by Trustees and Officers of the Bank and their Associates, based on their increased deposits in the Bank in the one-year period preceding the Eligibility Record Date, will be subordinated to all other subscriptions involving the exercise of non-transferable Subscription Rights of Eligible Account Holders.

2. Preference Category No. 2: Tax-Qualified Employee Plans

The Tax-Qualified Employee Plans will be given the opportunity to purchase in the aggregate up to 10% of the shares issued in the Conversion. In the event of an oversubscription in the Stock Offering, subscriptions for shares by the Tax-Qualified Employee Plans may be satisfied, in whole or in part, out of authorized but unissued shares of the Holding Company subject to the maximum purchase limitations applicable to such plans as set forth in Section 5.E, or may be satisfied, in whole or in part, through open market purchases by the Tax-Qualified Employee Plans subsequent to the closing of the Stock Offering. If after the satisfaction of subscriptions of Eligible Account Holders, a sufficient number of shares are not available to fill the subscriptions of the Tax-Qualified Employee Plans, the subscriptions by the Tax-Qualified Employee Plans will be filled to the maximum extent possible.

3. Preference Category No. 3: Supplemental Eligible Account Holders

Each Supplemental Eligible Account Holder will receive non-transferable Subscription Rights to subscribe for shares of Conversion Stock in an amount equal to the greater of the maximum purchase limitation established for the Community Offering, one-tenth of one percent (.10%) of the total number of shares issued in the Stock Offering, or 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be issued in the Stock Offering by a

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fraction, the numerator of which is the amount of the qualifying deposit of the Supplemental Eligible Account Holder and the denominator is the total amount of qualifying deposits of all Supplemental Eligible Account Holders, in each case as of the Supplemental Eligibility Record Date.

Subscription Rights received pursuant to this category will be subordinated to all Subscription Rights received by Eligible Account Holders and the Tax-Qualified Employee Plans pursuant to Category Nos. 1 and 2 above.

If sufficient shares are not available in this Category, the shares available will be allocated first to permit each subscribing Supplemental Eligible Account Holder, to the extent possible, to purchase a number of shares sufficient to make his or her total allocation equal to 100 shares, and thereafter among each subscribing Supplemental Eligible Account Holder whose order remains unfilled pro rata in the same proportion as his or her Qualifying Deposit bears to the total Qualifying Deposits of all subscribing Supplemental Eligible Account Holders whose subscriptions remain unsatisfied.

4. Preference Category No. 4: Other Members

To the extent there are sufficient shares remaining after satisfaction of subscriptions by Eligible Account Holders, the Tax-Qualified Employee Plans, and Supplemental Eligible Account Holders, each Other Member, who is not an Eligible Account Holder or Supplemental Eligible Account Holder, shall receive, non-transferable subscription rights to subscribe for shares of Conversion Stock in an amount equal to the greater of the maximum purchase limitation established for the Community Offering , or one-tenth of one percent (.10%) of the total shares issued in the Stock Offering. In the event Other Members subscribe for a number of shares which, when added to the shares subscribed for by Eligible Account Holders, the Tax-Qualified Employee Plans, and Supplemental Eligible Account Holders, is in excess of the total shares offered in the Stock Offering, the subscriptions of Other Members will be allocated among subscribing Other Members so as to permit each subscribing Other Members to purchase a number of shares sufficient to make his or her total allocation equal to the lesser of 100 shares or the number of shares for which such person has subscribed. Thereafter, unallocated shares will be allocated to each subscribing Other Member whose subscription remains unfilled on a pro rata basis based on the size of the order of each subscribing Other Member.

D. Community Offering, Syndicated Offering and Public Offering

1. Any remaining shares of Conversion Stock not sold in the Subscription Offering may be offered for sale to the general public through a Community Offering, with preference as to the purchase of Conversion Stock given first to natural persons residing in the Bank’s Local Community and then to the public at large; provided, however, that the amount of Conversion stock sold in the Community, Syndicated or Public Offerings to stockholders of the Acquiree Corporation shall be limited so that, such shares, when combined with shares issued to stockholders of the Acquiree Corporation in the Merger, shall not exceed 48.5% of the Holding Company’s total outstanding shares following the Conversion and the Merger. The Community Offering, if any, may commence simultaneously with the Subscription Offering, or may commence during or after the commencement of the Subscription Offering, as the Board of Directors of the Holding Company and the Board of Trustees of the Bank so determine. The right to subscribe for shares of Conversion Stock in the Community Offering is subject to the right of the Bank and Holding Company to accept or reject such subscriptions in whole or in part in their sole discretion. Conversion Stock being sold in the Community Offering will be offered and sold in a manner that will achieve the widest distribution of the Conversion Stock. No person may subscribe for or purchase more than 5% of the total shares sold in the Stock Offering, subject to the overall purchase limitations. In the event of an oversubscription in the Community Offering, orders accepted in the Community Offering shall be filled up to a maximum of 2% of the total shares sold in the Stock Offering and thereafter remaining shares shall be allocated to those whose orders remain unfilled on an equal number of shares basis per order until all available shares have been allocated. Further, the Bank may limit total subscriptions under this Section 5.D.1 so as to assure that the number of shares available for a Syndicated or Public Offering may be up to a specified percentage of the number of shares of Conversion Stock. The Community Offering shall be completed within 45 days after the termination of the Subscription Offering, unless such period is extended.

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2. If any Conversion Stock remains unsold after the close of the Subscription and Community Offerings, the Holding Company and the Bank may use the services of a syndicate of registered broker-dealers to sell such unsold shares on a best efforts basis in a Syndicated Community Offering. The syndicate of registered broker-dealers may be managed by one of the syndicate members who will act as agent of the Holding Company and the Bank to assist the Holding Company and the Bank in the sale of the Conversion Stock. Neither the syndicate manager nor any other syndicate member shall have any obligation to take or purchase any of the shares of Conversion Stock in the Syndicated Community Offering. No person may subscribe for or purchase more than 5% of the total shares sold in the Stock Offering, subject to the overall purchase limitations. Any Syndicated Community Offering shall be completed within 45 days after the termination of the Subscription Offering, unless such period is extended.

3. As an alternative to a Syndicated Community Offering, any shares of Conversion Stock not sold in the Subscription Offering or the Community Offering may then be sold to the Underwriters for resale to the general public in the Public Offering. It is expected that the Public Offering would begin as soon as practicable after termination of the Subscription Offering and any Community Offering. No person may subscribe for or purchase more than 5% of the shares sold in the Stock Offering subject to the overall purchase limitation. The Public Offering shall be completed within 45 days after the termination of the Subscription Offering, unless such period is extended as provided in Section 5 hereof. Each share of Conversion Stock will be offered for sale in the Public Offering at the Purchase Price less any underwriting discount as provided in Section 5.A hereof, and set forth in the underwriting agreement between the Holding Company, the Bank and the Underwriters. Such underwriting agreement shall be filed with the Department, the FDIC and the SEC.

4. If for any reason a Syndicated Community Offering or Public Offering of unsubscribed shares of Conversion Stock cannot be effected and any shares remain unsold after the Subscription Offering and any Community Offering, the Board of Directors of the Holding Company and the Board of Trustees of the Bank will seek to make other arrangements for the sale of the remaining shares. Such other arrangements will be subject to the approval of the Department and/or the FDIC, if required, and to compliance with applicable securities laws.

E. Additional Limitations Upon Purchases of Shares of Conversion Stock

The following additional limitations will be imposed on all purchases of Conversion Stock in the Conversion and Stock Offering:

1. The maximum purchase of Conversion Stock in the Stock Offering by any person is 5% of the Conversion Stock. No Person, by himself or herself, or with an Associate or group of Persons Acting in Concert, may purchase more than 5% of the Conversion Stock, except for the ESOP, which may subscribe for up to 8% of the Conversion Stock issued in the Conversion. For purposes of this paragraph, an Associate of a Person does not include a Tax-Qualified or Non-Tax Qualified Employee Plan in which the person has a substantial beneficial interest or serves as a trustee or in a similar fiduciary capacity. Moreover, for purposes of this paragraph, shares held by one or more Tax-Qualified or Non-Tax Qualified Employee Plans attributed to a Person shall not be aggregated with shares purchased directly by or otherwise attributable to that Person.

2. Trustees, Officers and their Associates may not purchase in all categories of the Stock Offering an aggregate of more than 32% of the Conversion Stock issued in the Stock Offering. For purposes of this paragraph, an Associate of a Person does not include any Tax-Qualified Employee Plan. Moreover, any shares attributable to the Officers and Trustees and their Associates, but held by one or more Tax-Qualified Employee Plans shall not be included in calculating the number of shares which may be purchased under the limitation in this paragraph.

3. The minimum number of shares of Conversion Stock that may be purchased by any Person in the Stock Offering is 25 shares, provided sufficient shares are available.

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For purposes of this Section 5, the Trustees, Directors and/or Officers of the Bank and the Holding Company shall not be deemed to be Associates or a group acting in concert solely as a result of their serving in such capacities.

Depending upon market, financial or other conditions, the Board of Trustees of the Bank and the Board of Directors of the Holding Company, with the receipt of any required approvals of the FDIC and/or the Department, may decrease or increase the purchase limitations in this Section 5 of the Plan, provided that the maximum purchase limitations may not be increased except as provided below. If the Bank and the Holding Company increase the maximum purchase limitations, the Bank and the Holding Company are only required to resolicit Persons who subscribed for the maximum purchase amount in the Subscription Offering and may, in their sole discretion, resolicit certain other large subscribers. The maximum purchase limitation may be increased to up to 9.99% of the shares sold in the Stock Offering; provided, however, that orders for Common Stock exceeding 5% of the shares of Conversion Stock sold in the Stock Offering shall not exceed in the aggregate 10% of the total shares of Conversion Stock sold in the Stock Offering.

In the event of an increase in the total number of shares offered in the Conversion due to an increase in the maximum of the Estimated Price Range of up to 15% (the “Adjusted Maximum”), the additional shares will be used in the following order of priority: (1) in the event that there is an oversubscription at the Eligible Account Holder level, to fill unfilled subscriptions of Eligible Account Holders exclusive of the Adjusted Maximum; (2) to fill the subscriptions of Tax-Qualified Employees Plans to up to 10% of the Adjusted Maximum (unless the Tax-Qualified Employees Plans elect to purchase stock subsequent to the Stock Offering in the open market; (3) in the event that there is an oversubscription at the Supplemental Eligible Account Holder level, to fill unfilled subscriptions of Supplemental Eligible Account Holders exclusive of the Adjusted Maximum; (4) in the event that there is an oversubscription at the Other Member level, to fill unfilled subscriptions of Other Members exclusive of the Adjusted Maximum; and (5) to fill unfilled Subscriptions in the Community Offering exclusive of the Adjusted Maximum.

Each Person purchasing Conversion Stock in the Stock Offering shall be deemed to confirm that such purchase does not conflict with the above purchase limitations.

F. Restrictions and Other Characteristics of Conversion Stock Being Sold

1. Transferability of Shares Purchased by Officers, Trustees and Directors. Shares purchased by Trustees, Directors or Officers may not be sold or otherwise disposed of for value for a period of one year from the date of Conversion, except for any disposition of such shares following the death of the original purchaser.

The certificates representing shares of Conversion Stock issued to Trustees, Directors and Officers will bear a legend giving appropriate notice of the one-year holding period restriction. Appropriate instructions will be given to the transfer agent for such stock with respect to the applicable restrictions relating to the transfer of restricted stock. Any shares of common stock of the Holding Company subsequently issued as a stock dividend, stock split, or otherwise, with respect to any such restricted stock, will be subject to the same holding period restrictions for Holding Company or Bank Directors or Officers as may be then applicable to such restricted stock.

2. Purchases After Conversion by Officers, Trustees and Directors. No Trustee, Director or Officer of the Holding Company or the Bank, or Associate of such a Trustee, Director or Officer, shall purchase any outstanding shares of capital stock of the Holding Company, except through a broker or dealer registered with the SEC, for a period of three years following the Conversion without the prior written approval of the FDIC and, if required, from the Department. This restriction does not apply, however, to: (a) negotiated transactions involving more than one percent of the outstanding common stock; (b) the purchase of common stock made pursuant to an employee stock option plan or employee stock purchase plan which meets the requirements of Section 423 of the Internal Revenue Code; or (c) the purchase of common stock pursuant to a non-tax-qualified employee stock benefit plan which may be attributable to individual Officers, Trustees and Directors of the Bank or Holding Company. As used herein, the term “negotiated transaction” means a transaction in which the securities are offered and the terms and arrangements relating to any sale are arrived at through direct communications between the seller

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or any Person acting on its behalf and the purchaser or his or her investment representative. The term “investment representative” means a professional investment advisor acting as agent for the purchaser and independent of the seller and not acting on behalf of the seller in connection with the transaction.

3. Stock Repurchases by the Holding Company. Federal regulations prohibit the Holding Company from repurchasing its capital stock within one year following the Conversion, except that open market stock repurchases of up to 5% of its outstanding capital stock may be permitted if compelling and valid business reasons are established, to the satisfaction of the FDIC and/or the FRB. The Holding Company must establish, to the satisfaction of the regulators, compelling and valid business purposes for any repurchases within one year of the Conversion, and provide notice to the FRB and FDIC. The FRB and FDIC will not object to a repurchase program if (i) the repurchase program does not adversely affect the Bank’s financial condition, (ii) the Holding Company submits sufficient information to evaluate the repurchase program; (iii) the Bank demonstrates extraordinary circumstances and a compelling and valid business purpose for the repurchase program consistent with the Bank’s business plan; and (iii) the repurchase program is not contrary to other applicable regulations. Purchases to fund Tax-Qualified Employee Plans do not count toward this repurchase limitation. Repurchases to fund restricted stock plans that have been approved by stockholders do not count toward the repurchase limitations (but prior written notification to the FDIC and FRB is required).

4. Voting Rights. After Conversion, holders of deposit accounts will not have voting rights in the Bank or the Holding Company. Exclusive voting rights as to the Bank will be vested in the Holding Company, as the sole stockholder of the Bank. Voting rights as to the Holding Company will be held exclusively by its stockholders.

G. Exercise of Subscription Rights; Order Forms

1. If the Subscription Offering occurs concurrently with the solicitation of proxies for the Special Meeting, the subscription prospectus and Order Form may be sent to each Eligible Account Holder, the Tax-Qualified Employee Plans, Supplemental Eligible Account Holder and Voting Member at their last known address as shown on the records of the Bank as of the Voting Record Date. However, the Bank may, and if the Subscription Offering commences after the Special Meeting the Bank will, furnish a subscription prospectus and Order Form only to Eligible Account Holders, the Tax-Qualified Employee Plans, Supplemental Eligible Account Holders and Voting Member who have returned to the Bank by a specified date prior to the commencement of the Subscription Offering a post card or other written communication requesting a subscription prospectus and Order Form. In such event, the Bank will provide a postage-paid post card for this purpose and make appropriate disclosure in its proxy statement for the solicitation of proxies to be voted at the Special Meeting and/or letter sent in lieu of the proxy statement to those Eligible Account Holders, the Tax-Qualified Employee Plans and Supplemental Eligible Account Holders who are not Voting Members on the Voting Record Date.

2. Each Order Form will be preceded or accompanied by a prospectus describing the Holding Company and the Bank and the shares of Conversion Stock being offered for subscription and containing all other information required by the FDIC, the Department, or the SEC or necessary to enable Persons to make informed investment decisions regarding the purchase of Conversion Stock.

3. The Order Forms (or accompanying instructions) used for the Subscription Offering and any Community Offering will contain, among other things, the following:

(i) An explanation of the Subscription Rights granted under the Plan to Eligible Account Holders, the Tax-Qualified Employee Plans, Supplemental Eligible Account Holders and Voting Members;

(ii) A specified expiration date by which Order Forms must be returned to and actually received by the Bank or its representative for purposes of exercising Subscription Rights, which date will be not less than 20 days after the Order Forms are mailed by the Bank;

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(iii) The Purchase Price to be paid for each share subscribed for when the Order Form is returned;

(iv) A statement that 25 shares is the minimum number of shares of Conversion Stock that may be subscribed for under the Plan;

(v) A specifically designated blank space for indicating the number of shares being subscribed for;

(vi) A set of detailed instructions as to how to complete the Order Form including a statement as to the available alternative methods of payment for the shares being subscribed for;

(vii) Specifically designated blank spaces for dating and signing the Order Form;

(viii) An acknowledgment that the subscriber has received the subscription prospectus;

(ix) A statement of the consequences of failing to properly complete and return the Order Form, including a statement that the Subscription Rights will expire on the expiration date specified on the Order Form unless such expiration date is extended by the Holding Company and the Bank, and that the Subscription Rights may be exercised only by delivering the Order Form, properly completed and executed, to the Bank or its representative by the expiration date, together with required payment of the Purchase Price for all shares of Conversion Stock subscribed for;

(x) A statement that the Subscription Rights are non-transferable and that all shares of Conversion Stock subscribed for upon exercise of Subscription Rights must be purchased on behalf of the Person exercising the Subscription Rights for his or her own account; and

(xi) A statement that, after receipt by the Bank or its representative, an order may not be modified, withdrawn or canceled without the consent of the Bank.

H. Method of Payment

Full payment for all shares of Conversion Stock at the Purchase Price per share must accompany all completed Order Forms. Payment may be made by check, bank draft or money order, or if the subscriber has a Deposit Account in the Bank (including a certificate of deposit), the subscriber may authorize the Bank to withdraw from designated types of accounts. Payment may not be made by wire transfer or any other electronic transfer of funds.

If a subscriber authorizes the Bank to withdraw from his or her account, the funds will continue to earn interest, but may not be used by the subscriber (a hold will be placed on the account) until all Conversion Stock has been sold or the Plan is terminated, whichever is earlier. The Bank will allow subscribers to purchase shares by withdrawing funds from certificate accounts without the assessment of early withdrawal penalties with the exception of prepaid interest in the form of promotional gifts. In the case of early withdrawal of only a portion of such account, the certificate evidencing such account shall be canceled if the remaining balance of the account is less than the applicable minimum balance requirement, in which event the remaining balance will earn interest at the passbook rate. This waiver of the early withdrawal penalty is applicable only to withdrawals made in connection with the purchase of Conversion Stock under the Plan. Interest will also be paid, at not less than the then-current passbook rate, on all orders paid by check, bank draft or money order, from the date payment is received until consummation of the Conversion. Payments made by check, bank draft or money order will be placed by the Bank in an escrow account at the Bank, or in our discretion at another insured depository institution, or other account established specifically for this purpose.

In the event of an unfilled amount of any order, the Bank will make an appropriate refund or cancel an appropriate portion of the related withdrawal authorization, after consummation of the Conversion. If for any reason the Conversion is not consummated, purchasers will have refunded to them all payments made (with applicable interest) and all withdrawal authorizations will be canceled in the case of subscription payments authorized from accounts at the Bank.

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If any Tax-Qualified Employee Plans or Non-Tax-Qualified Employee Plans subscribe for shares during the Subscription Offering, such plans will not be required to pay for the shares subscribed for at the time they subscribe, but may pay for such shares of Conversion Stock subscribed for upon consummation of the Conversion. In the event that, after the completion of the Subscription Offering, the number of shares to be issued is increased above the maximum of the appraisal range included in the Prospectus, the Tax-Qualified and Non-Tax Qualified Employee Plans will be entitled to increase their subscriptions by a percentage equal to the percentage increase in the number of shares to be issued above the maximum of the appraisal range, provided that such subscriptions will continue to be subject to applicable purchase limits and stock allocation procedures.

I. Undelivered, Defective or Late Order Forms; Insufficient Payment

The Holding Company and the Bank shall have the absolute right, in their sole discretion, to reject any Order Form, including but not limited to, any Order Forms which (i) are not delivered or are returned by the United States Postal Service; (ii) are not received back by the Bank or its representative, or are received after the termination date specified thereon; (iii) are defectively completed or executed; (iv) are not accompanied by the total required payment for the shares of Conversion Stock subscribed for (including cases in which the subscribers’ Deposit Accounts are insufficient to cover the authorized withdrawal for the required payment); (v) are photocopies or facsimiles of the printed Order Forms mailed to each Person; or (vi) are submitted by or on behalf of a Person whose representations the Holding Company and the Bank believe to be false or who they otherwise believe, either alone or acting in concert with others, is violating, evading or circumventing, or intends to violate, evade or circumvent, the terms and conditions of this Plan. In such event, the Subscription Rights of the Person to whom such rights have been granted will not be honored and will be treated as though such Person failed to return the completed Order Form within the time period specified therein. The Bank may, but will not be required to, waive any irregularity relating to any Order Form or require submission of corrected Order Forms or the remittance of full payment for subscribed shares by such date as the Bank may specify. The interpretation of the Holding Company and the Bank of the terms and conditions of this Plan and of the proper completion of the Order Form will be final, subject to the authority of the FDIC and/or the Department.

J. Transfer of Subscriptions Prohibited

Subscription Rights are nontransferable, and it is a violation of Federal and state law to either transfer or attempt to transfer Subscription Rights. Persons who transfer or attempt to transfer their Subscription Rights may be prosecuted and will risk forfeiture of such Subscription Rights.

K. Members in Non-Qualified States or in Foreign Countries

The Holding Company and the Bank will make reasonable efforts to comply with the securities laws of all states in the United States in which Persons entitled to subscribe for Conversion Stock pursuant to the Plan reside. However, no shares will be offered or sold under the Plan of Conversion to any such Person who (1) resides in a foreign country or (2) resides in a state of the United States in which a small number of Persons otherwise eligible to subscribe for shares under the Plan reside and as to which the Holding Company and the Bank determine that compliance with the securities laws of such state would be impracticable for reasons of cost or otherwise, including, but not limited to, a requirement that the Holding Company or the Bank or any of their Officers, Directors or Employees register, under the securities laws of such state, as a broker, dealer, salesman or agent. No payments will be made in lieu of the granting of Subscription Rights to any such Person.

6. Stock Articles of Incorporation and Bylaws

A. As part of the Conversion, the Bank will take all appropriate steps to amend its Articles of Incorporation to read in the form of a Pennsylvania stock bank charter, as prescribed by the Pennsylvania Banking Code of 1965, as amended.

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B. The Bank will also take appropriate steps to amend its Bylaws to read in the form prescribed by Pennsylvania law for a Pennsylvania commercial bank. The amended Bylaws shall be adopted at the first meeting of the directors of the Bank held after the effective date of the Conversion.

C. The effective date of the adoption of the Bank’s stock Articles of Incorporation and Bylaws will be the effective date of the Conversion specified in Section 3 of this Plan.

7. Holding Company Articles of Incorporation

A copy of the proposed Articles of Incorporation and Bylaws of the Holding Company will be made available from the Bank upon request.

8. Trustees of the Bank

Each Person serving as a member of the Board of Trustees of the Bank at the time of the Conversion will thereupon become a Director of the Bank after the Conversion. Additionally, the Holding Company and the stock Bank will expand their respective Boards to include up to 13 members, and upon consummation of the Merger the Boards will fill these vacancies with directors nominated by the Board of Directors of the Acquiree Corporation.

9. Stock Benefit Plans

In order to provide an incentive for Directors, Officers and Employees of the Holding Company and its subsidiaries (including the Bank), the Board of the Holding Company intends to adopt, subject to shareholder approval, one or more stock-based incentive plans following completion of the Conversion, subject to applicable regulatory requirements. If any such stock-based incentive plan is implemented within one year after completion of the Conversion, the plan may not authorize options in excess of 10% of the shares issued in the Conversion, and the plan may not provide for stock awards in excess of 4% of the shares issued in the Conversion.

10. Contributions to Tax-Qualified Employee Plans

The Bank and the Holding Company may in their discretion make scheduled contributions to any Tax-Qualified Employee Plans, provided that any such contributions which are for the acquisition of Conversion Stock, or the repayment of debt incurred for such an acquisition, do not cause the Bank to fail to meet its regulatory capital requirements.

11. Status of Deposit Accounts and Loans Subsequent to Conversion

Each Deposit Account holder will retain, without payment, a withdrawable Deposit Account or Accounts in the Bank, equal in amount to the withdrawable value of such account holder’s Deposit Account or Accounts prior to the Conversion, as reduced by any authorized payment for Conversion Stock as provided in Section 5.H hereof. All Deposit Accounts will continue to be insured by the FDIC up to the applicable limits of insurance coverage, and will be subject to the same terms and conditions (except as to voting and liquidation rights) as such Deposit Account in the Bank at the time of the Conversion. All loans will retain the same status after Conversion as these loans had prior to Conversion.

12. Liquidation Account

For purposes of granting to Eligible Account Holders and Supplemental Eligible Account Holders who continue to maintain Deposit Accounts at the Bank a priority in the event of a complete liquidation of the Bank, the Bank will, at the time of Conversion, establish a liquidation account in an amount equal to the total equity of the Bank as shown on its latest statement of financial condition contained in the Holding Company’s final prospectus used in connection with the Conversion. The creation and maintenance of the liquidation account will not operate to restrict the use or application of any of the capital accounts of the Bank; provided, however, that such capital accounts will not be voluntarily reduced below the required dollar amount of the liquidation account. Each Eligible Account Holder and Supplemental Eligible Account Holder shall, with respect to the Deposit Account held, have a related inchoate interest in a portion of the liquidation account balance (“subaccount balance”).

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The initial subaccount balance of an Eligible Account Holder or Supplemental Eligible Account Holder will be determined by multiplying the opening balance in the liquidation account by a fraction, the numerator of which is the amount of the Qualifying Deposit of the Eligible Account Holder on the Eligibility Record Date or the Supplemental Eligible Account Holder on the Supplemental Eligibility Record Date and the denominator is the total amount of the Qualifying Deposits of all Eligible Account Holders or Supplemental Eligible Account Holders on such record dates in the Bank. Such initial subaccount balance will not be increased, and it will be subject to downward adjustment as provided below.

If the deposit balance in any Deposit Account of an Eligible Account Holder or Supplemental Eligible Account Holder at the close of business on any annual closing date subsequent to the record date is less than the lesser of (i) the deposit balance in such Deposit Account at the close of business on any other annual closing date subsequent to the Eligibility Record Date or the Supplemental Eligibility Record Date or (ii) the amount of the Qualifying Deposit in such Deposit Account on the Eligibility Record Date or the Supplemental Eligibility Record Date, the subaccount balance will be reduced in an amount proportionate to the reduction in such deposit balance. In the event of a downward adjustment, the subaccount balance will not be subsequently increased, notwithstanding any increase in the deposit balance of the related Deposit Account. If all funds in such Deposit Account are withdrawn, the related subaccount balance will be reduced to zero.

In the event of a complete liquidation of the Bank (and only in such event), each Eligible Account Holder and Supplemental Eligible Account Holder will be entitled to receive a liquidation distribution from the liquidation account in the amount of the then-current adjusted subaccount balances for Deposit Accounts then held before any liquidation distribution may be made to stockholders. No merger, consolidation, bulk purchase of assets with assumptions of Deposit Accounts and other liabilities, or similar transactions with another institution the accounts of which are insured by the FDIC, will be considered to be a complete liquidation. In such transactions, the liquidation account will be assumed by the surviving institution.

13. Restrictions on Acquisition of the Bank

The Articles of Incorporation of the Bank will contain a provision stipulating that no person, for a period of five years following the date of the Conversion, shall directly or indirectly offer to acquire or shall acquire the beneficial ownership of more than 10% of any class of equity security of the Bank. The Articles of Incorporation will also contain a provision stipulating that in no event shall any record owner of any outstanding shares of the Bank’s common stock who beneficially owns in excess of 10% of such outstanding shares be entitled or permitted to any vote in respect to any shares held in excess of 10%. In addition, the Articles of Incorporation of the Bank will provide for staggered terms of the Trustees, noncumulative voting for Trustees, a fair price provision for certain business combinations and certain notice requirements.

For the purposes of this Section 13:

(a) The term “person” includes an individual, a group acting in concert, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization or similar company, a syndicate or any other group formed for the purpose of acquiring, holding or disposing of securities of an FDIC-insured institution;

(b) The term “offer” includes every offer to buy or acquire, solicitation of an offer to sell, tender offer for, or request or invitation for tenders of, a security or interest in a security for value;

(c) The term “acquire” includes every type of acquisition, whether effected by purchase, exchange, operation of law or otherwise; and

(d) The term “security” includes non-transferable subscription rights issued pursuant to a plan of conversion as well as a “security” as defined in 15 U.S.C. § 78c(a)(10).

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14. Amendment or Termination of the Plan

If deemed necessary or desirable, the Plan may be amended at any time prior to submission of the Plan and proxy materials to the Voting Members by a two-thirds vote of the Board of Trustees of the Bank. After submission of the Plan and proxy materials to the Voting Members, the Plan may be amended by a two-thirds vote of the Board of Trustees of the Bank only with the concurrence of the FDIC and/or the Department. Any amendments to the Plan made after approval by the Voting Members with the concurrence of the FDIC and/or the Department will not necessitate further approval by the Voting Members unless otherwise required by the FDIC or the Department. The Board of Trustees of the Bank may terminate this Plan at any time prior to the Special Meeting to vote on this Plan, and at any time thereafter with the concurrence of the FDIC and the Department.

The Plan will terminate if the sale of all shares of Conversion Stock is not completed within 24 months of the date of the Special Meeting. A specific resolution approved by a majority of the Board of Trustees of the Bank is required in order for the Bank to terminate the Plan prior to the end of such 24-month period.

15. Expenses of the Conversion

The Holding Company and the Bank will use their best efforts to assure that expenses of the Conversion are reasonable.

16. Tax Matters

Consummation of the Conversion is expressly conditioned upon prior receipt of either a ruling of the United States Internal Revenue Service or an opinion of tax counsel or other tax advisor with respect to federal taxation, and either a ruling of the Pennsylvania taxation authorities or an opinion of tax counsel or other tax advisor with respect to Pennsylvania taxation, to the effect that the Conversion and the transactions provided for in this Plan will not be taxable to the Holding Company or the Bank.

17. Extension of Credit for Purchase of Common Stock

The Bank may not loan funds or otherwise extend credit to any Person to purchase in the Conversion shares of Conversion Stock.

18. Registration Under the Exchange Act and Market Making

The Holding Company will register its Conversion Stock under the Exchange Act concurrently with or promptly following the Conversion. The Holding Company will not deregister such securities for a period of three years thereafter.

The Holding Company will use its best efforts to encourage and assist two or more Market Makers to establish and maintain a market for its common stock promptly following the Conversion. The Holding Company will also use its best efforts to cause its common stock to be listed on the Nasdaq Stock Market, another national securities exchange or a regional securities exchange.

19. Conversion Stock Not Insured

The Conversion Stock will not be insured by the FDIC or any other federal or state government agency or authority.

20. Interpretation

All interpretations of this Plan and all applications of the provisions of this Plan to particular circumstances by a majority of the Board of the Bank will be final, subject to the authority of the FDIC and the Department.

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21. Severability

If any term, provision, covenant or restriction contained in this Plan is held by a court or a federal or state regulatory agency of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions contained in this Plan will remain in full force and effect, and will in no way be affected, impaired or invalidated.

Dated December 12, 2013.

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EX-2.2

Exhibit 2.2

Execution Version

AGREEMENT AND PLAN OF MERGER

DATED AS OF DECEMBER 12, 2013

BY AND AMONG

HV BANCORP, INC.

HUNTINGDON VALLEY BANK

AND

THE VICTORY BANCORP, INC.

TABLE OF CONTENTS

		Page Nos.
Introductory Statement			1
ARTICLE I - DEFINITIONS			1
ARTICLE II - THE MERGER			8
2.1	The Merger		8
2.2	Closing		8
2.3	Effective Time		8
2.4	Effects of the Merger		8
2.5	Effect on Outstanding Shares of Victory Bancorp Common Stock		8
2.6	Effect on Outstanding Shares of Victory Bancorp Preferred Stock		10
2.7	Exchange Procedures		11
2.8	Effect on Outstanding Shares of HV Bancorp Common Stock		13
2.9	Directors of Surviving Corporation After Effective Time		13
2.10	Articles of Incorporation and Bylaws		13
2.11	Treatment of Stock Options		13
2.12	Treatment of Warrants		13
2.13	Bank Merger		14
2.14	Alternative Structure		14
2.15	Absence of Control		14
2.16	The Conversion		14
ARTICLE III - REPRESENTATIONS AND WARRANTIES			15
3.1	Disclosure Letters; Standard		15
3.2	Representations and Warranties of Victory Bancorp		15
3.3	Representations and Warranties of HV Bancorp and HV Bank		31
ARTICLE IV - CONDUCT PENDING THE MERGER			45
4.1	Forbearances by Victory Bancorp		45
4.2	Forbearances by HV Bancorp and HV Bank		48
ARTICLE V - COVENANTS			52
5.1	Acquisition Proposals		52
5.2	Advice of Changes		53
5.3	Access and Information		53
5.4	Applications; Consents		55
5.5	Antitakeover Provisions		56
5.6	Additional Agreements		56
5.7	Publicity		56
5.8	Stockholder Meeting		56
5.9	Registration of HV Bancorp Common Stock		57

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5.10	Notification of Certain Matters	58
5.11	Employee Benefit Matters	59
5.12	Indemnification	60
5.13	Stockholder Litigation	61
5.14	Board of Directors	62
5.15	Officers	62
5.16	The Conversion	62
5.17	Prohibition on Solicitation of Employees	64
ARTICLE VI - CONDITIONS TO CONSUMMATION		64
6.1	Conditions to Each Party’s Obligations	64
6.2	Conditions to the Obligations of HV Bancorp and HV Bank	66
6.3	Conditions to the Obligations of Victory Bancorp	67
ARTICLE VII - TERMINATION		67
7.1	Termination	67
7.2	Effect of Termination	69
ARTICLE VIII - CERTAIN OTHER MATTERS		69
8.1	Interpretation	69
8.2	Survival	69
8.3	Waiver; Amendment	70
8.4	Counterparts	70
8.5	Governing Law	70
8.6	Expenses	70
8.7	Notices	70
8.8	Entire Agreement; etc.	71
8.9	Successors and Assigns; Assignment	71

EXHIBITS

Exhibit A	Form of Voting Agreement
Exhibit B	Terms of Victory Bancorp Subordinated Debt
Exhibit C	Form of Exchange Agreement
Exhibit D	Plan of Bank Merger
Exhibit E	Directors/Officers of Surviving Corporation/Bank
Exhibit F	Form of Employment Agreement
Exhibit G	Officers with Employment/Change in Control Agreements

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Agreement and Plan of Merger

This is an Agreement and Plan of Merger, dated as of the 12th day of December, 2013 (“Agreement”), by and among HV Bancorp, Inc., a Pennsylvania corporation (“HV Bancorp”) and Huntingdon Valley Bank (“HV Bank”), on the one hand, and The Victory Bancorp, Inc., a Pennsylvania corporation (“Victory Bancorp”).

Introductory Statement

The Board of Directors of each of the parties has determined that this Agreement and the business combination and related transactions contemplated hereby are advisable and in the best interests of the respective parties, as the case may be, and in the best long-term interests of their respective constituencies.

The parties hereto intend that the Merger as defined herein shall qualify as a reorganization under the provisions of Section 368(a) of the IRC as defined herein for federal income tax purposes.

The parties desire to make certain representations, warranties and agreements in connection with the business combination and related transactions provided for herein and to prescribe various conditions to such transactions.

As a condition and inducement to HV Bancorp’s and HV Bank’s willingness to enter into this Agreement, each of the members of the Board of Directors of Victory Bancorp have entered into an agreement dated as of the date hereof in the form of Exhibit A hereto pursuant to which he or she will, among other things, vote his or her shares of Victory Bancorp Capital Stock in favor of this Agreement and the transactions contemplated hereby.

In consideration of their mutual promises and obligations hereunder, the parties hereto adopt and make this Agreement and prescribe the terms and conditions hereof and the manner and basis of carrying it into effect, which shall be as follows:

ARTICLE I

DEFINITIONS

The following terms are defined in this Agreement in the Section indicated:

Defined Term	Location of Definition
Articles of Merger	Section 2.3
Bank Merger	Section 2.12
Cause	Section 5.11(d)
Certificate(s)	Section 2.6(a)
Change of Recommendation	Section 5.8(b)
Closing	Section 2.2
Closing Date	Section 2.2
Common Stock Merger Consideration	Section 2.5(a)

Defined Term	Location of Definition
Continuing Employee	Section 5.11(a)
Conversion Price Per Share	Section 2.15
Disclosure Letter	Section 3.1(a)
Effective Time	Section 2.3
Exchange Agent	Section 2.6(c)
Exchange Ratio	Section 2.5(a)
HV Bancorp	Preamble
HV Bank	Preamble
HV Bank Employee Plans	Section 3.3(r)(i)
HV Bank Pension Plan	Section 3.3(r)(iii)
HV Bank Qualified Plan	Section 3.3(r)(iv)
HV Bank Members Meeting	Section 5.16(a)
Indemnified Party	Section 5.12(a)
Letter of Transmittal	Section 2.6(a)
Merger	Section 2.1
Merger Consideration	Section 2.5(b)
Ownership Limitation	Section 2.5(a)
Preferred Stock Merger Consideration	Section 2.5(b)
Surviving Bank	Section 2.12
Surviving Corporation	Section 2.1
Victory Bancorp	Preamble
Victory Bancorp Employee Plans	Section 3.2(s)(i)
Victory Bancorp Pension Plan	Section 3.2(s)(iii)
Victory Bancorp Proxy Statement	Section 5.8(a)
Victory Bancorp Qualified Plan	Section 3.2(s)(iv)
Victory Bancorp Stock Option	Section 2.10
Victory Bancorp Stock Option Plan	Section 2.10
Victory Bancorp Stockholder Meeting	Section 5.8(a)
Victory Bancorp Warrant	Section 2.11
Victory Bank	Section 2.13

For purposes of this Agreement:

“Acquisition Proposal” means any proposal or offer with respect to any of the following (other than the transactions contemplated hereunder): (i) any merger, consolidation, share exchange, business combination, or other similar transaction involving Victory Bancorp, Victory Bank or HV Bank; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of 25% or more of Victory Bancorp’s or HV Bank’s consolidated assets in a single transaction or series of transactions; (iii) any tender offer or exchange offer for 25% or more of the outstanding shares of Victory Bancorp’s capital stock or the filing of a registration statement under the Securities Act in connection therewith; or (iv) any public announcement of a proposal, plan or intention to do any of the foregoing or any agreement to engage in an any of the foregoing.

“Affiliate” of a person means any person that, directly or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with such person.

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“Agreement” means this Agreement, as amended, modified or restated from time to time in accordance with its terms.

“Applications” means the applications for regulatory approval that are required by the transactions contemplated hereby.

“Appraised Value Range” means the range of the estimated consolidated pro forma market value of HV Bancorp upon consummation of the Conversion and the Merger, as determined by the Independent Valuation.

“Banking Regulator” shall mean any federal or state banking regulator, including but not limited to the FDIC, the PDBS, and the Federal Reserve, which regulates HV Bancorp, HV Bank or Victory Bancorp, or any of their respective holding companies or subsidiaries, as the case may be.

“BHCA” means the Bank Holding Company Act of 1956, as amended.

“Business Day” means any day other than a Saturday, Sunday or Federal holiday.

“Conversion” shall mean the conversion from mutual to stock form of HV Bank, pursuant to the Plan of Conversion adopted by HV Bank.

“Conversion Offering” shall mean the offering, in connection with the Conversion, of shares of HV Bancorp Common Stock in a subscription offering and, if necessary, a community offering and/or a syndicated community offering.

“Conversion Prospectus” shall mean a prospectus issued by HV Bancorp in connection with the Offering, that meets all of the requirements of the Securities Act, applicable state securities laws and banking laws and regulations.

“Conversion Registration Statement” shall mean the registration statement, together with all amendments, filed with the SEC under the Securities Act for the purpose of registering shares of HV Bancorp Common Stock to be offered and issued in connection with the Offering. The Merger Registration Statement and the Conversion Registration Statement may be separate registration statements or may be combined in one registration statement that shall register shares of HV Bancorp Capital Stock to be offered and issued in connection with the Offering and to be offered to holders of Victory Bancorp Capital Stock in connection with the Merger.

“Environmental Law” means any federal, state or local law, statute, ordinance, rule, or regulation relating to (i) the protection, preservation or restoration of the environment (which includes, without limitation, air, water vapor, surface water, groundwater, drinking water supply, soil, surface land, subsurface land, plant and animal life or any other natural resource), or to human health or safety as it relates to Hazardous Materials, or (ii) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of, Hazardous Materials, in each case as amended and as now in

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effect. The term Environmental Law includes, without limitation, the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource Conservation and Recovery Act of 1976, and the Federal Occupational Safety and Health Act of 1970 as it relates to Hazardous Materials, each as amended and as now in effect.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any entity that is considered one employer with Victory Bancorp under Section 4001(b)(1) of ERISA or Section 414 of the IRC.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Offer” means the exchange offer conducted by Victory Bancorp to holders of Series E Preferred Stock offering such holders the option to exchange shares of such Series E Preferred Stock for Victory Bancorp Subordinated Debt.

“Excluded Shares” means shares of Victory Bancorp Capital Stock owned or held, other than in a bona fide fiduciary or agency capacity or in satisfaction of a debt previously contracted, by HV Bank, Victory Bancorp or a Subsidiary of either.

“FDIC” means the Federal Deposit Insurance Corporation.

“Federal Reserve” means the Board of Governors of the Federal Reserve System.

“GAAP” means U.S. generally accepted accounting principles.

“Governmental Entity” means any governmental or regulatory authority, agency, court, commission, or other administrative entity.

“Hazardous Material” means any substance (whether solid, liquid or gas) which is detrimental to human health or safety or to the environment, currently or hereafter listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any Environmental Law, whether by type or by quantity, including any substance containing any such substance as a component. Hazardous Material includes, without limitation, any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste, industrial substance, oil or petroleum, or any derivative or by-product thereof, radon, radioactive material, asbestos, asbestos-containing material, urea formaldehyde foam insulation, lead and polychlorinated biphenyl.

“HV Bancorp Capital Stock” shall mean the HV Bancorp Common Stock and the HV Bancorp Preferred Stock.

“HV Bancorp Common Stock” shall mean the common stock, par value $0.01 per share, of HV Bancorp that will be issued in the Offering and the Merger.

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“HV Bancorp Preferred Stock” shall mean the preferred stock, par value $0.01 per share, of HV Bancorp that will be issued in the Merger in exchange for shares of Series E Preferred Stock.

“HV Bancorp SBLF Preferred Stock” shall mean the preferred stock, par value $0.01 per share of HV Bancorp that will be issued to the Treasury Department in exchange for Series F Preferred Stock.

“HV Subordinated Debt” shall mean the 8.50% Subordinated Notes due 2021 of HV Bancorp that will be issued in the Merger in exchange for Victory Bancorp Subordinated Debt.

“Independent Valuation” shall mean the appraised pro forma market value of the HV Bancorp Common Stock issued in the Conversion, and any updates, as determined by an independent appraiser.

“IRC” means the Internal Revenue Code of 1986, as amended.

“IRS” means the Internal Revenue Service.

“knowledge” means, with respect to Victory Bancorp, HV Bancorp, HV Bank or any Subsidiary, the actual knowledge of the President, the Chief Executive Officer, the Chief Financial Officer, the Chief Lending Officer, the Chief Credit Officer or persons performing comparable functions.

“Lien” means any charge, mortgage, pledge, security interest, claim, lien or encumbrance.

“Loan” means a loan, lease, advance, credit enhancement, guarantee or other extension of credit.

“Loan Property” means any property in which the applicable party (or a subsidiary of it) holds a security interest and, where required by the context, includes the owner or operator of such property, but only with respect to such property.

“Material Adverse Effect” means an effect, circumstance, occurrence or change which is material and adverse to the business, financial condition or results of operations of Victory Bancorp, HV Bancorp or HV Bank, as the context may dictate, and its Subsidiaries taken as a whole or materially prevents, impairs or threatens the ability of either Victory Bancorp, HV Bancorp or HV Bank, as the context may dictate, to perform its obligations under this Agreement or consummate the transactions contemplated by this Agreement; provided, however, that any such effect, circumstance, occurrence or change resulting from any (i) changes in laws, rules or regulations or GAAP or regulatory accounting requirements or interpretations thereof that apply to financial and/or depository institutions and/or their holding companies generally, (ii) changes in economic conditions affecting financial institutions generally, including but not limited to, changes in the general level of market interest rates, (iii) actions and omissions of HV Bancorp, HV Bank or Victory Bancorp required under this Agreement or taken or omitted to be taken with

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the prior written consent, or at the request, of the other, including expenses incurred by the parties in consummating the transactions contemplated by this Agreement, (iv) changes in national or international political or social conditions including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon or within the United States and (v) natural disaster or other force majeure event, shall not be considered in determining if a Material Adverse Effect has occurred except, with respect to clauses (i), (ii), (iv) and (v), unless it uniquely affects either or both of the parties or any of their Subsidiaries.

“Member(s)” shall mean a former or current member of HV Bank that under the Plan of Conversion is given, as indicated by the context, the priority opportunity to purchase HV Bancorp Common Stock in the Conversion Offering or the opportunity to vote on the Plan of Conversion.

“Merger” shall mean the merger of Victory Bancorp with and into HV Bancorp (or a subsidiary thereof) pursuant to the terms hereof.

“Merger Consideration” shall mean the HV Bancorp Capital Stock and cash, if applicable, to be paid by HV Bancorp for each share of Victory Bancorp Common Stock and Series E Preferred Stock, as set forth in Sections 2.5(a), 2.5(b) and 2.6(a).

“Merger Registration Statement” shall mean the registration statement, together with all amendments, filed with the SEC under the Securities Act for the purpose of registering shares of HV Bancorp Capital Stock to be offered to holders of Victory Bancorp Capital Stock in connection with the Merger. The Merger Registration Statement and the Conversion Registration Statement may be separate registration statements or may be combined in one registration statement that shall register shares of HV Bancorp Capital Stock to be offered and sold in connection with the Offering and to be offered to holders of Victory Bancorp Capital Stock in connection with the Merger.

“Offering” shall mean the Conversion Offering.

“Participation Facility” means any facility in which the applicable party (or a Subsidiary of it) participates in the management (including all property held as trustee or in any other fiduciary capacity) and, where required by the context, includes the owner or operator of such property, but only with respect to such property.

“PBCL” shall mean the Pennsylvania Business Corporation Law of 1988.

“PDBS” shall mean the Pennsylvania Department of Banking and Securities.

“person” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization or other entity.

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“Plan of Conversion” shall mean the Plan of Conversion and Reorganization pursuant to which HV Bank will convert from the mutual form of organization to the capital stock form of organization.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Series E Preferred Stock” shall mean the issued and outstanding shares of 7% Series E Noncumulative Convertible Preferred Stock of Victory Bancorp.

“Series F Preferred Stock” shall mean the issued and outstanding shares of Senior Noncumulative Perpetual Preferred Stock, Series F of Victory Bancorp held by the Treasury Department in connection with participation by Victory Bancorp in the Small Business Lending Fund.

“Subsidiary” means a corporation, partnership, joint venture or other entity in which Victory Bancorp, Victory Bank, HV Bancorp or HV Bank, as the case may be, has, directly or indirectly, an equity interest representing 50% or more of any class of the capital stock thereof or other equity interests therein.

“Superior Proposal” means an unsolicited, bona fide written offer made by a third party to consummate an Acquisition Proposal that (i) Victory Bancorp’s or HV Bank’s Board of Directors determines in good faith, after consulting with its outside legal counsel and its financial advisor, would, if consummated, result in a transaction that is more favorable to the stockholders of Victory Bancorp or the constituencies of HV Bank than the transactions contemplated hereby (taking into account all factors relating to such proposed transaction deemed relevant by Victory Bancorp’s or HV Bank’s Board of Directors, including without limitation the amount and form of consideration, the timing of payment, the risk of consummation of the transaction, the financing thereof and all other conditions thereto, (including any adjustments to the terms and conditions of such transactions proposed by Victory Bancorp or HV Bank in response to such Acquisition Proposal)) and (ii) is for 100% of the outstanding shares of Victory Bancorp Common Stock or all or substantially all of the assets of Victory Bancorp or HV Bank.

“Taxes” means all income, franchise, gross receipts, real and personal property, real property transfer and gains, wage and employment taxes.

“Treasury Department” means the United States Department of the Treasury.

“Victory Bancorp Capital Stock” shall mean the Victory Bancorp Common Stock and Victory Bancorp Preferred Stock.

“Victory Bancorp Common Stock” shall mean the common stock, par value $1.00 per share, of Victory Bancorp.

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“Victory Bancorp Preferred Stock” shall mean the Series E Preferred Stock and Series F Preferred Stock, par value $1.00 per share, of Victory Bancorp.

“Victory Bancorp Subordinated Debt” shall mean the 8.50% Subordinated Notes due 2021 of Victory Bancorp that will be issued in the Exchange Offer to holders of Series E Preferred Stock.

“Victory Bancorp Shareholders” shall mean those individuals or entities holding Victory Bancorp Common Stock on the date immediately preceding the Closing Date.

ARTICLE II

THE MERGER

2.1 The Merger. Upon the terms and subject to the conditions set forth in this Agreement, Victory Bancorp will merge with and into HV Bancorp (the “Merger”) at the Effective Time. At the Effective Time, the separate corporate existence of Victory Bancorp shall cease. HV Bancorp shall be the surviving corporation (hereinafter sometimes referred to in such capacity as the “Surviving Corporation”) in the Merger and shall continue to be governed by the PBCL and its name and separate corporate existence, with all of its rights, privileges, immunities, powers and franchises, shall continue unaffected by the Merger.

2.2 Closing. The closing of the Merger (the “Closing”) will take place by the electronic (PDF), facsimile or overnight courier exchange of executed documents or at a location and at a time as agreed to by the parties hereto on the date designated by HV Bancorp within thirty (30) calendar days following satisfaction or waiver (subject to applicable law) of the conditions to Closing set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing), or such later date as the parties may otherwise agree (the “Closing Date”). The Closing of the Merger shall immediately follow the closing of the Offering and completion of the Conversion.

2.3 Effective Time. In connection with the Closing, HV Bancorp and Victory Bancorp shall duly execute and deliver Articles of Merger (the “Articles of Merger”) to the PDBS for filing pursuant to the PBCL. The Merger shall become effective at such time as the Articles of Merger are duly filed with the PDBS or at such later date or time as HV Bancorp and Victory Bancorp agree and specify in the Articles of Merger (the date and time the Merger becomes effective being the “Effective Time”).

2.4 Effects of the Merger. The Merger will have the effects set forth in the PBCL. Without limiting the generality of the foregoing, and subject thereto, from and after the Effective Time, HV Bancorp shall possess all of the properties, rights, privileges, powers and franchises of Victory Bancorp and be subject to all of the debts, liabilities and obligations of Victory Bancorp.

2.5 Effect on Outstanding Shares of Victory Bancorp Common Stock

(a) Except for shares of Victory Bancorp Common Stock as to which appraisal rights have been perfected and not withdrawn or otherwise forfeited under the PBCL

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and except as provided in Section 2.5(b), each share of Victory Bancorp Common Stock issued and outstanding at the Effective Time, other than Excluded Shares, shall become and be converted into the right to receive 0.6794 of a share (the “Exchange Ratio”) of HV Bancorp Common Stock (the “Common Stock Merger Consideration”); provided, however, that in no event shall the number of shares of HV Bancorp Common Stock owned by former Victory Bancorp Shareholders, including any shares purchased in the Conversion Offering by such Victory Bancorp Shareholders, exceed 48.5% of the outstanding shares of HV Bancorp Common Stock at the Closing (the “Ownership Limitation”), unless the FDIC and PDBS determine that Victory Bancorp Shareholders can hold shares of HV Bancorp Common Stock in excess of the Ownership Limitation.

(b) In the event that the aggregate Common Stock Merger Consideration, when added to the aggregate number of shares of HV Bancorp Common Stock to be purchased by Victory Bancorp Shareholders in the Conversion Offering, would result in Victory Bancorp Shareholders owning an amount of HV Bancorp Common Stock in excess of the Ownership Limitation, then HV Bancorp shall adjust the Common Stock Merger Consideration to substitute cash (the “Cash Merger Consideration”) in an amount sufficient to reduce the aggregate ownership of Victory Bancorp Shareholders below the Ownership Limitation, and all Victory Bancorp Shareholders shall receive a mix of Common Stock Merger Consideration and Cash Merger Consideration per share on a pro rata basis. The Cash Merger Consideration shall be an amount in cash, rounded to the nearest cent, determined by multiplying the Conversion Price Per Share by the number of excess shares of HV Bancorp Common Stock which such holder would otherwise be entitled to receive pursuant to Section 2.5(a) and Section 2.5(b). Notwithstanding this subsection, if the FDIC and/or PDBS permit the Ownership Limitation to be increased, then the Common Stock Merger Consideration and Cash Merger Consideration will be adjusted accordingly on a pro rata basis to address the impact of any increased Ownership Limitation permitted by the FDIC and/or PDBS.

(c) In the event HV Bancorp changes the Conversion Price Per Share prior to the Effective Time from $10.00, the Exchange Ratio shall be proportionately and appropriately adjusted.

(d) Notwithstanding any other provision of this Agreement, no fraction of a share of HV Bancorp Common Stock and no certificates or scrip therefor will be issued in the Merger; instead, HV Bancorp shall pay to each holder of Victory Bancorp Common Stock who would otherwise be entitled to a fraction of a share of HV Bancorp Common Stock an amount in cash, rounded to the nearest cent, determined by multiplying the Conversion Price Per Share by the fraction of a share of HV Bancorp Common Stock which such holder would otherwise be entitled to receive pursuant to Section 2.5(a) and Section 2.5(b).

(e) If, between the date of this Agreement and the Effective Time, the outstanding shares of HV Bancorp Common Stock shall have been changed into a different number of shares or into a different class by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, the Exchange Ratio shall be adjusted appropriately to provide the holders of Victory Bancorp Common Stock the same economic effect as contemplated by this Agreement prior to such event.

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(f) As of the Effective Time, each Excluded Share shall be canceled and retired and shall cease to exist, and no exchange or payment shall be made with respect thereto. All shares of HV Bancorp Common Stock that are held by Victory Bancorp, if any, other than shares held in a fiduciary capacity or in satisfaction of a debt previously contracted, shall be canceled and shall constitute authorized but unissued shares.

2.6 Effect on Outstanding Shares of Victory Bancorp Preferred Stock

(a) Prior to the Closing Date, Victory Bancorp shall effect an Exchange Offer to holders of Series E Preferred Stock, to be effective upon the Closing Date, whereby Victory Bancorp will offer each holder of Series E Preferred Stock the right to exchange shares of Series E Preferred Stock for an equal amount of Victory Bancorp Subordinated Debt, the terms of which are set forth on Exhibit B. Any shares of Series E Preferred Stock that are not exchanged for Victory Bancorp Subordinated Debt will be redeemed by Victory Bancorp immediately prior to the Closing Date, to the extent such redemption is permitted by the terms of Series E Preferred Stock and any necessary regulatory approvals, if any, are obtained for such redemption. Each share of Series E Preferred Stock that is not exchanged in the Exchange Offer, redeemed by Victory Bancorp or converted pursuant to its terms into Victory Bancorp Common Stock immediately prior to the Effective Time, shall become and be converted into, as provided in and subject to the limitations set forth in this Agreement, the right to receive one share of HV Bancorp Preferred Stock subject to the same designations, preferences and rights relating to the shares of such Series E Preferred Stock and the qualifications, limitations and restrictions thereof (the “Preferred Stock Merger Consideration”, and together with Common Stock Merger Consideration and the Cash Merger Consideration, the “Merger Consideration”).

(b) In order to ensure that Victory Bancorp Shareholders, in the aggregate, do not own shares of HV Bancorp Common Stock in excess of the Ownership Percentage at the Effective Time, each of the members of the Board of Directors of Victory Bancorp and each executive officer of Victory Bancorp (“Victory Bancorp Insiders”) has entered into an agreement dated as of the date hereof in the form of Exhibit C hereto pursuant to which the Victory Bancorp Insiders agree to exchange a certain percentage of shares of Series E Preferred Stock held by such Victory Bancorp Insiders in the Exchange Offer for Victory Bancorp Subordinated Debt in the event that the Conversion Offering closes at or below the Midpoint of the Conversion Offering, as such term is defined in the Plan of Conversion adopted by HV Bank.

(c) At the Effective Time, all outstanding Victory Bancorp Subordinated Debt shall be assumed by HV Bancorp.

(d) Concurrently with consummation of the Merger, each share of Series F Preferred Stock issued and outstanding at the Effective Time shall be assumed by HV Bancorp and exchanged for one share with an equal liquidation preference of HV Bancorp SBLF Preferred Stock. Any such HV Bancorp SBLF Preferred Stock shall entitle holders thereof to dividends from the date of issuance of such HV Bancorp SBLF Preferred Stock on terms that are equivalent to the terms set forth in the articles of incorporation of Victory Bancorp, and shall have such other right, preferences, privileges and voting power, limitations and restrictions

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thereof that are the same as the right, preferences, privileges and voting powers, and limitations and restrictions thereof of the Series F Preferred Stock issued and outstanding immediately prior to such exchange, taken as a whole. The exchange of the Series F Preferred Stock for shares of HV Bancorp SBLF Preferred Stock shall be in accordance with the charter and other governing documents of Victory Bancorp, as amended, and in accordance with the terms of any securities purchase and/or other agreements pursuant to which such shares of HV Bancorp SBLF were issued or required to be entered into in order to effect such exchange.

(e) Prior to consummation of the Merger, HV Bancorp and HV Bank shall use their commercially reasonable efforts to take such action as is necessary or advisable on their part for HV Bancorp to succeed, by assumption, exchange or otherwise, to all of the then-outstanding Series F Preferred Stock upon the consummation of the Merger. Victory Bancorp shall cooperate with HV Bancorp and HV Bank, and shall use its commercially reasonable efforts to provide for the succession by HV Bancorp to the then-outstanding Series F Preferred Stock, and in such regard will notify the Treasury Department of the transactions contemplated by this Agreement and effect all filings necessary to obtain any requisite regulatory approval for HV Bancorp’s succession to such Series F Preferred Stock prior to consummation of the Merger.

2.7 Exchange Procedures for Victory Bancorp Capital Stock.

(a) Appropriate transmittal materials (“Letter of Transmittal”) in a form satisfactory to HV Bancorp and Victory Bancorp shall be mailed as soon as practicable (but not later than five (5) business days) after the Effective Time to each holder of record of Victory Bancorp Capital Stock as of the Effective Time. A Letter of Transmittal will be deemed properly completed only if accompanied by one or more certificates theretofore representing Victory Bancorp Capital Stock (“Certificate(s)”) representing all shares of Victory Bancorp Capital Stock to be converted thereby.

(b) At and after the Effective Time, each Certificate (except as specifically set forth in Section 2.5) shall represent only the right to receive the Merger Consideration.

(c) Prior to the Effective Time, HV Bancorp shall (i) reserve for issuance with its transfer agent and registrar a sufficient number of shares of HV Bancorp Capital Stock to provide for payment of the aggregate Merger Consideration and (ii) deposit, or cause to be deposited, with a mutually agreed upon exchange agent for the benefit of the holders of shares of Victory Bancorp Common Stock, to the extent determinable, an amount of cash sufficient to pay the cash in lieu of fractional shares, pursuant to Section 2.5(d).

(d) The Letter of Transmittal shall (i) specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent, (ii) be in a form and contain any other provisions as HV Bancorp may reasonably determine and (iii) include instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon the proper surrender of the Certificates to the Exchange Agent, together with a properly completed and duly executed Letter of Transmittal, the holder of such Certificates shall be entitled to receive in exchange therefor a certificate representing that number of whole shares of HV Bancorp Capital Stock that such

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holder has the right to receive pursuant to Section 2.5 and a check in the amount equal to the cash that such holder has the right to receive pursuant to Section 2.5 for any cash in lieu of fractional shares, if any, and any dividends or other distributions to which such holder is entitled pursuant to Section 2.5. Certificates so surrendered shall forthwith be canceled. As soon as practicable (but not later than five (5) business days) following receipt of the properly completed Letter of Transmittal and any necessary accompanying documentation with respect to any certificate, the Exchange Agent shall distribute HV Bancorp Capital Stock and cash as provided herein with respect to such certificate. The Exchange Agent shall not be entitled to vote or exercise any rights of ownership with respect to the shares of HV Bancorp Capital Stock held by it from time to time hereunder, except that it shall receive and hold all dividends or other distributions paid or distributed with respect to such shares for the account of the persons entitled thereto. If there is a transfer of ownership of any shares of Victory Bancorp Capital Stock not registered in the transfer records of Victory Bancorp, the Merger Consideration shall be issued to the transferee thereof if the Certificates representing such Victory Bancorp Capital Stock are presented to the Exchange Agent, accompanied by all documents required, in the reasonable judgment of HV Bancorp and the Exchange Agent, to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid.

(e) No dividends or other distributions declared or made after the Effective Time with respect to HV Bancorp Capital Stock issued pursuant to this Agreement shall be remitted to any person entitled to receive shares of HV Bancorp Capital Stock hereunder until such person surrenders his or her Certificates in accordance with this Section 2.6. Upon the surrender of such person’s Certificates, such person shall be entitled to receive any dividends or other distributions, without interest thereon, which subsequent to the Effective Time had become payable but not paid with respect to shares of HV Bancorp Capital Stock represented by such person’s Certificates.

(f) The stock transfer books of Victory Bancorp shall be closed immediately upon the Effective Time and from and after the Effective Time there shall be no transfers on the stock transfer records of Victory Bancorp of any shares of Victory Bancorp Capital Stock. If, after the Effective Time, Certificates are presented to HV Bancorp, they shall be canceled and exchanged for the Merger Consideration deliverable in respect thereof pursuant to this Agreement in accordance with the procedures set forth in this Section 2.6.

(g) Any portion of the aggregate amount of cash to be paid pursuant to Section 2.5, any dividends or other distributions to be paid pursuant to this Section 2.6 or any proceeds from any investments thereof that remains unclaimed by the holders of Victory Bancorp Capital Stock for six months after the Effective Time shall be repaid by the Exchange Agent to HV Bancorp upon the written request of HV Bancorp. After such request is made, each holder of Victory Bancorp Capital Stock who have not theretofore complied with this Section 2.6 shall look only to HV Bancorp for the Merger Consideration deliverable in respect of each share of Victory Bancorp Capital Stock such stockholder holds, as determined pursuant to Section 2.5 of this Agreement, without any interest thereon. Notwithstanding the foregoing, neither the Exchange Agent nor any party to this Agreement (or any affiliate thereof) shall be liable to any former holder of Victory Bancorp Capital Stock for any amount delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.

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(h) HV Bancorp and the Exchange Agent shall be entitled to rely upon Victory Bancorp’s stock transfer books to establish the identity of those persons entitled to receive the Merger Consideration, which books shall be conclusive with respect thereto. In the event of a dispute with respect to ownership of stock represented by any Certificate, HV Bancorp and the Exchange Agent shall be entitled to deposit any Merger Consideration represented thereby in escrow with an independent third party and thereafter be relieved with respect to any claims thereto.

(i) If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and the posting by such person of a bond in such amount as the Exchange Agent may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof pursuant to Section 2.5.

2.8 Effect on Outstanding Shares of HV Bancorp Common Stock. At the Effective Time, and except as provided in Section 2.5(f), each share of HV Bancorp Common Stock issued and outstanding immediately prior to the Effective Time shall remain an issued and outstanding share of common stock of the Surviving Corporation and shall not be affected by the Merger.

2.9 Directors and Officers of Surviving Corporation and Surviving Bank After Effective Time. Subject to Sections 5.14 and 5.15, immediately after the Effective Time, until their respective successors are duly elected or appointed and qualified, the directors and officers of the Surviving Corporation and the Surviving Bank shall consist of the directors and officers of HV Bancorp and HV Bank serving immediately prior to the Effective Time.

2.10 Articles of Incorporation and Bylaws. The articles of incorporation of HV Bancorp, as in effect immediately prior to the Effective Time, shall be the articles of incorporation of the Surviving Corporation until thereafter amended in accordance with applicable law and the terms thereof. The bylaws of HV Bancorp, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation until thereafter amended in accordance with applicable law and the terms of such bylaws.

2.11 Treatment of Stock Options. Immediately prior to the Effective Time, each option to acquire shares of Victory Bancorp Common Stock that is outstanding and unexercised immediately prior thereto (“Victory Bancorp Stock Option”) pursuant to the Victory Bancorp 2008 Stock Option Plan (the “Victory Bancorp Stock Option Plan”) shall automatically be cancelled for no consideration.

2.12 Treatment of Warrants. Immediately prior to the Effective Time, each warrant to acquire shares of Victory Bancorp Common Stock that is outstanding and unexercised immediately prior thereto (“Victory Bancorp Warrant”) shall be cancelled and converted into the right to receive $0.54 per Victory Bancorp Warrant.

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2.13 Bank Merger. Concurrently with or as soon as practicable after the execution and delivery of this Agreement, HV Bank, a wholly owned subsidiary of HV Bancorp, and The Victory Bank (“Victory Bank”), a wholly owned subsidiary of Victory Bancorp, shall enter into the Plan of Bank Merger, in the form attached hereto as Exhibit C, pursuant to which Victory Bank will merge with and into HV Bank (the “Bank Merger”) with HV Bank as the resulting institution (hereinafter sometimes referred to in such capacity as the “Surviving Bank”) under the name “Victory Bank,” which name shall be effective at the time of the consummation of the Bank Merger. The parties intend that the Bank Merger will become effective simultaneously with or immediately following the Effective Time.

2.14 Alternative Structure. Notwithstanding anything to the contrary contained in this Agreement, prior to the Effective Time, Victory Bancorp and HV Bank may specify that the structure of the transactions contemplated by this Agreement, including the Merger, the Bank Merger or the Conversion, be revised and the parties shall enter into such alternative transactions as Victory Bancorp and HV Bank may reasonably determine to effect the purposes of this Agreement; provided, however, that such revised structure shall not (i) alter or change the amount or kind of the Merger Consideration (ii) materially impede or delay consummation of the transactions contemplated by this Agreement, (iii) adversely limit or impact the qualification of the Merger as a reorganization under the provisions of Section 368(a) of the IRC, (iv) result in any adverse Federal or state income tax consequences to Victory Bancorp stockholders, or (v) in the case of revision to the structure of the Conversion, the pro forma capitalization of HV Bancorp shall not be materially different than that contemplated by the Conversion Prospectus. In the event that Victory Bancorp and HV Bank agree to make such a revision, the parties agree to execute appropriate documents to reflect the revised structure.

2.15 Absence of Control. It is the intent of the parties hereto that HV Bancorp and HV Bank by reason of this Agreement shall not be deemed (until consummation of the transactions contemplated hereby) to control, directly or indirectly, Victory Bancorp or to exercise, directly or indirectly, a controlling influence over the management or policies of Victory Bancorp.

2.16 The Conversion. Contemporaneous with the adoption of this Agreement, the Board of Directors of HV Bank is adopting a Plan of Conversion for HV Bank to convert to the capital stock form of organization. HV Bancorp is being organized to act as the holding company for HV Bank, and to offer for sale shares of common stock to Members in the Conversion, based on the Independent Valuation. The price per share of the shares of HV Bancorp Common Stock to be issued in the Conversion is referred to as the “Conversion Price Per Share.” The Conversion Price Per Share is expected to be $10.00. The shares of HV Bancorp Common Stock to be issued in connection with the Merger may be either shares unsubscribed for in the Conversion Offering, or if such shares are unavailable, authorized but unissued shares of HV Bancorp Common Stock, which shares shall be issued immediately following completion of the Conversion.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Disclosure Letters; Standard.

(a) Prior to the execution and delivery of this Agreement, HV Bancorp and Victory Bancorp have each delivered to the other a letter (each, its “Disclosure Letter”) setting forth, among other things, facts, circumstances and events the disclosure of which is required or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more of their respective representations and warranties contained in Section 3.2 or Section 3.3, as applicable, or to one or more of its covenants contained in Articles IV or V (and making specific reference to the Section of this Agreement to which they relate). Disclosure in any paragraph of the Disclosure Letter shall apply only to the indicated Section of this Agreement except to the extent that it is reasonably clear on the face of such disclosure that it is relevant to another paragraph of the Disclosure Letter or another Section of this Agreement.

(b) No representation or warranty of Victory Bancorp, HV Bancorp or HV Bank contained in Sections 3.2 or 3.3, as applicable (other than (i) the representations and warranties contained in Sections 3.2(c) and 3.3(c), which shall be true in all respects, and (ii) the representations and warranties contained in Sections 3.2(a), 3.2(d), 3.2(e)(i) and (ii), 3.2(dd), 3.3(a), 3.3(d), 3.3(e)(i) and (ii), and 3.3(bb), which shall be true in all material respects) will be deemed untrue or incorrect, and no party will be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, event or circumstance unless such fact, event or circumstance, individually or taken together with all other facts, events or circumstances inconsistent with any representation or warranty contained in Sections 3.2 or 3.3, has had or is reasonably likely to have a Material Adverse Effect with respect to Victory Bancorp, HV Bancorp or HV Bank, as the case may be (it being understood that, except with respect to Sections 3.2(j) and Section 3.3(i), for purposes of determining the accuracy of such representations and warranties, all “Material Adverse Effect” qualifications and other materiality qualifications contained in such representations and warranties shall be disregarded).

3.2 Representations and Warranties of Victory Bancorp. Victory Bancorp represents and warrants to HV Bancorp and HV Bank that, except as disclosed in Victory Bancorp’s Disclosure Letter:

(a) Organization and Qualification. Victory Bancorp is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania and is registered with the Federal Reserve as a bank holding company. Victory Bancorp has all requisite corporate power and authority to own, lease and operate its properties and to conduct the business currently being conducted by it. Victory Bancorp is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect on Victory Bancorp. Victory Bancorp engages only in activities (and holds properties only of the types) permitted to bank holding companies by the BHCA and the rules, regulations and interpretations promulgated thereunder.

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(b) Subsidiaries.

(i) Victory Bancorp’s Disclosure Letter sets forth with respect to each of Victory Bancorp’s direct and indirect Subsidiaries its name, its jurisdiction of incorporation, Victory Bancorp’s percentage ownership, the number of shares of stock or other equity interests owned or controlled by Victory Bancorp and the name and number of shares held by any other person who owns any stock of the Subsidiary. Victory Bancorp owns of record and beneficially all the capital stock of each of its Subsidiaries free and clear of any Liens. There are no contracts, commitments, agreements or understandings relating to Victory Bancorp’s right to vote or dispose of any equity securities of its Subsidiaries. Victory Bancorp’s ownership interest in each of its Subsidiaries is in compliance with all applicable laws, rules and regulations relating to equity investments by bank holding companies or Pennsylvania chartered commercial banks.

(ii) Each of Victory Bancorp’s direct and indirect Subsidiaries is a corporation duly organized and validly existing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to own, lease and operate its properties and to conduct the business currently being conducted by it and is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect.

(iii) The outstanding shares of capital stock of each Subsidiary have been validly authorized and are validly issued, fully paid and nonassessable. No shares of capital stock of any Subsidiary of Victory Bancorp are or may be required to be issued by virtue of any options, warrants or other rights, no securities exist that are convertible into or exchangeable for shares of such capital stock or any other debt or equity security of any Subsidiary, and there are no contracts, commitments, agreements or understandings of any kind for the issuance of additional shares of capital stock or other debt or equity security of any Subsidiary or options, warrants or other rights with respect to such securities.

(iv) Victory Bank is a Pennsylvania-chartered bank. No Subsidiary of Victory Bancorp other than Victory Bank is an “insured depository institution” as defined in the Federal Deposit Insurance Act, as amended, and the applicable regulations thereunder. Victory Bank’s deposits are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by law.

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(c) Capital Structure.

(i) The authorized capital stock of Victory Bancorp consists of 10,000,000 shares of Victory Bancorp Common Stock and 2,000,000 shares of Victory Bancorp Preferred Stock.

(ii) As of the date of this Agreement:

(A) 1,025,464 shares of Victory Bancorp Common Stock are issued and outstanding, all of which are validly issued, fully paid and nonassessable and were issued in full compliance with all applicable laws and not in violation of any preemptive rights;

(B) 26,158 shares of Series E Preferred Stock are issued and outstanding;

(C) 3,431 shares of Series F Preferred Stock are issued and outstanding

(D) No shares of Victory Bancorp Common Stock are held in treasury by Victory Bancorp or otherwise directly or indirectly owned by Victory Bancorp;

(E) 68,138 shares of Victory Bancorp Common Stock are reserved for issuance pursuant to outstanding Victory Bancorp Stock Options (including vested and unvested Victory Bancorp Stock Options);

(F) 100,000 shares of Victory Bancorp Common Stock are reserved for issuance pursuant to outstanding Victory Bancorp Warrants; and

(G) 515,313 shares of Victory Bancorp Common Stock are reserved for issuance pursuant to outstanding Series E Stock.

(iii) Set forth in Victory Bancorp’s Disclosure Letter are: (a) a complete and accurate list of all outstanding Victory Bancorp Stock Options, including the names of the optionees, dates of grant, exercise prices, dates of vesting, dates of termination, shares subject to each grant and whether stock appreciation, limited or other similar rights were granted in connection with such options, and (b) a complete and accurate list of all outstanding Victory Bancorp Warrants, including the names of the holders, dates of acquisition, dates of expiration and shares subject each Warrant.

(iv) No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which stockholders of Victory Bancorp may vote are issued or outstanding.

(v) Except as set forth in this Section 3.2(c), as of the date of this Agreement, (A) no shares of capital stock or other voting securities of Victory Bancorp are issued, reserved for issuance or outstanding and (B) other than Victory Bancorp Stock Options,

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Victory Bancorp Warrants and Series E Preferred Stock, neither Victory Bancorp nor any of its Subsidiaries has or is bound by any outstanding subscriptions, options, warrants, calls, rights, convertible securities, commitments or agreements of any character obligating Victory Bancorp or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any additional shares of capital stock of Victory Bancorp (including any rights plan or agreement) or obligating Victory Bancorp or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, right, convertible security, commitment or agreement. As of the date hereof, other than the Series E Preferred Stock and Series F Preferred Stock, there are no outstanding securities or instruments that contain any redemption or similar provisions, and there are no outstanding contractual obligations of Victory Bancorp or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of Victory Bancorp or any of its Subsidiaries.

(d) Authority. Victory Bancorp has all requisite corporate power and authority to enter into this Agreement, to perform its obligations hereunder and, subject to the consents, approvals and filings set forth in Section 3.2(f), to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate actions on the part of Victory Bancorp’s Board of Directors, and no other corporate proceedings on the part of Victory Bancorp are necessary to authorize this Agreement or to consummate the transactions contemplated by this Agreement other than the approval and adoption of this Agreement by the affirmative vote of a majority of the votes cast by Victory Bancorp stockholders. Victory Bancorp’s Board of Directors has determined that this Agreement is advisable and has directed that this Agreement be submitted to Victory Bancorp’s stockholders for approval and adoption and has unanimously adopted a resolution to the foregoing effect and recommend that the stockholders adopt this Agreement. This Agreement has been duly and validly executed and delivered by Victory Bancorp and constitutes a valid and binding obligation of Victory Bancorp, enforceable against Victory Bancorp in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, whether applied in a court of law or a court of equity.

(e) No Violations. The execution, delivery and performance of this Agreement by Victory Bancorp does not, and the consummation of the transactions contemplated by this Agreement will not, assuming that the consents, approvals and filings referred to in Section 3.2(f) have been obtained and the applicable waiting periods have expired, (i) violate any law, rule or regulation or any judgment, decree, order, governmental permit or license to which Victory Bancorp or any of its Subsidiaries (or any of their respective properties) is subject, (ii) violate the articles of incorporation or bylaws of Victory Bancorp or the similar organizational documents of any of its Subsidiaries or (iii) constitute a breach or violation of, or a default under (or an event which, with due notice or lapse of time or both, would constitute a default under), or result in the termination of, accelerate the performance required by, or result in the creation of any Lien upon any of the properties or assets of Victory Bancorp or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, indenture, deed of trust, loan agreement or other agreement, instrument or obligation to which Victory Bancorp or any of its Subsidiaries is a party, or to which any of their respective properties or assets may be subject except, in the case of (iii), for any such breaches, violations or defaults that would not, individually or in the aggregate, have a Material Adverse Effect on Victory Bancorp.

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(f) Consents and Approvals. Except for (i) filings of applications and notices with, receipt of approvals or no objections from, and the expiration of related waiting periods required by, federal and state banking authorities, including filings and notices with the Federal Reserve, the FDIC and the PDBS, (ii) the filing with the SEC of the Merger Registration Statement and the declaration of effectiveness of the Merger Registration Statement by the SEC, and such proxy solicitation materials relating to the Victory Bancorp Stockholder Meeting as may be required in connection with this Agreement and the transactions contemplated by this Agreement, (iii) the filing of the Articles of Merger with the PDBS pursuant to the PBCL, (iv) such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of shares of HV Bancorp Common Stock pursuant to this Agreement, and (v) the approval of this Agreement by the requisite vote of the stockholders of Victory Bancorp, no consents or approvals of, or filings or registrations with, any Governmental Entity or any third party are required to be made or obtained by Victory Bancorp in connection with the execution and delivery by Victory Bancorp of this Agreement or the consummation by Victory Bancorp of the Merger and the other transactions contemplated by this Agreement, including the Bank Merger. As of the date hereof, Victory Bancorp has no knowledge of any reason pertaining to Victory Bancorp why any of the approvals referred to in this Section 3.2(f) should not be obtained without the imposition of any material condition or restriction described in Section 6.1(j).

(g) Governmental Filings. Victory Bancorp and each of its Subsidiaries has filed all reports, schedules, and other documents that it has been required to file since January 1, 2011 with the Federal Reserve, the FDIC, the PDBS or any other Governmental Entity. As of their respective dates, each of such filings complied in all material respects with all laws or regulations under which it was filed (or was amended so as to be in compliance promptly following discovery of such noncompliance).

(h) [Reserved].

(i) Financial Statements. Victory Bancorp has previously made available to HV Bancorp copies of the consolidated balance sheets of Victory Bancorp and its Subsidiaries as of December 31, 2012 and 2011 and related consolidated statements of operation, changes in stockholders’ equity and cash flows for each of the two years in the two-year period ended December 31, 2012, and each interim period subsequent to the end of its fiscal year ended December 31, 2012 through September 30, 2013. Such financial statements have been prepared in accordance with GAAP, and (including the related notes where applicable) fairly present in each case in all material respects (subject in the case of the unaudited interim statements to normal year-end adjustments), the consolidated financial position, results of operations, changes in stockholders’ equity and cash flows of Victory Bancorp and Victory Bancorp Subsidiaries on a consolidated basis as of and for the respective periods ending on the dates thereof, in accordance with GAAP during the periods involved, except as indicated in the notes thereto.

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(j) Undisclosed Liabilities. Neither Victory Bancorp nor any of its Subsidiaries has incurred any debt, liability or obligation of any nature whatsoever (whether accrued, contingent, absolute or otherwise and whether due or to become due) other than liabilities reflected on or reserved against in the consolidated balance sheet of Victory Bancorp as of December 31, 2012, except for (i) liabilities incurred since December 31, 2012 in the ordinary course of business consistent with past practice that, either alone or when combined with all similar liabilities, have not had, and would not reasonably be expected to have, a Material Adverse Effect on Victory Bancorp and (ii) liabilities incurred for legal, accounting, financial advising fees and out-of-pocket expenses in connection with the transactions contemplated by this Agreement.

(k) Absence of Certain Changes or Events. Since December 31, 2012, Victory Bancorp and its Subsidiaries have conducted their respective businesses only in the ordinary and usual course of such businesses consistent with their past practices and there has not been any event or occurrence that has had, or is reasonably expected to have, a Material Adverse Effect on Victory Bancorp.

(l) Litigation. There are no suits, actions or legal, administrative or arbitration proceedings pending or, to the knowledge of Victory Bancorp, threatened against or affecting Victory Bancorp or any of its Subsidiaries or any property or asset of Victory Bancorp or any of its Subsidiaries that (i) are seeking damages or declaratory relief against Victory Bancorp or any of its Subsidiaries or (ii) challenge the validity or propriety of the transactions contemplated by this Agreement. There are no judgments, decrees, injunctions, orders or rulings of any Governmental Entity or arbitrator outstanding against Victory Bancorp or any of its Subsidiaries or the assets of Victory Bancorp or any of its Subsidiaries (or that, upon consummation of the Merger, would apply to HV Bancorp or any of its Subsidiaries). Since January 1, 2011, (i) there have been no subpoenas, written demands, or document requests received by Victory Bancorp or any of its Subsidiaries from any Governmental Entity and (ii) no Governmental Entity has requested that Victory Bancorp or any of its Subsidiaries enter into a settlement negotiation or tolling agreement with respect to any matter related to any such subpoena, written demand, or document request.

(m) Absence of Regulatory Actions. Since January 1, 2011, neither Victory Bancorp nor any of its Subsidiaries has been a party to any cease and desist order, written agreement or memorandum of understanding with, or any commitment letter or similar undertaking to, or has been subject to any action, proceeding, order or directive by any Governmental Entity, or has adopted any board resolutions relating to such matters as are material to the business of Victory Bancorp or its Subsidiaries at the request of any Governmental Entity, or has been advised by any Governmental Entity that it is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such action, proceeding, order, directive, written agreement, memorandum of understanding, commitment letter, board resolutions or similar undertaking. To the knowledge of Victory Bancorp, there are no material unresolved violations, criticisms or exceptions by any Governmental Entity with respect to any report or statement relating to any examinations of Victory Bancorp or its Subsidiaries.

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(n) Compliance with Laws. Victory Bancorp and each of its Subsidiaries conducts its business in compliance with all statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable to it or the employees conducting such business, except where noncompliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Victory Bancorp. Victory Bancorp and each of its Subsidiaries has all material permits, licenses, certificates of authority, orders and approvals of, and has made all filings, applications and registrations with, all Governmental Entities that are required in order to permit it to carry on its business as it is presently conducted; all such permits, licenses, certificates of authority, orders and approvals are in full force and effect, and no suspension or cancellation of any of them is, to the knowledge of Victory Bancorp, threatened. Neither Victory Bancorp nor any of its Subsidiaries has been given notice or been charged with any violation of, any law, ordinance, regulation, order, writ, rule, decree or condition to approval of any Governmental Entity which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on Victory Bancorp.

(o) Taxes. All federal, state, local and foreign tax returns required to be filed by or on behalf of Victory Bancorp or any of its Subsidiaries have been timely filed or requests for extensions have been timely filed and any such extension shall have been granted and not have expired, and all such filed returns are complete and accurate in all material respects. All Taxes shown on such returns, all Taxes required to be shown on returns for which extensions have been granted and all other Taxes required to be paid by Victory Bancorp or any of its Subsidiaries have been paid in full or adequate provision has been made for any such Taxes on Victory Bancorp’s balance sheet (in accordance with GAAP). To the knowledge of Victory Bancorp, there is no audit examination, deficiency assessment, tax investigation or refund litigation with respect to any Taxes of Victory Bancorp or any of its Subsidiaries, and no claim has been made in writing by any authority in a jurisdiction where Victory Bancorp or any of its Subsidiaries do not file tax returns that Victory Bancorp or any such Subsidiary is subject to taxation in that jurisdiction. All Taxes, interest, additions and penalties due with respect to completed and settled examinations or concluded litigation relating to Victory Bancorp or any of its Subsidiaries have been paid in full or adequate provision has been made for any such Taxes on Victory Bancorp’s balance sheet (in accordance with GAAP). Victory Bancorp and its Subsidiaries have not executed an extension or waiver of any statute of limitations on the assessment or collection of any tax due that is currently in effect. Victory Bancorp and each of its Subsidiaries has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party, and Victory Bancorp and each of its Subsidiaries has timely complied with all applicable information reporting requirements under Part III, Subchapter A of Chapter 61 of the IRC and similar applicable state and local information reporting requirements. Neither Victory Bancorp nor any of its Subsidiaries is a party to any agreement, contract, arrangement or plan that has resulted or would result, individually or in the aggregate, in connection with this Agreement in the payment to any individual of any “excess parachute payments” within the meaning of Section 280G of the IRC and neither Victory Bancorp nor any of its Subsidiaries has made any payments and is not a party to any agreement, and does not maintain any plan, program or arrangement, that could require it to make any payments that would not be fully deductible by reason of Section 162(m) of the IRC.

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(p) Agreements.

(i) Victory Bancorp has previously delivered to HV Bancorp and HV Bank, and Victory Bancorp’s Disclosure Letter lists, any contract, arrangement, commitment or understanding (whether written or oral) to which Victory Bancorp or any of its Subsidiaries is a party or is bound:

(A) (1) with any executive officer or other employee of Victory Bancorp or any of its Subsidiaries holding the title of Senior Vice President or higher the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving Victory Bancorp or any of its Subsidiaries of the nature contemplated by this Agreement; (2) with respect to the employment of any directors, officers, employees or consultants; or (3) any of the benefits of which will be increased, or the vesting or payment of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement (including any stock option plan);

(B) that (1) contains a non-compete or client or customer non-solicit requirement or any other provision that restricts the conduct of, or the manner of conducting, any line of business of Victory Bancorp or any of its Subsidiaries (or, following the consummation of the transactions contemplated hereby, Victory Bancorp or any of its Subsidiaries), (2) obligates Victory Bancorp or any of its affiliates (or, following the consummation of the transactions contemplated hereby, Victory Bancorp or any of its Subsidiaries) to conduct business with any third party on an exclusive or preferential basis, or (3) requires referrals of business or requires Victory Bancorp or any of its Subsidiaries to make available investment opportunities to any person on a priority or exclusive basis;

(C) pursuant to which Victory Bancorp or any of its Subsidiaries may become obligated to invest in or contribute capital to any entity;

(D) that relates to borrowings of money (or guarantees thereof) by Victory Bancorp or any of its Subsidiaries in excess of $100,000, other than Federal Home Loan Bank borrowings and repurchase agreements with customers entered into in the ordinary course of business;

(E) that grants any right of first refusal, right of first offer or similar right with respect to any material assets, rights or properties of Victory Bancorp or any of its Subsidiaries;

(F) that limits the payment of dividends by Victory Bancorp or any of its Subsidiaries;

(G) that relates to the involvement of Victory Bancorp or any Subsidiary in a joint venture, partnership, limited liability company agreement or other similar agreement or arrangement, or to the formation, creation or operation, management or control of any partnership or joint venture with any third parties;

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(H) that relates to an acquisition, divestiture, merger or similar transaction and which contains representations, covenants, indemnities or other obligations (including indemnification, “earn-out” or other contingent obligations) that are still in effect,

(I) which is a lease or license with respect to any property, real or personal, whether as landlord, tenant, licensor or licensee, involving a liability or obligation as obligor in excess of $50,000 on an annual basis;

(J) which is a consulting agreement or data processing, software programming or licensing contract involving the payment of more than $50,000 per annum; or

(K) which is not of the type described in clauses (A) through (J) above and which involved payments by, or to, Victory Bancorp or any of its Subsidiaries in the fiscal year ended December 31, 2012, or which could reasonably be expected to involve such payments during the fiscal year ending December 31, 2013, of more than $100,000 (excluding Loans) or the termination of which would require payment by Victory Bancorp or any of its Subsidiaries in excess of $100,000.

(ii) Neither Victory Bancorp nor any of its Subsidiaries is in default under (and no event has occurred which, with due notice or lapse of time or both, would constitute a default under) or is in material violation of any provision of any note, bond, indenture, mortgage, deed of trust, loan agreement, lease or other agreement to which it is a party or by which it is bound or to which any of its respective properties or assets is subject and, to the knowledge of Victory Bancorp, no other party to any such agreement (excluding any loan or extension of credit made by Victory Bancorp or any of its Subsidiaries) is in default in any respect thereunder.

(q) Intellectual Property. Victory Bancorp and each of its Subsidiaries owns or possesses valid and binding licenses and other rights to use (in the manner and the geographic areas in which they are currently used) without payment all patents, copyrights, trade secrets, trade names, service marks and trademarks material to its business. Victory Bancorp’s Disclosure Letter sets forth a complete and correct list of all material trademarks, trade names, service marks and copyrights owned by or licensed to Victory Bancorp or any of its Subsidiaries for use in its business, and all licenses and other agreements relating thereto and all agreements relating to third party intellectual property that Victory Bancorp or any of its Subsidiaries is licensed or authorized to use in its business, including without limitation any software licenses but excluding any so-called “shrink-wrap” license agreements and other similar computer software licensed in the ordinary course of business and/or otherwise resident on desktop computers. With respect to each item of intellectual property owned by Victory Bancorp or any of its Subsidiaries, the owner possesses all right, title and interest in and to the item, free and clear of any Lien. With respect to each item of intellectual property that Victory Bancorp or any of its Subsidiaries is licensed or authorized to use, the license, sublicense or agreement covering

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such item is legal, valid, binding, enforceable and in full force and effect as to Victory Bancorp and the Subsidiaries. Neither Victory Bancorp nor any of its Subsidiaries has received any charge, complaint, claim, demand or notice alleging any interference, infringement, misappropriation or violation with or of any intellectual property rights of a third party (including any claims that Victory Bancorp or any of its Subsidiaries must license or refrain from using any intellectual property rights of a third party). To the knowledge of Victory Bancorp, neither Victory Bancorp nor any of its Subsidiaries has interfered with, infringed upon, misappropriated or otherwise come into conflict with any intellectual property rights of third parties and no third party has interfered with, infringed upon, misappropriated or otherwise come into conflict with any intellectual property rights of Victory Bancorp or any of its Subsidiaries.

(r) Labor Matters.

(i) Victory Bancorp and its Subsidiaries are in material compliance with all applicable laws respecting employment, retention of independent contractors, employment practices, terms and conditions of employment, and wages and hours. Neither Victory Bancorp nor any of its Subsidiaries is or has ever been a party to, or is or has ever been bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization with respect to its employees, nor is Victory Bancorp or any of its Subsidiaries the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it or any such Subsidiary to bargain with any labor organization as to wages and conditions of employment nor, to the knowledge of Victory Bancorp, has any such proceeding been threatened, nor is there any strike, other labor dispute or organizational effort involving Victory Bancorp or any of its Subsidiaries pending or, to the knowledge of Victory Bancorp, threatened.

(ii) Victory Bancorp’s Disclosure Letter identifies (A) all present employees (including any leased or temporary employees) of Victory Bancorp and its Subsidiaries and any consultants or independent contractors providing services to Victory Bancorp or any of its Subsidiaries; (B) each employee’s, consultant’s or independent contractor’s current rate of compensation; and (C) each employee’s accrued vacation, sick leave or personal leave if applicable. There are no unpaid wages, bonuses or commissions owed to any employee (other than those not yet due).

(s) Employee Benefit Plans.

(i) Victory Bancorp’s Disclosure Letter contains a complete and accurate list of all pension, retirement, stock option, stock purchase, stock appreciation right, profit sharing, deferred compensation, consulting, bonus, group insurance, severance and other benefit plans, contracts, agreements and arrangements, including, but not limited to, “employee benefit plans,” as defined in Section 3(3) of ERISA, incentive and welfare policies, contracts, plans and arrangements and all trust agreements related thereto with respect to any present or former directors, officers or other employees of Victory Bancorp or any of its Subsidiaries (hereinafter referred to collectively as the “Victory Bancorp Employee Plans”). Victory Bancorp previously delivered or made available to HV Bancorp true and complete copies of each agreement, plan and other documents referenced in Victory Bancorp’s Disclosure Letter, along

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with, where applicable, copies of the IRS Form 5500 for the most recently completed year. There has been no announcement or commitment by Victory Bancorp or any of its Subsidiaries to create an additional Victory Bancorp Employee Plan, or to amend any Victory Bancorp Employee Plan, except for amendments required by applicable law or which do not materially increase the cost of such Victory Bancorp Employee Plan. Each Victory Bancorp Employee Plan that provides for the payment of “deferred compensation,” including any employment agreement between Victory Bancorp and any employee, complies in all material respects with Section 409A of the IRC.

(ii) There is no pending or, to the knowledge of Victory Bancorp, threatened litigation, administrative action or proceeding relating to any Victory Bancorp Employee Plan. All of Victory Bancorp Employee Plans comply in all material respects with all applicable requirements of ERISA, the IRC and other applicable laws. There has occurred no “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the IRC) with respect to Victory Bancorp Employee Plans that is likely to result in the imposition of any penalties or Taxes upon Victory Bancorp or any of its Subsidiaries under Section 502(i) of ERISA or Section 4975 of the IRC.

(iii) No liability to the Pension Benefit Guarantee Corporation has been or is expected by Victory Bancorp or any of its Subsidiaries to be incurred with respect to any Victory Bancorp Employee Plan which is subject to Title IV of ERISA (the “Victory Bancorp Pension Plan”), or with respect to any “single-employer plan” (as defined in Section 4001(a) of ERISA) currently or formerly maintained by Victory Bancorp or any ERISA Affiliate. No Victory Bancorp Pension Plan had an “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, as of the last day of the end of the most recent plan year ending prior to the date hereof; the fair market value of the assets of each Victory Bancorp Pension Plan exceeds the present value of the “benefit liabilities” (as defined in Section 4001(a)(16) of ERISA) under such Victory Bancorp Pension Plan as of the end of the most recent plan year with respect to the respective Victory Bancorp Pension Plan ending prior to the date hereof, calculated on the basis of the actuarial assumptions used in the most recent actuarial valuation for such Victory Bancorp Pension Plan as of the date hereof; and no notice of a “reportable event” (as defined in Section 4043 of ERISA) for which the 30-day reporting requirement has not been waived has been required to be filed for any Victory Bancorp Pension Plan within the 12-month period ending on the date hereof. Neither Victory Bancorp nor any of its Subsidiaries has provided, or is required to provide, security to any Victory Bancorp Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the IRC. Neither Victory Bancorp, any of its Subsidiaries, nor any ERISA Affiliate has contributed to any “multiemployer plan,” as defined in Section 3(37) of ERISA.

(iv) Each Victory Bancorp Employee Plan that is an “employee pension benefit plan” (as defined in Section 3(2) of ERISA) and which is intended to be qualified under Section 401(a) of the IRC (a “Victory Bancorp Qualified Plan”) has received or applied for a current favorable determination letter from the IRS, and to Victory Bancorp’s knowledge, there are no circumstances likely to result in revocation of any such favorable determination letter. Each Victory Bancorp Qualified Plan that is an “employee stock ownership plan” (as defined in Section 4975(e)(7) of the IRC) has satisfied all of the applicable requirements of

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Sections 409 and 4975(e)(7) of the IRC and the regulations thereunder in all material respects and any assets of any such Victory Bancorp Qualified Plan that, as of the end of the plan year, are not allocated to participants’ individual accounts are pledged as security for, and may be applied to satisfy, any securities acquisition indebtedness.

(v) Neither Victory Bancorp nor any of its Subsidiaries has any obligations for post-retirement or post-employment benefits under any Victory Bancorp Employee Plan that cannot be amended or terminated upon sixty (60) days’ notice or less without incurring any liability thereunder, except for coverage required by Part 6 of Title I of ERISA or Section 4980B of the IRC, or similar state laws, the cost of which is borne by the insured individuals.

(vi) All contributions required to be made with respect to any Victory Bancorp Employee Plan by applicable law or regulation or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Victory Bancorp Employee Plan, for any period through the date hereof have been timely made or paid in full, or to the extent not required to be made or paid on or before the date hereof, have been fully reflected in the financial statements of Victory Bancorp. Each Victory Bancorp Employee Plan that is an employee welfare benefit plan under Section 3(1) of ERISA either (A) is funded through an insurance Victory Bancorp contract and is not a “welfare benefit fund” within the meaning of Section 419 of the IRC or (B) is unfunded.

(vii) Victory Bancorp’s Disclosure Letter contains a calculation of the severance payment (estimated where necessary) and a description of other benefits payable to each director, officer or employee of Victory Bancorp or any of its Subsidiaries that is a party to a severance, change in control or employment agreement, assuming that such person’s service with Victory Bancorp terminates as of the Effective Time.

(t) Properties.

(i) A list of all real property owned or leased by Victory Bancorp or a Subsidiary of Victory Bancorp is set forth in Victory Bancorp’s Disclosure Letter. Victory Bancorp and each of its Subsidiaries has good and marketable title to all real property owned by it (including any property acquired in a judicial foreclosure proceeding or by way of a deed in lieu of foreclosure or similar transfer), in each case free and clear of any Liens except (i) liens for Taxes not yet due and payable and (ii) such easements, restrictions and encumbrances, if any, as are not material in character, amount or extent, and do not materially detract from the value, or materially interfere with the present use of the properties subject thereto or affected thereby. Each lease pursuant to which Victory Bancorp or any of its Subsidiaries as lessee, leases real or personal property is valid and in full force and effect as to Victory Bancorp and the Subsidiaries and neither Victory Bancorp nor any of its Subsidiaries, nor, to Victory Bancorp’s knowledge, any other party to any such lease, is in default or in violation of any material provisions of any such lease. Victory Bancorp has previously delivered to HV Bancorp a complete and correct copy of each such lease. All real property owned or leased by Victory Bancorp or any of its Subsidiaries are in all material respects in a good state of maintenance and repair (normal wear and tear excepted), conform in all material respects with all applicable ordinances, regulations

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and zoning laws and are considered by Victory Bancorp to be adequate for the current business of Victory Bancorp and its Subsidiaries. To the knowledge of Victory Bancorp, none of the buildings, structures or other improvements located on any real property owned or leased by Victory Bancorp or any of its Subsidiaries encroaches upon or over any adjoining parcel or real estate or any easement or right-of-way.

(ii) Victory Bancorp and each of its Subsidiaries has good and marketable title to all tangible personal property owned by it, free and clear of all Liens except such Liens, if any, that are not material in character, amount or extent, and that do not materially detract from the value, or materially interfere with the present use of the properties subject thereto or affected thereby. With respect to personal property used in the business of Victory Bancorp and its Subsidiaries that is leased rather than owned, neither Victory Bancorp nor any of its Subsidiaries is in default under the terms of any such lease.

(u) Environmental Matters.

(i) Each of Victory Bancorp’s and its Subsidiaries’ properties, the Participation Facilities, and, to the knowledge of Victory Bancorp, the Loan Properties are, and have been during the period of Victory Bancorp’s or its Subsidiaries’ ownership or operation thereof, in material compliance with all Environmental Laws.

(ii) There is no suit, claim, action, demand, executive or administrative order, directive, investigation or proceeding pending or, to the knowledge of Victory Bancorp, threatened, before any court or Governmental Entity against Victory Bancorp or any of its Subsidiaries or any Participation Facility (A) for alleged noncompliance (including by any predecessor) with, or liability under, any Environmental Law or (B) relating to the presence of or release into the environment of any Hazardous Material, whether or not occurring at or on a site owned, leased or operated by Victory Bancorp or any of its Subsidiaries or any Participation Facility.

(iii) To the knowledge of Victory Bancorp, there is no suit, claim, action, demand, executive or administrative order, directive, investigation or proceeding pending or threatened before any court or Governmental Entity relating to or against any Loan Property (or Victory Bancorp or any of its Subsidiaries in respect of such Loan Property) (A) relating to alleged noncompliance (including by any predecessor) with, or liability under, any Environmental Law or (B) relating to the presence of or release into the environment of any Hazardous Material, whether or not occurring at a Loan Property.

(iv) Neither Victory Bancorp nor any of its Subsidiaries has received in writing any notice, demand letter, executive or administrative order, directive or request for information from any Governmental Entity or any third party indicating that it may be in violation of, or liable under, any Environmental Law.

(v) To the knowledge of Victory Bancorp, there are no underground storage tanks at any properties owned or operated by Victory Bancorp or any of its Subsidiaries or any Participation Facility. Neither Victory Bancorp nor any of its Subsidiaries nor, to the

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knowledge of Victory Bancorp, any other person or entity, has closed or removed any underground storage tanks from any properties owned or operated by Victory Bancorp or any of its Subsidiaries or any Participation Facility.

(vi) During the period of (A) Victory Bancorp’s or its Subsidiary’s ownership or operation of any of their respective current properties or (B) Victory Bancorp’s or its Subsidiary’s participation in the management of any Participation Facility, to the knowledge of Victory Bancorp, there has been no release of Hazardous Materials in, on, under or affecting such properties except for releases of Hazardous Materials in quantities below the level at which they were regulated under any Environmental Law in effect at the time of such release. To the knowledge of Victory Bancorp, prior to the period of (A) Victory Bancorp’s or its Subsidiary’s ownership or operation of any of their respective current properties or (B) Victory Bancorp’s or its Subsidiary’s participation in the management of any Participation Facility, there was no contamination by or release of Hazardous Material in, on, under or affecting such properties except for releases of Hazardous Materials in quantities below the level at which they were regulated under any Environmental Law in effect at the time of such release.

(v) Loan Matters.

(i) To the knowledge of Victory Bancorp, all Loans held by Victory Bancorp or any of its Subsidiaries were made in all material respects for good, valuable and adequate consideration in the ordinary course of the business, and, to the knowledge of Victory Bancorp, the Loans are not subject to any defenses, setoffs or counterclaims, including without limitation any such as are afforded by usury or truth in lending laws, except as may be provided by bankruptcy, insolvency or similar laws or by general principles of equity. The notes or other evidences of indebtedness evidencing such Loans and all forms of pledges, mortgages and other collateral documents and security agreements are, in all material respects, enforceable and valid.

(ii) Neither the terms of any Loan, any of the documentation for any Loan, the manner in which any Loans have been administered and serviced, nor Victory Bancorp’s practices of approving or rejecting Loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury.

(iii) The allowance for loan losses reflected in Victory Bancorp’s audited balance sheet at December 31, 2012 was, and the allowance for loan losses shown on the balance sheets in Victory Bancorp’s reports for periods ending after such date, in the opinion of management, was or will be adequate, as of the dates thereof.

(iv) None of the agreements pursuant to which Victory Bancorp or any of its Subsidiaries has sold Loans or pools of Loans or participations in Loans or pools of Loans contains any obligation to repurchase such Loans or interests therein solely on account of a payment default by the obligor on any such Loan.

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(v) (A) Victory Bancorp’s Disclosure Letter sets forth a list of all Loans as of the date hereof by Victory Bancorp or Victory Bank to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Victory Bancorp or any of its Subsidiaries, (B) there are no Loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and (C) all such Loans are and were originated in compliance in all material respects with all applicable laws.

(vi) Victory Bancorp’s Disclosure Letter sets forth a listing, as of September 30, 2013, of all Loans (A) that are contractually past due ninety (90) days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are classified as “Watch,” “Special Mention,” “Substandard,” “Doubtful,” “Loss” or words of similar import, (D) where the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the origination of the Loan due to concerns regarding the borrower’s ability to pay in accordance with the Loan’s original terms and (E) where a specific reserve allocation exists in connection therewith.

(w) Insurance. In the opinion of management, Victory Bancorp and its Subsidiaries are presently insured for amounts deemed reasonable by management against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured. Victory Bancorp’s Disclosure Letter contains a list of all policies of insurance carried and owned by Victory Bancorp or any of Victory Bancorp’s Subsidiaries showing the name of the insurance, Victory Bancorp and agent, the nature of the coverage, the policy limit, the annual premiums and the expiration date. All of the insurance policies and bonds maintained by Victory Bancorp and its Subsidiaries are in full force and effect, Victory Bancorp and its Subsidiaries are not in default thereunder, all premiums and other payments due under any such policy have been paid and all material claims thereunder have been filed in due and timely fashion.

(x) Investment Securities; Derivatives.

(i) Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities and derivatives held by Victory Bancorp or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

(ii) Neither Victory Bancorp nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as “structured notes,” “high risk mortgage derivatives,” “capped floating rate notes” or “capped floating rate mortgage derivatives” or (B) are likely to have changes in value as a result of interest or exchange rate changes that materially exceed normal changes in value attributable to interest or exchange rate changes.

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(y) Indemnification. Except as provided in the articles of incorporation or bylaws of Victory Bancorp and the similar organizational documents of its Subsidiaries, and in employment agreements, change in control agreements and other agreements related to employment or service as a director, neither Victory Bancorp nor any of its Subsidiaries is a party to any agreement that provides for the indemnification of any of its present or former directors, officers or employees, or other persons who serve or served as a director, officer or employee of another corporation, partnership or other enterprise at the request of Victory Bancorp and, to the knowledge of Victory Bancorp, there are no claims for which any such person would be entitled to indemnification under the articles of incorporation or bylaws of Victory Bancorp or the similar organizational documents of any of its Subsidiaries, under any applicable law or regulation or under any such employment-related agreement.

(z) Corporate Documents and Records. Victory Bancorp has previously provided a complete and correct copy of the articles of incorporation, bylaws and similar organizational documents of Victory Bancorp and each of Victory Bancorp’s Subsidiaries, as in effect as of the date of this Agreement. Neither Victory Bancorp nor any of Victory Bancorp’s Subsidiaries is in violation of its articles of incorporation, bylaws or similar organizational documents. The minute books of Victory Bancorp and each of Victory Bancorp’s Subsidiaries constitute a complete and correct record of all actions taken by their respective boards of directors (and each committee thereof) and their stockholders.

(aa) CRA, Anti-Money Laundering, OFAC and Customer Information Security. Victory Bank has received a rating of “Satisfactory” or better in its most recent examination or interim review with respect to the CRA. Victory Bancorp does not have knowledge of any facts or circumstances that would cause Victory Bank or any other Subsidiary of Victory Bancorp: (i) to be deemed not to be in satisfactory compliance in any material respect with the CRA, and the regulations promulgated thereunder, or to be assigned a rating for CRA purposes by federal bank regulators of lower than “Satisfactory”; or (ii) to be deemed to be operating in violation in any material respect of the Bank Secrecy Act, the USA PATRIOT Act, any order issued with respect to anti-money laundering by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or any other applicable anti-money laundering statute, rule or regulation; or (iii) to be deemed not to be in satisfactory compliance in any material respect with the applicable privacy of customer information requirements contained in any federal and state privacy laws and regulations, including without limitation, in Title V of the Gramm-Leach-Bliley Act of 1999 and the regulations promulgated thereunder, as well as the provisions of the information security program adopted by Victory Bank. To the knowledge of Victory Bancorp, no non-public customer information has been disclosed to or accessed by an unauthorized third party in a manner which would cause either Victory Bancorp or any of its Subsidiaries to undertake any remedial action. The Board of Directors of Victory Bank (or where appropriate of any other Subsidiary of Victory Bancorp) has adopted, and Victory Bank (or such other Subsidiary of Victory Bancorp) has implemented, an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with Section 326 of the USA PATRIOT Act and such anti-money laundering program meets the requirements in all

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material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and Victory Bank (or such other Subsidiary of Victory Bancorp) has complied in all material respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.

(bb) Tax Treatment of the Merger. Victory Bancorp has no knowledge of any fact or circumstance relating to it that would prevent the transactions contemplated by this Agreement from qualifying as a reorganization under Section 368(a) of the IRC.

(cc) Fairness Opinion. Victory Bancorp has received the opinion of the Kafafian Group to the effect that, as of the date of such opinion and subject to the assumptions and qualifications set forth therein, the Merger Consideration to be paid to Victory Bancorp’s stockholders by HV Bancorp in connection with the Merger pursuant to this Agreement is fair, from a financial point of view, to such Victory Bancorp stockholders.

(dd) Fees. Other than for financial advisory services performed for Victory Bancorp by the Kafafian Group pursuant to an agreement dated June 25, 2013, a true and complete copy of which has previously been provided to HV Bancorp, neither Victory Bancorp nor any of its Subsidiaries, nor any of their respective officers, directors, employees or agents, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for Victory Bancorp or any of its Subsidiaries in connection with this Agreement or the transactions contemplated hereby.

3.3 Representations and Warranties of HV Bancorp and HV Bank. HV Bancorp and HV Bank represent and warrant to Victory Bancorp that, except as set forth in HV Bancorp’s Disclosure Letter:

(a) Organization and Qualification. HV Bancorp is a corporation in formation and upon completion of the Conversion will be duly organized and validly existing under the laws of the Commonwealth of Pennsylvania and will be registered with the Federal Reserve as a bank holding company. Upon completion of the Conversion, HV Bancorp will have all requisite corporate power and authority to own, lease and operate its properties and to conduct its business. Upon completion of the Conversion, HV Bancorp will be duly qualified or licensed as a foreign corporation to transact business and in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect on HV Bancorp. Upon completion of the Conversion, HV Bancorp will engage only in activities (and holds properties only of the types) permitted to bank holding companies by the BHCA and the rules, regulations and interpretations promulgated thereunder.

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(b) Subsidiaries.

(i) Each of HV Bancorp’s and HV Bank’s direct and indirect Subsidiaries is a corporation duly organized and validly existing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to own, lease and operate its properties and to conduct the business currently being conducted by it and is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect.

(ii) HV Bank is a savings bank organized, validly existing and in good standing under Pennsylvania law. Prior to consummation of the Merger, HV Bank will be a commercial bank organized, validly existing and in good standing under Pennsylvania law. No Subsidiary of HV Bancorp other than HV Bank is an “insured depository institution” as defined in the Federal Deposit Insurance Act, as amended, and the applicable regulations thereunder. HV Bank’s deposits are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by law.

(c) Capital Structure.

(i) Neither HV Bancorp nor HV Bank has authorized capital stock as of the date of this Agreement. Neither HV Bancorp, HV Bank nor any HV Bank Subsidiary has or is bound by any rights of any character relating to the purchase, sale or issuance or voting of, or right to receive dividends or other distributions on any shares of HV Bancorp Capital Stock, or any other security of HV Bancorp or any securities representing the right to vote, purchase or otherwise receive any shares of HV Bancorp Capital Stock or any other security of HV Bancorp, other than, as to HV Bancorp, subscription rights issuable in connection with the Conversion.

(ii) Following completion of the Conversion, HV Bancorp will beneficially own of record all of the issued and outstanding capital stock of HV Bank free and clear of any lien or encumbrance.

(iii) The shares of HV Bancorp Capital Stock to be issued pursuant this Agreement, when issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and non-assessable, subject to no preemptive rights and will be issued in full compliance with all applicable laws.

(d) Authority. HV Bancorp and HV Bank each has all requisite corporate power and authority to enter into this Agreement, to perform its obligations hereunder and, subject to the consents, approvals and filings set forth in Section 3.3(f), to consummate the transactions contemplated by this Agreement, including the Conversion. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate actions on the part of the Boards of Directors of HV Bancorp and HV Bank, and no other corporate proceedings on the part of HV Bancorp or HV Bank are necessary to authorize this Agreement or to consummate the

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transactions contemplated by this Agreement other than the approval of the Members of HV Bank with respect to the Conversion. This Agreement has been duly and validly executed and delivered by HV Bancorp and HV Bank, and constitutes a valid and binding obligation of HV Bancorp and HV Bank, enforceable against HV Bancorp and HV Bank in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, whether applied in a court of law or a court of equity.

(e) No Violations. The execution, delivery and performance of this Agreement by HV Bancorp and HV Bank do not, and the consummation of the transactions contemplated by this Agreement will not, assuming that the consents, approvals and filings referred to in Section 3.3(f) have been obtained and the applicable waiting periods have expired, (i) violate any law, rule or regulation or any judgment, decree, order, governmental permit or license to which HV Bancorp or HV Bank (or any of their properties) is subject, (ii) violate the articles of incorporation or bylaws of HV Bancorp or HV Bank or the similar organizational documents of its Subsidiaries or (iii) constitute a breach or violation of, or a default under (or an event which, with due notice or lapse of time or both, would constitute a default under), or result in the termination of, accelerate the performance required by, or result in the creation of any Lien upon any of the properties or assets of HV Bancorp or HV Bank or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, indenture, deed of trust, loan agreement or other agreement, instrument or obligation to which HV Bancorp or HV Bank or any of their Subsidiaries is a party, or to which any of their respective properties or assets may be subject except, in the case of (iii), for any such breaches, violations or defaults that would not, individually or in the aggregate, have a Material Adverse Effect on HV Bancorp or HV Bank.

(f) Consents and Approvals. Except for (i) filings of applications and notices with, receipt of approvals or no objections from, and the expiration of related waiting periods required by, federal and state banking authorities, including filings and notices with the Federal Reserve, the FDIC and the PDBS, (ii) the filing with the SEC of the Merger Registration Statement and the declaration of effectiveness of the Merger Registration Statement by the SEC, and such proxy solicitation materials and reports, schedules and forms under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement, (iii) the filing of the Articles of Merger with the PDBS pursuant to the PBCL, (iv) filing with the Nasdaq Stock Market of a notification of the listing of the shares of HV Bancorp Common Stock to be issued in the Merger; (v) such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of shares of HV Bancorp Common Stock pursuant to this Agreement; (vi) the regulatory approvals required for the completion of the Conversion, as described in the Plan of Conversion; and (vii) the approval of the Plan of Conversion by the Members, no consents or approvals of, or filings or registrations with, any Governmental Entity or any third party are required to be made or obtained by HV Bancorp or HV Bank in connection with the execution and delivery by HV Bancorp and HV Bank of this Agreement or the consummation by HV Bancorp and HV Bank of the Merger and the other transactions contemplated by this Agreement, including the Bank Merger. As of the date hereof, neither HV Bancorp or HV Bank has knowledge of any reason pertaining to HV Bancorp or HV Bank why any of the approvals referred to in this Section 3.3(f) should not be obtained without the imposition of any material condition or restriction described in Section 6.1(j).

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(g) Governmental Filings. HV Bancorp and HV Bank and each of their Subsidiaries has filed all reports, schedules, and other documents that it has been required to file since January 1, 2011 with the Federal Reserve, the FDIC, the PDBS or any other Governmental Entity. As of their respective dates, each of such filings complied in all material respects with all laws or regulations under which it was filed (or was amended so as to be in compliance promptly following discovery of such noncompliance).

(h) Financial Statements. HV Bank has previously made available to Victory Bancorp copies of the consolidated balance sheets of HV Bank and its Subsidiaries as of June 30, 2013 and 2012 and related consolidated statements of operation, changes in equity and cash flows for each of the two years in the two-year period ended June 30, 2013, and the interim period subsequent to the end of its fiscal year ended June 30, 2013, through September 30, 2013. Such financial statements have been prepared in accordance with GAAP, and (including the related notes where applicable) fairly present in each case in all material respects (subject in the case of the unaudited interim statements to normal year-end adjustments), the consolidated financial position, results of operations, changes in equity and cash flows of HV Bank and HV Bank Subsidiaries on a consolidated basis as of and for the respective periods ending on the dates thereof, in accordance with GAAP during the periods involved, except as indicated in the notes thereto.

(i) Undisclosed Liabilities. Neither HV Bancorp, HV Bank nor any of their Subsidiaries has incurred any debt, liability or obligation of any nature whatsoever (whether accrued, contingent, absolute or otherwise and whether due or to become due) other than liabilities reflected on or reserved against in the consolidated balance sheet of HV Bank as of June 30, 2013, except for (i) liabilities incurred since June 30, 2013 in the ordinary course of business consistent with past practice that, either alone or when combined with all similar liabilities, have not had, and would not reasonably be expected to have, a Material Adverse Effect on HV Bancorp or HV Bank and (ii) liabilities incurred for legal, accounting, financial advising fees and out-of-pocket expenses in connection with the transactions contemplated by this Agreement.

(j) Absence of Certain Changes or Events. Since December 31, 2012, HV Bancorp, HV Bank and their Subsidiaries have conducted their respective businesses only in the ordinary and usual course of such businesses consistent with their past practices and there has not been any event or occurrence that has had, or is reasonably expected to have, a Material Adverse Effect on HV Bancorp or HV Bank.

(k) Litigation. There are no suits, actions or legal, administrative or arbitration proceedings pending or, to the knowledge of HV Bancorp or HV Bank, threatened against or affecting HV Bancorp, HV Bank or any of their Subsidiaries or any property or asset of HV Bancorp, HV Bank or any of their Subsidiaries that (i) are seeking damages or declaratory relief against HV Bancorp, HV Bank or any of their Subsidiaries, (ii) challenge the validity or propriety of the transactions contemplated by this Agreement. There are no judgments, decrees,

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injunctions, orders or rulings of any Governmental Entity or arbitrator outstanding against HV Bancorp, HV Bank or any of their Subsidiaries or the assets of HV Bancorp, HV Bank or any of their Subsidiaries. Since January 1, 2011, (i) there have been no subpoenas, written demands, or document requests received by HV Bancorp, HV Bank or any of their Subsidiaries from any Governmental Entity and (ii) no Governmental Entity has requested that HV Bancorp, HV Bank or any of their Subsidiaries enter into a settlement negotiation or tolling agreement with respect to any matter related to any such subpoena, written demand, or document request.

(l) Absence of Regulatory Actions. Since January 1, 2011, neither HV Bancorp, HV Bank nor any of their Subsidiaries has been a party to any cease and desist order, written agreement or memorandum of understanding with, or any commitment letter or similar undertaking to, or has been subject to any action, proceeding, order or directive by any Governmental Entity, or has adopted any board resolutions relating to such matters as are material to the business of HV Bancorp, HV Bank or any of their Subsidiaries at the request of any Governmental Entity, or has been advised by any Governmental Entity that it is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such action, proceeding, order, directive, written agreement, memorandum of understanding, commitment letter, board resolutions or similar undertaking. To the knowledge of the HV Bancorp and HV Bank, there are no material unresolved violations, criticisms or exceptions by any Governmental Entity with respect to any report or statement relating to any examinations of HV Bancorp, HV Bank or any of their Subsidiaries.

(m) Compliance with Laws. HV Bancorp, HV Bank and each of their Subsidiaries conduct their business in compliance with all statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable to it or the employees conducting such business, except where noncompliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on HV Bancorp or HV Bank. HV Bancorp, HV Bank and each of their Subsidiaries have all material permits, licenses, certificates of authority, orders and approvals of, and have made all filings, applications and registrations with, all Governmental Entities that are required in order to permit it to carry on its business as it is presently conducted; all such permits, licenses, certificates of authority, orders and approvals are in full force and effect, and no suspension or cancellation of any of them is, to the knowledge of HV Bancorp or HV Bank, threatened. Neither HV Bancorp, HV Bank nor any of their Subsidiaries has been given notice or been charged with any violation of, any law, ordinance, regulation, order, writ, rule, decree or condition to approval of any Governmental Entity which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on HV Bancorp or HV Bank.

(n) Taxes. All federal, state, local and foreign tax returns required to be filed by or on behalf of HV Bancorp, HV Bank or any of its Subsidiaries have been timely filed or requests for extensions have been timely filed and any such extension shall have been granted and not have expired, and all such filed returns are complete and accurate in all material respects. All Taxes shown on such returns, all Taxes required to be shown on returns for which extensions have been granted and all other Taxes required to be paid by HV Bank or any of its Subsidiaries have been paid in full or adequate provision has been made for any such Taxes on HV Bank’s balance sheet (in accordance with GAAP). To the knowledge of the HV Bank, there is no audit

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examination, deficiency assessment, tax investigation or refund litigation with respect to any Taxes of HV Bank or any of its Subsidiaries, and no claim has been made in writing by any authority in a jurisdiction where HV Bank or any of its Subsidiaries do not file tax returns that HV Bank or any such Subsidiary is subject to taxation in that jurisdiction. All Taxes, interest, additions and penalties due with respect to completed and settled examinations or concluded litigation relating to HV Bank or any of its Subsidiaries have been paid in full or adequate provision has been made for any such Taxes on HV Bank’s balance sheet (in accordance with GAAP). HV Bank and its Subsidiaries have not executed an extension or waiver of any statute of limitations on the assessment or collection of any tax due that is currently in effect. HV Bank and each of its Subsidiaries has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party, and HV Bank and each of its Subsidiaries has timely complied with all applicable information reporting requirements under Part III, Subchapter A of Chapter 61 of the IRC and similar applicable state and local information reporting requirements.

(o) Agreements.

(i) HV Bank has previously delivered to Victory Bancorp, and HV Bancorp’s Disclosure Letter lists, any contract, arrangement, commitment or understanding (whether written or oral) to which HV Bancorp, HV Bank or any of their Subsidiaries is a party or is bound:

(A) (1) with any executive officer or other employee of HV Bancorp, HV Bank or any of their Subsidiaries holding the title of Senior Vice President or higher the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving HV Bancorp, HV Bank or any of their Subsidiaries of the nature contemplated by this Agreement; (2) with respect to the employment of any directors, officers, employees or consultants; or (3) any of the benefits of which will be increased, or the vesting or payment of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement (including any stock option plan);

(B) that (1) contains a non-compete or client or customer non-solicit requirement or any other provision that restricts the conduct of, or the manner of conducting, any line of business of HV Bancorp, HV Bank or any of their Subsidiaries (or, following the consummation of the transactions contemplated hereby, HV Bancorp, HV Bank or any of their Subsidiaries), (2) obligates HV Bancorp, HV Bank or any of its affiliates (or, following the consummation of the transactions contemplated hereby, HV Bancorp, HV Bank or any of its Subsidiaries) to conduct business with any third party on an exclusive or preferential basis, or (3) requires referrals of business or requires HV Bancorp, HV Bank or any of its Subsidiaries to make available investment opportunities to any person on a priority or exclusive basis;

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(C) pursuant to which HV Bancorp, HV Bank or any of their Subsidiaries or any of its Subsidiaries may become obligated to invest in or contribute capital to any entity;

(D) that relates to borrowings of money (or guarantees thereof) by HV Bancorp, HV Bank or any of their Subsidiaries in excess of $100,000, other than Federal Home Loan Bank borrowings and repurchase agreements with customers entered into in the ordinary course of business;

(E) that grants any right of first refusal, right of first offer or similar right with respect to any material assets, rights or properties of HV Bancorp, HV Bank or any of their Subsidiaries;

(F) that limits the payment of dividends by HV Bancorp, HV Bank or any of their Subsidiaries;

(G) that relates to the involvement of HV Bancorp, HV Bank or any of their Subsidiaries in a joint venture, partnership, limited liability company agreement or other similar agreement or arrangement, or to the formation, creation or operation, management or control of any partnership or joint venture with any third parties;

(H) that relates to an acquisition, divestiture, merger or similar transaction and which contains representations, covenants, indemnities or other obligations (including indemnification, “earn-out” or other contingent obligations) that are still in effect,

(I) which is a lease or license with respect to any property, real or personal, whether as landlord, tenant, licensor or licensee, involving a liability or obligation as obligor in excess of $50,000 on an annual basis;

(J) which is a consulting agreement or data processing, software programming or licensing contract involving the payment of more than $50,000 per annum; or

(K) which is not of the type described in clauses (A) through (J) above and which involved payments by, or to, HV Bancorp, HV Bank or any of their Subsidiaries in the fiscal year ended June 30, 2013, or which could reasonably be expected to involve such payments during the fiscal year ending June 30, 2014, of more than $100,000 (excluding Loans) or the termination of which would require payment by HV Bancorp, HV Bank or any of their Subsidiaries in excess of $100,000.

(ii) Neither HV Bancorp, HV Bank nor any of their Subsidiaries is in default under (and no event has occurred which, with due notice or lapse of time or both, would constitute a default under) or is in material violation of any provision of any note, bond, indenture, mortgage, deed of trust, loan agreement, lease or other agreement to which it is a party or by which it is bound or to which any of its respective properties or assets is subject and, to the knowledge of HV Bancorp and HV Bank, no other party to any such agreement (excluding any loan or extension of credit made by HV Bancorp, HV Bank or any of their Subsidiaries) is in default in any respect thereunder.

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(p) Intellectual Property. HV Bancorp, HV Bank and each of their Subsidiaries own or possess valid and binding licenses and other rights to use (in the manner and the geographic areas in which they are currently used) without payment all patents, copyrights, trade secrets, trade names, service marks and trademarks material to its business. HV Bancorp’s Disclosure Letter sets forth a complete and correct list of all material trademarks, trade names, service marks and copyrights owned by or licensed to HV Bancorp, HV Bank or any of their Subsidiaries for use in its business, and all licenses and other agreements relating thereto and all agreements relating to third party intellectual property that HV Bancorp, HV Bank or any of their Subsidiaries is licensed or authorized to use in its business, including without limitation any software licenses but excluding any so-called “shrink-wrap” license agreements and other similar computer software licensed in the ordinary course of business and/or otherwise resident on desktop computers. With respect to each item of intellectual property owned by HV Bancorp, HV Bank or any of their Subsidiaries, the owner possesses all right, title and interest in and to the item, free and clear of any Lien. With respect to each item of intellectual property that HV Bancorp, HV Bank or any of their Subsidiaries is licensed or authorized to use, the license, sublicense or agreement covering such item is legal, valid, binding, enforceable and in full force and effect as to HV Bancorp, HV Bank and the Subsidiaries. Neither HV Bancorp, HV Bank nor any of their Subsidiaries has received any charge, complaint, claim, demand or notice alleging any interference, infringement, misappropriation or violation with or of any intellectual property rights of a third party (including any claims that HV Bancorp, HV Bank or any of their Subsidiaries must license or refrain from using any intellectual property rights of a third party). To the knowledge of HV Bancorp and HV Bank, neither HV Bancorp, HV Bank nor any of their Subsidiaries has interfered with, infringed upon, misappropriated or otherwise come into conflict with any intellectual property rights of third parties and no third party has interfered with, infringed upon, misappropriated or otherwise come into conflict with any intellectual property rights of HV Bancorp, HV Bank or any of their Subsidiaries.

(q) Labor Matters.

(i) HV Bancorp, HV Bank and their Subsidiaries are in material compliance with all applicable laws respecting employment, retention of independent contractors, employment practices, terms and conditions of employment, and wages and hours. Neither HV Bancorp, HV Bank nor any of their Subsidiaries is or has ever been a party to, or is or has ever been bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization with respect to its employees, nor is HV Bancorp, HV Bank or any of their Subsidiaries subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel HV Bancorp, HV Bank or any such Subsidiary to bargain with any labor organization as to wages and conditions of employment nor, to the knowledge of HV Bancorp and HV Bank, has any such proceeding been threatened, nor is there any strike, other labor dispute or organizational effort involving HV Bancorp, HV Bank or any of their Subsidiaries pending or, to the knowledge of HV Bancorp and HV Bank, threatened.

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(ii) HV Bancorp’s Disclosure Letter identifies (A) all present employees (including any leased or temporary employees) of HV Bancorp, HV Bank and their Subsidiaries and any consultants or independent contractors providing services to HV Bancorp, HV Bank or any of their Subsidiaries; (B) each employee’s, consultant’s or independent contractor’s current rate of compensation; and (C) each employee’s accrued vacation, sick leave or personal leave if applicable. There are no unpaid wages, bonuses or commissions owed to any employee (other than those not yet due).

(r) Employee Benefit Plans.

(i) HV Bank has previously delivered or made available to Victory Bancorp true and complete copies of each pension, retirement, stock option, stock purchase, stock ownership, savings, stock appreciation right, profit sharing, deferred compensation, consulting, bonus, group insurance, severance and other benefit plans, contracts, agreements and arrangements, including, but not limited to, “employee benefit plans,” as defined in Section 3(3) of ERISA, incentive and welfare policies, contracts, plans and arrangements and all trust agreements related thereto with respect to any present or former directors, officers or other employees of HV Bancorp or any of its Subsidiaries (hereinafter referred to collectively as the “HV Bank Employee Plans”), along with, where applicable, copies of the IRS Form 5500 for the most recently completed year.

(ii) There is no pending or, to the knowledge of HV Bank, threatened litigation, administrative action or proceeding relating to any HV Bank Employee Plan. All of HV Bank Employee Plans comply in all material respects with all applicable requirements of ERISA, the IRC and other applicable laws. There has occurred no “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the IRC) with respect to HV Bank Employee Plans that is likely to result in the imposition of any penalties or Taxes upon HV Bank or any of its Subsidiaries under Section 502(i) of ERISA or Section 4975 of the IRC.

(iii) No liability to the Pension Benefit Guarantee Corporation has been or is expected by HV Bank or any of its Subsidiaries to be incurred with respect to any HV Bank Employee Plan which is subject to Title IV of ERISA (the “HV Bank Pension Plan”), or with respect to any “single-employer plan” (as defined in Section 4001(a) of ERISA) currently or formerly maintained by HV Bank or any ERISA Affiliate. No HV Bank Pension Plan had an “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, as of the last day of the end of the most recent plan year ending prior to the date hereof; the fair market value of the assets of each HV Bank Pension Plan exceeds the present value of the “benefit liabilities” (as defined in Section 4001(a)(16) of ERISA) under such HV Bank Pension Plan as of the end of the most recent plan year with respect to the respective HV Bank Pension Plan ending prior to the date hereof, calculated on the basis of the actuarial assumptions used in the most recent actuarial valuation for such HV Bank Pension Plan as of the date hereof; and no notice of a “reportable event” (as defined in Section 4043 of ERISA) for which the 30-day reporting requirement has not been waived has been required to be filed for any HV Bank Pension Plan within the 12-month period ending on the date hereof. Neither HV Bank nor any of its Subsidiaries has provided, or is required to provide, security to any HV Bank Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the IRC. Neither HV Bank, any of its Subsidiaries, nor any ERISA Affiliate has contributed to any “multiemployer plan,” as defined in Section 3(37) of ERISA.

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(iv) Each HV Bank Employee Plan that is an “employee pension benefit plan” (as defined in Section 3(2) of ERISA) and which is intended to be qualified under Section 401(a) of the IRC (a “HV Bank Qualified Plan”) has received or applied for a current favorable determination letter from the IRS, and to HV Bank’s knowledge, there are no circumstances likely to result in revocation of any such favorable determination letter. Each HV Bank Qualified Plan that is an “employee stock ownership plan” (as defined in Section 4975(e)(7) of the IRC) has satisfied all of the applicable requirements of Sections 409 and 4975(e)(7) of the IRC and the regulations thereunder in all material respects and any assets of any such HV Bank Qualified Plan that, as of the end of the plan year, are not allocated to participants’ individual accounts are pledged as security for, and may be applied to satisfy, any securities acquisition indebtedness.

(s) Properties.

(i) A list of all real property owned or leased by HV Bancorp, HV Bank or a Subsidiary of HV Bank is set forth in HV Bancorp’s Disclosure Letter. HV Bancorp, HV Bank and each of their Subsidiaries has good and marketable title to all real property owned by it (including any property acquired in a judicial foreclosure proceeding or by way of a deed in lieu of foreclosure or similar transfer), in each case free and clear of any Liens except (i) liens for Taxes not yet due and payable and (ii) such easements, restrictions and encumbrances, if any, as are not material in character, amount or extent, and do not materially detract from the value, or materially interfere with the present use of the properties subject thereto or affected thereby. Each lease pursuant to which HV Bancorp, HV Bank or any of their Subsidiaries as lessee, leases real or personal property is valid and in full force and effect as to HV Bancorp, HV Bank and the Subsidiaries and neither HV Bancorp, HV Bank nor any of their Subsidiaries, nor, to HV Bancorp’s and HV Bank’s knowledge, any other party to any such lease, is in default or in violation of any material provisions of any such lease. HV Bank has previously delivered to Victory Bancorp a complete and correct copy of each such lease. All real property owned or leased by HV Bancorp, HV Bank or any of their Subsidiaries are in all material respects in a good state of maintenance and repair (normal wear and tear excepted), conform in all material respects with all applicable ordinances, regulations and zoning laws and are considered by HV Bancorp and HV Bank to be adequate for the current business of HV Bancorp, HV Bank and their Subsidiaries. To the knowledge of HV Bancorp and HV Bank, none of the buildings, structures or other improvements located on any real property owned or leased by HV Bancorp, HV Bank or any of their Subsidiaries encroaches upon or over any adjoining parcel or real estate or any easement or right-of-way.

(ii) HV Bancorp, HV Bank and each of their Subsidiaries has good and marketable title to all tangible personal property owned by it, free and clear of all Liens except such Liens, if any, that are not material in character, amount or extent, and that do not materially detract from the value, or materially interfere with the present use of the properties subject thereto or affected thereby. With respect to personal property used in the business of HV Bancorp, HV Bank and their Subsidiaries that is leased rather than owned, neither HV Bancorp, HV Bank nor any of their Subsidiaries is in default under the terms of any such lease.

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(t) Loan Matters.

(i) To the knowledge of HV Bank, all Loans held by HV Bank were made in all material respects for good, valuable and adequate consideration in the ordinary course of the business, and, to the knowledge of HV Bank, the Loans are not subject to any defenses, setoffs or counterclaims, including without limitation any such as are afforded by usury or truth in lending laws, except as may be provided by bankruptcy, insolvency or similar laws or by general principles of equity. The notes or other evidences of indebtedness evidencing such Loans and all forms of pledges, mortgages and other collateral documents and security agreements are, in all material respects, enforceable and valid.

(ii) Neither the terms of any Loan, any of the documentation for any Loan, the manner in which any Loans have been administered and serviced, nor HV Bank’s practices of approving or rejecting Loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury.

(iii) The allowance for loan losses reflected in HV Bank’s audited balance sheet at June 30, 2013, was, and the allowance for loan losses shown on the balance sheets in HV Bank‘s reports for periods ending after such date, in the opinion of management, was or will be adequate, as of the dates thereof.

(iv) None of the agreements pursuant to which HV Bank or any of its Subsidiaries has sold Loans or pools of Loans or participations in Loans or pools of Loans contains any obligation to repurchase such Loans or interests therein solely on account of a payment default by the obligor on any such Loan.

(v) (A) HV Bancorp’s Disclosure Letter sets forth a list of all Loans as of the date hereof by HV Bank to any directors and executive officers (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of HV Bank or any of its Subsidiaries, (B) there are no Loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and (C) all such Loans are and were originated in compliance in all material respects with all applicable laws.

(vi) HV Bancorp’s Disclosure Letter sets forth a listing, as of June 30, 2013, of all Loans (A) that are contractually past due ninety (90) days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are classified as “Watch,” “Special Mention,” “Substandard,” “Doubtful,” “Loss” or words of similar import, (D) where the interest rate terms have been reduced and/or the maturity dates have been extended

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subsequent to the origination of the Loan due to concerns regarding the borrower’s ability to pay in accordance with the Loan’s original terms and (E) where a specific reserve allocation exists in connection therewith.

(u) Environmental Matters.

(i) Each of HV Bank’s and its Subsidiaries’ properties and the Participation Facilities, and, to the knowledge of HV Bank, the Loan Properties, are, and have been during the period of HV Bank’s or its Subsidiaries’ ownership or operation thereof, in material compliance with all Environmental Laws.

(ii) There is no suit, claim, action, demand, executive or administrative order, directive, investigation or proceeding pending or, to the knowledge of HV Bank, threatened, before any court or Governmental Entity against HV Bank or any of its Subsidiaries or any Participation Facility (A) for alleged noncompliance (including by any predecessor) with, or liability under, any Environmental Law or (B) relating to the presence of or release into the environment of any Hazardous Material, whether or not occurring at or on a site owned, leased or operated by HV Bank or any of its Subsidiaries or any Participation Facility.

(iii) To the knowledge of HV Bank, there is no suit, claim, action, demand, executive or administrative order, directive, investigation or proceeding pending or threatened before any court or Governmental Entity relating to or against any Loan Property (or HV Bank or any of its Subsidiaries in respect of such Loan Property) (A) relating to alleged noncompliance (including by any predecessor) with, or liability under, any Environmental Law or (B) relating to the presence of or release into the environment of any Hazardous Material, whether or not occurring at a Loan Property.

(iv) Neither HV Bank nor any of its Subsidiaries has received in writing any notice, demand letter, executive or administrative order, directive or request for information from any Governmental Entity or any third party indicating that it may be in violation of, or liable under, any Environmental Law.

(v) To the knowledge of HV Bank, there are no underground storage tanks at any properties owned or operated by HV Bank or any of its Subsidiaries or any Participation Facility. Neither HV Bank nor any of its Subsidiaries nor, to the knowledge of HV Bank, any other person or entity, has closed or removed any underground storage tanks from any properties owned or operated by HV Bank or any of its Subsidiaries or any Participation Facility.

(vi) During the period of (A) HV Bank’s or its Subsidiary’s ownership or operation of any of their respective current properties or (B) HV Bank’s or its Subsidiary’s participation in the management of any Participation Facility, to the knowledge of HV Bank, there has been no release of Hazardous Materials in, on, under or affecting such properties except for releases of Hazardous Materials in quantities below the level at which they were regulated under any Environmental Law in effect at the time of such release. To the knowledge of HV Bank, prior to the period of (A) HV Bank’s or its Subsidiary’s ownership or operation of any of their respective current properties or (B) HV Bank’s or its Subsidiary’s participation in

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the management of any Participation Facility, there was no contamination by or release of Hazardous Material in, on, under or affecting such properties except for releases of Hazardous Materials in quantities below the level at which they were regulated under any Environmental Law in effect at the time of such release.

(v) Insurance. In the opinion of management, HV Bancorp and HV Bank and their Subsidiaries are presently insured for amounts deemed reasonable by management against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured. HV Bancorp’s Disclosure Letter contains a list of all policies of insurance carried and owned by HV Bancorp, HV Bank or any of their Subsidiaries showing the name of the insurance company and agent, the nature of the coverage, the policy limit, the annual premiums and the expiration date. All of the insurance policies and bonds maintained by HV Bancorp, HV Bank and their Subsidiaries are in full force and effect, HV Bancorp, HV Bank and their Subsidiaries are not in default thereunder, all premiums and other payments due under any such policy have been paid and all material claims thereunder have been filed in due and timely fashion.

(w) Investment Securities; Derivatives.

(i) Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities and derivatives held by HV Bank or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

(ii) Neither HV Bank nor any of its Subsidiaries is a party to or has agreed to enter into an exchange-traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is a derivative contract (including various combinations thereof) or owns securities that (A) are referred to generically as “structured notes,” “high risk mortgage derivatives,” “capped floating rate notes” or “capped floating rate mortgage derivatives” or (B) are likely to have changes in value as a result of interest or exchange rate changes that materially exceed normal changes in value attributable to interest or exchange rate changes.

(x) Indemnification. Except as provided in the articles of incorporation or bylaws of HV Bancorp, HV Bank and the similar organizational documents of their Subsidiaries, and in employment agreements, change in control agreements and other agreements related to employment or service as a director, neither HV Bancorp, HV Bank nor any of their Subsidiaries is a party to any agreement that provides for the indemnification of any of its present or former directors, officers or employees, or other persons who serve or served as a director, officer or employee of another corporation, partnership or other enterprise at the request of HV Bancorp or HV Bank and, to the knowledge of HV Bancorp and HV Bank, there are no claims for which any such person would be entitled to indemnification under the articles of incorporation or bylaws of HV Bancorp, HV Bank and the similar organizational documents of their Subsidiaries, under any applicable law or regulation or under any such employment-related agreement.

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(y) Corporate Documents and Records. HV Bank has previously provided a complete and correct copy of the articles of incorporation, bylaws and similar organizational documents of HV Bank and each of HV Bank’s Subsidiaries, as in effect as of the date of this Agreement, and forms of articles of incorporation and bylaws of HV Bancorp (which forms when finalized shall not be materially different from the forms provided). Neither HV Bancorp, HV Bank nor any of HV Bancorp’s Subsidiaries is in violation of its articles of incorporation, bylaws or similar organizational documents. The minute books of HV Bancorp, if any, HV Bank constitute a complete and correct record of all actions taken by their respective boards of directors (and each committee thereof).

(z) CRA, Anti-Money Laundering, OFAC and Customer Information Security. HV Bank has received a rating of “Satisfactory” or better in its most recent examination or interim review with respect to the CRA. HV Bank does not have knowledge of any facts or circumstances that would cause HV Bank or any other Subsidiary of HV Bank: (i) to be deemed not to be in satisfactory compliance in any material respect with the CRA, and the regulations promulgated thereunder, or to be assigned a rating for CRA purposes by federal bank regulators of lower than “Satisfactory;” or (ii) to be deemed to be operating in violation in any material respect of the Bank Secrecy Act, the USA PATRIOT Act, any order issued with respect to anti-money laundering by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or any other applicable anti-money laundering statute, rule or regulation; or (iii) to be deemed not to be in satisfactory compliance in any material respect with the applicable privacy of customer information requirements contained in any federal and state privacy laws and regulations, including without limitation, in Title V of the Gramm-Leach-Bliley Act of 1999 and the regulations promulgated thereunder, as well as the provisions of the information security program adopted by HV Bank. To the knowledge of HV Bank, no non-public customer information has been disclosed to or accessed by an unauthorized third party in a manner which would cause either HV Bank or any of its Subsidiaries to undertake any remedial action. The Board of Trustees of HV Bank (or where appropriate of any other Subsidiary of HV Bank) has adopted, and HV Bank (or such other Subsidiary of HV Bank) has implemented, an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with Section 326 of the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and HV Bank (or such other Subsidiary of HV Bank) has complied in all material respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.

(aa) Tax Treatment of the Merger. Neither HV Bancorp nor HV Bank have knowledge of any fact or circumstance relating to it that would prevent the transactions contemplated by this Agreement from qualifying as a reorganization under Section 368(a) of the IRC.

(bb) Fees. Other than for financial advisory services performed for HV Bancorp and HV Bank by Griffin Financial Group LLC pursuant to an agreement dated June 25, 2013, a true and complete copy of which has previously been provided to Victory Bancorp, neither HV Bancorp nor HV Bank, nor any of their respective officers, directors, employees or agents, has employed any broker or finder or incurred any liability for any financial advisory

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fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for HV Bancorp or HV Bank in connection with this Agreement or the transactions contemplated hereby.

ARTICLE IV

CONDUCT PENDING THE MERGER

4.1 Forbearances by Victory Bancorp. Except as expressly contemplated or permitted by this Agreement or disclosed in Victory Bancorp’s Disclosure Letter, and except to the extent required by law or regulation or any Governmental Entity during the period from the date of this Agreement to the Effective Time, Victory Bancorp shall not, nor shall Victory Bancorp permit any of its Subsidiaries to, without the prior written consent of HV Bancorp (which shall not be unreasonably withheld, conditioned or delayed):

(a) conduct its business other than in the regular, ordinary and usual course consistent with past practice; fail to use reasonable efforts to maintain and preserve intact its business organization, properties, leases, employees and advantageous business relationships and retain the services of its officers and key employees; or take any action that would adversely affect or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby;

(b) (i) incur, modify, extend or renegotiate any material indebtedness for borrowed money, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, other than (A) the creation of deposit liabilities in the ordinary course of business consistent with past practice and (B) advances from the Federal Home Loan Bank of Pittsburgh;

(ii) prepay any indebtedness or other similar arrangements so as to cause Victory Bancorp to incur any prepayment penalty thereunder; or

(iii) purchase any brokered certificates of deposit;

(c) (i) adjust, split, combine or reclassify any capital stock;

(ii) make, declare or pay any dividend, or make any other distribution on its capital stock, except for cash dividends in accordance with the terms of the Series E Preferred Stock and Series F Preferred Stock, and dividends paid by Victory Bank to enable Victory Bancorp to pay such dividends;

(iii) grant any person any right to acquire any shares of its capital stock;

(iv) issue any additional shares of capital stock or any securities or obligations convertible or exercisable for any shares of its capital stock, except pursuant to the exercise of Victory Bancorp Stock Options and Victory Bancorp Warrants and the conversion of Series E Preferred Stock outstanding as of the date hereof; or

(v) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock;

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(d) take any action that would adversely affect or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby;

(e) take any action that is intended to or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article VI not being satisfied or in a violation of any provision of this Agreement;

(f) knowingly take action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368 of the IRC;

(g) agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by this Section 4.1;

(h) amend, repeal or modify any provision of its articles of incorporation or bylaws;

(i) consummate, or enter into any agreement with respect to any transaction involving a third party that would constitute an Acquisition Proposal with respect to such third party;

(j) other than in the ordinary course of business consistent with past practice (including the sale, transfer or disposal of other real estate owned (“OREO”)), (i) sell, transfer, mortgage, encumber or otherwise dispose of any of its real property or other assets to any person other than a Subsidiary, or (ii) cancel, release or assign any indebtedness to any such person or any claims held by any such person;

(k) make any equity investment, either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other person, or form any new subsidiary;

(l) except as set forth in Section 4.1(l) of Victory Bancorp’s Disclosure Letter, enter into, renew, amend or terminate any material contract, plan or agreement, or make any change in any of its leases or contracts other than contracts or agreements covered by Section 4.1(m);

(m) make, renegotiate, renew, increase the amount of, extend the term of, modify or purchase any Loan, or make any commitment in respect of any of the foregoing, except (i) in conformity with existing lending practices in amounts not to exceed $100,000 if such Loan is not fully secured or $1,000,000 if such Loan is fully secured or (ii) Loans as to which Victory Bancorp has a binding obligation to make such Loans (including without limitation lines of credit and letters of credit) as of the date hereof and which are described in Victory Bancorp’s Disclosure Letter; provided, however, that neither Victory Bancorp nor any of

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its Subsidiaries shall make, renegotiate, renew, increase the amount of, extend the term of, modify or purchase any Loan, or make any commitment in respect of any of the foregoing, to any person if when aggregated with all outstanding Loans and commitments for Loans made to such person and such person’s family members and affiliates, the Loans would exceed $1,500,000;

(n) except for Loans made in accordance with Regulation O of the Federal Reserve Board (12 C.F.R. Part 215), make or increase any Loan, or commit to make or increase any such Loan, to any director or executive officer of Victory Bancorp or Victory Bank, or any entity controlled, directly or indirectly, by any of the foregoing;

(o) (i) increase in any manner the compensation, bonuses or other fringe benefits of any of its employees or directors other than in the ordinary course of business consistent with past practice and pursuant to policies then in effect, or pay any bonus, pension, retirement allowance or contribution not required by any existing plan or agreement to any such employees or directors;

(ii) except as contemplated by Section 5.15, become a party to, amend, renew, extend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment, severance or change in control agreement with or for the benefit of any employee or director, except for amendments to any plan or agreement that are required by law;

(iii) amend, modify or revise the terms of any outstanding stock option or voluntarily accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation;

(iv) elect to any office with the title of Senior Vice President or higher any person who does not hold such office as of the date of this Agreement or elect to its Board of Directors any person who is not a member of its Board of Directors as of the date of this Agreement; or

(v) hire any employee with an annualized salary in excess of $100,000 except as may be necessary to replace any non-officer employee whose employment is terminated, whether voluntarily or involuntarily;

(p) except as set forth on Section 4.1(p) of the Victory Bancorp Disclosure Letter, commence any action or proceeding, other than to enforce any obligation owed to Victory Bancorp or any of its Subsidiaries and in accordance with past practice, or settle any claim, action or proceeding (i) involving payment by it of money damages in excess of $50,000 or (ii) which would impose any material restriction on its operations or the operations of any of its Subsidiaries;

(q) increase or decrease the rate of interest paid on time deposits or on certificates of deposit, except in the ordinary course of business;

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(r) purchase any debt security, including mortgage-backed and mortgage-related securities, not in accordance with past practices;

(s) make any capital expenditures in excess of $100,000, other than pursuant to binding commitments existing on the date hereof, which are described in the Victory Bancorp’s Disclosure Letter, and expenditures reasonably necessary to maintain existing assets in good repair;

(t) establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office;

(u) enter into any futures contract, option, swap agreement, interest rate cap, interest rate floor, interest rate exchange agreement, or take any other action for purposes of hedging the exposure of its interest-earning assets or interest-bearing liabilities to changes in market rates of interest;

(v) make any changes in policies in any material respect in existence on the date hereof with regard to: the extension of credit, or the establishment of reserves with respect to possible loss thereon or the charge off of losses incurred thereon; investments; asset/liability management; or other material banking policies, except as may be required by changes in applicable law or regulations, GAAP, or the direction of a Governmental Entity;

(w) except as required by law or for communications in the ordinary course of business consistent with past practice that do not relate to the Merger or other transactions contemplated hereby, issue any communication relating to post-Closing employment, benefits or compensation information, without the prior consent of HV Bank (which shall not be unreasonably withheld, conditioned or delayed);

(x) except with respect to foreclosures in process as of the date hereof, foreclose upon or take a deed or title to any commercial real estate (i) without providing prior notice to HV Bank and conducting a Phase I environmental assessment of the property, or (ii) if the Phase I environmental assessment referred to in the prior clause reflects the presence of any Hazardous Material or underground storage tank; or

(y) make, change or rescind any material election concerning Taxes or Tax Returns, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle or compromise any material Tax claim or assessment, or surrender any right to claim a refund of Taxes or obtain any Tax ruling;

Any request by Victory Bancorp or response thereto by HV Bancorp or HV Bank shall be made in accordance with the notice provisions of Section 8.7 and shall note that it is a request pursuant to this Section 4.1.

4.2 Forbearances by HV Bancorp and HV Bank. Except as expressly contemplated or permitted by this Agreement, and except to the extent required by law or regulation or any Governmental Entity, during the period from the date of this Agreement to the

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Effective Time, HV Bancorp and HV Bank shall maintain its rights and franchises in all material respects, and shall not, nor shall HV Bancorp or HV Bank permit any of their Subsidiaries to, without the prior written consent of Victory Bancorp (which shall not be unreasonably withheld, conditioned or delayed):

(a) conduct its business other than in the regular, ordinary and usual course consistent with past practice; fail to use reasonable efforts to maintain and preserve intact its business organization, properties, leases, employees and advantageous business relationships and retain the services of its officers and key employees; or take any action that would adversely affect or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby;

(b) (i) incur, modify, extend or renegotiate any material indebtedness for borrowed money, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, other than (A) the creation of deposit liabilities in the ordinary course of business consistent with past practice and (B) advances from the Federal Home Loan Bank of Pittsburgh;

(ii) prepay any indebtedness or other similar arrangements so as to cause HV Bank to incur any prepayment penalty thereunder; or

(iii) purchase any brokered certificates of deposit;

(c) take any action that would adversely affect or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby;

(d) take any action that is intended to or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article VI not being satisfied or in a violation of any provision of this Agreement;

(e) knowingly take action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368 of the IRC;

(f) agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by this Section 4.2;

(g) amend, repeal or modify any provision of its articles of incorporation or bylaws in a manner which would adversely affect Victory Bancorp or any Victory Bancorp stockholder or the transactions contemplated by this Agreement;

(h) consummate, or enter into any agreement with respect to any transaction involving a third party that would constitute an Acquisition Proposal with respect to such third party;

(i) other than in the ordinary course of business consistent with past practice (including the sale, transfer or disposal of other real estate owned (“OREO”)), (i) sell, transfer,

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mortgage, encumber or otherwise dispose of any of its real property or other assets to any person other than a Subsidiary, or (ii) cancel, release or assign any indebtedness to any such person or any claims held by any such person;

(j) make any equity investment, either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other person, or form any new subsidiary;

(k) except as set forth in Section 4.2(k) of HV Bancorp’s Disclosure Letter, enter into, renew, amend or terminate any material contract, plan or agreement, or make any change in any of its leases or contracts other than contracts or agreements covered by Section 4.2(l);

(l) make, renegotiate, renew, increase the amount of, extend the term of, modify or purchase any Loan, or make any commitment in respect of any of the foregoing, except (i) in conformity with existing lending practices in amounts not to exceed $100,000 if such Loan is not fully secured or $1,000,000 if such Loan is fully secured or (ii) Loans as to which HV Bank has a binding obligation to make such Loans (including without limitation lines of credit and letters of credit) as of the date hereof and which are described in HV Bancorp’s Disclosure Letter; provided, however, that neither HV Bank nor any of its Subsidiaries shall make, renegotiate, renew, increase the amount of, extend the term of, modify or purchase any Loan, or make any commitment in respect of any of the foregoing, to any person if when aggregated with all outstanding Loans and commitments for Loans made to such person and such person’s family members and affiliates, the Loans would exceed $1,500,000;

(m) except for Loans made in accordance with Regulation O of the Federal Reserve Board (12 C.F.R. Part 215), make or increase any Loan, or commit to make or increase any such Loan, to any director or executive officer of HV Bank, or any entity controlled, directly or indirectly, by any of the foregoing;

(n) (i) increase in any manner the compensation, bonuses or other fringe benefits of any of its employees or directors other than in the ordinary course of business consistent with past practice and pursuant to policies then in effect, or pay any bonus, pension, retirement allowance or contribution not required by any existing plan or agreement to any such employees or directors;

(ii) except as contemplated by Section 5.15, become a party to, amend, renew, extend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment, severance or change in control agreement with or for the benefit of any employee or director, except for amendments to any plan or agreement that are required by law;

(iii) elect to any office with the title of Senior Vice President or higher any person who does not hold such office as of the date of this Agreement or elect to its Board of Trustees any person who is not a member of its Board of Trustees as of the date of this Agreement; or

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(iv) elect to any office with the title of Senior Vice President or higher any person who does not hold such office as of the date of this Agreement or elect to its Board of Trustees any person who is not a member of its Board of Trustees as of the date of this Agreement; or

(v) hire any employee with an annualized salary in excess of $100,000 except as may be necessary to replace any non-officer employee whose employment is terminated, whether voluntarily or involuntarily;

(o) except as set forth on Section 4.2(o) of the HV Bancorp Disclosure Letter, commence any action or proceeding, other than to enforce any obligation owed to HV Bank or any of its Subsidiaries and in accordance with past practice, or settle any claim, action or proceeding (i) involving payment by it of money damages in excess of $50,000 or (ii) which would impose any material restriction on its operations or the operations of any of its Subsidiaries;

(p) increase or decrease the rate of interest paid on time deposits or on certificates of deposit, except in the ordinary course of business;

(q) purchase any debt security, including mortgage-backed and mortgage-related securities, not in accordance with past practices;

(r) make any capital expenditures in excess of $100,000, other than pursuant to binding commitments existing on the date hereof, which are described in HV Bancorp’s Disclosure Letter, and expenditures reasonably necessary to maintain existing assets in good repair;

(s) establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office;

(t) enter into any futures contract, option, swap agreement, interest rate cap, interest rate floor, interest rate exchange agreement, or take any other action for purposes of hedging the exposure of its interest-earning assets or interest-bearing liabilities to changes in market rates of interest;

(u) make any changes in policies in any material respect in existence on the date hereof with regard to: the extension of credit, or the establishment of reserves with respect to possible loss thereon or the charge off of losses incurred thereon; investments; asset/liability management; or other material banking policies, except as may be required by changes in applicable law or regulations, GAAP, or the direction of a Governmental Entity;

(v) except as required by law or for communications in the ordinary course of business consistent with past practice that do not relate to the Merger or other transactions contemplated hereby, issue any communication: (i) relating to post-Closing employment, benefits or compensation information, without the prior consent of Victory Bancorp (which shall not be unreasonably withheld, conditioned or delayed); or (ii) of a general nature to customers of Victory Bank without the prior approval of Victory Bancorp (which shall not be unreasonably withheld, conditioned or delayed).

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(w) except with respect to foreclosures in process as of the date hereof, foreclose upon or take a deed or title to any commercial real estate (i) without providing prior notice to Victory Bancorp and conducting a Phase I environmental assessment of the property, or (ii) if the Phase I environmental assessment referred to in the prior clause reflects the presence of any Hazardous Material or underground storage tank; or

(x) make, change or rescind any material election concerning Taxes or Tax Returns, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle or compromise any material Tax claim or assessment, or surrender any right to claim a refund of Taxes or obtain any Tax ruling.

Any request by HV Bank or response thereto by Victory Bancorp shall be made in accordance with the notice provisions of Section 8.7 and shall note that it is a request pursuant to this Section 4.2.

ARTICLE V

COVENANTS

5.1 Acquisition Proposals.

(a) From the date of this Agreement until the earlier to occur of the Closing or the termination of this Agreement in accordance with its terms, Victory Bancorp and HV Bank shall not, and shall not authorize or permit any of their respective Subsidiaries’ officers, directors or employees or any investment banker, financial advisor, attorney, accountant or other representative retained by Victory Bancorp or HV Bank or any of its Subsidiaries, as applicable, to directly or indirectly, (i) solicit, initiate or encourage, or take any other action to facilitate, any inquiries, discussions or the making of any proposal that constitutes or could reasonably be expected to lead to an Acquisition Proposal, (ii) furnish any information or data regarding Victory Bancorp or HV Bank to any person in connection with or in response to an Acquisition Proposal or an inquiry or indication of interest that would reasonably be expected to lead to an Acquisition Proposal, (iii) continue or otherwise participate in any discussions or negotiations, or otherwise communicate in any way with any person (other than the parties to this Agreement), regarding an Acquisition Proposal, (iv) approve, endorse or recommend any Acquisition Proposal, or (v) enter into or consummate any agreement, arrangement or understanding contemplating any Acquisition Proposal or requiring Victory Bancorp or HV Bank to abandon, terminate or fail to consummate the transactions contemplated hereby. Without limiting the foregoing, it is understood that any violation of the restrictions set forth in the preceding sentence by any officer, director or employee of Victory Bancorp or HV Bank or any investment banker, financial advisor, attorney, accountant or other representative retained by Victory Bancorp or HV Bank shall be deemed to be a breach of this Section 5.1 by Victory Bancorp or HV Bank, as applicable. Notwithstanding the foregoing, prior to the adoption and approval of this Agreement by Victory Bancorp’s stockholders at a meeting of the stockholders of Victory Bancorp, the Board of Directors of Victory Bancorp or HV Bank may respond to, in a manner it deems

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appropriate, participate in any discussions, provide any third party with nonpublic information regarding, unsolicited inquiries relating to an Acquisition Proposal, in each case, if (1) the Acquisition Proposal constitutes or is reasonably expected to result in a Superior Proposal, and (2) the respective Board of Directors shall have determined, in good faith after consultation with its legal and financial advisors, that the failure to do so may constitute a breach of their fiduciary duties.

(b) Each party will notify the other party immediately orally (within one (1) calendar day) and in writing (within three (3) calendar days) of receipt of any Acquisition Proposal, any request for non-public information that could reasonably be expected to lead to an Acquisition Proposal, or any inquiry with respect to or that could reasonably be expected to lead to an Acquisition Proposal, including, in each case, the identity of the person making such Acquisition Proposal, request or inquiry and the terms and conditions thereof, and shall provide to the other party any written materials received by it in connection therewith. Each party will keep the other party informed of any developments with respect to any such Acquisition Proposal, request or inquiry immediately orally (within one (1) calendar day) and in writing (within three (3) calendar days) upon the occurrence thereof.

(c) Each of Victory Bancorp and HV Bank will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted prior to the date of this Agreement with respect to any of the foregoing. Neither Victory Bancorp nor HV Bank shall release any third party from, or waive any provisions of, any confidentiality agreements or standstill agreement to which it or any of its Subsidiaries is a party.

5.2 Advice of Changes. Prior to the Closing, each party shall promptly advise the other party orally and in writing to the extent that it has knowledge of (i) any representation or warranty made by it contained in this Agreement becoming untrue or inaccurate in any material respect or (ii) the failure by it to comply in any material respect with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement.

5.3 Access and Information.

(a) Upon reasonable notice and subject to applicable laws relating to the exchange of information, each party shall (and shall cause such party’s Subsidiaries to) afford the other party and its representatives (including, without limitation, officers and employees of the other party and its affiliates and counsel, accountants and other professionals retained by the other party) such reasonable access during normal business hours throughout the period prior to the Effective Time to the books, records (including, without limitation tax returns and work papers of independent auditors and materials prepared in connection with meetings of the parties’ Board of Directors), contracts, properties, personnel and to such other information relating to such party and its Subsidiaries as the other party may reasonably request, except where such materials relate to (i) matters involving this Agreement, (ii) pending or threatened litigation or investigations if, in the opinion of counsel to the party granting access to such information, the

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presence of such designees would or might adversely affect the confidential nature of, or any privilege relating to, the matters being discussed, or (iii) matters involving an Acquisition Proposal; provided, however, that the foregoing exception shall not apply to any transaction proposed to be conducted by Victory Bancorp pursuant to Section 4.1(i) or by HV Bancorp or HV Bank pursuant to Section 4.2(h) hereof; provided, further, that no investigation pursuant to this Section 5.3 shall affect or be deemed to modify any representation or warranty made in this Agreement by the party granting access to such information. Neither party nor any of their Subsidiaries shall be required to provide access to or to disclose information where such access or disclosure would violate or prejudice the rights of its customers, jeopardize the attorney-client privilege of the entity in possession or control of such information or contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or binding agreement entered into prior to the date of this Agreement. The parties will make appropriate and reasonable substitute disclosure arrangements under circumstances in which the restrictions of the preceding sentence apply.

(b) From the date hereof until the Effective Time, each party shall, and shall cause its Subsidiaries to, promptly provide the other party with (i) a copy of each report filed with a Governmental Entity, (ii) a copy of each periodic report to its senior management and all materials relating to its business or operations furnished to its Board of Directors, (iii) a copy of each press release made available to the public and (iv) all other information concerning its business, properties and personnel as the other party may reasonably request, provided that a party shall not be entitled to receive reports or other documents relating to (x) matters involving this Agreement, (y) pending or threatened litigation or investigations if, in the opinion of counsel, the disclosure of such information would or might adversely affect the confidential nature of, or any privilege relating to, the matters being discussed, or (z) matters involving an Acquisition Proposal.

(c) Victory Bancorp, HV Bancorp and HV Bank will not, and will cause its respective representatives not to, use any information and documents obtained in the course of the consideration of the consummation of the transactions contemplated by this Agreement, including any information obtained pursuant to this Section 5.3, for any purpose unrelated to the consummation of the transactions contemplated by this Agreement and to hold such information and documents in confidence and treat such information and documents as secret and confidential and to use all reasonable efforts to safeguard the confidentiality of such information and documents.

(d) From and after the date hereof, representatives of HV Bank and Victory Bancorp shall meet on a regular basis to discuss and plan for the conversion of Victory Bancorp’s and its Subsidiaries’ data processing and related electronic informational systems to those used by HV Bank with the goal of conducting such conversion simultaneously with the consummation of the Bank Merger or as soon thereafter as possible.

(f) Within ten (10) Business Days of the end of each calendar month, Victory Bancorp and HV Bank shall each provide the other with an updated list of Loans described in Sections 3.2(v)(vi) and 3.3(t)(vi).

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(g) Victory Bancorp Information. The information regarding Victory Bancorp and its Subsidiaries to be supplied by Victory Bancorp for inclusion in the Merger Registration Statement, any filings or approvals under applicable state securities laws, or any filing pursuant to Rule 165 or Rule 425 under the Securities Act or Rule 14a-12 under the Exchange Act will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The information supplied, or to be supplied, by Victory Bancorp for inclusion in applications filed by HV Bancorp and HV Bank to Governmental Entities to obtain all permits, consents, approvals and authorizations necessary or advisable to consummate the transactions contemplated by this Agreement shall be accurate in all material respects.

(h) HV Bancorp and HV Bank Information. The information regarding HV Bancorp, HV Bank and its Subsidiaries to be supplied by HV Bancorp for inclusion in the Merger Registration Statement, any filings or approvals under applicable state securities laws, or any filing pursuant to Rule 165 or Rule 425 under the Securities Act or Rule 14a-12 under the Exchange Act will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Conversion Prospectus (except for such portions thereof supplied by Victory Bancorp or any of its Subsidiaries) will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder. The Merger Registration Statement will comply as to form in all material respects with the provisions of the Securities Act and the rules and regulations thereunder. The information supplied, or to be supplied, by HV Bancorp and HV Bank for inclusion in applications filed by Victory Bancorp and Victory Bank to Governmental Entities to obtain all permits, consents, approvals and authorizations necessary or advisable to consummate the transactions contemplated by this Agreement shall be accurate in all material respects.

5.4 Applications; Consents.

(a) The parties hereto shall cooperate with each other and shall use their reasonable best efforts to prepare and file as soon as practicable after the date hereof, all necessary applications, notices and filings to obtain all permits, consents, approvals and authorizations of all Governmental Entities that are necessary or advisable to consummate the transactions contemplated by this Agreement. The parties shall furnish each other with all information concerning themselves, their respective subsidiaries, and their respective subsidiaries’ directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with any application, notice or filing made by or on behalf of HV Bancorp, HV Bank, Victory Bancorp or any of their respective subsidiaries to any Governmental Entity in connection with the transactions contemplated by this Agreement. HV Bancorp, HV Bank and Victory Bancorp shall have the right to review in advance, and to the extent practicable each will consult with the other on, all the information relating to HV Bancorp, HV Bank and Victory Bancorp, as the case may be, and any of their respective Subsidiaries, that appears in any filing made with, or written materials submitted to, any Governmental Entity pursuant to this Section 5.4(a).

(b) As soon as practicable after the date hereof, each of the parties hereto shall, and they shall cause their respective Subsidiaries to, use its reasonable best efforts to obtain any consent, authorization or approval of any third party that is required to be obtained in connection with the transactions contemplated by this Agreement.

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5.5 Antitakeover Provisions. Victory Bancorp and its Subsidiaries shall take all steps required by any relevant federal or state law or regulation or under any relevant agreement or other document to exempt or continue to exempt HV Bancorp, the Agreement, the Plan of Bank Merger, the Merger and the Bank Merger from any provisions of an antitakeover nature in Victory Bancorp’s or its Subsidiaries’ articles of incorporation and bylaws, or similar organizational documents, and the provisions of any federal or state antitakeover laws.

5.6 Additional Agreements. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use all reasonable efforts to take promptly, or cause to be taken promptly, all actions and to do promptly, or cause to be done promptly, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement as expeditiously as possible, including using efforts to obtain all necessary actions or non-actions, extensions, waivers, consents and approvals from all applicable Governmental Entities, effecting all necessary registrations, applications and filings (including, without limitation, filings under any applicable state securities laws) and obtaining any required contractual consents and regulatory approvals.

5.7 Publicity. The initial press release announcing this Agreement shall be a joint press release. Thereafter Victory Bancorp and HV Bank shall consult with each other prior to issuing any press releases or otherwise making public statements (including any written communications to stockholders) with respect to the Merger and any other transaction contemplated hereby and in making any filings with any Governmental Entity that are related to the transactions contemplated by this Agreement; provided, however, that nothing in this Section 5.7 shall be deemed to prohibit any party from making any disclosure which its counsel deems necessary in order to satisfy such party’s disclosure obligations imposed by law.

5.8 Stockholder Meeting.

(a) Victory Bancorp will submit to its stockholders this Agreement and any other matters required to be approved or adopted by stockholders in order to carry out the intentions of this Agreement. In furtherance of that obligation, Victory Bancorp will take, in accordance with applicable law and its articles of incorporation and bylaws, all action necessary to call, give notice of, convene and hold a meeting of its stockholders (the meeting of the stockholders of Victory Bancorp referred to herein as the “Victory Bancorp Stockholder Meeting”) as promptly as practicable for the purpose of considering and voting on approval and adoption of this Agreement and the transactions provided for in this Agreement. Subject to Section 5.8(b), Victory Bancorp shall, (i) through its Board of Directors, recommend to its stockholders adoption of this Agreement, (ii) include such recommendation in the proxy materials relating to the matters to be submitted to Victory Bancorp stockholders at the Victory Bancorp Stockholder Meeting (such proxy statement, and any amendments or supplements

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thereto, the “Victory Bancorp Proxy Statement”) and (iii) use commercially reasonable efforts to obtain from its stockholders a vote approving and adopting this Agreement. Victory Bancorp will use reasonable best efforts to cause the Victory Bancorp Proxy Statement to be mailed to its stockholders as promptly as practicable after the Merger Registration Statement is declared effective under the Securities Act.

(b) Notwithstanding anything in this Agreement to the contrary, at any time prior to the Effective Time, Victory Bancorp’s Board of Directors may, if it concludes in good faith (after consultation with its outside legal advisors) that the failure to do so would cause it to violate its fiduciary duties under applicable law, withdraw, modify or change its recommendation that the stockholders of Victory Bancorp approve this Agreement in a manner adverse to HV Bank (a “Change of Recommendation”); provided that prior to any such Change of Recommendation, Victory Bancorp shall have complied in all material respects with Section 5.1, given HV Bank written notice promptly (and in any event within twenty-four (24) hours) advising it of the decision of Victory Bancorp’s Board of Directors to take such action and, in the event the decision relates to an Acquisition Proposal, given HV Bank the material terms and conditions of the Acquisition Proposal, including the identity of the person making any such Acquisition Proposal or inquiry and the material terms of such Acquisition Proposal or inquiry; and provided, further, that in the event the decision relates to an Acquisition Proposal: (i) Victory Bancorp shall have given HV Bank three (3) Business Days after delivery of such notice to propose revisions to the terms of this Agreement (or make another proposal) and if HV Bank proposes to revise the terms of this Agreement, Victory Bancorp shall have negotiated, and shall have caused its financial and legal advisors to negotiate, in good faith with HV Bank with respect to such proposed revisions or other proposal; and (ii) Victory Bancorp’s Board of Directors shall have determined in good faith, after considering the results of such negotiations and giving effect to any proposals, amendments or modifications made or agreed to by HV Bank, if any, that such Acquisition Proposal constitutes a Superior Proposal. In the event Victory Bancorp’s Board of Directors does not make the determination that such Acquisition Proposal constitutes a Superior Proposal and thereafter determines not to withdraw, modify or change its recommendation that the stockholders of Victory Bancorp approve this Agreement in connection with a new Acquisition Proposal, the procedures referred to above shall apply anew and shall also apply to any subsequent withdrawal, amendment or change. In the event of any material revisions to the Acquisition Proposal that result in terms that are less favorable to Victory Bancorp, Victory Bancorp shall be required to deliver a new written notice to HV Bank and to again comply with the requirements of this Section 5.8(b) with respect to such new written notice, except that the three (3) Business Day period referred to above shall be reduced to two (2) Business Days. In addition to the foregoing, Victory Bancorp shall not submit to the vote of its stockholders any Acquisition Proposal other than the Merger.

5.9 Registration of HV Bancorp Common Stock.

(a) As promptly as reasonably practicable following the date hereof, HV Bancorp shall prepare and file the Merger Registration Statement with the SEC. The Merger Registration Statement shall contain the prospectus relating to the shares of HV Bancorp Common Stock to be issued in the Merger. Victory Bancorp will furnish to HV Bancorp the information required to be included in the Merger Registration Statement with respect to its

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business and affairs and shall have the right to review and consult with HV Bancorp and approve the form of, and any characterizations of such information included in, the Merger Registration Statement prior to its being filed with the SEC. HV Bancorp shall use reasonable best efforts to have the Merger Registration Statement declared effective by the SEC and to keep the Merger Registration Statement effective as long as is necessary to consummate the Merger and the transactions contemplated hereby. HV Bancorp will advise Victory Bancorp, promptly after it receives notice thereof, of the time when the Merger Registration Statement has become effective, the issuance of any stop order, the suspension of the qualification of HV Bancorp Common Stock issuable in connection with the Merger for offering or sale in any jurisdiction, or any request by the SEC for amendment of the HV Bancorp Prospectus or the Merger Registration Statement. If at any time prior to the Effective Time any information relating to HV Bancorp or Victory Bancorp, or any of their respective affiliates, officers or directors, should be discovered by HV Bancorp or Victory Bancorp which should be set forth in an amendment or supplement to any of the Merger Registration Statement, Victory Bancorp Proxy Statement or the Conversion Prospectus so that any of such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party which discovers such information shall promptly notify the other party hereto and, to the extent required by law, rules or regulations, an appropriate amendment or supplement describing such information shall be promptly filed by HV Bancorp with the SEC and disseminated by Victory Bancorp to the stockholders of Victory Bancorp.

(b) HV Bancorp shall also take any action required to be taken under any applicable state securities laws in connection with the Merger and each of Victory Bancorp and HV Bancorp shall furnish all information concerning it and the holders of Victory Bancorp Common Stock as may be reasonably requested in connection with any such action.

(c) HV Bancorp shall list on the Nasdaq Stock Market the shares of HV Bancorp Common Stock to be issued in the Merger.

5.10 Notification of Certain Matters. Each party shall give prompt notice to the other of: (i) any event or notice of, or other communication relating to, a default or event that, with notice or lapse of time or both, would become a default, received by it or any of its Subsidiaries subsequent to the date of this Agreement and prior to the Effective Time, under any contract material to the financial condition, properties, businesses or results of operations of each party and its Subsidiaries taken as a whole to which each party or any Subsidiary is a party or is subject; and (ii) any event, condition, change or occurrence which individually or in the aggregate has, or which, so far as reasonably can be foreseen at the time of its occurrence, is reasonably likely to result in a Material Adverse Effect. Each of Victory Bancorp and HV Bank shall give prompt notice to the other party of any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with any of the transactions contemplated by this Agreement.

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5.11 Employee Benefit Matters.

(a) HV Bancorp intends to offer employment beginning as of the Effective Time to all employees of Victory Bancorp. All persons who are employees of Victory Bancorp immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a “Continuing Employee”) shall, at the Effective Time, become employees of HV Bancorp. Except as set forth in Section 5.11(d), below, HV Bancorp shall employ Continuing Employees at salary rates identical to those in effect at Victory Bancorp immediately prior to the Effective Time. Except for any Continuing Employee who is a party to an employment agreement with Victory Bancorp or who enters into an employment agreement with HV Bancorp, all of the Continuing Employees shall be employed at the will of HV Bancorp, and no contractual right to employment shall inure to such employees because of this Agreement.

(b) Following the Effective Time, subject to Section 5.11(c) below, HV Bancorp will use its reasonable best efforts not to make any change during calendar year 2014 in any medical, dental, vision, disability, life insurance or any other “welfare plan” as defined in Section 3(1) of ERISA that a Continuing Employee was covered by immediately prior to the Effective Time. Beginning in calendar year 2015, HV Bancorp will use its reasonable best efforts to cause Continuing Employees to receive benefits under HV Bancorp medical plans and other welfare plans substantially similar to those provided to such persons under existing Victory Bancorp medical plans and other welfare plans. Continuing Employees and their eligible dependents will receive credit under HV Bancorp’s and HV Bank’s medical plans and other welfare plans for any expenses incurred by such Continuing Employees and their eligible dependents during the portion of the calendar year prior to the Effective Time for purposes of satisfying applicable deductible, co-insurance, maximum out-of-pocket and similar expenses.

(c) Credit for Prior Service. To the extent applicable, service with Victory Bancorp shall be deemed to be service with HV Bancorp for eligibility and vesting purposes only, but not for purposes of benefit accruals.

(d) HV Bancorp and Victory Bancorp will collaborate with respect to structuring, amending or terminating the benefit plans of HV Bancorp and Victory Bancorp with a view toward establishing an appropriate benefits structure for employees no later than calendar year 2015.

(e) Subject to Section 5.11(c), for calendar year 2013, except as required by applicable law, there shall be no change to the Victory Bancorp 401(k) Plan, and Continuing Employees will continue to participate in the 401(k) Plan under the same terms and conditions that were in effect immediately prior to the Effective Time, unless such changes are required by applicable law. Beginning with calendar year 2015, the Victory Bancorp 401(k) Plan may be merged, terminated or frozen, at the discretion of HV Bancorp.

(f) HV Bancorp agrees that each full-time Victory Bancorp employee who is involuntarily terminated by HV Bancorp (other than for “Cause”) or voluntarily resigns after being notified that, as a condition to employment, such Continuing Employee’s base salary will

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be materially decreased at the Effective Time or within one year of the Effective Time and who is not covered by a separate severance, change in control or employment agreement shall, upon executing an appropriate release in the form reasonably determined by HV Bancorp, receive a severance payment equal to four weeks of base pay (at the rate in effect on the termination date) for each year of service at Victory Bancorp, with a maximum equal to 20 weeks of base pay. For purposes of calculating the number of years of service, fractional years of service shall be rounded up or down to the nearest full year, except no employee shall receive less than two weeks of base pay. For purposes of calculating base pay, Victory Bancorp employees who are paid on an hourly basis shall be deemed to have a base pay equal to the employee’s average weekly compensation over the two months prior to the termination date. For these purposes, “Cause” shall mean termination due to the employee’s personal dishonesty, willful misconduct, any breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than minor traffic violations or similar offenses) or final cease-and-desist order.

(g) HV Bancorp shall honor all obligations under the employment or change in control agreements as set forth in Section 5.11(e) of Victory Bancorp’s Disclosure Letter, except to the extent superseded by agreements referenced in Section 5.15 of this Agreement.

(h) Payments. HV Bancorp agrees that Victory Bancorp shall be permitted to offer bonus payments to such employees and officers of Victory Bancorp in an aggregate amount not to exceed $50,000 for the purpose of encouraging such employees and officers to continue in the employ of Victory Bancorp until the date the system conversion occurs. Such payments shall be allocated to such employees and officers of Victory Bancorp as determined by the Chairman and Chief Executive Officer of Victory Bancorp in his sole discretion (it being understood and agreed that no amounts shall be allocated to employees of Victory Bank who currently have employment agreements with Victory Bank or Victory Bancorp), and shall be made by HV Bancorp on the date of the systems conversion. In addition, the parties agree that HV Bancorp may pay, or may direct Victory Bancorp to pay, signing bonuses to certain employees and officers of Victory Bancorp in exchange for their agreement to remain with the HV Bancorp.

5.12 Indemnification.

(a) From and after the Effective Time through the sixth anniversary of the Effective Time, HV Bancorp shall indemnify and hold harmless each of the current or former directors, officers or employees of Victory Bancorp or any of its Subsidiaries (each, an “Indemnified Party”), and any person who becomes an Indemnified Party between the date hereof and the Effective Time, against any costs or expenses (including reasonable attorneys’ fees and expenses), judgments, fines, losses, claims, damages or liabilities and amounts paid in settlement incurred in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, based in whole or in part on, or arising in whole or in part out of, or pertaining to (i) the fact that he or she is or was a director or officer of Victory Bancorp, any of its Subsidiaries or any of their respective predecessors or was prior to the Effective Time serving at the request of any such party as a director, officer, employee, trustee or partner of another

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corporation, partnership, trust, joint venture, employee benefit plan or other entity or (ii) any matters arising in connection with the transactions contemplated by this Agreement, to the fullest extent such person would have been indemnified or have the right to advancement of expenses pursuant to Victory Bancorp’s articles of incorporation and bylaws as in effect on the date of this Agreement and as permitted by applicable law, and HV Bancorp shall also advance expenses as incurred to the fullest extent permitted under applicable law, provided that the person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined by a court of competent jurisdiction that such person is not entitled to indemnification.

(b) Any Indemnified Party wishing to claim indemnification under Section 5.12(a), upon learning of any action, suit, proceeding or investigation described above, shall promptly notify HV Bancorp thereof. Any failure to so notify shall not affect the obligations of HV Bancorp under Section 5.12(a) unless and to the extent that HV Bancorp is actually prejudiced as a result of such failure.

(c) For a period of six (6) years following the Effective Time, HV Bancorp shall maintain in effect Victory Bancorp’s current directors’ and officers’ liability insurance covering each person currently covered by Victory Bancorp’s directors’ and officers’ liability insurance policy with respect to claims against such persons arising from facts or events occurring at or prior to the Effective Time; provided, however, that in no event shall HV Bancorp be required to expend in the aggregate pursuant to this Section 5.12(c) more than 250% of the annual premiums currently paid by Victory Bancorp for such insurance and, if HV Bancorp is unable to maintain such policy as a result of this provision, HV Bancorp shall obtain as much comparable insurance as is available by payment of such time; provided further, that HV Bancorp may (i) request Victory Bancorp to obtain an extended reporting period endorsement under Victory Bancorp’s existing directors’ and officers’ liability insurance policy or (ii) substitute therefor “tail” policies the material terms of which, including coverage and amount, are no less favorable in any material respect to such person’s than Victory Bancorp’s existing insurance policies as of the date hereof.

(d) In the event HV Bancorp or any of its successors or assigns (i) consolidates with or merges into any other person or entity and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) liquidates, dissolves, transfers or conveys all or substantially all of its properties and assets to any person or entity, then, and in each such case, to the extent necessary, proper provision shall be made so that such successor and assign of HV Bancorp and its successors and assigns assume the obligations set forth in this Section 5.12.

(e) The provisions of this Section 5.12 are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party and his or her representatives.

5.13 Stockholder Litigation. Victory Bancorp shall give HV Bancorp the opportunity to participate in the defense or settlement of any stockholder litigation against Victory Bancorp and/or its directors relating to the transactions contemplated by this Agreement, and no such settlement shall be agreed to without HV Bancorp’s prior written consent (such consent not to be unreasonably withheld or delayed).

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5.14 Board of Directors. Prior to the Effective Time, but effective conditioned upon Closing, HV Bancorp and HV Bank shall increase the size of their respective boards of directors by six (6) directors, so that upon such increase: (i) each Board shall consist of thirteen (13) directors and (ii) each Board shall appoint the Victory Bancorp designees as set forth in Exhibit D as directors to fill the six (6) resulting vacancies (the “Victory Bancorp Designees”). Two (2) of the Victory Bancorp Designees shall serve in the class of directors whose term expires in 2015; two (2) of the Victory Bancorp Designees shall serve in the class of directors whose term expires in 2016; and two (2) of the Victory Bancorp Designees shall serve in the class of directors whose term expires in 2017. Subject to their fiduciary duties, each of the Boards shall take all action necessary to nominate each of the Victory Bancorp Designees to their respective Boards for a three-year term following the expiration of their terms listed above. If any Victory Bancorp Designee shall be unable or unwilling to serve as a nominee or a director for any reason, either prior to his appointment as a director or during his term of office, then the remaining Victory Bancorp Designees shall be entitled to designate another person acceptable to the nominating committees of the respective Boards, and any such person shall become a “Victory Bancorp Designee” for all purposes under this Agreement. For a period of at least four (4) years subsequent to the Closing, Victory Bancorp Designees shall not constitute a majority of the membership of the Nominating and Corporate Governance Committee and the Compensation Committee of the HV Bancorp Board of Directors.

5.15 Officers. HV Bancorp and HV Bank will take all appropriate actions to appoint the persons identified in Exhibit E to the positions opposite such persons name, effective upon Closing. HV Bancorp and HV Bank will also take all appropriate action to execute and deliver employment agreements with Travis J. Thompson and Joseph W. Major, substantially in the form attached hereto as Exhibit F. HV Bancorp and HV Bank will also enter into employment agreements or change in control agreements with the individuals listed in Exhibit G, with the form of such agreements to be determined.

5.16 The Conversion. Commencing promptly after the date of this Agreement, HV Bancorp and HV Bank will take all reasonable steps necessary to effect the Conversion. In addition, without limiting the generality of the foregoing, HV Bank shall cause the following to be done:

(a) HV Bank will (i) as promptly as practicable after the Conversion Registration Statement is declared effective by the SEC, and the requisite approvals from the Banking Regulators have been obtained, take all steps necessary to duly call, give notice of, convene and hold a meeting of Members (the “HV Bank Members Meeting”) for the purpose of approving the Plan of Conversion, and for such other purposes as may be, in the reasonable judgment of HV Bank, necessary or desirable, (ii) subject to the fiduciary responsibility of the Board of Directors of HV Bank as advised by counsel, recommend to Members the approval of the aforementioned matters to be submitted by it to Members, and (iii) cooperate and consult with Victory Bancorp with respect to each of the foregoing matters.

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(b) HV Bank and HV Bancorp will use all reasonable efforts to prepare and file all required regulatory applications required in connection with the Conversion. HV Bancorp and HV Bank shall give Victory Bancorp and its counsel the opportunity to review and comment on all such applications prior to their being filed with any Banking Regulator and shall give Victory Bancorp and its counsel the opportunity to review and comment on all amendments and supplements to such applications and all responses to regulatory comments and requests for additional information prior to their being filed with, or sent to any Banking Regulator, provided that the requirement to provide the opportunity to review and comment pursuant to this Section 5.15(b) shall be limited to information with respect to Victory Bancorp, Victory Bank, the Merger and this Agreement. HV Bank shall notify Victory Bancorp promptly of the receipt of any comments of any Banking Regulator with respect to such applications and of any requests by any Banking Regulator for any amendment or supplement thereto or for additional information and shall provide to Victory Bancorp promptly copies of all correspondence between HV Bancorp, HV Bank or any of their representatives and any Banking Regulator.

(c) HV Bank and HV Bancorp shall prepare as promptly as practicable, and Victory Bancorp shall cooperate in the preparation of, the Conversion Prospectus. Such Conversion Prospectus shall be incorporated into the Conversion Registration Statement. HV Bancorp shall file the Conversion Registration Statement with the SEC. HV Bancorp shall use its reasonable best efforts to have the Conversion Registration Statement declared effective under the Securities Act as promptly as practicable after such filing.

(d) Victory Bancorp shall provide HV Bank and HV Bancorp with any information concerning it that HV Bank or HV Bancorp may reasonably request in connection with the Conversion Prospectus, and HV Bank shall notify Victory Bancorp promptly of the receipt of any comments of the SEC and any other Banking Regulator with respect to the Conversion Prospectus and of any requests by the SEC or any other Banking Regulator for any amendment or supplement thereto or for additional information, and shall provide to Victory Bancorp promptly copies of all correspondence between HV Bancorp or any representative of HV Bancorp and the SEC or any Banking Regulator. HV Bancorp shall give Victory Bancorp and its counsel the opportunity to review and comment on the Conversion Prospectus prior to its being filed with the SEC and any Banking Regulator and shall give Victory Bancorp and its counsel the opportunity to review and comment on all amendments and supplements to the Conversion Prospectus and all responses to regulatory comments and requests for additional information prior to their being filed with, or sent to, the SEC and any Banking Regulator, provided that the requirement to provide the opportunity to review and comment pursuant to this Section 5.15(d) shall be limited to information with respect to Victory Bancorp, Victory Bank, the Merger and this Agreement. Each of HV Bank, HV Bancorp and Victory Bancorp agrees to use all reasonable efforts, after consultation with the other party hereto, to respond promptly to all such comments of and requests by the SEC and any Banking Regulator and to cause the Conversion Prospectus and all required amendments and supplements thereto to be mailed to Members at the earliest practicable time.

(e) Each party hereto shall promptly notify the other party if at any time it becomes aware that the Conversion Prospectus or the Conversion Registration Statement contains any untrue statement of a material fact or omits to state a material fact required to be

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stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. In such event, Victory Bancorp shall cooperate with HV Bank and HV Bancorp in the preparation of a supplement or amendment to such Conversion Prospectus, which corrects such misstatement or omission, and HV Bancorp shall file an amended Conversion Registration Statement with the SEC. Victory Bancorp shall provide to HV Bancorp, HV Bank and the placement agent for the sale of HV Bancorp Common Stock in the Conversion Offering a “comfort” letter from the independent certified public accountants for Victory Bancorp, dated as of the date of the Conversion Prospectus and updated as of the date of consummation of the Conversion, with respect to certain financial information regarding Victory Bancorp, each in form and substance which is customary in transactions such as the Conversion, and shall cause its counsel to deliver to the placement agent for the Conversion such opinions as HV Bank and HV Bancorp may reasonably request.

(f) The aggregate price for which the shares of HV Bancorp Common Stock are sold to purchasers in the Conversion Offering shall be based on the Independent Valuation. The Independent Valuation shall be expressed as a range, the maximum and minimum of which shall vary 15% above and below the midpoint of such range, and the maximum of such range may be increased by an additional 15%.

(g) If any shares of HV Bancorp Common Stock that are offered for sale in the subscription offering that is conducted as part of the Conversion Offering remain unsold then, at HV Bank’s discretion, subject to any necessary regulatory approvals of the Banking Regulators, such shares may be issued to Victory Bancorp stockholders as part of the Merger Consideration if necessary to complete the Conversion.

5.17 Prohibition on Solicitation of Employees. If this Agreement is terminated or if the Merger is not consummated for any reason, for a period of two (2) years from the date of termination, neither party, nor any of their respective officers or directors will, directly or indirectly, initiate, solicit or knowingly encourage any employee who is designated as a Vice President or higher, or who is designated a loan officer, of the other party to leave his or her employment to pursue employment with such party.

ARTICLE VI

CONDITIONS TO CONSUMMATION

6.1 Conditions to Each Party’s Obligations. The respective obligations of each party to effect the Merger shall be subject to the satisfaction of the following conditions:

(a) Stockholder Approval. This Agreement shall have been approved by the requisite vote of Victory Bancorp’s stockholders in accordance with applicable laws and regulations.

(b) Member Approval. The Conversion and the Plan of Conversion shall have been approved by the requisite vote of Members of HV Bank.

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(c) Regulatory Approvals. All approvals, consents or waivers of any Governmental Entity required to permit consummation of the transactions contemplated by this Agreement shall have been obtained and shall remain in full force and effect, and all statutory waiting periods shall have expired or been terminated.

(d) No Injunctions or Restraints; Illegality. No party hereto shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction that enjoins or prohibits the consummation of the Merger or the Bank Merger and no Governmental Entity shall have instituted any proceeding for the purpose of enjoining or prohibiting the consummation of the Merger, the Bank Merger or any transactions contemplated by this Agreement. No statute, rule or regulation shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits or makes illegal consummation of the Merger.

(e) Third Party Consents. HV Bancorp, HV Bank and Victory Bancorp shall have obtained the consent or approval of each person (other than the governmental approvals or consents referred to in Section 6.1(c)) whose consent or approval shall be required to consummate the transactions contemplated by this Agreement, except those for which failure to obtain such consents and approvals would not, individually or in the aggregate, have a Material Adverse Effect on HV Bancorp, HV Bank or Victory Bancorp (after giving effect to the consummation of the transactions contemplated hereby).

(f) Registration Statement; Blue Sky Laws. The Merger Registration Statement shall have been declared effective by the SEC and no proceedings shall be pending or threatened by the SEC to suspend the effectiveness of the Merger Registration Statement, and HV Bancorp shall have received all required approvals by state securities or “blue sky” authorities with respect to the transactions contemplated by this Agreement.

(g) Nasdaq. The shares of HV Bancorp Common Stock to be issued in the Merger shall have been authorized for listing on the Nasdaq Stock Market.

(h) Tax Opinion. HV Bancorp and Victory Bancorp shall have received written opinions of Jones Walker LLP and Kilpatrick Townsend & Stockton LLP, respectively, dated as of the Closing Date, in form and substance customary in transactions of the type contemplated hereby, and reasonably satisfactory to HV Bancorp and Victory Bancorp, as the case may be, substantially to the effect that on the basis of the facts, representations and assumptions set forth in such opinions which are consistent with the state of facts existing at the Effective Time, (i) the Merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the IRC and (ii) HV Bancorp and Victory Bancorp will each be a party to that reorganization within the meaning of Section 368(b) of the IRC. Such opinions may be based on, in addition to the review of such matters of fact and law as counsel considers appropriate, representations contained in certificates of officers of HV Bancorp, HV Bank, Victory Bancorp and others.

(i) Consummation of Conversion. HV Bancorp shall have received and accepted orders to purchase, for at least the minimum number of shares of HV Bancorp Common Stock offered for sale in the Conversion Offering, and the Conversion and Offering shall have been consummated.

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(j) Burdensome Condition. None of the approvals, consents or waivers of any Governmental Entity required to permit consummation of the transactions contemplated by this Agreement shall contain any condition or requirement that would so materially and adversely impact the economic or business benefits to Victory Bancorp, HV Bancorp or HV Bank of the transactions contemplated hereby that, had such condition or requirement been known, Victory Bancorp, HV Bancorp and HV Bank would not, in its reasonable judgment, have entered into this Agreement.

(k) Employment Agreements. HV Bancorp and HV Bank shall have entered into the employment agreements, the forms of which are attached hereto as Exhibit F, with Travis J. Thompson and Joseph W. Major.

(l) Exchange Offer. Victory Bancorp shall have conducted the Exchange Offer and holders of a minimum of 19.0% of the issued and outstanding Series E Preferred Stock shall have made an irrevocable election to exchange shares of Series E Preferred Stock for Victory Bancorp Subordinated Debt.

6.2 Conditions to the Obligations of HV Bancorp and HV Bank. The obligations of HV Bancorp and HV Bank to effect the Merger shall be further subject to the satisfaction of the following additional conditions, any one or more of which may be waived by HV Bancorp or HV Bank:

(a) Victory Bancorp’s Representations and Warranties. Subject to the standard set forth in Section 3.1, each of the representations and warranties of Victory Bancorp contained in this Agreement and in any certificate or other writing delivered by Victory Bancorp pursuant hereto shall be true and correct at and as of the Closing Date as though made at and as of the Closing Date, except that those representations and warranties that address matters only as of a particular date need only be true and correct as of such date.

(b) Performance of Victory Bancorp’s Obligations. Victory Bancorp shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Effective Time.

(c) Officers’ Certificate. HV Bancorp shall have received a certificate signed by the chief executive officer and the chief financial or principal accounting officer of Victory Bancorp to the effect that the conditions set forth in Sections 6.2(a) and (b) have been satisfied.

(d) No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any Material Adverse Effect with respect to Victory Bancorp.

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6.3 Conditions to the Obligations of Victory Bancorp. The obligations of Victory Bancorp to effect the Merger shall be further subject to the satisfaction of the following additional conditions, any one or more of which may be waived by Victory Bancorp:

(a) HV Bancorp’s and HV Bank’s Representations and Warranties. Subject to the standard set forth in Section 3.1, each of the representations and warranties of HV Bancorp and HV Bank contained in this Agreement and in any certificate or other writing delivered by HV Bancorp or HV Bank pursuant hereto shall be true and correct at and as of the Closing Date as though made at and as of the Closing Date, except that those representations and warranties that address matters only as of a particular date need only be true and correct as of such date.

(b) Performance of HV Bancorp’s and HV Bank’s Obligations. HV Bancorp and HV Bank shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Effective Time.

(c) Officers’ Certificate. Victory Bancorp shall have received a certificate signed by the chief executive officer and the chief financial or principal accounting officer of HV Bancorp and HV Bank to the effect that the conditions set forth in Sections 6.3(a) and (b) have been satisfied.

(d) No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any Material Adverse Effect with respect to HV Bancorp or HV Bank.

ARTICLE VII

TERMINATION

7.1 Termination. This Agreement may be terminated, and the Merger abandoned, at any time prior to the Effective Time, by action taken or authorized by the Board of Directors of the terminating party, either before or after any requisite stockholder or Member approval:

(a) by the mutual written consent of HV Bancorp, HV Bank and Victory Bancorp; or

(b) by either HV Bank or Victory Bancorp, in the event of the failure of (i) Victory Bancorp’s stockholders to approve the Agreement at Victory Bancorp Stockholder Meeting; provided, however, that Victory Bancorp shall only be entitled to terminate the Agreement pursuant to this clause if it has complied in all material respects with its obligations under Section 5.8 (subject to Section 5.8(b)) or (ii) the Members fail to approve the Conversion at the HV Bank Members Meeting; provided, however, that HV Bank shall only be entitled to terminate the Agreement pursuant to this clause if it has complied in all material respects with its obligations under Section 5.16; or

(c) by either HV Bank or Victory Bancorp, if either (i) any approval, consent or waiver of a Governmental Entity required to permit consummation of the transactions contemplated by this Agreement shall have been denied and such denial has become final and non-appealable or (ii) any court or other Governmental Entity of competent jurisdiction shall have issued a final, unappealable order enjoining or otherwise prohibiting consummation of the transactions contemplated by this Agreement; or

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(d) by either HV Bank or Victory Bancorp, in the event that the Merger is not consummated by July 31, 2014, unless the failure to so consummate by such time is due to the failure of the party seeking to terminate this Agreement to perform or observe the covenants and agreements of such party set forth herein; or

(e) by either HV Bank or Victory Bancorp (provided that the party seeking termination is not then in material breach of any representation, warranty, covenant or other agreement contained herein), in the event of a breach of any covenant or agreement on the part of the other party set forth in this Agreement, or if any representation or warranty of the other party shall have become untrue, in either case such that the conditions set forth in Sections 6.2(a) and (b) or Sections 6.3(a) and (b), as the case may be, would not be satisfied and such breach or untrue representation or warranty has not been or cannot be cured within thirty (30) days following written notice to the party committing such breach or making such untrue representation or warranty; or

(f) by HV Bank, if (i) Victory Bancorp shall have materially breached its obligations under Section 5.1 or Section 5.8 or (ii) if the Board of Directors of Victory Bancorp does not publicly recommend in the Victory Bancorp Proxy Statement that stockholders approve and adopt this Agreement or if, after recommending in the Victory Bancorp Proxy Statement that stockholders approve and adopt this Agreement, the Board of Directors modifies or qualifies its recommendation in a manner adverse to HV Bank; or

(g) by Victory Bancorp, if (i) HV Bancorp or HV Bank shall have materially breached its obligations under Section 5.1 or Section 5.16 or (ii) if the Board of Directors of HV Bank does not publicly recommend in the Member proxy statement that Members approve the Plan of Conversion or if, after recommending in the Member proxy statement that Members approve the Plan of Conversion, the Board of Directors modifies or qualifies its recommendation in a manner adverse to Victory Bancorp; or

(h) by Victory Bancorp, at any time prior to the adoption and approval of this Agreement by Victory Bancorp’s stockholders, in order to enter into an agreement with respect to a Superior Proposal, but only if (i) Victory Bancorp’s Board of Directors has determined in good faith based on the advice of legal counsel that failure to take such action would cause the Board of Directors to violate its fiduciary duties under applicable law, and (ii) Victory Bancorp has not materially breached its obligations under Section 5.1;

(i) By HV Bank, if Victory Bancorp has received a Superior Proposal, and in accordance with Section 5.1, the Board of Directors of Victory Bancorp has entered into an acquisition agreement with respect to the Superior Proposal, terminated this Agreement, or withdraws its recommendation of this Agreement, fails to make such recommendation, or modifies or qualifies its recommendation in a manner adverse to HV Bank; or

(j) by Victory Bancorp, if HV Bank (i) enters into an acquisition agreement to merge with or acquire another financial institution, or (ii) refuses to consummate the Merger within thirty (30) days of the later of: (A) receipt of all necessary approvals of Governmental Entities or (B) the expiration of any applicable regulatory waiting periods.

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7.2 Effect of Termination.

(a) In the event of termination of this Agreement by either HV Bancorp or Victory Bancorp as provided in Section 7.1, this Agreement shall forthwith become void and have no effect, and there shall be no liability on the part of any party hereto or their respective officers and directors, except that (i) Sections 5.3(c) and 8.6, shall survive any termination of this Agreement, and (ii) notwithstanding anything to the contrary contained in this Agreement, in the event of a willful breach of any provision of this Agreement, the breaching party shall remain liable for any and all damages, costs and expenses, including all reasonable attorneys’ fees, sustained or incurred by the non-breaching party.

(b) In the event this Agreement is terminated by Victory Bancorp pursuant to Section 7.1(h) and within one year after the date of such termination Victory Bancorp, without HV Bancorp’s or HV Bank’s prior written consent, accepts an Acquisition Proposal, then Victory Bancorp shall pay HV Bank $300,000 (the “Victory Termination Fee”) not later than the fifth Business Day following the date Victory Bancorp consummates such Acquisition Proposal. Upon payment by Victory Bancorp of the Victory Termination Fee pursuant to this Section 7.2(b), neither HV Bancorp nor HV Bank will have any other rights or claims against Victory Bancorp or is Subsidiaries, or their respective officers or directors, under this Agreement.

(c) In the event this Agreement is terminated by Victory Bancorp pursuant to Section 7.1(j), then HV Bank shall pay Victory Bancorp $300,000 (the “HV Termination Fee”) not later than the fifth day after the date on which Victory Bancorp notifies HV Bank of termination of the Agreement under Section 7.2(j). Upon payment by HV Bank of the HV Termination Fee pursuant to this Section 7.2(c), Victory Bancorp will not have any other rights or claims against HV Bank or is Subsidiaries, or their respective officers or directors, under this Agreement.

ARTICLE VIII

CERTAIN OTHER MATTERS

8.1 Interpretation. When a reference is made in this Agreement to Sections or Exhibits such reference shall be to a Section of, or Exhibit to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for ease of reference only and shall not affect the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed followed by the words “without limitation.” Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Any reference to gender in this Agreement shall be deemed to include any other gender.

8.2 Survival. Only those agreements and covenants of the parties that are by their terms applicable in whole or in part after the Effective Time, including Section 5.12 of this Agreement, shall survive the Effective Time. All other representations, warranties, agreements and covenants shall be deemed to be conditions of the Agreement and shall not survive the Effective Time.

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8.3 Waiver; Amendment. Prior to the Effective Time, any provision of this Agreement may be: (i) waived in writing by the party benefited by the provision or (ii) amended or modified at any time (including the structure of the transaction) by an agreement in writing between the parties hereto except that, after the vote by the stockholders of Victory Bancorp, no amendment or modification may be made that would reduce the amount or alter or change the kind of consideration to be received by holders of Victory Bancorp Common Stock or that would contravene any provision of the PBCL or the applicable state and federal banking laws, rules and regulations.

8.4 Counterparts. This Agreement may be executed in counterparts each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same instrument. A facsimile or other electronic copy of a signature page shall be deemed to be an original signature page.

8.5 Governing Law. This Agreement shall be governed by, and interpreted in accordance with, the laws of the Commonwealth of Pennsylvania, without regard to conflicts of laws principles.

8.6 Expenses. Each party hereto will bear all expenses incurred by it in connection with this Agreement and the transactions contemplated hereby.

8.7 Notices. All notices and other communications in connection with this Agreement shall be in writing and shall be deemed given if delivered personally, sent via facsimile (with confirmation), by email, by registered or certified mail (return receipt requested) or by commercial overnight delivery service, or delivered by an express courier (with confirmation) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to HV Bancorp or HV Bank, to:

Travis J. Thompson. Esq.

President and Chief Executive Officer

Huntingdon Valley Bank

3501 Masons Mill Road, Suite 401

Huntingdon Valley, PA 19006

Fax: (215) 706-4311

With copies to:

Jones Walker LLP

499 S. Capitol Street, SW, Suite 600

Washington, D.C. 20003

Fax: (202) 203-0000

Attention: Edward B. Crosland, Jr., Esq.

Email: ecrosland@joneswalker.com

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If to Victory Bancorp or Victory Bank, to:

Joseph W. Major

Chairman and Chief Executive Officer

The Victory Bancorp, Inc.

548 North Lewis Road

Limerick, Pennsylvania 19468

Email: jmajor@thevictorybank.com

Fax: (610) 948-9008

With copies to:

Kilpatrick Townsend & Stockton LLP

607 14^th Street, NW, Suite 900

Washington, DC 20005

Fax: (202) 204-5611

Attention: Christina M. Gattuso

Email: cgattuso@kilpatricktownsend.com

8.8 Entire Agreement; etc. This Agreement, together with the Disclosure Letters, represents the entire understanding of the parties hereto with reference to the transactions contemplated hereby and supersedes any and all other oral or written agreements heretofore made. All terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Except for Section 5.12, which confers rights on the parties described therein, nothing in this Agreement is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.

8.9 Successors and Assigns; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that this Agreement may not be assigned by either party hereto without the written consent of the other party.

[Signature page follows]

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In Witness Whereof, the parties hereto have caused this Agreement and Plan of Merger to be executed by their duly authorized officers as of the date first above written.

HV BANCORP, INC.
By:	/s/ Travis J. Thompson, Esq.
	Name:	Travis J. Thompson, Esq.
	Title:	President and Chief Executive Officer

HUNTINGDON VALLEY BANK
By:	/s/ Travis J. Thompson, Esq.
	Name:	Travis J. Thompson, Esq.
	Title:	President and Chief Executive Officer

THE VICTORY BANCORP, INC.
By:	/s/ Joseph W. Major
	Name:	Joseph W. Major
	Title:	Chairman and Chief Executive Officer

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EX-3.1

Exhibit 3.1

ARTICLES OF

INCORPORATION OF

HV BANCORP, INC.

ARTICLE I

NAME

The name of the corporation is HV Bancorp, Inc. (hereinafter referred to as the “Corporation”).

ARTICLE II

REGISTERED OFFICE

The address of the initial registered office of the Corporation in the Commonwealth of Pennsylvania is 3501 Masons Mill Road, Suite 401, Huntingdon, Pennsylvania 19006.

ARTICLE III

NATURE OF BUSINESS

The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the Business Corporation Law of 1988, as amended, of the Commonwealth of Pennsylvania (the “PBCL”). The Corporation is incorporated under the provisions of the PBCL.

ARTICLE IV

CAPITAL STOCK

A. Authorized Amount. The total number of shares of capital stock which the Corporation has authority to issue is 12,000,000, of which 2,000,000 shall be serial preferred stock, par value $0.01 per share (hereinafter the “Preferred Stock”), and 10,000,000 shall be common stock, par value $0.01 per share (hereinafter the “Common Stock”). Except to the extent required by governing law, rule or regulation, the shares of capital stock may be issued from time to time by the Board of Directors without further approval of shareholders. The Corporation shall have the authority to purchase its capital stock out of funds lawfully available therefor.

B. Common Stock. Except as provided in this Article IV (or in any resolution or resolutions adopted by the Board of Directors pursuant hereto), the exclusive voting power of the Corporation shall be vested in the Common Stock, with each holder thereof being entitled to one vote for each share of such Common Stock standing in the holder’s name on the books of the Corporation. Subject to any rights and preferences of any class of stock having preference over the Common Stock, holders of Common Stock shall be entitled to such dividends as may be declared by the Board of Directors out of funds lawfully available therefor. Upon any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, holders of Common Stock shall be entitled to receive pro rata the remaining assets of the Corporation after the holders of any class of stock having preference over the Common Stock have been paid in full any sums to which they may be entitled.

C Authority of Board to Fix Terms of Preferred Stock. The Board of Directors shall have the full authority permitted by law to divide the authorized and unissued shares of Preferred Stock into series and to fix by resolution full, limited, multiple or fractional, or no voting rights, and such designations, preferences, qualifications, privileges, limitations, restrictions, options, conversion rights, and other special or relative rights of the Preferred Stock or any series thereof that may be desired.

D. Preemptive Rights. Except as may be provided in a resolution or resolutions of the Board of Directors providing for the issue of any series of Preferred Stock, no holder of shares of capital stock of the Corporation as such shall have any preemptive or preferential right to purchase or subscribe to any part of any new or additional issue of capital stock of any class whatsoever of the Corporation, or of securities convertible into capital stock of any class whatsoever, whether now or hereafter authorized or issued.

ARTICLE V

The name and mailing address of the sole incorporator is as follows:

Name	Address
Travis J. Thompson, Esq.	3501 Masons Mill Road, Suite 401 Huntingdon, PA 19006

ARTICLE VI

DIRECTORS

A. Directors and Number of Directors. The business and affairs of the Corporation shall be managed under the direction of a Board of Directors. Except as otherwise increased from time to time by the exercise of the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation to elect additional directors, the number of directors of the Corporation shall be determined in accordance with the Corporation’s Bylaws.

B. Initial Directors. The number of directors constituting the initial Board of Directors of the Corporation is six (6), and the names and addresses of the persons who are to serve as directors until their successors are elected and qualified, together with the classes of directorships to which such persons have been assigned, are:

Name	Address	Class
Carl Hj. Asplundh	6977 Phillips Mill Road New Hope, PA 18938	II (2015)
Scott W. Frogatt	1385 Millcreek Road Southampton, PA 18966	I (2014)
Donald A. Gordon	51 Frieland Drive Churchville, PA 18966	II (2015)
Joseph F. Kelly	3 Swallow Road Holland, PA 18966	III (2016)
Joseph F. Spanier	319 Carson Terrace Huntingdon Valley, PA 19006	III (2016)
Travis J. Thompson	3690 Sablewood Drive Doylestown, PA 18902	I (2014)

C. Classification and Terms. The Board of Directors, other than those who may be elected by the holders of any class or series of stock having preference over the Common Stock as to dividends or upon liquidation, shall be divided into three classes as nearly equal in number as possible, with one class to be elected annually. The term of office of the initial directors shall be as follows: the term of directors of the first class shall expire at the first annual meeting of shareholders after the effective date of these Articles of Incorporation; the term of office of the directors of the second class shall expire at the second annual meeting of shareholders after the effective date of these Articles of Incorporation; and the term of office of the third class shall expire at the third annual meeting of shareholders after the effective date of these Articles of Incorporation; and, as to directors of each class, when their respective successors are elected and qualified. At each annual meeting of shareholders, directors elected to succeed those whose terms are expiring shall be elected for a term of office to expire at the third succeeding annual meeting of shareholders (except to the extent necessary to ensure that the Board of Directors shall be divided into three classes as nearly equal in number as possible) and when their respective successors are elected and qualified.

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D. No Cumulative Voting. Shareholders of the Corporation shall not be permitted to cumulate their votes for the election of directors.

E. Vacancies. Except as otherwise fixed pursuant to the provisions of Article IV hereof relating to the right to elect directors by the holders of any class or series of stock having preference over the Common Stock as to dividends or upon liquidation, any vacancy occurring in the Board of Directors, including any vacancy created by reason of an increase in the number of directors, shall be filled by a majority vote of the directors then in office, whether or not a quorum is present, or by a sole remaining director, and any director so chosen shall serve until the term of the class to which he was appointed shall expire and until his successor is elected and qualified. When the number of directors is changed, the Board of Directors shall determine the class or classes to which the increased or decreased number of directors shall be apportioned, provided that no decrease in the number of directors shall shorten the term of any incumbent director.

F. Removal. Except as otherwise required by law, and subject to the rights of any class or series of stock having preference over the Common Stock as to dividends or upon liquidation to elect directors, any director (including persons elected by directors to fill vacancies in the Board of Directors) may be removed from office by shareholders only for cause and only upon the affirmative vote of not less than a majority of the total votes eligible to be cast by shareholders at a duly constituted meeting of shareholders called expressly for such purpose. Cause for removal shall exist only if the director whose removal is proposed has been either declared of unsound mind by an order of a court of competent jurisdiction, convicted of a felony or of an offense punishable by imprisonment for a term of more than one year by a court of competent jurisdiction, or deemed liable by a court of competent jurisdiction for gross negligence or misconduct in the performance of such director’s duties to the Corporation.

ARTICLE VII

MEETINGS OF SHAREHOLDERS; ACTION WITHOUT A MEETING

A. Special Meetings of Shareholders. Except as otherwise required by law, and subject to the rights of the holders of any class or series of Preferred Stock, special meetings of shareholders may be called by the Board of Directors of the Corporation pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office, or upon the written request of not less than one-fifth of all of the shares entitled to vote at the particular meeting.

B. Action Without a Meeting. An action permitted to be taken by the shareholders of the Corporation at a meeting of shareholders may be taken without a meeting only if a unanimous written consent setting forth the action so taken is signed by all shareholders who would be entitled to vote at a meeting for such purpose and such consent is filed with the Secretary of the Corporation as part of the corporate records.

ARTICLE VIII

LIABILITY OF DIRECTORS AND OFFICERS

The personal liability of the directors and officers of the Corporation for monetary damages for conduct in their capacities as such shall be eliminated to the fullest extent permitted by the PBCL as it exists on the effective date of these Articles of Incorporation or as such law may be thereafter in effect. No amendment, modification or repeal of this Article VIII, nor the adoption of any provision of these Articles of Incorporation inconsistent with this Article VIII, shall adversely affect the rights provided hereby with respect to any claim, issue or matter in any proceeding that is based in any respect on any alleged action or failure to act occurring prior to such amendment, modification, repeal or adoption.

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ARTICLE IX

RESTRICTIONS ON OFFERS AND ACQUISITIONS OF

THE CORPORATION’S EQUITY SECURITIES

A. Definitions.

(a) Acquire. The term “Acquire” includes every type of acquisition, whether effected by purchase, exchange, operation of law or otherwise.

(b) Acting in Concert. The term “Acting in Concert” means (a) knowing participation in a joint activity or conscious parallel action towards a common goal whether or not pursuant to an express agreement, or (b) a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise.

(c) Affiliate. An “Affiliate” of, or a Person “affiliated with” a specified Person, means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.

(d) Associate. The term “Associate” used to indicate a relationship with any Person means:

(i) Any corporation, partnership, limited liability company or other organization (other than the Corporation or a Subsidiary of the Corporation), or any subsidiary or parent thereof, of which such Person is a director, officer or partner or member or is, directly or indirectly, the Beneficial Owner of 10% or more of any class of equity securities;

(ii) Any trust or other estate in which such Person has a 10% or greater beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity, provided, however, such term shall not include any employee stock benefit plan of the Corporation or a Subsidiary of the Corporation in which such Person has a 10% or greater beneficial interest or serves as a trustee or in a similar fiduciary capacity;

(iii) Any relative or spouse of such Person (or any relative of such spouse) who has the same home as such Person or who is a director or officer of the Corporation or a Subsidiary of the Corporation (or any subsidiary or parent thereof); or

(iv) Any investment company registered under the Investment Company Act of 1940 for which such Person or any Affiliate or Associate of such Person serves as investment advisor.

(e) Beneficial Owner (including Beneficially Owned). A Person shall be considered the “Beneficial Owner” of any shares of stock (whether or not owned of record):

(i) With respect to which such Person or any Affiliate or Associate of such Person directly or indirectly has or shares (A) voting power, including the power to vote or to direct the voting of such shares of stock, and/or (B) investment power, including the power to dispose of or to direct the disposition of such shares of stock;

(ii) Which such Person or any Affiliate or Associate of such Person has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, and/or (B) the right to vote pursuant to any agreement, arrangement or understanding (whether such right is exercisable immediately or only after the passage of time); or

(iii) Which are Beneficially Owned within the meaning of clauses (i) or (ii) above by any other Person with which such first-mentioned Person or any of its Affiliates or Associates either (A) has any agreement, arrangement or understanding, written or oral, with respect to acquiring, holding, voting or disposing of any shares of stock of the Corporation or any Subsidiary of the Corporation or acquiring, holding or disposing of all

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or substantially all, or any Substantial Part, of the assets or business of the Corporation or a Subsidiary of the Corporation, or (B) is Acting in Concert. For the purpose only of determining whether a Person is the Beneficial Owner of a percentage specified in this Article IX of the outstanding Voting Shares, such shares shall be deemed to include any Voting Shares which may be issuable pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants, options or otherwise and which are deemed to be Beneficially Owned by such Person pursuant to the foregoing provisions of this Article IX A(e), but shall not include any other Voting Shares which may be issuable in such manner.

(f) Offer. The term “Offer” shall mean every offer to buy or acquire, solicitation of an offer to sell, tender offer or request or invitation for tender of, a security or interest in a security for value; provided that the term “Offer” shall not include (i) inquiries directed solely to the management of the Corporation and not intended to be communicated to shareholders which are designed to elicit an indication of management’s receptivity to the basic structure of a potential acquisition with respect to the amount of cash and or securities, manner of acquisition and formula for determining price, or (ii) non-binding expressions of understanding or letters of intent with the management of the Corporation regarding the basic structure of a potential acquisition with respect to the amount of cash and or securities, manner of acquisition and formula for determining price.

(g) Person. The term “Person” shall mean any individual, partnership, corporation, limited liability company, association, trust, group or other entity. When two or more Persons act as a partnership, limited partnership, limited liability company, syndicate, association or other group for the purpose of acquiring, holding or disposing of shares of stock, such partnership, syndicate, associate or group shall be deemed a “Person.”

(h) Substantial Part. The term “Substantial Part” as used with reference to the assets of the Corporation or of any Subsidiary means assets having a value of more than 10% of the total consolidated assets of the Corporation and its Subsidiaries as of the end of the Corporation’s most recent fiscal year ending prior to the time the determination is being made.

(i) Subsidiary. “Subsidiary” means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Person in question.

(j) Voting Shares. “Voting Shares” shall mean shares of the Corporation entitled to vote generally in an election of directors.

(k) Certain Determinations With Respect to Article IX. A majority of the directors shall have the power to determine for the purposes of this Article IX, on the basis of information known to them and acting in good faith: (A) the number of Voting Shares of which any Person is the Beneficial Owner, (B) whether a Person is an Affiliate or Associate of another, (C) whether a Person has an agreement, arrangement or understanding with another as to the matters referred to in the definition of “Beneficial Owner” as hereinabove defined, and (D) such other matters with respect to which a determination is required under this Article IX.

(l) Directors, Officers or Employees. Directors, officers or employees of the Corporation or any Subsidiary thereof shall not be deemed to be a group with respect to their individual acquisitions of any class of equity securities of the Corporation solely as a result of their capacities as such.

B. Restrictions. No Person shall directly or indirectly Offer to acquire or acquire the Beneficial Ownership of (i) more than 10% of the issued and outstanding shares of any class of an equity security of the Corporation, or (ii) any securities convertible into, or exercisable for, any equity securities of the Corporation if, assuming conversion or exercise by such Person of all securities of which such Person is the Beneficial Owner which are convertible into, or exercisable for, such equity securities (but of no securities convertible into, or exercisable for, such equity securities of which such Person is not the Beneficial Owner), such Person would be the Beneficial Owner of more than 10% of any class of an equity security of the Corporation.

C. Exclusions. The foregoing restrictions shall not apply to (i) any Offer with a view toward public resale made exclusively to the Corporation by underwriters or a selling group acting on its behalf, (ii) any employee benefit plan or arrangement established by the Corporation or a Subsidiary of the Corporation and any trustee of such a plan or arrangement, and (iii) any other Offer or acquisition approved in advance by the affirmative vote of 80% of the members of the Corporation’s Board of Directors then in office.

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D. Remedies. In the event that shares are acquired in violation of this Article IX, all shares Beneficially Owned by any Person in excess of 10% shall be considered “Excess Shares” and shall not be counted as shares entitled to vote and shall not be voted by any Person or counted as Voting Shares in connection with any matters submitted to shareholders for a vote, and the Board of Directors may cause such Excess Shares to be transferred to an independent trustee for sale on the open market or otherwise, with the expenses of such trustee to be paid out of the proceeds of the sale.

ARTICLE X

BOARD OF DIRECTORS CONSIDERATION OF CERTAIN TRANSACTIONS

The Board of Directors of the Company, when evaluating any offer to: (a) make a tender or exchange offer for any equity security of the Company; (b) merge or consolidate the Company with another corporation or entity; or (c) purchase or otherwise acquire all or substantially all of the properties and assets of the Company, may, in connection with the exercise of its judgment in determining what is in the best interest of the Company and its stockholders, give due consideration to all relevant factors, including, without limitation, those factors that directors of any subsidiary of the Company may consider in evaluating any action that may result in a change or potential change in the control of the subsidiary, and the social and economic effect of acceptance of such offer on the following: the Company’s present and future customers and employees and those of its subsidiaries; the communities in which the Company and its subsidiaries operate or are located; and the ability of the Company to fulfill its corporate objective as a financial institution holding company and on the ability of its subsidiary financial institution to fulfill the objectives of a federally insured financial institution under applicable laws and regulations.

ARTICLE XI

STOCKHOLDER APPROVAL OF CERTAIN ACTIONS

Except as set forth in the following sentence, any action required or permitted to be taken by the stockholders of the Corporation pursuant to Subchapters C (Merger, Consolidation, Share Exchange, and Sale of Assets), D (Division) and F (Voluntary Dissolution and Winding Up) of Chapter 19 of the PBCL, or any successors thereto, shall be taken upon only the affirmative vote of at least 75% of the Voting Shares (as defined in Article IX hereof and after giving effect to Article IX D hereof), as well as such additional vote of the Preferred Stock as may be required by the provisions of any series thereof. Notwithstanding the preceding sentence, if any such action is recommended by at least two-thirds of the entire Board of Directors, the 75% stockholder vote set forth in the preceding sentence will not be applicable, and, in such event, the action will require only such affirmative vote as is required by law.

ARTICLE XII

AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS

A. Articles of Incorporation. The Corporation reserves the right to amend, alter, change or repeal any provision contained in these Articles of Incorporation, in the manner now or hereafter prescribed by law, and all rights conferred upon shareholders herein are granted subject to this reservation. No amendment, addition, alteration, change or repeal of these Articles of Incorporation shall be made unless it is first approved by the Board of Directors of the Corporation pursuant to a resolution adopted by the affirmative vote of a majority of the directors then in office, and, to the extent required by applicable law, thereafter is approved by the holders of a majority (except as provided below) of the shares of the Corporation entitled to vote generally in an election of directors, voting together as a single class, as well as such additional vote of the Preferred Stock as may be required by the provisions of any series thereof. Notwithstanding anything contained in these Articles of Incorporation to the contrary, the affirmative vote of the holders of at least 75% of the shares of the Corporation entitled to vote generally in an election of directors, voting together as a single class, as well as such additional vote of the Preferred Stock as may be required by the provisions of any series thereof, shall be required to amend, adopt, alter, change or repeal any provision inconsistent with Articles IV, VI, VII, VIII, IX, X, XI and XII hereof which has not been approved by the affirmative vote of 80% of the Corporation’s Board of Directors then in office. Notwithstanding the foregoing or anything contained in these Articles of Incorporation to the contrary, the Board of Directors has

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authority to the fullest extent permitted by the PBCL to amend these Articles of Incorporation without stockholder vote in accordance with Section 1914(c) of the PBCL, or any other section of the PBCL, that gives the Board of Directors authority to amend these Articles of Incorporation without stockholder vote, and any amendment thereto.

B. Bylaws. The Board of Directors, to the extent permitted by law, or shareholders may adopt, alter, amend or repeal the Bylaws of the Corporation. Such action by the Board of Directors shall require the affirmative vote of a majority of the directors then in office at any regular or special meeting of the Board of Directors. Such action by the shareholders shall require the affirmative vote of at least a majority of the Voting Shares (as defined in Article IX hereof and after giving effect to Article IX D hereof), as well as such additional vote of the Preferred Stock as may be required by the provisions of any series thereof provided, however, that the affirmative vote of at least 75% of the Voting Shares (as defined in Article IX hereof and after giving effect to Article IX D hereof), voting together as a single class, as well as such additional vote of the Preferred Stock as may be required by the provisions of any series thereof, shall be required to amend, alter, change or repeal any provision of, or adopt any provision inconsistent with, Sections 2.10, 3.1, 3.2, 3.3, 3.4 and 3.12 and Article VI of the Bylaws.

THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the Business Corporation Law of 1988, as amended, of the Commonwealth of Pennsylvania through these Articles of Incorporation, has caused these Articles of Incorporation to be signed by its President and Chief Executive Officer, who hereby declares and certifies that the facts herein stated are true and who has hereunto set his hand this 11^th day of December, 2013.

		HV Bancorp, Inc.
/s/ Janice Garner	By:	/s/ Travis J. Thompson
Janice Garner		Travis J. Thompson
Corporate Secretary		Chairman, President and Chief Executive Officer

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EX-3.2

Exhibit 3.2

BYLAWS

OF

HV BANCORP, INC.

ARTICLE I

OFFICES

1.1 Registered Office and Registered Agent. The registered office of HV Bancorp, Inc. (“Corporation”) shall be located in the Commonwealth of Pennsylvania at such place as may be fixed from time to time by the Board of Directors upon filing of such notices as may be required by law, and the registered agent shall have a business office identical with such registered office.

1.2 Other Offices. The Corporation may have other offices within or outside the Commonwealth of Pennsylvania at such place or places as the Board of Directors may from time to time determine.

ARTICLE II

SHAREHOLDERS’ MEETINGS

2.1 Place of Meetings. All meetings of the shareholders shall be held at such place within or outside the Commonwealth of Pennsylvania as shall be determined by the Board of Directors.

2.2 Annual Meetings. The annual meeting of the shareholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held each year on such date and time as may be determined by the Board of Directors and stated in the notice of such meeting.

2.3 Organization and Conduct. Each meeting of the shareholders shall be presided over by the President, or if the President is not present, by the Chairman of the Board or any Executive Vice President or such other person as the directors may determine. The Secretary, or in his absence any Assistant Secretary or temporary Secretary, shall act as secretary of each meeting of the shareholders. In the absence of the Secretary, Assistant Secretary and any temporary Secretary, the chairman of the meeting may appoint any person present to act as secretary of the meeting. The chairman of any meeting of the shareholders, unless prescribed by law or regulation or unless the Board of Directors has otherwise determined, shall determine the order of the business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussions as shall be deemed appropriate by him in his sole discretion.

2.4 Notice.

(a) Written notice of every meeting of shareholders shall be given by, or at the direction of, the Secretary of the Corporation or other authorized person to each shareholder of record entitled to vote at the meeting at least (i) ten days prior to the day named for a meeting that will consider a fundamental change under Chapter 19 of the Pennsylvania Business Corporation Law (“PBCL”), or any successor thereto, or (ii) five days prior to the day named for a meeting in any other case. A notice of meeting shall specify the place, day and hour of the meeting, and in the case of a special meeting, the general nature of the business to be transacted thereat, as well as any other information required by law.

(b) When a meeting of shareholders is adjourned, it shall not be necessary to give any notice of the adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which the adjournment is taken, unless the Board of Directors fixes a new record date for the adjourned meeting or notice of the business to be transacted is required to be given by applicable law and such notice previously has not been given.

2.5 Record Date. The Board of Directors may fix in advance a record date for the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof, such date to be not more than 90 days and not less than (i) ten days in the case of a meeting that will consider a fundamental change under Chapter 19 of the PBCL, or any successor thereto, or (ii) five days in the case of a meeting for any other purpose, prior to the date of the meeting established by the Board of Directors.

2.6 Voting List. The officer or agent having charge of the transfer books for shares of the Corporation shall make a complete list of the shareholders entitled to vote at any meeting of shareholders, arranged in alphabetical order, with the address of and number of shares held by each. The list shall be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting for the purposes thereof.

2.7 Quorum. Except as otherwise required by law:

(a) The presence of shareholders entitled to vote at least a majority of the votes that all shareholders are entitled to cast on a particular matter to be acted upon at a meeting of shareholders shall constitute a quorum for the purposes of consideration and action on the matter.

(b) The shareholders present at a duly organized meeting can continue to do business until adjournment notwithstanding the general withdrawal of enough shareholders to leave less than a quorum.

2.8 Voting of Shares.

(a) Except as otherwise provided in these Bylaws or to the extent that voting rights of the shares of any class or classes are limited or denied by the Articles of Incorporation, each shareholder, on each matter submitted to a vote at a meeting of shareholders, shall have one vote for each share of stock registered in his name on the books of the Corporation.

(b) Except as otherwise provided by law, the Corporation’s Articles of Incorporation or paragraph (c) of this Section 2.8, any corporate action to be taken by vote of the shareholders of the Corporation shall be authorized by receiving the affirmative vote of a majority of the votes cast by all shareholders entitled to vote thereon and, if any shareholders are entitled to vote thereon as a class, upon receiving the affirmative vote of a majority of the votes cast by shareholders entitled to vote as a class.

(c) Directors are to be elected by a plurality of votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. If, at any meeting of the shareholders, due to a vacancy or vacancies or otherwise, directors of more than one class of the Board of Directors are to be elected, each class of directors to be elected at the meeting shall be elected in a separate election by a plurality vote.

2.9 Proxies. Every shareholder entitled to vote at a meeting of shareholders may authorize another person to act for him by a proxy duly executed by the shareholder or his duly authorized attorney-in-fact. The presence of, or vote or other action at a meeting of shareholders, by a proxy of a shareholder shall constitute the presence of, or vote or other action by, the shareholder for all purposes. No proxy shall be valid after three years from the date of execution unless a longer time is expressly provided therein.

2.10 Shareholder Proposals.

(a) At an annual meeting of shareholders, only such new business shall be conducted, and only such proposals shall be acted upon, as shall have been brought before the annual meeting by, or at the direction of, (a) the Board of Directors or (b) any shareholder of the Corporation who complies with all the requirements set forth in this Section 2.10.

(b) Proposals, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation as set forth in this Section 2.10. For shareholder proposals to be included in the Corporation’s proxy materials, the shareholder must comply with all the timing and informational requirements of Rule 14a-8 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) (or any successor regulation), whether or not the Corporation’s common stock is registered under the Exchange Act. With respect to shareholder proposals to be considered at the annual meeting of shareholders but

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not included in the Corporation’s proxy materials, the shareholder notice shall be delivered to, or mailed and received at, the principal executive offices of the Corporation not later than (x) 120 days prior to the anniversary date of the initial mailing of proxy materials or of a notice of the meeting by the Corporation in connection with the immediately preceding annual meeting of shareholders of the Corporation or (y), with respect to the first annual meeting of shareholders of the Corporation, which is expected to be held in              2014, notice must be provided             . Such shareholder’s notice shall set forth as to each matter the shareholder proposes to bring before the annual meeting (1) a description of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (2) the name and address, as they appear on the Corporation’s books, of the shareholder proposing such business and, to the extent known, any other shareholders known by such shareholder to be supporting such proposal, (3) the class and number of shares of the Corporation’s stock which are Beneficially Owned (as defined in Section 3.12 (d) hereof) by the shareholder submitting the notice, by any Person who is Acting in Concert with or who is an Affiliate or Associate of such shareholder (as such capitalized terms are defined in Section 3.12 (d) hereof), by any Person who is a member of any group with such shareholder with respect to the Corporation stock or who is known by such shareholder to be supporting such proposal on the date the notice is given to the Corporation, and by each Person who is in control of, is controlled by or is under common control with any of the foregoing Persons (if any of the foregoing Persons is a partnership, corporation, limited liability company, association or trust, information shall be provided regarding the name and address of, and the class and number of shares of Corporation stock which are Beneficially Owned (as defined in Section 3.12(d) hereof) by, each partner in such partnership, each director, executive officer and shareholder in such corporation, each member in such limited liability company or association, and each trustee and beneficiary of such trust, and in each case each Person controlling such entity and each partner, director, executive officer, shareholder, member or trustee of any entity which is ultimately in control of such partnership, corporation, limited liability company, association or trust), (4) the identification of any person retained or to be compensated by the shareholder submitting the proposal, or any person acting on his or her behalf, to make solicitations or recommendations to shareholders for the purpose of assisting in the passage of such proposal and a brief description of the terms of such employment, retainer or arrangement for compensation, and (5) any material interest of the shareholder in such business.

(c) The Board of Directors may reject any shareholder proposal not timely made in accordance with the terms of this Section 2.10. If the Board of Directors, or a designated committee thereof or other authorized individual, determines that the information provided in a shareholder’s notice does not satisfy the information requirements of this Section 2.10 in any material respect, the Secretary of the Corporation or a duly authorized representative of the Corporation shall promptly notify such shareholder of the deficiency in the notice. The shareholder shall have an opportunity to cure the deficiency by providing additional information to the Secretary within such period of time not to exceed five days from the date such deficiency notice is given to the shareholder as the Board of Directors or such committee or other authorized individual shall reasonably determine. If the deficiency is not cured within such period, or if the Board of Directors or such committee or other authorized individual determines that the additional information provided by the shareholder, together with information previously provided, does not satisfy the requirements of this Section 2.10 in any material respect, then the Board of Directors may reject such shareholder’s proposal. The Secretary of the Corporation or a duly authorized representative of the Corporation shall notify a shareholder in writing whether his proposal has been made in accordance with the time and informational requirements of this Section 2.10. Notwithstanding the procedures set forth in this paragraph, if neither the Board of Directors nor such committee or other authorized individual makes a determination as to the validity of any shareholder proposal, the presiding officer of the annual meeting shall determine and declare at the annual meeting whether the shareholder proposal was made in accordance with the terms of this Section 2.10. If the presiding officer determines that a shareholder proposal was made in accordance with the terms of this Section 2.10, he shall so declare at the annual meeting and ballots shall be provided for use at the meeting with respect to any such proposal. If the presiding officer determines that a shareholder proposal was not made in accordance with the terms of this Section 2.10, he shall so declare at the annual meeting and any such proposal shall not be acted upon at the annual meeting.

(d) This provision shall not prevent the consideration and approval or disapproval at the annual meeting of reports of officers, directors and committees of the Board of Directors, but in connection with such reports, no new business shall be acted upon at such annual meeting unless stated, filed and received as herein provided.

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2.1 Judges of Election.

(a) For each meeting of shareholders, the Board of Directors may appoint judges of election, who need not be shareholders, to act at the meeting or any adjournment thereof. If judges of election are not so appointed, the presiding officer of the meeting may, and on the request of any shareholder shall, appoint judges of election at the meeting. The number of judges shall be one or three. A person who is a candidate for office to be filled at the meeting shall not act as a judge.

(b) The judges of election shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the authenticity, validity and effect of proxies, receive votes or ballots, hear and determine all challenges and questions in any way arising in connection with the right to vote, count and tabulate all votes, determine the result and do such acts as may be proper to conduct the election or vote with fairness to all shareholders. The judges of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If there are three judges of election, the decision, act or certificate of a majority shall be effective in all respects as the decision, act or certificate of all.

ARTICLE III

BOARD OF DIRECTORS

3.1 Number and Powers. The business affairs of the Corporation shall be managed under the direction of a Board of Directors of not less than [five nor more than twenty-five], as set from time to time by resolution of the Board of Directors. Directors need not be shareholders or residents of the Commonwealth of Pennsylvania. In addition to the powers and authorities expressly conferred upon it by these Bylaws and the Articles of Incorporation, all such powers of the Corporation as are not by statute or by the Corporation’s Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the shareholders, may be exercised by or under the authority of the Board of Directors.

3.2 Classification and Terms. The classification and terms of the directors shall be as set forth in the Corporation’s Articles of Incorporation, which provisions are incorporated herein with the same effect as if they were set forth herein.

3.3 Vacancies. All vacancies on the Board of Directors shall be filled in the manner provided in the Corporation’s Articles of Incorporation, which provisions are incorporated herein with the same effect as if they were set forth herein.

3.4 Removal of Directors. Directors may be removed in the manner provided in the Corporation’s Articles of Incorporation, which provisions are incorporated herein with the same effect as if they were set forth herein.

3.5 Regular Meetings. Regular meetings of the Board of Directors or any committee may be held without notice at the principal place of business of the Corporation or at such other place or places, either within or outside the Commonwealth of Pennsylvania, as the Board of Directors or such committee, as the case may be, may from time to time appoint or as may be designated in the notice of the meeting. A regular meeting of the Board of Directors shall be held without notice immediately after the annual meeting of shareholders.

3.6 Special Meetings.

(a) Special meetings of the Board of Directors may be called at any time by the Chairman of the Board, the President or by a majority of the authorized number of directors, to be held at the principal place of business of the Corporation or at such other place or places as the Board of Directors or the person or persons calling such meeting may from time to time designate. Notice of all special meetings of the Board of Directors shall be given to each director at least twenty-four (24) hours prior to such meeting if notice is given in person or by telephone, telegraph, telex, facsimile or other electronic transmission and at least five (5) days prior to such meeting if notice is given in writing and delivered by courier or by postage prepaid mail. Such notice need not specify the business to be transacted at, nor the purpose of, the meeting. Any director may waive notice of any meeting by submitting a signed waiver of notice with the Secretary, whether before or after the meeting. The attendance of a

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director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.

(b) Special meetings of any committee may be called at any time by such person or persons and with such notice as shall be specified for such committee by the Board of Directors, or in the absence of such specification, in the manner and with the notice required for special meetings of the Board of Directors.

3.7 Action of Directors by Communications Equipment. One or more persons may participate in a meeting of directors, or of a committee thereof, by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other.

3.8 Quorum of and Action by Directors. A majority of the Board of Directors then in office shall be necessary at all meetings to constitute a quorum for the transaction of business and the acts of a majority of the directors present and voting at a meeting at which a quorum is present shall be the acts of the Board of Directors. Every director of the Corporation shall be entitled to one vote.

3.9 Registering Dissent. A director who is present at a meeting of the Board of Directors or of a committee thereof, at which action on a corporate matter is taken on which the director is generally competent to act, shall be presumed to have assented to such action unless his dissent is entered in the minutes of the meeting, or unless he files his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof, or unless he delivers his dissent in writing to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.

3.10 Action by Directors Without a Meeting. Any action which may be taken at a meeting of the directors, or of a committee thereof, may be taken without a meeting if, prior or subsequent to the action, a consent or consents in writing, setting forth the action so taken or to be taken, is signed by all of the directors in office, or by all of the members of the committee, as the case may be, and filed with the Secretary of the Corporation. Such consent shall have the same effect as a unanimous vote.

3.11 Compensation of Directors. The Board of Directors shall have the authority to fix the compensation of directors for their services as directors and a director may be a salaried officer of the Corporation.

3.12 Nominations of Directors.

(a) Nominations of candidates for election as directors at any annual meeting of shareholders may be made (1) by, or at the direction of, a majority of the Board of Directors or (2) by any shareholder entitled to vote at such annual meeting. Only persons nominated in accordance with the procedures set forth in this Section 3.12 shall be eligible for election as directors at an annual meeting. Ballots bearing the names of all the persons who have been nominated for election as directors at an annual meeting in accordance with the procedures set forth in this Section 3.12 shall be provided for use at the annual meeting.

(b) Nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation as set forth in this Section 3.12. To be timely, a shareholder’s notice shall be delivered to, or mailed and received at, the principal executive offices of the Corporation not later than (x) 120 days prior to the anniversary date of the initial mailing of proxy materials or a notice of the meeting by the Corporation in connection with the immediately preceding annual meeting of shareholders of the Corporation or (y), with respect to the first annual meeting of shareholders of the Corporation, which is expected to be held in 2014, notice must be provided by 2014. Such shareholder’s notice shall set forth (1) the name, age, business address and residence address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (2) the principal occupation or employment of the shareholder submitting the notice and of each person being nominated; (3) the class and number of shares of the Corporation’s stock which are Beneficially Owned (as defined in Section 3.12(d) hereof) by the shareholder submitting the notice, by any Person who is Acting in Concert with or who is an Affiliate or Associate of such shareholder (as such capitalized terms are

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defined in Section 3.12(d) hereof), by any Person who is a member of any group with such shareholder with respect to the Corporation stock or who is known by such shareholder to be supporting such nominee(s) on the date the notice is given to the Corporation, by each person being nominated, and by each Person who is in control of, is controlled by or is under common control with any of the foregoing Persons (if any of the foregoing Persons is a partnership, corporation, limited liability company, association or trust, information shall be provided regarding the name and address of, and the class and number of shares of Corporation stock which are Beneficially Owned by, each partner in such partnership, each director, executive officer and shareholder in such corporation, each member in such limited liability company or association, and each trustee and beneficiary of such trust, and in each case each Person controlling such entity and each partner, director, executive officer, shareholder, member or trustee of any entity which is ultimately in control of such partnership, corporation, limited liability company, association or trust); (4) a representation that the shareholder is and will continue to be a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (5) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (6) such other information regarding the shareholder submitting the notice, each nominee proposed by such shareholder and any other Person covered by clause (3) of this paragraph as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission, whether or not the Corporation’s common stock is registered under the Exchange Act; and (7) the consent of each nominee to serve as a director of the Corporation if so elected. At the request of the Board of Directors, any person nominated by, or at the direction of, the Board for election as a director at an annual meeting shall furnish to the Secretary of the Corporation that information required to be set forth in a shareholder’s notice of nomination which pertains to the nominee.

(c) The Board of Directors may reject any nomination by a shareholder not timely made in accordance with the requirements of this Section 3.12. If the Board of Directors, or a designated committee thereof or other authorized individual, determines that the information provided in a shareholder’s notice does not satisfy the informational requirements of this Section 3.12 in any material respect, the Secretary of the Corporation or a duly authorized representative of the Corporation shall promptly notify such shareholder of the deficiency in the notice. The shareholder shall have an opportunity to cure the deficiency by providing additional information to the Secretary within such period of time, not to exceed five days from the date such deficiency notice is given to the shareholder, as the Board of Directors or such committee or other authorized individual shall reasonably determine. If the deficiency is not cured within such period, or if the Board of Directors or such committee or other authorized individual reasonably determines that the additional information provided by the shareholder, together with information previously provided, does not satisfy the requirements of this Section 3.12 in any material respect, then the Board of Directors may reject such shareholder’s nomination. The Secretary of the Corporation or a duly authorized representative of the Corporation shall notify a shareholder in writing whether his nomination has been made in accordance with the time and informational requirements of this Section 3.12. Notwithstanding the procedures set forth in this paragraph, if neither the Board of Directors nor such committee or other authorized individual makes a determination as to the validity of any nominations by a shareholder, the presiding officer of the annual meeting shall determine and declare at the annual meeting whether the nomination was made in accordance with the terms of this Section 3.12. If the presiding officer determines that a nomination was made in accordance with the terms of this Section 3.12, he shall so declare at the annual meeting and ballots shall be provided for use at the meeting with respect to such nominee. If the presiding officer determines that a nomination was not made in accordance with the terms of this Section 3.12, he shall so declare at the annual meeting and the defective nomination shall be disregarded.

(d) For purposes of these Bylaws, the following capitalized terms shall have the meanings indicated:

(1) Acquire. The term “Acquire” includes every type of acquisition, whether effected by purchase, exchange, operation of law or otherwise.

(2) Acting in Concert. The term “Acting in Concert” means (a) knowing participation in a joint activity or conscious parallel action towards a common goal whether or not pursuant to an express agreement, or (b) a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise.

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(3) Affiliate. An “Affiliate” of, or a Person “affiliated with,” a specified Person, means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.

(4) Associate. The term “Associate” used to indicate a relationship with any Person means:

(i) Any corporation, partnership, limited liability company or other organization (other than the Corporation or a Subsidiary of the Corporation), or any subsidiary or parent thereof, of which such Person is a director, officer, partner or member or is, directly or indirectly, the Beneficial Owner of 10% or more of any class of equity securities;

(ii) Any trust or other estate in which such Person has a 10% or greater beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity, provided, however, such term shall not include any employee stock benefit plan of the Corporation or a Subsidiary of the Corporation in which such Person has a 10% or greater beneficial interest or serves as a trustee or in a similar fiduciary capacity;

(iii) Any relative or spouse of such Person (or any relative of such spouse) who has the same home as such Person or who is a director or officer of the Corporation or a Subsidiary of the Corporation (or any subsidiary or parent thereof); or

(iv) Any investment company registered under the Investment Company Act of 1940 for which such Person or any Affiliate or Associate of such Person serves as investment advisor.

(5) Beneficial Owner (including Beneficially Owned). A Person shall be considered the “Beneficial Owner” of any shares of stock (whether or not owned of record):

(i) With respect to which such Person or any Affiliate or Associate of such Person directly or indirectly has or shares (A) voting power, including the power to vote or to direct the voting of such shares of stock, and/or (B) investment power, including the power to dispose of or to direct the disposition of such shares of stock;

(ii) Which such Person or any Affiliate or Associate of such Person has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, and/or (B) the right to vote pursuant to any agreement, arrangement or understanding (whether such right is exercisable immediately or only after the passage of time); or

(iii) Which are Beneficially Owned within the meaning of (i) or (ii) of this Section 3.12(d)(5) by any other Person with which such first-mentioned Person or any of its Affiliates or Associates either (A) has any agreement, arrangement or understanding, written or oral, with respect to acquiring, holding, voting or disposing of any shares of stock of the Corporation or any Subsidiary of the Corporation or acquiring, holding or disposing of all or substantially all, or any Substantial Part, of the assets or business of the Corporation or a Subsidiary of the Corporation, or (B) is Acting in Concert. For the purpose only of determining whether a Person is the Beneficial Owner of a percentage specified in these Bylaws of the outstanding Voting Shares, such shares shall be deemed to include any Voting Shares which may be issuable pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants, options or otherwise and which are deemed to be Beneficially Owned by such Person pursuant to the foregoing provisions of this Section 3.12(d)(5) but shall not include any other Voting Shares which may be issuable in such manner.

(6) Person. The term “Person” shall mean any individual, partnership, corporation, limited liability company, association, trust, group or other entity. When two or more Persons act as a partnership, limited partnership, limited liability company, syndicate, association or other group for the purpose of acquiring, holding or disposing of shares of stock, such partnership, syndicate, associate or group shall be deemed a “Person.”

(7) Substantial Part. The term “Substantial Part” as used with reference to the assets of the Corporation or of any Subsidiary means assets having a value of more than 10% of the total consolidated assets of the Corporation and its Subsidiaries as of the end of the Corporation’s most recent fiscal year ending prior to the time the determination is being made.

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(8) Subsidiary. “Subsidiary” means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Person in question.

(9) Voting Shares. “Voting Shares” shall mean shares of the Corporation entitled to vote generally in an election of directors.

ARTICLE IV

EXECUTIVE AND OTHER COMMITTEES

4.1 Executive Committee.

(a) The Board of Directors may appoint from the Board of Directors an Executive Committee of not less than three members, and may delegate to such committee, except as otherwise provided by law or the Articles of Incorporation, the powers of the Board of Directors in the management of the business and affairs of the Corporation in the intervals between meetings of the Board of Directors in all cases in which specific directions shall not have been given by the Board, as well as the power to authorize the seal of the Corporation to be affixed to all papers which may require it, provided, however, that the Executive Committee shall not have the power or authority of the Board of Directors with respect to the following: the submission to shareholders of any action requiring approval of shareholders by law; the creation or filling of vacancies on the Board of Directors; the adoption, amendment or repeal of the Articles of Incorporation or these Bylaws; the amendment or repeal of any resolution of the Board of Directors that by its terms is amendable or repealable only by the Board of Directors; action on matters committed by these Bylaws or resolution of the Board of Directors to another committee of the Board of Directors; the declaration of dividends; and approval of a transaction in which any member of the Executive Committee, directly or indirectly, has any material beneficial interest.

(b) Meetings of the Executive Committee shall be held at such times and places as the Chairman of the Executive Committee may determine. The Executive Committee, by a vote of a majority of its members, may appoint a Chairman and fix its rules of procedure, determine its manner of acting and specify what notice, if any, of meetings shall be given, except as otherwise set forth in these Bylaws or as the Board of Directors shall by resolution otherwise provide.

(c) The Executive Committee shall keep minutes of all business transacted by it. All completed action by the Executive Committee shall be reported to the Board of Directors at its meeting next succeeding such action or at its meeting held in the month following the taking of such action, and shall be subject to revision or alteration by the Board of Directors.

4.2 Audit Committee. The Board of Directors shall designate not less than three members of the Board of Directors who are not employed by the Corporation and who otherwise comply with the requirements of applicable law, regulation and listing requirements to constitute an Audit Committee, which shall receive and evaluate internal and independent auditor’s reports, monitor the Corporation’s adherence in accounting and financial reporting to generally accepted accounting principles and perform such other duties as may be delegated to it by the Board of Directors. Meetings of the Audit Committee shall be held at such times and places as the Chairman of the Audit Committee may determine. The Audit Committee, by a vote of a majority of its members, may fix its rules of procedure, determine its manner of acting and specify what notice, if any, of meetings shall be given, except as otherwise set forth in these Bylaws or as the Board of Directors shall by resolution otherwise provide.

4.3 Other Committees. The Board may, by resolutions passed by a majority of the Board of Directors, designate members of the Board to constitute other committees, which shall in each case consist of one or more directors and shall have and may execute such powers as may be determined and specified in the respective resolutions appointing them. A majority of all the members of any such committee may fix its rules of procedure, determine its manner of acting and fix the time and place of its meetings and specify what notice thereof, if any, shall be given, except as otherwise set forth in these Bylaws or as the Board of Directors shall by resolution otherwise provide.

4.4 Term. A majority of the Board of Directors shall have the power to change the membership of any committee of the Board of Directors at any time, to fill vacancies therein and to discharge any such committee or to remove any member thereof, either with or without cause, at any time.

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ARTICLE V

OFFICERS

5.1 Designations. The Board of Directors shall annually appoint a Chairman of the Board, a Chairman and President, a Chief Executive Officer, a Chief Financial Officer, a Secretary, a Treasurer and such other officers as the Board of Directors may from time to time deem appropriate. The Board of Directors shall designate one officer as the Corporation’s Chief Executive Officer and may designate another officer as the Chief Operating Officer. One individual may hold the position of Chairman and Chief Executive Officer.

5.2 Powers and Duties. The officers of the Corporation shall have such authority and perform such duties as are specified in these Bylaws and as the Board of Directors may from time to time authorize or determine. In the absence of action by the Board of Directors, the officers shall have such powers and duties as generally pertain to their respective offices.

5.3 Chairman of the Board. The Chairman of the Board, who shall be chosen from among the directors, shall preside at all meetings of the Board of Directors. He shall supervise the carrying out of the policies adopted or approved by the Board of Directors.

5.4 Chief Executive Officer and President. The Chief Executive Officer shall have general executive powers and shall have and may exercise any and all other powers and duties pertaining by law, regulations or practice to the office of the Chief Executive Officer, or imposed by these Bylaws. The President shall have general executive powers and shall have and may exercise any and all other powers and duties pertaining by law, regulations or practice to the office of President, or imposed by these Bylaws. One individual may hold the positions of Chief Executive Officer, President and Chairman of the Board.

5.5 Secretary. The Secretary shall keep the minutes of the meetings of the shareholders and the Board of Directors and shall give notice of all such meetings as required in these Bylaws, the Corporation’s Articles of Incorporation or by law. The Secretary shall have custody of such minutes, the seal of the Corporation and the stock certificate records of the Corporation, except to the extent some other person is authorized to have custody and possession thereof by a resolution of the Board of Directors.

5.6 Treasurer. The Treasurer shall keep, or cause to be kept, the fiscal accounts of the Corporation, including an account of all monies received or disbursed.

5.7 Term; Removal. Each officer of the Corporation shall hold office for a term of one year and until his successor has been selected and qualified or until his earlier death, resignation or removal. Any officer or agent of the Corporation may be removed at any time, with or without cause, by the Board of Directors, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

5.8 Compensation. The officers of the Corporation shall receive such salary or compensation as may be determined by or under authority of the Board of Directors.

5.9 Delegation. In the case of absence or inability to act of any officer of the Corporation and of any person herein authorized to act in his place, the Board of Directors may from time to time delegate the powers or duties of such officer to any other officer or any director or other person whom it may select.

5.10 Vacancies. Vacancies in any office arising from any cause may be filled by the Board of Directors at any regular or special meeting of the Board.

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ARTICLE VI

INDEMNIFICATION

6.1 Persons Covered. Subject to, and in accordance with, the provisions of this Article VI, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, including actions by or in the right of the Corporation, whether civil, criminal, administrative, or investigative, by reason of the fact that such person is or was a director, officer, employee, fiduciary, trustee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, fiduciary, trustee, or agent of another corporation, partnership, joint venture, trust, or other enterprise.

6.2 Derivative Actions.

(a) In the case of a threatened, pending, or completed action or suit by or in the right of the Corporation against a person named in Section 6.1 by reason of such person holding a position named in Section 6.1, the Corporation shall indemnify such person if such person satisfies the standard in Section 6.2(b), for expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of the action or suit.

(b) In the case of a threatened, pending, or completed action or suit by or in the right of the Corporation, a person named in Section 6.1 shall be indemnified only if:

(1) such person is successful on the merits or otherwise; or

(2) such person acted in good faith in the transaction that is the subject of the suit or action, and in a manner reasonably believed to be in, or not opposed to, the best interests of the Corporation. However, such person shall not be indemnified in respect of any claim, issue, or matter as to which such person has been adjudged liable to the Corporation unless (and only to the extent that) the court of common pleas or the court in which the suit was brought shall determine, upon application, that despite the adjudication of liability but in view of all the circumstances, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper.

6.3 Third-Party Actions.

(a) In case of a threatened, pending, or completed suit, action, or proceeding (whether civil, criminal, administrative, or investigative), other than a suit by or in the right of the Corporation, together hereafter referred to as a third-party action, against a person named in Section 6.1 by reason of such person holding a position named in Section 6.1, the Corporation shall indemnify such person if such person satisfies the standard in Section 6.3(b), for amounts actually and reasonably incurred by such person in connection with the defense or settlement of the third-party action, including, but not limited to (i) expenses (including attorneys’ fees), (ii) amounts paid in settlement, (iii) judgments, and (iv) fines.

(b) In case of a third-party action, a person named in Section 6.1 shall be indemnified only if:

(1) such person is successful on the merits or otherwise; or

(2) such person acted in good faith in the transaction that is the subject of the third-party action and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, such person had no reasonable cause to believe such person’s conduct was unlawful. The termination of a third-party action by judgment, order, settlement, conviction, or upon a pleas of nolo contendere or its equivalent shall not, in itself, create a presumption that the person failed to satisfy the standard of this Section 6.3(b).

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6.4 Determination That Standard Has Been Met. A determination that the standard of either Section 6.2(b) or 6.3(b) has been satisfied may be made by a court, or, except as stated in the record sentence of Section 6.2(b), the determination may be made by:

(1) the Board of Directors by a majority vote of a quorum consisting of directors of the Corporation who were not parties to the action, suit, or proceeding;

(2) if such a quorum is not obtainable or if obtainable and a majority of a quorum of disinterested directors so directs, by independent legal counsel in a written opinion; or

(3) the shareholders of the Corporation.

6.5 Proration. Anyone making a determination under Section 6.4 may determine that a person has met the standard as to some matters but not as to others, and may reasonably prorate amounts to be indemnified.

6.6 Advancement of Expenses. Reasonable expenses incurred by a director, officer, employee, or agent of the Corporation in defending a civil or criminal action, suit, or proceeding described in Section 6.1 may be paid by the Corporation in advance of the final disposition of such action, suit, or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that the person is not entitled to be indemnified by the Corporation.

6.7 Other Rights. The indemnification and advancement of expenses provided by or pursuant to this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any insurance or other agreement, vote of shareholders or directors, or otherwise, both as to actions in their official capacity and as to actions in another capacity while holding an office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such person.

6.8 Insurance. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VI.

6.9 Security Fund; Indemnity Agreements. By action of the Board of Directors (notwithstanding their interest in the transaction), the Corporation may create and fund a trust fund or fund of any nature, and may enter into agreements with its officers, directors, employees, and agents for the purpose of securing or insuring in any manner its obligation to indemnify or advance expenses provided for in this Article VI.

6.10 Modification. The duties of the Corporation to indemnify and to advance expenses to any person as provided in this Article VI shall be in the nature of a contract between the Corporation and each such person, and no amendment or repeal of any provision of this Article VI, and no amendment or termination of any trust fund or other fund created pursuant to Section 6.9 hereof, shall alter to the detriment of such person the right of such person to the advancement of expenses or indemnification related to a claim based on an act or failure to act which took place prior to such amendment, repeal, or termination.

6.11 Proceedings Initiated by Indemnified Persons. Notwithstanding any other provision in this Article VI, the Corporation shall not indemnify a director, officer, employee, or agent for any liability incurred in an action, suit, or proceeding initiated by (which shall not be deemed to include counter-claims or affirmative defenses) or participated in as an intervenor or amicus curiae by the person seeking indemnification unless such initiation of or participation in the action, suit, or proceeding is authorized, either before or after its commencement, by the affirmative vote of a majority of the directors then in office.

6.12 Savings Clause. If this Article VI or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director, officer, employee,

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and agent of the Corporation as to costs, charges, and expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement with respect to any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article VI that shall not have been invalidated and to the fullest extent permitted by applicable law.

If the laws of the Commonwealth of Pennsylvania are amended to permit further indemnification of the directors, officers, employees, and agents of the Corporation, then the Corporation shall indemnify such persons to the fullest extent permitted by law. Any repeal or modification of this Article VI by the Board of Directors or the shareholders of the Corporation shall not adversely affect any right or protection of a director, officer, employee, or agent existing at the time of such repeal or modification.

ARTICLE VII

CAPITAL STOCK

7.1 Certificates. Certificates of stock shall be issued in numerical order, and each shareholder shall be entitled to a certificate signed by the President or a Vice President, and the Secretary or the Treasurer, or in such other manner as the Corporation may determine, and may be sealed with the seal of the Corporation or a facsimile thereof. The signatures of such officers may be facsimiles if the certificate is manually signed on behalf of a transfer agent, or registered by a registrar, other than the Corporation itself or an employee of the Corporation. If an officer who has signed or whose facsimile signature has been placed upon such certificate ceases to be an officer before the certificate is issued, it may be issued by the Corporation with the same effect as if the person were an officer on the date of issue. Each certificate of stock shall state:

(a) that the Corporation is incorporated under the laws of the Commonwealth of Pennsylvania;

(b) the name of the person to whom issued;

(c) the number and class of shares and the designation of the series, if any, which such certificate represents; and

(d) the par value of each share represented by such certificate, or a statement that such shares are without par value.

7.2 Transfers.

(a) Transfers of stock shall be made only upon the stock transfer books of the Corporation, kept at the registered office of the Corporation or at its principal place of business, or at the office of its transfer agent or registrar, and before a new certificate is issued the old certificate shall be surrendered for cancellation. The Board of Directors may, by resolution, open a share register in any state of the United States, and may employ an agent or agents to keep such register, and to record transfers of shares therein.

(b) Shares of stock shall be transferred by delivery of the certificates therefor, accompanied either by an assignment in writing on the back of the certificate or an assignment separate from the certificate, or by a written power of attorney to sell, assign and transfer the same, signed by the holder of said certificate. Subject to the provisions of Section 7.4 hereof, no shares of stock shall be transferred on the books of the Corporation until the outstanding certificates therefor have been surrendered to the Corporation.

(c) Article IX of the Corporation’s Articles of Incorporation imposes certain restrictions on offers and acquisitions of the Corporation’s equity securities.

7.3 Registered Owner. Registered shareholders shall be treated by the Corporation as the holders in fact of the stock standing in their respective names and the Corporation shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided below or by the laws of the Commonwealth of

12

Pennsylvania. The Board of Directors may adopt by resolution a procedure whereby a shareholder of the Corporation may certify in writing to the Corporation that all or a portion of the shares registered in the name of such shareholder are held for the account of a specified person or persons. The resolution shall set forth:

(a) The classification of shareholder who may certify;

(b) The purpose or purposes for which the certification may be made;

(c) The form of certification and information to be contained therein;

(d) If the certification is with respect to a record date, the time after the record date within which the certification must be received by the Corporation; and

(e) Such other provisions with respect to the procedure as are deemed necessary or desirable.

Upon receipt by the Corporation of a certification complying with the above requirements, the persons specified in the certification shall be deemed, for the purpose or purposes set forth in the certification, to be the holders of record of the number of shares specified in place of the shareholder making the certification.

7.4 Mutilated, Lost or Destroyed Certificates. In case of any mutilation, loss or destruction of any certificate of stock, another may be issued in its place upon receipt of proof of such mutilation, loss or destruction. The Board of Directors may impose conditions on such issuance and may require the giving of a satisfactory bond or indemnity to the Corporation in such sum as they might determine, or establish such other procedures as they deem necessary.

7.5 Fractional Shares or Scrip. The Corporation may (a) issue fractions of a share which shall entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the Corporation in the event of liquidation; (b) arrange for the disposition of fractional interests by those entitled thereto; (c) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such shares are determined; or (d) issue scrip in registered or bearer form which shall entitle the holder to receive a certificate for a full share upon the surrender of such scrip aggregating a full share.

ARTICLE VIII

FISCAL YEAR; ANNUAL AUDIT

The fiscal year of the Corporation shall end on the 30^th day of June of each year. The Corporation shall be subject to an annual audit as of the end of its fiscal year by independent public accountants appointed by and responsible to the Board of Directors or the Audit Committee of the Board of Directors.

ARTICLE IX DIVIDENDS AND FINANCE

9.1 Dividends. Dividends may be declared by the Board of Directors and paid by the Corporation in accordance with the conditions and subject to the limitations imposed by the laws of the Commonwealth of Pennsylvania. The Board of Directors may declare dividends payable only to shareholders of record at the close of business on any business day not more than 90 days prior to the date on which the dividend is paid.

9.2 Depositories. The monies of the Corporation shall be deposited in the name of the Corporation in such bank or banks or trust company or trust companies as the Board of Directors shall designate, and shall be drawn out only by check or other order for payment of money signed by such persons and in such manner as may be determined by resolution of the Board of Directors.

13

ARTICLE X

NOTICES

10.1 Notice. Whenever written notice is required to be given to any person pursuant to these Bylaws, it may be given to the person either personally or by sending a copy thereof by first class or express mail, postage prepaid, or by electronic mail, telegram (with messenger service specified), telex or TWX (with answerback received) or courier service, charges prepaid, or by facsimile transmission, to his address (or to his telex, TWX or facsimile number), in the case of shareholders, appearing on the books of the Corporation or, in the case of directors, supplied by them to the Corporation for the purpose of notice or, in the case of the Corporation, at the address of its principal executive offices. If the notice is sent by mail, telegraph or courier service, it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail or with a telegraph office or courier service for delivery to that person or, in the case of, electronic mail, telex or TWX, when dispatched.

10.2 Written Waiver of Notice. Whenever any written notice is required to be given under these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to the notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of the notice. Neither the business to be transacted at, nor the purpose of, a meeting need be specified in the waiver of notice of the meeting.

10.3 Waiver of Notice by Attendance. Attendance of a person at any meeting shall constitute a waiver of notice of the meeting except where a person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting was not lawfully called or convened.

ARTICLE XI

SEAL

The corporate seal of the Corporation shall be in such form and bear such inscription as may be adopted by resolution of the Board of Directors, or by usage of the officers on behalf of the Corporation.

ARTICLE XII

BOOKS AND RECORDS

The Corporation shall keep correct and complete books and records of account and shall keep minutes and proceedings of meetings of its shareholders and Board of Directors; and it shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each. Any books, records and minutes may be in written form or any other form capable of being converted into written form within a reasonable time.

ARTICLE XIII

AMENDMENTS

The Bylaws may be altered, amended or repealed only as set forth in the Corporation’s Articles of Incorporation, which are incorporated herein with the same effect as if they were set forth herein.

ARTICLE XIV

MISCELLANEOUS

In these Bylaws, unless otherwise indicated, defined terms in singular shall include the plural as well as vice versa, and the masculine, feminine or neuter gender shall include all genders.

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EX-4.0

Exhibit 4.0

(FORM OF STOCK CERTIFICATE - FRONT SIDE)

NUMBER	SHARES
	CUSIP
COMMON STOCK (Par Value $.01 Per Share)	See reverse for certain definitions

HV BANCORP, INC.

A Pennsylvania Corporation

This certifies that                      is the registered holder of                      fully paid and non-assessable shares of the Common Stock, par value $.01 per share, of HV Bancorp, Inc., Huntingdon, Pennsylvania (the “Corporation”).

The shares evidenced by this Certificate are transferable only on the books of the Corporation by the holder hereof, in person or by a duly authorized attorney or legal representative, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby are subject to all the provisions of the Articles of Incorporation and Bylaws of the Corporation and any and all amendments thereto. The shares represented by this certificate are not deposits or accounts, are not federally insured or guaranteed and are not insured by HV Oak Bancorp, Inc. This Certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed by the facsimile signatures of its duly authorized officers and has caused its facsimile seal to be affixed hereto.

Dated:

	(SEAL)
Corporate Secretary		Travis J. Thompson
		President and Chief Executive Officer

(FORM OF STOCK CERTIFICATE - BACK SIDE)

The Corporation is authorized to issue more than one class of stock, including a class of preferred stock which may be issued in one or more series. The Corporation will furnish to any stockholder, upon written request and without charge, a full statement of the designations, preferences, limitations and relative rights of the shares of each class authorized to be issued and, with respect to the issuance of any preferred stock to be issued in series, the relative rights and preferences between the shares of each series so far as the rights and preferences have been fixed and determined and the authority of the Board of Directors to fix and determine the relative rights and preferences of subsequent series.

The Articles of Incorporation of the Corporation includes a provision which generally prohibits any person (including an individual, company or group acting in concert) from directly or indirectly offering to acquire or acquiring the beneficial ownership of more than 10% of any class of equity securities of the Corporation. In the event that stock is acquired in violation of this 10% limitation, the excess shares will no longer be counted in determining the total number of outstanding shares for purposes of any matter involving stockholder action and the Board of Directors of the Corporation may cause such excess shares to be transferred to an independent trustee for sale in the open market or otherwise, with the expenses of such sale to be paid out of the proceeds of the sale.

The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM	-	as tenants in common
TEN ENT	-	as tenants by the entireties
JT TEN	-	as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT		Custodian
	(Cust)		(Minor)

under Uniform Gifts to Minors Act
	(State)
UNIF TRF MIN ACT		Custodian (until age     )
	(Cust)

	Under Uniform Transfers to Minors Act
(Minor)		(State)

Additional abbreviations may also be used though not in the above list.

For value received,                      hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFYING NUMBER OF ASSIGNEE

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

                 shares of Common Stock represented by this Certificate, and do hereby irrevocably constitute and appoint                      as Attorney to transfer the said shares on the books of the within named Corporation with full power of substitution.

Dated                  ,         

NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION, ENLARGEMENT OR ANY CHANGE WHATSOEVER.

Signature(s) Guaranteed

By

THE SIGNATURES(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17 AD-15.

EX-5

Exhibit 5

[Stark & Stark Letterhead]

May 9, 2014

Board of Directors

HV Bancorp, Inc.

3501 Masons Mill Road, Suite 401

Huntingdon Valley, Pennsylvania 19006

Ladies and Gentlemen:

We have acted as special counsel to HV Bancorp, Inc. (the “Company”) in connection with the preparation and filing with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, of the Registration Statement on Form S-1 (the “Registration Statement”), relating to the issuance of shares of the Company’s common stock, par value $.01 per share (the “Common Stock”), in connection with (i) the conversion of Huntingdon Valley Bank, Huntingdon Valley, Pennsylvania (the “Bank”) from mutual to stock form and the reorganization of the Bank as a subsidiary of the Company (the “Conversion”) and (ii) the merger of The Victory Bancorp, Inc. (“Victory Bancorp”) with and into the Company and The Victory Bank (“Victory Bank”) with and into the Bank.

In this regard, we have examined the Articles of Incorporation and Bylaws of the Company, resolutions of the Board of Directors of the Company and the Board of Trustees of the Bank, the Plan of Conversion of the Bank (“Plan of Conversion”), the Agreement and Plan of Merger by and among the Company, the Bank and Victory Bancorp (“Merger Agreement”) and such other documents and matters of law as we deemed appropriate for the purposes of this opinion. This opinion is limited to federal laws and regulations and the laws of the Commonwealth of Pennsylvania which are in effect on the date hereof.

Based upon the foregoing, we are of the opinion as of the date hereof that the Common Stock has been duly and validly authorized, and when issued in accordance with the terms of the Plan of Conversion and the Merger Agreement, and upon the receipt of the consideration required thereby, will be legally issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as an exhibit to the Company’s Registration Statement and to the references to this firm under the headings “Legal and Tax Opinions” in the Prospectus contained in the Registration Statement.

Very truly yours,

/s/ Stark & Stark

EX-10.1

Exhibit 10.1

December 19, 2012

Travis J. Thompson, Esquire

RE: Employment Agreement

Dear Travis:

In consideration of the mutual promises herein contained and intending to be legally bound, Huntingdon Valley Bank (the “Bank”) and you, Travis J. Thompson, Esquire, agree that you will be employed by the Bank, on the following terms and conditions:

1. Your Employment by the Bank.

(a) The Bank hereby agrees to employ you as, and you agree to serve as, the Bank’s President and Chief Executive Officer during the term of employment set forth in Section 2 of this Agreement. You shall report only to the Board of Trustees of the Bank. You hereby agree to keep the Board of Trustees of the Bank fully advised concerning the operations of the Bank. You agree to serve as a Trustee of the Bank, as well as a member of any committee of the Board of Trustees of the Bank to which you may be elected or appointed.

(b) In January of 2011 you were elected as a Trustee of the Bank for the three year term ending January 2014. During the term of this Agreement you shall remain a Trustee of the Bank, as an inside Trustee. However, you agree to step down as Chairman of the Board of Trustees effective January 1, 2013.

2. Term of Employment. Your employment by the Bank and the Bank as provided in Section 1 hereof will commence on January 1, 2013 (your “employment Date”) until December 31, 2015, unless extended or sooner terminated as provided herein

3. Your Duties During the Term of Employment. You shall devote your full business time (with allowances for vacations and sick leave), attention and best efforts to the affairs of the Bank, during the term of employment hereunder.

4. Compensation and Related Matters.

(a) Salary. During the term of your employment hereunder, the Bank shall pay to you a salary at a rate of not less than One Eighty Thousand Dollars ($180,000) per annum, in equal biweekly installments in arrears. Such salary may be increased from time to time in accordance with normal business practices of the Bank.

(b) Signing Bonus. You will receive a Signing Bonus of Thirty Thousand Dollars ($30,000), to be paid in calendar year 2012 but vesting annually at the rate of Ten Thousand Dollars ($10,000) per year. You agree to repay the Bank any unvested portion of the Signing Bonus if your employment with the Bank is terminated.

Travis J. Thompson, Esquire

December 19, 2012

Page 2

(c) Executive Bonus. You will also be entitled to participate in the discretionary Executive Incentive Plan, as determined by the Board of Trustees from year to year.

(d) Expenses. During the term of your employment hereunder, you shall be entitled to receive prompt reimbursement for all reasonable expenses you incur in performing your duties hereunder, including all expenses of travel and living expenses while away from home on business in the service of the Bank, the Bank and their subsidiaries, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Bank at the time the expenses are incurred. Additionally, you shall receive a car allowance in the amount of Six Hundred Fifty and no/100 ($650.00) per month during the term of your employment. You will also be reimbursed for your social membership at Doylestown Country Club.

(e) Other Plan Benefits. During the term of your employment hereunder, the Bank shall maintain in full force and effect, and you shall be entitled to participate in all of its employee benefit plans and arrangements made generally available to its executives and key management employees in effect on your employment Date or plans or arrangements providing you with at least equivalent benefits thereunder, including, without limitation, each retirement plan and arrangement, life insurance and health and accident plan and arrangement, medical insurance plan, disability plan, survivor income plan, vacation plan and bonus plan. The Bank shall not make any changes in such plans or arrangements, which would adversely affect your rights or benefits thereunder, unless such changes occur pursuant to a program applicable to all the Bank’s executives and do not result in a proportionately greater reduction in your rights or benefits as compared with any other executive of the Bank. You shall be entitled to participate in or receive benefits under any employee benefit plan or arrangement made generally available by the Bank in the future to its executives and key management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements. Nothing paid to you under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the salary payable to you pursuant to subsection (a) of this Section 4. Any payments or benefits payable to you hereunder in respect of any calendar year during which you are employed by the Bank for less than the entire such year shall, unless otherwise provided in the applicable plan or arrangement, be prorated in accordance with the number of days in such calendar year during which you are so employed. In lieu of providing you coverage under the Bank’s current disability insurance and life insurance plans, the Bank will reimburse your Mass Mutual disability insurance premiums, currently in the amount of Two Thousand Dollars ($2,000) and provide you with a twenty (20) year term life insurance policy in the face amount of One Million Dollars ($1,000,000), provided that the annual premium does not exceed One Thousand Two Hundred Dollars ($1,200).

(f) Vacation and Sick Leave.

Travis J. Thompson, Esquire

December 19, 2012

Page 3

At such reasonable times as the Board of Trustees shall in its discretion permit, you shall be entitled, without loss of pay, to absent yourself voluntarily from the performance of your employment under this Agreement, all such voluntary absences to count as vacation time, provided that:

(a) You shall be entitled to an annual vacation in accordance with the policies that the Board of Trustees periodically establishes for senior management employees of the Bank.

(b) You shall not receive any additional compensation from the Bank on account of your failure to take a vacation or sick leave, and you shall not accumulate unused vacation or sick leave from one fiscal year to the next, except in either case to the extent authorized by the Board of Trustees.

(c) In addition to the aforesaid paid vacations, you shall be entitled without loss of pay, to absent yourself voluntarily from the performance of your employment with the Bank for such additional periods of time and for such valid and legitimate reasons as the Board of Trustees may in its discretion determine. Further, the Board of Trustees may grant to you a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the Board of Trustees in its discretion may determine.

(d) In addition, you shall be entitled to an annual sick leave benefit established by the Board of Trustees.

5. Place of Performance of Employment. In connection with your employment by the Bank, you shall be based at the principal executive offices of the Bank in Huntingdon Valley, Pennsylvania, except for required travel on the Bank’s business.

6. Confidential Information.

(a) You hereby agree not to disclose, while in the employ of the Bank, or at any time thereafter, to any person who does not have a right to obtain such information, whether or not employed by the Bank, or engaged to render services to the Bank, any confidential information obtained by you while in the employ of the Bank provided, however, that this provision shall not preclude you from disclosure required by law or Court order. The term “confidential information” as used in this Agreement includes, but is not limited to, records, lists, and knowledge of the Bank’s, clients, customers, methods of operation, processes, trade secrets, methods of determination of prices, prices or fees, financial condition, profits, sales, net income, and indebtedness, as the same may exist from time to time.

(b) You hereby agree that, upon leaving the Bank’s employ, you will not take with you, without obtaining the prior written consent of an officer authorized to give such consent by the Board of Trustees of the Bank, any of the Bank’s documents or copies thereof which are of a confidential nature

Travis J. Thompson, Esquire

December 19, 2012

Page 4

7. Termination of Employment.

(a) Your employment hereunder may be terminated without any breach of this Agreement, only under the following circumstances:

(i) Death. Your employment hereunder shall terminate upon your death.

(ii) Disability. The Bank may terminate your employment hereunder because of your incapacity as a result of physical or mental illness causing your absence from your office and your inability, on a full-time basis, to perform your duties hereunder for the entire period of ninety (90) consecutive days, and within thirty (30) days after your receipt of a Notice of Termination,(which may be sent to you before or after the end of such ninety (90) day period), you shall not have returned to your office and the performance of your duties hereunder on a full time basis.

(iii) Cause. The Bank may terminate your employment hereunder for “Cause”. For purposes of this Agreement, the Bank shall have “Cause” to terminate your employment hereunder upon (A) the willful and continued failure by you to substantially perform your duties hereunder (other than any such failure resulting from your incapacity due to physical or mental illness as provided in subsection (a)(ii) of this Section 7, after a written demand for your substantial performance is delivered to you by the Bank, which demand specifically identifies the manner in which the Bank believes you have not substantially performed your duties and your failure to provide the performance demanded within thirty (30) days after your receipt of such written demand, or (B) the willful engaging by you in misconduct which is materially injurious to the Bank, monetarily or otherwise, or (C) your plea of nolo contendere with respect to or conviction of a crime involving moral turpitude, dishonesty or a felony, or (D) your making a general assignment for the benefit of your creditors or your institution of any proceeding seeking to adjudicate you bankrupt or insolvent under any laws relating to bankruptcy or insolvency or an involuntary petition shall be filed against you seeking relief under any law relating to bankruptcy or insolvency which remains undismissed for a period of sixty (60) days or more, or (E) your willful violation of the provisions of this Agreement and your failure to cure such violation within thirty (30) days after receipt of written notice of such violation, or (F) the receipt of a request by the Bank from any of the governmental agencies that regulate any of them, that you be removed from your position as a director of the Bank or the President and Chief Executive Officer.

(iv) Voluntary Termination. You may terminate your employment hereunder at any time upon not less than thirty (30) days prior written notice to the Bank, subject to your obligations and covenants under Sections 4(b), 6 and Section 9 of this Agreement.

(b) Any termination of your employment by the Bank or by you (other than termination pursuant to subsection (a)(i) of this Section 7 or any notice by you to the Bank of a failure of the Bank or the Bank to comply with the provisions of this Agreement shall be communicated by a Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate the

Travis J. Thompson, Esquire

December 19, 2012

Page 5

specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated. A purported “Notice of Termination” which does not comply with the requirements of the foregoing sentence shall not be considered a Notice of Termination under this Agreement.

(c) For the purposes of this Agreement “Date of Termination” shall mean (A) if your employment is terminated by death, the date of death,(B) if your employment is terminated pursuant to subsection (a)(ii) of this Section 7, thirty (30) days after Notice of Termination is sent to you (provided that you shall not have returned to the performance of your duties on a full-time basis during such thirty (30) day period) and if requested by the Board of Trustees of the Bank, you agree to undergo a physical examination by a doctor selected by the Board which confirms that you are fit to continue full time normal employment hereunder,(C) if your employment is terminated pursuant to subsection (a)(iii) of this Section 8, the date specified in the Notice of Termination, which date cannot precede the date of the Notice of Termination, (D) if your employment is terminated pursuant to subsection a(iv) of this Section 8, the date specified in the Notice of Termination, which date must be at least thirty (30) days after the date of the Notice of Termination, and (E) if your employment or this Agreement is terminated for any other reason, the date on which a Notice of Termination is sent to the other party hereto, which date cannot precede the date of the Notice of Termination; provided that if within thirty (30) days after any Notice of Termination is sent hereunder, the party receiving such Notice of Termination notifies the other party, that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally resolved, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected).

8. Compensation in the event of Death, During Disability Period or Upon Other Termination.

(a) If your employment shall be terminated because of your death, the Bank shall pay to your spouse or your estate your full salary through the last day of the month of your death at the rate in effect at the time of your death, and the Bank shall have no further obligations to you, your spouse or your estate under this Agreement.

(b) If your employment shall be terminated because you fail to perform your duties hereunder as a result of incapacity due to physical or mental illness, which is a disability as defined in subsection 7(a)(ii) hereof, the Bank shall pay your full salary for a period equal to the applicable “elimination period” under any group long term disability insurance provided by the Bank or the Bank which is currently 180 days, and the Bank shall have no further obligations to you under this Agreement. In the event that the Bank or the Bank ceases to provide group long term disability insurance, the Bank shall pay your full salary through the last day of the month after your receipt of a Notice of Termination advising you of the termination of your employment due to your disability and the Bank shall have no further obligations to you under this Agreement.

Travis J. Thompson, Esquire

December 19, 2012

Page 6

(c) If your employment shall be terminated for Cause, the Bank shall pay you your full salary through the Date of Termination at the rate in effect at the time Notice of Termination is sent to you and the Bank shall have no further obligations to you under this Agreement.

(d) If, in breach of this Agreement: the Bank shall terminate your employment, other than pursuant to subsections 7(a)(ii) or 7(a)(iii) hereof (it being understood that a purported termination pursuant to subsection 7(a)(ii) or 7(a)(iii) hereof, which is disputed and finally determined not to have been proper, shall be a termination by the Bank in breach of this Agreement); or the Bank causes a significant diminution in your duties and responsibilities or the assignment to you duties and responsibilities inconsistent with your position, then,

(i) the Bank shall pay your full salary, including incentive compensation due you, through the date the Bank terminates your employment; and

(ii) in lieu of any further salary and all other payments hereunder due to you for the remaining term of this Agreement, the Bank shall pay you an amount equal to your annual salary in effect as of the Date of Termination, in substantially equal biweekly installments commencing on the Date of Termination and continuing for six (6) months (“Severance Period”). However, in the event that the Date of Termination is within twenty-four (24) months from a change of control of the Board of Trustees a severance payment in lump sum payment equal to two (2x) times your base Salary as defined in Paragraph 4(a), payable within thirty (30) days of your Date of Termination.

(e) If you shall terminate your employment, the Bank shall pay your full salary through the Date of Termination at the rate in effect at the time Notice of Termination and thereafter the Bank shall have no further obligations to you under this Agreement.

(f) You shall not be required to mitigate the amount of any payment provided for in this Section 8 by seeking other employment or otherwise. Notwithstanding anything herein to the contrary, the Bank’s obligations under this Section 8 shall survive termination of this Agreement.

9. Non-Competition.

(a) Non-Solicitation of Employees. During the term of your employment and for a time period of two (2) years after the date of termination of your employment (“Covenant Period”), despite the voluntary or involuntary termination of your employment relationship with the Bank for any reason whatsoever, you shall not, either on your own account or for any person, firm, partnership, Bank, or other entity (a) solicit, interfere with, offer employment to, or endeavor to cause any employee of the Bank, hired prior to your date of employment, to leave his or her employment, or (b) induce or attempt to induce any such employee to breach his or her employment agreement, nondisclosure and non-solicitation agreement or other agreement with the Bank.

Travis J. Thompson, Esquire

December 19, 2012

Page 7

(b) Non-Solicitation of Customers. During the Covenant Period, despite voluntary or involuntary termination of your employment relationship with the Bank for any reason whatsoever, you shall not solicit, induce, or attempt to induce any person, who has been a customer of the Bank prior to your date of employment (a) to cease doing business in whole or in part with or through the Bank, or (b) to do business with any other person, firm, partnership, Bank, or other entity which performs services similar to or competitive with those provided by the Bank, or agree to accept as a customer or do any business directly or indirectly with a customer of the Bank prior to your date of hire.

(c) Non-Compete Covenant: During the Covenant Period, you will not, directly or indirectly, own, manage, operate, join or control, or participate in the ownership, management, operation or control of, or be a director, shareholder or an employee of, or a consultant to, accept remuneration from, or provide services of any kind for or on behalf of, as an employee, officer, partner, independent contractor, volunteer, owner or in any other capacity for the retention of personal services or acts of management, operation or control which is in any respect competitive with the business, affairs or interests of the Bank (a “Competitive Business”), within the Restricted Territory (as defined below) or any entity (regardless of its location) which derives more than ten percent of its gross revenue from Competitive Business within the Restricted Territory. A “Competitive Business” shall include, but is not limited to, any entity which provides general banking services, including but not limited to residential and commercial lending. The “Restricted Territory” shall mean the geographical area within a fifty (50) mile radius of the Bank’s present Huntingdon Valley headquarters. In consideration of the Non-Compete Covenant that Bank shall pay you the sum of Fifteen Thousand ($15,000) Dollars, to be paid in 2012.

10. Termination or Suspension Under Federal Law

(a) If you are removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (the “FDIA”) (12 U.S.C. §§ 1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement shall terminate, as of the effective date of the order, but vested rights of the parties shall not be affected.

(b) If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default; however, this paragraph shall not affect the vested rights of the parties.

(c) All obligations under this Agreement shall terminate, except to the extent that continuation of this Agreement is necessary for the continued operation of the Bank: (i) by the Secretary of Banking and Securities of the Pennsylvania Department of Banking (the “Secretary”), or his or her designee, at the time that the Federal Deposit Insurance Corporation (“FDIC”) enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDIA; or (ii) by the Secretary, or his or her designee, at the time that the Secretary, or his or her designee, approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Secretary to be in an unsafe or unsound condition. Such action shall not affect any vested rights of the parties.

Travis J. Thompson, Esquire

December 19, 2012

Page 8

(d) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C. § 1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits you from participating in the conduct of the Bank’s affairs, the Bank’s obligations under this Agreement shall be suspended as of the date of such service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion (i) pay you all or part of the compensation withheld while its contract obligations were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

11. Compliance with Section 409A of the Internal Revenue Code.

(a) This Agreement shall be interpreted to avoid any penalty sanctions under Section 409A of the Internal Revenue Code of 1986, as amended, and applicable Treasury Regulations and guidance thereunder (“Section 409A”). The timing of any payment provided hereunder that is subject to Section 409A may not be accelerated unless permitted under Section 409A.

(b) No payments or benefits provided under this Agreement intended to be paid upon termination of employment shall be paid, unless such termination of employment also constitutes a “separation from service” within the meaning of Section 409A. If you are a “specified employee” under Section 409A on the date of separation from service, any cash payment to you, not including reimbursement for benefits and not otherwise exempt from Section 409A, shall be made on the first business day of the seventh month following separation from service. If you are a “specified employee” under Section 409A on the date of separation from service and if any benefits provided to you under this Agreement are taxable to you, then, with the exception of medical insurance benefits, the value of the aggregate amount of such taxable benefits provided to you pursuant to this Agreement during the six-month period following your separation from service shall be limited to the amount specified by Code Section 402(g)(1)(B) for the year of the separation from service. You shall pay the cost of any benefits exceeding the amount specified in the prior sentence during the six-month period following your separation from service, and shall be reimbursed by the Bank during the seventh month following the separation from service.

(c) All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during your lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. In no event shall you, directly or indirectly, designate the calendar year of payment.

Travis J. Thompson, Esquire

December 19, 2012

Page 9

12. Choice of Law and Venue.

It is understood and agreed that the construction and interpretation of this Agreement shall at all times and in all respects be governed by the laws of the Commonwealth of Pennsylvania, without giving effect to the conflict of law’s provisions thereof. Venue of any action brought to enforce or relating to this Agreement shall be brought exclusively in the Court of Common Pleas of Bucks County or the United States District Court for the Eastern District of Pennsylvania.

11. Entire Agreement.

This Agreement represents the entire agreement of the parties, and supersedes all prior understandings and agreements between the parties relating to the subject matter of the employment of Executive. This Agreement may not be modified or amended except by an instrument in writing signed by all of the parties hereto.

12. Waiver.

The failure of any party to insist in any one or more instances performance of any terms or conditions of this Agreement shall not be construed as a waiver of future performance of any such term, covenants or conditions, but the obligations of either party with respect thereto shall continue in full force and effect.

If you are in agreement with the above terms and conditions of employment with Huntingdon Valley Bank, kindly sign below and return a fully executed original to me. I look forward to your new role at the Bank.

Very truly yours,
HUNTINGDON VALLEY BANK
By:	/s/ Scott W. Froggatt
	Scott W. Froggatt
	Member, Board of Trustees
Agreed to and accepted this 19th day of December, 2012.
/s/ Travis J. Thompson, Esquire
Travis J. Thompson, Esquire

EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of June 1, 2012], by and among THE VICTORY BANK (the “Bank”) and JOSEPH W. MAJOR (the “Executive”).

WHEREAS, the Executive serves in positions of substantial responsibility with the Bank; and

WHEREAS, the Bank and the Executive wish to set forth the terms of the Executive’s continued employment in these positions and enter into this employment agreement; and

WHEREAS, the Executive is willing and desires to continue to serve in these positions with the Bank.

NOW THEREFORE, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree and intend to be legally bound as follows.

ARTICLE 1

EMPLOYMENT

1.1 Employment. The Bank hereby employs the Executive to serve as Chairman of the Board and Chief Executive Officer according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement. The Executive hereby accepts continued employment according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement.

1.2 Responsibilities and Duties.

(a) As Chairman of the Board and Chief Executive Officer, the Executive shall serve under the board of directors of the Bank and will perform all duties and will have all powers associated with the positions, as set forth in any job description provided to the Executive by the Bank or as may be set forth in the bylaws of the Bank. The Executive shall report directly to the board of directors of the Bank.

(b) During the period of his employment hereunder, except for reasonable periods of absence occasioned by illness, reasonable vacation periods, and other reasonable leaves of absence approved by the board of directors of the Bank, the Executive will devote all of his business time, attention, skill and efforts to the faithful performance of his duties under this Agreement, including activities and duties directed by the board of directors. Notwithstanding the preceding sentence, subject to the approval of the board of directors, the Executive may serve as a member of the board of directors of business, community and charitable organizations, provided that in each case the service shall not materially interfere with the performance of his duties under this Agreement, adversely affect the reputation of the Bank or any of its affiliates, or present any conflict of interest. Nothing in this Section 1.2 shall prevent the Executive from managing personal investments and affairs, provided that doing so also does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.

1.3 Term.

(a) The term of this Agreement shall include: (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and continuing for thirty-six (36) full months thereafter, plus (ii) any and all extensions of the initial term made pursuant to this Section 1.3.

(b) Commencing as of the first anniversary of the Effective Date and continuing as of each anniversary of the Effective Date thereafter, the disinterested members of the board of directors of the Bank may extend the Agreement term for an additional year, so that the remaining term of the Agreement again becomes thirty-six (36) full months from the applicable anniversary of the Effective Date, unless the Executive elects not to extend the term of this Agreement by giving written notice at least thirty (30) days prior to the applicable anniversary date.

(c) The disinterested members of the board of directors of the Bank will review the Agreement and the Executive’s performance annually for purposes of determining whether to extend the Agreement term and will include the rationale and results of its review in the minutes of the meetings. The board of directors will notify the Executive no earlier than ninety (90) days and no later than thirty (30) days prior to the applicable anniversary date whether it has determined to extend the Agreement.

(d) Nothing in this Agreement shall mandate or prohibit a continuation of the Executive’s employment following the expiration of the term of this Agreement, upon such terms and conditions as the Bank and the Executive may mutually agree.

1.4 Service on the Board of Directors. The Executive serves as a member of the board of directors of the Bank. The board of directors of the Bank shall undertake every lawful effort to ensure that the Executive continues throughout the term of his employment to be elected as a director of the Bank.

ARTICLE 2

COMPENSATION AND BENEFITS

2.1 Base Salary and Bonus and Incentive Compensation.

(a) In consideration of the Executive’s performance of the obligations under this Agreement, the Bank shall pay or cause to be paid to the Executive a total salary at the annual rate of not less than $193,100, payable according to the regular payroll practices of the Bank. During the period of this Agreement, the board of directors (or committees thereof) shall review the Executive’s base salary at least annually. Any increase in the Executive’s base salary will become the new “Base Salary” for purposes of this Agreement.

(b) The Executive shall be entitled to incentive compensation in accordance with any program established by the Bank for the Executive or as otherwise may be provided to the Executive at the discretion of the Bank.

2.2 Benefit Plans and Perquisites. For as long as the Executive is employed by the Bank, the Executive shall be eligible (x) to participate in any and all officer or employee compensation, incentive compensation and benefit plans in effect from time to time, including without limitation plans providing retirement, medical, dental, disability, and group life benefits and including incentive, or bonus plans existing on the date of this Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the eligibility requirements for any of the plans, arrangements or benefits, and (y) to receive any and all other fringe and other benefits provided from time to time, including the specific items described in (a)-(c) below.

(a) Reimbursement of business expenses. The Executive shall be entitled to reimbursement for all reasonable business expenses incurred while performing his obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while

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acting at the request of or in the service of the Bank and reasonable expenses for attendance at annual and other periodic meetings of trade associations. Expenses will be reimbursed if they are submitted in accordance with the Bank’s policies and procedures.

(b) Facilities. The Bank will furnish the Executive with the working facilities and staff customary for executive officers with the comparable title and duties of the Executive, as set forth in Sections 1.1 and 1.2 of this Agreement, and as are necessary for the Executive to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Bank.

(c) Automobile Allowance. During the term of this Agreement, the Bank shall provide the Executive with a automobile to be selected by the Executive. The Executive shall have exclusive use of the automobile for himself and his family. The Bank shall annually include on the Executive’s Form W-2 any amount of income attributable to the Executive’s personal use of the automobile. The Bank shall maintain minimum liability insurance coverage on the automobile and shall have the Executive named as additional insured on the automobile insurance policy. Upon termination of the Executive’s employment hereunder (other than a termination for Cause), he shall have the option of purchasing the vehicle from the Bank for an amount equal to its fair market value. The Executive agrees to maintain the vehicle in accordance with any applicable warranty provisions, and the Bank agrees to reimburse the Executive for maintenance and upkeep, subject to submission of documentation as may be reasonably required by the Bank.

2.3 Vacation: Leave. The Executive shall be entitled to sick leave and paid annual vacation (of at least 31 days total paid time off per year) in accordance with policies established from time to time by the Bank. In addition to paid vacations and other leave, the board of directors may grant the Executive a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the board of directors may determine.

2.4 Indemnification and Liability Insurance.

(a) Indemnification. The Bank agrees to indemnify the Executive (and his heirs, executors, and administrators), and to advance expenses related thereto, to the fullest extent permitted under applicable law and regulations against any and all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of his having been a director or executive of the Bank or any of its affiliates (whether or not he continues to be a director or executive at the time of incurring any such expenses or liabilities). These expenses and liabilities may include, but not be limited to, judgments, court costs, and attorneys’ fees and the costs of reasonable settlements approved by the board of directors, if such action is brought against the Executive in his capacity as an executive or director of the Bank or any of its affiliates. Indemnification for expenses shall not extend to matters for which the Executive has been terminated for Cause. Nothing contained herein shall be deemed to provide indemnification prohibited by applicable law or regulation. Notwithstanding anything herein to the contrary, the obligations of this Section 2.4 shall survive the term of this Agreement by a period of six (6) years.

(b) Insurance. During the period in which indemnification of the Executive is required under this Section 2.4, the Bank shall provide the Executive with coverage under a directors’ and officers’ liability policy at the expense of the Bank, at least equivalent to such coverage provided to directors and senior executives of the Bank.

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ARTICLE 3

EMPLOYMENT TERMINATION

3.1 Termination of Employment.

(a) Death. The Executive’s employment shall terminate automatically at the Executive’s death. If the Executive dies while in active service to the Bank, the Executive’s spouse, or, if there is no surviving spouse, his estate, shall receive any sums due to the Executive as Base Salary and reimbursement of expenses through the end of the month in which his death occurred.

(b) Disability. The board of directors of the Bank or the Executive may terminate the Executive’s employment after having determined the Executive has a Disability. For purposes of this Agreement, “Disability” means the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. The board of directors of the Bank shall determine whether or not the Executive is and continues to be permanently disabled for purposes of this Agreement in good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant. As a condition to any benefits, the board of directors may require the Executive to submit to any physical or mental evaluations and tests as they deem reasonably appropriate. In the event of such Disability, the Executive’s obligation to perform services under this Agreement will terminate. The Bank will pay the Executive, as Disability pay, one hundred percent (100%) of the Executive’s annual Base Salary in effect as of the date of his termination of employment due to Disability. Disability payments will be made in equal installments on a monthly basis, commencing on the first day of the month following the effective date of the Executive’s termination of employment for Disability and ending on the earlier of: (x) the date he returns to full-time employment at the Bank or another employer; (y) his death; or (z) thirty-six months. Disability payments shall be reduced by the amount of any short- or long-term disability benefits payable to the Executive under any other disability programs sponsored by the Bank.

3.2 Involuntary Termination with Cause. The Bank may terminate the Executive’s employment for Cause. If the Executive’s employment terminates for Cause, the Executive shall receive the Base Salary through the date on which the termination of employment becomes effective and reimbursement of expenses to which the Executive is entitled when the termination becomes effective. The Executive shall not be deemed to have been terminated for Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution adopted at a meeting of the board of directors called and held for the purpose, which resolution shall (x) contain findings that the Executive has committed an act constituting Cause, and (y) specify the particulars thereof. The resolution of the board of directors shall be deemed to have been duly adopted if it is adopted by the affirmative vote of a majority of the directors then in office, excluding the Executive. Notice of the meeting and the proposed termination for Cause shall be given to the Executive a reasonable time before the meeting of the board of directors. The Executive and the Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable opportunity to be heard by the board of directors at the meeting. For purposes of this Agreement “Cause” means any of the following:

(1) a material act of dishonesty in performing the Executive’s duties on behalf of the Bank;

(2) a willful misconduct that in the judgment of the board of directors will likely cause economic damage to the Bank or its affiliates or injury to the business reputation of the Bank or its affiliates;

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(3) a breach of fiduciary duty involving personal profit;

(4) the intentional failure to perform stated duties under this Agreement after written notice thereof from the board of directors of the Bank;

(5) any felony conviction; or

(6) a material breach by the Executive of any provision of this Agreement.

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has acted, or failed to act, with an absence of good faith and without reasonable belief that his action or failure to act was in the best interest of the Bank.

3.3 Voluntary Termination by the Executive Without Good Reason. In addition to his other rights to terminate his employment under this Agreement, the Executive may voluntarily terminate employment during the term of this Agreement upon at least sixty (60) days prior written notice to the board of directors of the Bank. Upon the Executive’s voluntary termination, he will receive only his compensation and vested rights and benefits to the date of his termination of employment. Following his voluntary termination of employment under this Section 3.3, the Executive will be subject to the restrictions set forth in Article 7.

3.4 Involuntary Termination Without Cause and Voluntary Termination with Good Reason. With written notice to the Executive at least thirty (30) days in advance, the Bank may terminate the Executive’s employment without Cause. Termination shall take effect at the end of the notice period. With advance written notice to the Bank as provided in clause (y), the Executive may terminate employment for Good Reason. If the Executive’s employment terminates involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement. For purposes of this Agreement, a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions stated in both clauses (x) and (y) of this Section 3.4 are satisfied:

(x) a voluntary termination by the Executive shall be considered a termination with Good Reason if any of the following occur without the Executive’s written consent, and the term Good Reason shall mean the occurrence of any of the following events without the Executive’s written consent:

(1) a failure to reelect or reappoint the Executive as Chairman of the Board and Chief Executive Officer of the Bank (provided, however, that a change in the Executive’s position consented to in writing by the Executive in connection with succession planning of the Bank, or otherwise, shall not be deemed a Good Reason);

(2) a failure to renominate the Executive to the board of directors of the Bank;

(3) a material change in the Executive’s positions to become positions of lesser responsibility, importance, or scope from the positions and attributes thereof described in Sections 1.1 and 1.2 of this Agreement (provided, however, that a reduction in duties and responsibilities consented to in writing by the Executive in connection with succession planning of the Bank, or otherwise, shall not be deemed a Good Reason);

(4) a liquidation or dissolution of the Bank, other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of the Executive;

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(5) a material reduction in the Executive’s Base Salary or benefits (or any such reduction following a Change in Control) required to be provided hereunder (other than a reduction that is generally applicable to the Bank’s executive employees or a reduction or elimination of the Executive’s benefits under one or more benefit plans maintained by the Bank as part of a good faith, overall reduction or elimination of such plans or benefits applicable to all participants in a manner that does not discriminate against the Executive (except as such discrimination may be necessary to comply with applicable law));

(6) a relocation of the Executive’s principal place of employment by more than twenty-five (25) miles from its location as of the date of this Agreement; or

(7) a material breach of this Agreement by the Bank.

(y) the Executive must give notice to the Bank of the existence of one or more of the conditions described in clause (x) within sixty (60) days after the initial existence of the condition, and the Bank shall have thirty (30) days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (x) must occur within six (6) months after the initial existence of the condition.

ARTICLE 4

SEVERANCE COMPENSATION

4.1 Cash Severance after Termination Without Cause or Termination for Good Reason.

(a) Subject to the possibility that cash severance after employment termination might be delayed under Section 4.1(b), if the Executive’s employment terminates involuntarily but without Cause or if the Executive terminates employment with Good Reason. The Bank shall pay the Executive, in a single lump sum within ten (10) days of his termination of employment, an amount equal to (i) the Base Salary that would have been paid to him for the remaining term of the Agreement, plus (ii) the amount of the last bonus paid to the Executive multiplied by a fraction, the numerator of which equals the number of full calendar months remaining on the term of the Agreement and the denominator of which equals twelve (12). However, the Bank and the Executive acknowledge and agree that the severance benefits under this Section 4.1 shall not be payable if severance benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement.

(b) If the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) at the time of his termination, and if the cash severance payment under Section 4.1(a) would be considered deferred compensation under Section 409A of the Code, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available, the severance benefits shall be paid to the Executive in a single lump sum without interest on the first day of the seventh (7^th) month after the month in which the Executive’s employment terminates to the extent necessary to comply with Section 409A of the Code. References in this Agreement to Section 409A of the Code include rules, regulations, and guidance of general application issued by the Department of the Treasury under Section 409A of the Code.

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4.2 Post-Termination Insurance Coverage.

(a) If the Executive’s employment terminates involuntarily but without Cause or with Good Reason, the Bank shall continue or cause to be continued at the Bank’s expense medical, dental and life insurance benefits for the Executive and any of his dependents covered at the time of his termination. The health and welfare insurance benefits shall continue until the end of the term remaining under this Agreement when the Executive’s employment terminates.

(b) If (x) under the terms of the applicable policy or policies for the insurance benefits specified in Section 4.2(a) it is not possible to continue coverage for the Executive and his dependents, or (y) when employment termination occurs the Executive is a “specified employee” within the meaning of Section 409A of the Code, if any of the continued insurance coverage benefits specified in Section 4.2(a) would be considered deferred compensation under Section 409A of the Code, and finally, if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available for that particular insurance benefit, the Bank shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s projected cost to maintain that particular insurance benefit (and associated income tax gross-up benefit, if applicable) had the Executive’s employment not terminated, assuming continued coverage for thirty-six (36) months. The lump-sum payment shall be made ten (10) days after employment termination or, if Section 4.1(b) applies, on the first day of the seventh (7^th) month after the month in which the Executive’s employment terminates.

ARTICLE 5

CHANGE IN CONTROL BENEFITS

5.1 Change in Control Benefits. If a Change in Control occurs during the term of this Agreement and, thereafter, the Executive’s employment terminates involuntarily but without Cause or if the Executive voluntarily terminates employment with Good Reason, the Bank shall make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to 2.99 times the Executive’s “base amount” (as such term is defined for purposes of Section 280G of the Code). The payment required under this paragraph is payable no later than ten (10) business days after the Executive’s termination of employment. If the Executive receives payment under Section 5.1, the Executive shall not be entitled to any additional severance benefits under Section 4.1 of this Agreement. In addition to the cash severance benefit provided for under this Section 5.1, the Bank shall provide the Executive with the post-termination insurance coverage described in Section 4.2(a) of this Agreement, subject to the provisions of Section 4.2(b) of this Agreement.

5.2 Change in Control Defined. For purposes of this Agreement “Change in Control” means a change in ownership, change in effective control or change in ownership of a substantial portion of assets of the Bank or The Victory Bancorp, Inc., as defined for purposes of Section 409A of the Code.

5.3 Potential Limitation of Benefits Under Certain Circumstances. In the event that the aggregate payments or benefits to be made or afforded to the Executive in the event of a Change of Control (whether under this Agreement or otherwise) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such payments or benefits shall be reduced to the extent necessary to avoid treatment as an “excess parachute payment”, with the reduction among such payments and benefits to be made first to payments and benefits payable or provided under this Agreement.

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ARTICLE 6

CONFIDENTIALITY AND CREATIVE WORK

6.1 Non-disclosure. The Executive covenants and agrees not to reveal to any person, firm, or corporation any confidential information of any nature concerning the Bank or its business, or anything connected therewith. As used in this Article 6 the term “confidential information” means all of the confidential and proprietary information and trade secrets of the Bank and its affiliates in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to:

(a) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information;

(b) the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information;

(c) the whole or any portion or phase of any marketing or sales information, sales records, customer lists, prices, sales projections, or other sales information; and

(d) trade secrets, as defined from time to time by the laws of Pennsylvania.

This Section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

6.2 Return of Materials. The Executive agrees to immediately deliver or return to the Bank upon termination of his employment, or as soon thereafter as possible, all written information and any other items furnished by the Bank or prepared by the Executive in connection with the Executive’s employment and to immediately delete (except to the extent provided below) all electronically stored data of the Bank maintained on the Executive’s personal computers and to return all employer-provided computers or communication devices (i.e., laptop, Blackberry, PDA, etc.). The Executive will retain no copies thereof after termination of the Executive’s employment; provided, however, that the Executive shall be entitled to retain any list of names and related contact information with whom the Executive has had personal contact during or prior to his employment with the Bank.

6.3 Creative Work. The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Bank. The Executive hereby assigns to the Bank all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.

6.4 Affiliates’ Confidential Information is Covered; Confidentiality Obligation Survives Termination. For purposes of this Agreement, the term “affiliate” of the Bank includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control of the Bank. The rights and obligations set forth in this Article 6 shall survive termination of this Agreement.

6.5 Injunctive Relief. The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Bank if the Executive fails to observe the obligations imposed by this Article 6. Accordingly, if the Bank institutes an action to enforce the provisions hereof, the

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Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank, and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. The confidentiality and remedies provisions of this Article 6 shall be in addition to and shall not be deemed to supersede or restrict, limit, or impair the Bank’s rights under applicable state or federal statute or regulation dealing with or providing a remedy for the wrongful disclosure, misuse, or misappropriation of trade secrets or proprietary or confidential information.

ARTICLE 7

COMPETITION AFTER EMPLOYMENT TERMINATION

7.1 Covenant Not to Solicit Employees. The Executive agrees not to, directly or indirectly, solicit or employ the services of any officer or employee of the Bank (including an individual who was an officer or employee of the Bank during the one year period following the Executive’s termination) for one year after the Executive’s employment termination.

7.2 Covenant Not to Compete.

(a) The Executive covenants and agrees not to compete directly or indirectly with the Bank for one year after employment termination. For purposes of this Section 7.2:

(1) the term compete means:

(i) providing financial products or services on behalf of any financial institution for any person residing in the territory;

(ii) assisting (other than through the performance of ministerial or clerical duties) any financial institution in providing financial products or services to any person residing in the territory; or

(iii) inducing or attempting to induce any person who was a customer of the Bank at the date of the Executive’s employment termination to seek financial products or services from another financial institution.

(2) the words directly or indirectly mean:

(i) acting as a consultant, officer, director, independent contractor, or employee of any financial institution in competition with the Bank in the territory, or

(ii) communicating to such financial institution the names or addresses or any financial information concerning any person who was a customer of the Bank when the Executive’s employment terminated.

(3) the term customer means any person to whom the Bank is providing financial products or services on the date of the Executive’s employment termination or within one year thereafter.

(4) the term financial institution means any bank, savings association, or bank or savings association holding company, or any other institution, the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in Section 4(k) of the Bank Holding Company Act of 1956, other than the Bank or any of its affiliated corporations.

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(5) financial product or service means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Bank or an affiliate on the date of the Executive’s employment termination, including but not limited to banking activities and activities that are closely related and a proper incident to banking.

(6) the term person means any individual or individuals, corporation, partnership, fiduciary or association.

(7) the term territory means the area within a 30-mile radius of any office of the Bank at the date of the Executive’s employment termination.

(b) If any provision of this section or any word, phrase, clause, sentence or other portion thereof (including, without limitation, the geographical and temporal restrictions contained therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid provision or portion shall be modified or deleted so that the provisions hereof, as modified, are legal and enforceable to the fullest extent permitted under applicable law.

(c) The Executive acknowledges that the Bank’s willingness to enter into this Agreement and to make the payments contemplated by Articles 3 and 4 of this Agreement is conditioned on the Executive’s acceptance of the covenants set forth in Articles 6 and 7 of this Agreement and that the Bank would not have entered into this Agreement without such covenants in force.

7.3 Injunctive and Other Relief. Because of the unique character of the services to be rendered by the Executive hereunder, the Executive understands that the Bank would not have an adequate remedy at law for the material breach or threatened breach by the Executive of any one or more of the Executive’s covenants in this Article 7. Accordingly, the Executive agrees that the Bank’s remedies for a breach of this Article 7 include, but are not limited to, (x) forfeiture of any money representing accrued salary, contingent payments, or other fringe benefits (including any amount payable pursuant to Article 4) due and payable to the Executive during the period of any breach by Executive, and (y) a suit in equity by the Bank to enjoin the Executive from the breach or threatened breach of such covenants. The Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. Nothing herein shall be construed to prohibit the Bank from pursuing any other or additional remedies for the breach or threatened breach.

7.4 Article 7 Survives Termination But Is Void After a Change in Control. The rights and obligations set forth in this Article 7 shall survive termination of this Agreement. However, Article 7 shall become null and void effective immediately upon a Change in Control.

ARTICLE 8

MISCELLANEOUS

8.1 Successors and Assigns.

(a) This Agreement shall be binding upon the Bank and any successor to the Bank, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank by purchase, merger, consolidation, reorganization, or otherwise, but this Agreement and the Bank’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank. By agreement in form and substance satisfactory to the Executive, the Bank shall require any successor to all

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or substantially all of the business or assets of the Bank expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform had no succession occurred.

(b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c) Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement, except as expressly provided herein. Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this Section 8.1, the Bank shall have no liability to pay any amount to the assignee or transferee.

8.2 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and governed by the internal laws of the Commonwealth of Pennsylvania, without giving effect to any conflict of laws provision or rule that would cause the application of the laws of any jurisdiction other than Pennsylvania. By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in Pennsylvania.

8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive by the Bank and replaces any prior employment agreement between the Bank and the Executive. Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void by the parties.

8.4 Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Bank at the time of the delivery of such notice, and properly addressed to the Bank if addressed to the board of directors of the Bank at the Bank’s executive offices.

8.5 Severability. If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law. If any provisions of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

8.6 Captions and Counterparts. The captions in this Agreement are solely for convenience. The captions do not define, limit, or describe the scope or intent of this Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

8.7 No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment. Moreover, provided the Executive is not in breach of any obligation under Article 6 of this Agreement, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after employment termination.

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8.8 Amendment and Waiver. This Agreement may not be amended, released, discharged, abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of the parties hereto. The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision, nor affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

8.9 Reimbursement of the Executive’s Expenses to Enforce this Agreement. The Bank shall reimburse the Executive for all out-of-pocket expenses, including, without limitation, reasonable attorneys’ fees, incurred by the Executive in connection with enforcement by the Executive of the obligations of the Bank to the Executive under this Agreement.

8.10 Compliance with Internal Revenue Code Section 409A. The Bank and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code. If any provision of this Agreement does not satisfy the requirements of Section 409A of the Code, the provision shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A of the Code, the Bank shall reform the provision. However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision.

8.12 Effect of Federal Banking Statutes and Regulations. Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359. In addition, the Executive agrees that this Agreement is subject to amendment at any time in order to comply with laws that are applicable to the Bank (including regulations and rules relating to any governmental program in which Company or the Bank may participate).

8.12 Source of Payments. All payments provided for under this Agreement shall be timely paid in cash or check from the general funds of the Bank.

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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.

VICTORY BANK

For the Board of Directors

EXECUTIVE

Joseph W. Major

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EX-10.3

Exhibit 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) which was originally entered into as of June 14, 2012, by and among THE VICTORY BANK (the “Bank”) and RICHARD L. GRAVER (the “Executive”), is amended and restated in its entirety effective as of April 1, 2013.

WHEREAS, the Executive serves in positions of substantial responsibility with the Bank; and

WHEREAS, the Bank and the Executive wish to set forth the terms of the Executive’s continued employment in these positions and enter into this employment agreement; and

WHEREAS, the Executive is willing and desires to continue to serve in these positions with the Bank; and

WHEREAS, the parties to the Agreement desire to amend the original agreement to reflect the Executive’s current title and to eliminate non-competition obligations and desire to do so by amending and restating the original agreement.

NOW THEREFORE, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree and intend to be legally bound as follows.

ARTICLE 1

EMPLOYMENT

1.1 Employment. The Bank hereby employs the Executive to serve as Chief Banking Officer according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement. The Executive hereby accepts continued employment according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement.

1.2 Responsibilities and Duties.

(a) As Chief Banking Officer, the Executive will perform all duties and will have all powers associated with the positions, as set forth in any job description provided to the Executive by the Bank or as may be set forth in the bylaws of the Bank. The Executive shall report directly to the President and Chief Executive Officer of the Bank.

(b) During the period of his employment hereunder, except for reasonable periods of absence occasioned by illness, reasonable vacation periods, and other reasonable leaves of absence approved by the board of directors of the Bank, the Executive will devote all of his business time, attention, skill and efforts to the faithful performance of his duties under this Agreement, including activities and duties directed by the board of directors. Notwithstanding the preceding sentence, subject to the approval of the board of directors, the Executive may serve as a member of the board of directors of business, community and charitable organizations, provided that in each case the service shall not materially interfere with the performance of his duties under this Agreement, adversely affect the reputation of the Bank or any of its affiliates, or present any conflict of interest. Nothing in this Section 1.2 shall prevent the Executive from managing personal investments and affairs, provided that doing so also does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.

1.3 Term.

(a) The term of this Agreement shall include (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and ending on June 13, 2013, plus (ii) any and all extensions of the initial term made pursuant to this Section 3.

(b) Commencing on June 13, 2013 (the “Renewal Date”), and continuing on each anniversary thereafter, the disinterested members of the board of directors of the Bank may extend the term of this Agreement for an additional year so that the remaining term of the Agreement again becomes thirty-six (36) months (from the Renewal Date), unless the Executive elects not to extend the term of this Agreement by giving written notice of at least thirty (30) days prior to the applicable Renewal Date anniversary.

(c) The disinterested members of the board of directors of the Bank will review the Agreement and the Executive’s performance annually for purposes of determining whether to extend the Agreement term and will include the rationale and results of its review in the minutes of the meetings. The board of directors will notify the Executive no earlier than ninety (90) days and no later than thirty (30) days prior to the applicable anniversary date whether it has determined to extend the Agreement.

(d) Nothing in this Agreement shall mandate or prohibit a continuation of the Executive’s employment following the expiration of the term of this Agreement, upon such terms and conditions as the Bank and the Executive may mutually agree.

ARTICLE 2

COMPENSATION AND BENEFITS

2.1 Base Salary and Bonus and Incentive Compensation.

(a) In consideration of the Executive’s performance of the obligations under this Agreement, the Bank shall pay or cause to be paid to the Executive a total salary at the annual rate of not less than $149,158.00, payable according to the regular payroll practices of the Bank. During the period of this Agreement, the board of directors (or committees thereof) shall review the Executive’s base salary at least annually. Any increase in the Executive’s base salary will become the new “Base Salary” for purposes of this Agreement.

(b) The Executive shall be entitled to incentive compensation in accordance with any program established by the Bank for the Executive or as otherwise may be provided to the Executive at the discretion of the Bank.

2.2 Benefit Plans and Perquisites. For as long as the Executive is employed by the Bank, the Executive shall be eligible (x) to participate in any and all officer or employee compensation, incentive compensation and benefit plans in effect from time to time, including without limitation plans providing retirement, medical, dental, disability, and group life benefits and including incentive, or bonus plans existing on the date of this Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the eligibility requirements for any of the plans, arrangements or benefits, and (y) to receive any and all other fringe and other benefits provided from time to time, including the specific items described in (a)-(c) below.

(a) Reimbursement of business expenses. The Executive shall be entitled to reimbursement for all reasonable business expenses incurred while performing his obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while

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acting at the request of or in the service of the Bank and reasonable expenses for attendance at annual and other periodic meetings of trade associations. Expenses will be reimbursed if they are submitted in accordance with the Bank’s policies and procedures.

(b) Facilities. The Bank will furnish the Executive with the working facilities and staff customary for executive officers with the comparable title and duties of the Executive, as set forth in Sections 1.1 and 1.2 of this Agreement, and as are necessary for the Executive to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Bank.

(c) Automobile Allowance. During the term of this Agreement, the Bank shall provide the Executive with a automobile to be selected by the Executive. The Executive shall have exclusive use of the automobile for himself and his family. The Bank shall annually include on the Executive’s Form W-2 any amount of income attributable to the Executive’s personal use of the automobile. The Bank shall maintain minimum liability insurance coverage on the automobile and shall have the Executive named as additional insured on the automobile insurance policy. Upon termination of the Executive’s employment hereunder (other than a termination for Cause), he shall have the option of purchasing the vehicle from the Bank for an amount equal to its fair market value. The Executive agrees to maintain the vehicle in accordance with any applicable warranty provisions, and the Bank agrees to reimburse the Executive for maintenance and upkeep, subject to submission of documentation as may be reasonably required by the Bank.

2.3 Vacation; Leave. The Executive shall be entitled to sick leave and paid annual vacation (of at least 25 days total paid time off per year) in accordance with policies established from time to time by the Bank. In addition to paid vacations and other leave, the board of directors may grant the Executive a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the board of directors may determine.

2.4 Indemnification and Liability Insurance.

(a) Indemnification. The Bank agrees to indemnify the Executive (and his heirs, executors, and administrators), and to advance expenses related thereto, to the fullest extent permitted under applicable law and regulations against any and all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of his having been a director or executive of the Bank or any of its affiliates (whether or not he continues to be a director or executive at the time of incurring any such expenses or liabilities). These expenses and liabilities may include, but not be limited to, judgments, court costs, and attorneys’ fees and the costs of reasonable settlements approved by the board of directors, if such action is brought against the Executive in his capacity as an executive or director of the Bank or any of its affiliates. Indemnification for expenses shall not extend to matters for which the Executive has been terminated for Cause. Nothing contained herein shall be deemed to provide indemnification prohibited by applicable law or regulation. Notwithstanding anything herein to the contrary, the obligations of this Section 2.4 shall survive the term of this Agreement by a period of six (6) years.

(b) Insurance. During the period in which indemnification of the Executive is required under this Section 2.4, the Bank shall provide the Executive with coverage under a directors’ and officers’ liability policy at the expense of the Bank, at least equivalent to such coverage provided to directors and senior executives of the Bank.

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ARTICLE 3

EMPLOYMENT TERMINATION

3.1 Termination of Employment.

(a) Death. The Executive’s employment shall terminate automatically at the Executive’s death. If the Executive dies while in active service to the Bank, the Executive’s spouse, or, if there is no surviving spouse, his estate, shall receive any sums due to the Executive as Base Salary and reimbursement of expenses through the end of the month in which his death occurred.

(b) Disability. The board of directors of the Bank or the Executive may terminate the Executive’s employment after having determined the Executive has a Disability. For purposes of this Agreement, “Disability” means the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. The board of directors of the Bank shall determine whether or not the Executive is and continues to be permanently disabled for purposes of this Agreement in good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant. As a condition to any benefits, the board of directors may require the Executive to submit to any physical or mental evaluations and tests as they deem reasonably appropriate. In the event of such Disability, the Executive’s obligation to perform services under this Agreement will terminate. The Bank will pay the Executive, as Disability pay, one hundred percent (100%) of the Executive’s annual Base Salary in effect as of the date of his termination of employment due to Disability. Disability payments will be made in equal installments on a monthly basis, commencing on the first day of the month following the effective date of the Executive’s termination of employment for Disability and ending on the earlier of: (x) the date he returns to full-time employment at the Bank or another employer; (y) his death; or (z) thirty-six months. Disability payments shall be reduced by the amount of any short- or long-term disability benefits payable to the Executive under any other disability programs sponsored by the Bank.

3.2 Involuntary Termination with Cause. The Bank may terminate the Executive’s employment for Cause. If the Executive’s employment terminates for Cause, the Executive shall receive the Base Salary through the date on which the termination of employment becomes effective and reimbursement of expenses to which the Executive is entitled when the termination becomes effective. The Executive shall not be deemed to have been terminated for Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution adopted at a meeting of the board of directors called and held for the purpose, which resolution shall (x) contain findings that the Executive has committed an act constituting Cause, and (y) specify the particulars thereof. The resolution of the board of directors shall be deemed to have been duly adopted if it is adopted by the affirmative vote of a majority of the directors then in office, excluding the Executive. Notice of the meeting and the proposed termination for Cause shall be given to the Executive a reasonable time before the meeting of the board of directors. The Executive and the Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable opportunity to be heard by the board of directors at the meeting. For purposes of this Agreement “Cause” means any of the following:

(1) a material act of dishonesty in performing the Executive’s duties on behalf of the Bank;

(2) a willful misconduct that in the judgment of the board of directors will likely cause economic damage to the Bank or its affiliates or injury to the business reputation of the Bank or its affiliates;

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(3) a breach of fiduciary duty involving personal profit;

(4) the intentional failure to perform stated duties under this Agreement after written notice thereof from the board of directors of the Bank;

(5) a willful violation of any law, rule or regulation (other than minor or routine traffic violations or similar offenses) that reflects adversely on the reputation of the Bank or its affiliates, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease- and-desist order; or

(6) a material breach by the Executive of any provision of this Agreement.

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has acted, or failed to act, with an absence of good faith and without reasonable belief that his action or failure to act was in the best interest of the Bank.

3.3 Voluntary Termination by the Executive Without Good Reason. In addition to his other rights to terminate his employment under this Agreement, the Executive may voluntarily terminate employment during the term of this Agreement upon at least sixty (60) days prior written notice to the board of directors of the Bank. Upon the Executive’s voluntary termination, he will receive only his compensation and vested rights and benefits to the date of his termination of employment. Following his voluntary termination of employment under this Section 3.3, the Executive will be subject to the restrictions set forth in Article 7.

3.4 Involuntary Termination Without Cause and Voluntary Termination with Good Reason. With written notice to the Executive at least thirty (30) days in advance, the Bank may terminate the Executive’s employment without Cause. Termination shall take effect at the end of the notice period. With advance written notice to the Bank as provided in clause (y), the Executive may terminate employment for Good Reason. If the Executive’s employment terminates involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement. For purposes of this Agreement, a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions stated in both clauses (x) and (y) of this Section 3.4 are satisfied:

(x) a voluntary termination by the Executive shall be considered a termination with Good Reason if any of the following occur without the Executive’s written consent, and the term Good Reason shall mean the occurrence of any of the following events without the Executive’s written consent:

(1) a failure to reelect or reappoint the Executive as Chief Banking Officer of the Bank (provided, however, that a change in the Executive’s position consented to in writing by the Executive in connection with succession planning of the Bank, or otherwise, shall not be deemed a Good Reason);

(2) a material change in the Executive’s positions to become positions of lesser responsibility, importance, or scope from the positions and attributes thereof described in Sections 1.1 and 1.2 of this Agreement (provided, however, that a reduction in duties and responsibilities consented to in writing by the Executive in connection with succession planning of the Bank, or otherwise, shall not be deemed a Good Reason);

(3) a liquidation or dissolution of the Bank, other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of the Executive;

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(4) a material reduction in the Executive’s Base Salary or benefits (or any such reduction following a Change in Control) required to be provided hereunder (other than a reduction that is generally applicable to the Bank’s executive employees or a reduction or elimination of the Executive’s benefits under one or more benefit plans maintained by the Bank as part of a good faith, overall reduction or elimination of such plans or benefits applicable to all participants in a manner that does not discriminate against the Executive (except as such discrimination may be necessary to comply with applicable law));

(5) a relocation of the Executive’s principal place of employment by more than twenty-five (25) miles from its location as of the date of this Agreement; or

(6) a material breach of this Agreement by the Bank.

(y) the Executive must give notice to the Bank of the existence of one or more of the conditions described in clause (x) within sixty (60) days after the initial existence of the condition, and the Bank shall have thirty (30) days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (x) must occur within six (6) months after the initial existence of the condition.

ARTICLE 4

SEVERANCE COMPENSATION

4.1 Cash Severance after Termination Without Cause or Termination for Good Reason.

(a) Subject to the possibility that cash severance after employment termination might be delayed under Section 4.1(b), if the Executive’s employment terminates involuntarily but without Cause or if the Executive terminates employment with Good Reason. The Bank shall pay the Executive, in a single lump sum within ten (10) days of his termination of employment, an amount equal to (i) the Base Salary that would have been paid to him for the remaining term of the Agreement, plus (ii) the amount of the last bonus paid to the Executive multiplied by a fraction, the numerator of which equals the number of full calendar months remaining on the term of the Agreement and the denominator of which equals twelve (12). However, the Bank and the Executive acknowledge and agree that the severance benefits under this Section 4.1 shall not be payable if severance benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement.

(b) If the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) at the time of his termination, and if the cash severance payment under Section 4.1(a) would be considered deferred compensation under Section 409A of the Code, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available, the severance benefits shall be paid to the Executive in a single lump sum without interest on the first day of the seventh (7^th) month after the month in which the Executive’s employment terminates to the extent necessary to comply with Section 409A of the Code. References in this Agreement to Section 409A of the Code include rules, regulations, and guidance of general application issued by the Department of the Treasury under Section 409A of the Code.

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4.2 Post-Termination Insurance Coverage.

(a) If the Executive’s employment terminates involuntarily but without Cause or with Good Reason, the Bank shall continue or cause to be continued at the Bank’s expense medical, dental and life insurance benefits for the Executive and any of his dependents covered at the time of his termination. The health and welfare insurance benefits shall continue until the end of the term remaining under this Agreement when the Executive’s employment terminates.

(b) If (x) under the terms of the applicable policy or policies for the insurance benefits specified in Section 4.2(a) it is not possible to continue coverage for the Executive and his dependents, or (y) when employment termination occurs the Executive is a “specified employee” within the meaning of Section 409A of the Code, if any of the continued insurance coverage benefits specified in Section 4.2(a) would be considered deferred compensation under Section 409A of the Code, and finally, if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available for that particular insurance benefit, the Bank shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s projected cost to maintain that particular insurance benefit (and associated income tax gross-up benefit, if applicable) had the Executive’s employment not terminated, assuming continued coverage for thirty-six (36) months. The lump-sum payment shall be made ten (10) days after employment termination or, if Section 4.1 (b) applies, on the first day of the seventh (7^th) month after the month in which the Executive’s employment terminates.

ARTICLE 5

CHANGE IN CONTROL BENEFITS

5.1 Change in Control Benefits. If a Change in Control occurs during the term of this Agreement and, thereafter, the Executive’s employment terminates involuntarily but without Cause or if the Executive voluntarily terminates employment with Good Reason, the Bank shall make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to 2.99 times the Executive’s “base amount” (as such term is defined for purposes of Section 280G of the Code). The payment required under this paragraph is payable no later than ten (10) business days after the Executive’s termination of employment. If the Executive receives payment under Section 5.1, the Executive shall not be entitled to any additional severance benefits under Section 4.1 of this Agreement. In addition to the cash severance benefit provided for under this Section 5.1, the Bank shall provide the Executive with the post-termination insurance coverage described in Section 4.2(a) of this Agreement, subject to the provisions of Section 4.2(b) of this Agreement.

5.2 Change in Control Defined. For purposes of this Agreement “Change in Control” means a change in ownership, change in effective control or change in ownership of a substantial portion of assets of the Bank or The Victory Bancorp, Inc., as defined for purposes of Section 409A of the Code.

5.3 Potential Limitation of Benefits Under Certain Circumstances. In the event that the aggregate payments or benefits to be made or afforded to the Executive in the event of a Change of Control (whether under this Agreement or otherwise) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such payments or benefits shall be reduced to the extent necessary to avoid treatment as an “excess parachute payment”, with the reduction among such payments and benefits to be made first to payments and benefits payable or provided under this Agreement.

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ARTICLE 6

CONFIDENTIALITY AND CREATIVE WORK

6.1 Non-disclosure. The Executive covenants and agrees not to reveal to any person, firm, or corporation any confidential information of any nature concerning the Bank or its business, or anything connected therewith. As used in this Article 6 the term “confidential information” means all of the confidential and proprietary information and trade secrets of the Bank and its affiliates in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to:

(a) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information;

(b) the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information;

(c) the whole or any portion or phase of any marketing or sales information, sales records, customer lists, prices, sales projections, or other sales information; and

(d) trade secrets, as defined from time to time by the laws of Pennsylvania.

This Section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

6.2 Return of Materials. The Executive agrees to immediately deliver or return to the Bank upon termination of his employment, or as soon thereafter as possible, all written information and any other items furnished by the Bank or prepared by the Executive in connection with the Executive’s employment and to immediately delete all electronically stored data of the Bank maintained on the Executive’s personal computers and to return all employer-provided computers or communication devices (i.e., laptop, Blackberry, PDA, etc.). The Executive will retain no copies thereof after termination of the Executive’s employment.

6.3 Creative Work. The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Bank. The Executive hereby assigns to the Bank all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.

6.4 Affiliates’ Confidential Information is Covered; Confidentiality Obligation Survives Termination. For purposes of this Agreement, the term “affiliate” of the Bank includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control of the Bank. The rights and obligations set forth in this Article 6 shall survive termination of this Agreement.

6.5 Injunctive Relief. The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Bank if the Executive fails to observe the obligations imposed by this Article 6. Accordingly, if the Bank institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank, and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at

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law exists. The confidentiality and remedies provisions of this Article 6 shall be in addition to and shall not be deemed to supersede or restrict, limit, or impair the Bank’s rights under applicable state or federal statute or regulation dealing with or providing a remedy for the wrongful disclosure, misuse, or misappropriation of trade secrets or proprietary or confidential information.

ARTICLE 7

COMPETITION AFTER EMPLOYMENT TERMINATION

7.1 Covenant Not to Solicit Employees. The Executive agrees not to, directly or indirectly, solicit or employ the services of any officer or employee of the Bank (including an individual who was an officer or employee of the Bank during the one year period following the Executive’s termination) for one year after the Executive’s employment termination.

7.2 Covenant Not to Solicit Customers and Potential Customers.

(a) The Executive hereby covenants and agrees that during his employment with the Bank and for a period of one year following his termination of employment, the Executive shall not, without the written consent of Bank, either directly or indirectly:

(1) as an individual, employee, consultant, partner, shareholder, or in association with any other person, business or enterprise, except on behalf of the Bank and its affiliates, solicit or accept business from any current or past customer of the Bank or any affiliate (A) for which the Executive performed work or provided services, (B) for whom the Bank or any affiliate performed work or provided services, or (C) which the Executive knew during the course of his employment with the Bank; or

(2) induce or attempt to induce any past or current customer of the Bank or any affiliate (A) to cease doing business in whole or in part with or through the Bank or any affiliate, or (B) to do business with any other person, firm, partnership, corporation, or other entity which performs services materially similar to or competitive with those provided by the Bank or any affiliate.

For purposes of Section 7.2, if the customer is part of a group of companies that conducts business through more than one entity, division or operating unit, whether or not separately incorporated (a “Customer Group”), then the term “customer” as used in this Section 7.2 shall also include each entity, division and operating unit of the Customer Group where the same management group of the Customer Group has the decision making authority or significant influence with respect to contracting for services of the type rendered by the Bank or any affiliate. The term “customer” shall include, but not be limited to, brokers and producers and their respective customers.

(b) If any provision of this section or any word, phrase, clause, sentence or other portion thereof (including, without limitation, the geographical and temporal restrictions contained therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid provision or portion shall be modified or deleted so that the provisions hereof, as modified, are legal and enforceable to the fullest extent permitted under applicable law.

(c) The Executive acknowledges that the Bank’s willingness to enter into this Agreement and to make the payments contemplated by Articles 3 and 4 of this Agreement is conditioned on the Executive’s acceptance of the covenants set forth in Articles 6 and 7 of this Agreement and that the Bank would not have entered into this Agreement without such covenants in force.

7.3 Injunctive and Other Relief. Because of the unique character of the services to be rendered by the Executive hereunder, the Executive understands that the Bank would not have an

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adequate remedy at law for the material breach or threatened breach by the Executive of any one or more of the Executive’s covenants in this Article 7. Accordingly, the Executive agrees that the Bank’s remedies for a breach of this Article 7 include, but are not limited to, (x) forfeiture of any money representing accrued salary, contingent payments, or other fringe benefits (including any amount payable pursuant to Article 4) due and payable to the Executive during the period of any breach by Executive, and (y) a suit in equity by the Bank to enjoin the Executive from the breach or threatened breach of such covenants. The Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. Nothing herein shall be construed to prohibit the Bank from pursuing any other or additional remedies for the breach or threatened breach.

7.4 Article 7 Survives Termination But Is Void After a Change in Control. The rights and obligations set forth in this Article 7 shall survive termination of this Agreement. However, Article 7 shall become null and void effective immediately upon a Change in Control.

ARTICLE 8

MISCELLANEOUS

8.1 Successors and Assigns.

(a) This Agreement shall be binding upon the Bank and any successor to the Bank, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank by purchase, merger, consolidation, reorganization, or otherwise, but this Agreement and the Bank’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank. By agreement in form and substance satisfactory to the Executive, the Bank shall require any successor to all or substantially all of the business or assets of the Bank expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform had no succession occurred.

(b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c) Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement, except as expressly provided herein. Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this Section 8.1, the Bank shall have no liability to pay any amount to the assignee or transferee.

8.2 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and governed by the internal laws of the Commonwealth of Pennsylvania, without giving effect to any conflict of laws provision or rule that would cause the application of the laws of any jurisdiction other than Pennsylvania. By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in Pennsylvania.

8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive by the Bank and replaces any prior employment agreement between the Bank and the Executive. Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void by the parties.

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8.4 Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Bank at the time of the delivery of such notice, and properly addressed to the Bank if addressed to the board of directors of the Bank at the Bank’s executive offices.

87.5 Severability. If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law. If any provisions of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

8.6 Captions and Counterparts. The captions in this Agreement are solely for convenience. The captions do not define, limit, or describe the scope or intent of this Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

8.7 No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment. Moreover, provided the Executive is not in breach of any obligation under Article 6 of this Agreement, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after employment termination.

8.8 Amendment and Waiver. This Agreement may not be amended, released, discharged, abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of the parties hereto. The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision, nor affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

8.9 Reimbursement of the Executive’s Expenses to Enforce this Agreement. The Bank shall reimburse the Executive for all out-of-pocket expenses, including, without limitation, reasonable attorneys’ fees, incurred by the Executive in connection with successful enforcement by the Executive of the obligations of the Bank to the Executive under this Agreement. Successful enforcement shall mean the grant of an award of money or the requirement that the Bank takes some action specified by this Agreement: (i) as a result of court order; or (ii) otherwise by the Bank following an initial failure of the Bank to pay such money or take such action promptly after written demand therefor from the Executive stating the reason that such money or action was due under this Agreement at or prior to the time of such demand.

8.10 Compliance with Internal Revenue Code Section 409A. The Bank and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code. If any provision of this Agreement does not satisfy the requirements of Section 409A of the Code, the provision shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A

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of the Code, the Bank shall reform the provision. However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision.

8.12 Effect of Federal Banking Statutes and Regulations. Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359. In addition, the Executive agrees that this Agreement is subject to amendment at any time in order to comply with laws that are applicable to the Bank (including regulations and rules relating to any governmental program in which Company or the Bank may participate).

8.12 Source of Payments. All payments provided for under this Agreement shall be timely paid in cash or check from the general funds of the Bank.

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.

VICTORY BANK
	Chairman of the Board
For the Board of Directors
EXECUTIVE
Richard L. Graver

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EX-10.4

Exhibit 10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of June 14, 2012, by and among THE VICTORY BANK (the “Bank”) and ROBERT H. SCHULTZ (the “Executive”).

WHEREAS, the Executive serves in positions of substantial responsibility with the Bank; and

WHEREAS, the Bank and the Executive wish to set forth the terms of the Executive’s continued employment in these positions and enter into this employment agreement; and

WHEREAS, the Executive is willing and desires to continue to serve in these positions with the Bank.

NOW THEREFORE, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree and intend to be legally bound as follows.

ARTICLE 1

EMPLOYMENT

1.1 Employment. The Bank hereby employs the Executive to serve as Chief Financial Officer and Chief Operating Officer according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement. The Executive hereby accepts continued employment according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement.

1.2 Responsibilities and Duties.

(a) As Chief Financial Officer and Chief Operating Officer, the Executive will perform all duties and will have all powers associated with the positions, as set forth in any job description provided to the Executive by the Bank or as may be set forth in the bylaws of the Bank. The Executive shall report directly to the Chief Executive Officer of the Bank.

(b) During the period of his employment hereunder, except for reasonable periods of absence occasioned by illness, reasonable vacation periods, and other reasonable leaves of absence approved by the board of directors of the Bank, the Executive will devote all of his business time, attention, skill and efforts to the faithful performance of his duties under this Agreement, including activities and duties directed by the board of directors. Notwithstanding the preceding sentence, subject to the approval of the board of directors, the Executive may serve as a member of the board of directors of business, community and charitable organizations, provided that in each case the service shall not materially interfere with the performance of his duties under this Agreement, adversely affect the reputation of the Bank or any of its affiliates, or present any conflict of interest. Nothing in this Section 1.2 shall prevent the Executive from managing personal investments and affairs, provided that doing so also does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.

1.3 Term.

(a) The term of this Agreement shall include: (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and continuing for twenty-four (24) full months thereafter, plus (ii) any and all extensions of the initial term made pursuant to this Section 1.3.

(b) Commencing as of the first anniversary of the Effective Date and continuing as of each anniversary of the Effective Date thereafter, the disinterested members of the board of directors of the Bank may extend the Agreement term for an additional year, so that the remaining term of the Agreement again becomes twenty-four (24) full months from the applicable anniversary of the Effective Date, unless the Executive elects not to extend the term of this Agreement by giving written notice at least thirty (30) days prior to the applicable anniversary date.

(c) The disinterested members of the board of directors of the Bank will review the Agreement and the Executive’s performance annually for purposes of determining whether to extend the Agreement term and will include the rationale and results of its review in the minutes of the meetings. The board of directors will notify the Executive no earlier than ninety (90) days and no later than thirty (30) days prior to the applicable anniversary date whether it has determined to extend the Agreement.

(d) Nothing in this Agreement shall mandate or prohibit a continuation of the Executive’s employment following the expiration of the term of this Agreement, upon such terms and conditions as the Bank and the Executive may mutually agree.

ARTICLE 2

COMPENSATION AND BENEFITS

2.1 Base Salary and Bonus and Incentive Compensation.

(a) In consideration of the Executive’s performance of the obligations under this Agreement, the Bank shall pay or cause to be paid to the Executive a total salary at the annual rate of not less than $139,000, payable according to the regular payroll practices of the Bank. During the period of this Agreement, the board of directors (or committees thereof) shall review the Executive’s base salary at least annually. Any increase in the Executive’s base salary will become the new “Base Salary” for purposes of this Agreement.

(b) The Executive shall be entitled to incentive compensation in accordance with any program established by the Bank for the Executive or as otherwise may be provided to the Executive at the discretion of the Bank.

2.2 Benefit Plans and Perquisites. For as long as the Executive is employed by the Bank, the Executive shall be eligible (x) to participate in any and all officer or employee compensation, incentive compensation and benefit plans in effect from time to time, including without limitation plans providing retirement, medical, dental, disability, and group life benefits and including incentive, or bonus plans existing on the date of this Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the eligibility requirements for any of the plans, arrangements or benefits, and (y) to receive any and all other fringe and other benefits provided from time to time, including the specific items described in (a)-(c) below.

(a) Reimbursement of business expenses. The Executive shall be entitled to reimbursement for all reasonable business expenses incurred while performing his obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Bank and reasonable expenses for attendance at annual and other periodic meetings of trade associations. Expenses will be reimbursed if they are submitted in accordance with the Bank’s policies and procedures.

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(b) Facilities. The Bank will furnish the Executive with the working facilities and staff customary for executive officers with the comparable title and duties of the Executive, as set forth in Sections 1.1 and 1.2 of this Agreement, and as are necessary for the Executive to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Bank.

(c) Automobile Allowance. During the term of this Agreement, the Bank shall provide the Executive with a automobile to be selected by the Executive. The Executive shall have exclusive use of the automobile for himself and his family. The Bank shall annually include on the Executive’s Form W-2 any amount of income attributable to the Executive’s personal use of the automobile. The Bank shall maintain minimum liability insurance coverage on the automobile and shall have the Executive named as additional insured on the automobile insurance policy. Upon termination of the Executive’s employment hereunder (other than a termination for Cause), he shall have the option of purchasing the vehicle from the Bank for an amount equal to its fair market value. The Executive agrees to maintain the vehicle in accordance with any applicable warranty provisions, and the Bank agrees to reimburse the Executive for maintenance and upkeep, subject to submission of documentation as may be reasonably required by the Bank.

2.3 Vacation; Leave. The Executive shall be entitled to sick leave and paid annual vacation (of at least 25 days total paid time off per year) in accordance with policies established from time to time by the Bank. In addition to paid vacations and other leave, the board of directors may grant the Executive a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the board of directors may determine.

2.4 Indemnification and Liability Insurance.

(a) Indemnification. The Bank agrees to indemnify the Executive (and his heirs, executors, and administrators), and to advance expenses related thereto, to the fullest extent permitted under applicable law and regulations against any and all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of his having been a director or executive of the Bank or any of its affiliates (whether or not he continues to be a director or executive at the time of incurring any such expenses or liabilities). These expenses and liabilities may include, but not be limited to, judgments, court costs, and attorneys’ fees and the costs of reasonable settlements approved by the board of directors, if such action is brought against the Executive in his capacity as an executive or director of the Bank or any of its affiliates. Indemnification for expenses shall not extend to matters for which the Executive has been terminated for Cause. Nothing contained herein shall be deemed to provide indemnification prohibited by applicable law or regulation. Notwithstanding anything herein to the contrary, the obligations of this Section 2.4 shall survive the term of this Agreement by a period of six (6) years.

(b) Insurance. During the period in which indemnification of the Executive is required under this Section 2.4, the Bank shall provide the Executive with coverage under a directors’ and officers’ liability policy at the expense of the Bank, at least equivalent to such coverage provided to directors and senior executives of the Bank.

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ARTICLE 3

EMPLOYMENT TERMINATION

3.1 Termination of Employment.

(a) Death. The Executive’s employment shall terminate automatically at the Executive’s death. If the Executive dies while in active service to the Bank, the Executive’s spouse, or, if there is no surviving spouse, his estate, shall receive any sums due to the Executive as Base Salary and reimbursement of expenses through the end of the month in which his death occurred.

(b) Disability. The board of directors of the Bank or the Executive may terminate the Executive’s employment after having determined the Executive has a Disability. For purposes of this Agreement, “Disability” means the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. The board of directors of the Bank shall determine whether or not the Executive is and continues to be permanently disabled for purposes of this Agreement in good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant. As a condition to any benefits, the board of directors may require the Executive to submit to any physical or mental evaluations and tests as they deem reasonably appropriate. In the event of such Disability, the Executive’s obligation to perform services under this Agreement will terminate. The Bank will pay the Executive, as Disability pay, one hundred percent (100%) of the Executive’s annual Base Salary in effect as of the date of his termination of employment due to Disability. Disability payments will be made in equal installments on a monthly basis, commencing on the first day of the month following the effective date of the Executive’s termination of employment for Disability and ending on the earlier of: (x) the date he returns to full-time employment at the Bank or another employer; (y) his death; or (z) thirty-six months. Disability payments shall be reduced by the amount of any short- or long-term disability benefits payable to the Executive under any other disability programs sponsored by the Bank.

3.2 Involuntary Termination with Cause. The Bank may terminate the Executive’s employment for Cause. If the Executive’s employment terminates for Cause, the Executive shall receive the Base Salary through the date on which the termination of employment becomes effective and reimbursement of expenses to which the Executive is entitled when the termination becomes effective. The Executive shall not be deemed to have been terminated for Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution adopted at a meeting of the board of directors called and held for the purpose, which resolution shall (x) contain findings that the Executive has committed an act constituting Cause, and (y) specify the particulars thereof. The resolution of the board of directors shall be deemed to have been duly adopted if it is adopted by the affirmative vote of a majority of the directors then in office, excluding the Executive. Notice of the meeting and the proposed termination for Cause shall be given to the Executive a reasonable time before the meeting of the board of directors. The Executive and the Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable opportunity to be heard by the board of directors at the meeting. For purposes of this Agreement “Cause” means any of the following:

(1) a material act of dishonesty in performing the Executive’s duties on behalf of the Bank;

(2) a willful misconduct that in the judgment of the board of directors will likely cause economic damage to the Bank or its affiliates or injury to the business reputation of the Bank or its affiliates;

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(3) a breach of fiduciary duty involving personal profit;

(4) the intentional failure to perform stated duties under this Agreement after written notice thereof from the board of directors of the Bank;

(5) a willful violation of any law, rule or regulation (other than minor or routine traffic violations or similar offenses) that reflects adversely on the reputation of the Bank or its affiliates, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order; or

(6) a material breach by the Executive of any provision of this Agreement.

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has acted, or failed to act, with an absence of good faith and without reasonable belief that his action or failure to act was in the best interest of the Bank.

3.3 Voluntary Termination by the Executive Without Good Reason. In addition to his other rights to terminate his employment under this Agreement, the Executive may voluntarily terminate employment during the term of this Agreement upon at least sixty (60) days prior written notice to the board of directors of the Bank. Upon the Executive’s voluntary termination, he will receive only his compensation and vested rights and benefits to the date of his termination of employment. Following his voluntary termination of employment under this Section 3.3, the Executive will be subject to the restrictions set forth in Article 7.

3.4 Involuntary Termination Without Cause and Voluntary Termination with Good Reason. With written notice to the Executive at least thirty (30) days in advance, the Bank may terminate the Executive’s employment without Cause. Termination shall take effect at the end of the notice period. With advance written notice to the Bank as provided in clause (y), the Executive may terminate employment for Good Reason. If the Executive’s employment terminates involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement. For purposes of this Agreement, a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions stated in both clauses (x) and (y) of this Section 3.4 are satisfied:

(x) a voluntary termination by the Executive shall be considered a termination with Good Reason if any of the following occur without the Executive’s written consent, and the term Good Reason shall mean the occurrence of any of the following events without the Executive’s written consent:

(1) a failure to reelect or reappoint the Executive as Chief Financial Officer and Chief Operating Officer of the Bank (provided, however, that a change in the Executive’s position consented to in writing by the Executive in connection with succession planning of the Bank, or otherwise, shall not be deemed a Good Reason);

(2) a material change in the Executive’s positions to become positions of lesser responsibility, importance, or scope from the positions and attributes thereof described in Sections 1.1 and 1.2 of this Agreement (provided, however, that a reduction in duties and responsibilities consented to in writing by the Executive in connection with succession planning of the Bank, or otherwise, shall not be deemed a Good Reason);

(3) a liquidation or dissolution of the Bank, other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of the Executive;

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(4) a material reduction in the Executive’s Base Salary or benefits (or any such reduction following a Change in Control) required to be provided hereunder (other than a reduction that is generally applicable to the Bank’s executive employees or a reduction or elimination of the Executive’s benefits under one or more benefit plans maintained by the Bank as part of a good faith, overall reduction or elimination of such plans or benefits applicable to all participants in a manner that does not discriminate against the Executive (except as such discrimination may be necessary to comply with applicable law));

(5) a relocation of the Executive’s principal place of employment by more than twenty-five (25) miles from its location as of the date of this Agreement; or

(6) a material breach of this Agreement by the Bank.

(y) the Executive must give notice to the Bank of the existence of one or more of the conditions described in clause (x) within sixty (60) days after the initial existence of the condition, and the Bank shall have thirty (30) days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (x) must occur within six (6) months after the initial existence of the condition.

ARTICLE 4

SEVERANCE COMPENSATION

4.1 Cash Severance after Termination Without Cause or Termination for Good Reason.

(a) Subject to the possibility that cash severance after employment termination might be delayed under Section 4.1(b), if the Executive’s employment terminates involuntarily but without Cause or if the Executive terminates employment with Good Reason. The Bank shall pay the Executive, in a single lump sum within ten (10) days of his termination of employment, an amount equal to (i) the Base Salary that would have been paid to him for the remaining term of the Agreement, plus (ii) the amount of the last bonus paid to the Executive multiplied by a fraction, the numerator of which equals the number of full calendar months remaining on the term of the Agreement and the denominator of which equals twelve (12). However, the Bank and the Executive acknowledge and agree that the severance benefits under this Section 4.1 shall not be payable if severance benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement.

(b) If the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) at the time of his termination, and if the cash severance payment under Section 4.1(a) would be considered deferred compensation under Section 409A of the Code, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available, the severance benefits shall be paid to the Executive in a single lump sum without interest on the first day of the seventh (7^th) month after the month in which the Executive’s employment terminates to the extent necessary to comply with Section 409A of the Code. References in this Agreement to Section 409A of the Code include rules, regulations, and guidance of general application issued by the Department of the Treasury under Section 409A of the Code.

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4.2 Post-Termination Insurance Coverage.

(a) If the Executive’s employment terminates involuntarily but without Cause or with Good Reason, the Bank shall continue or cause to be continued at the Bank’s expense medical, dental and life insurance benefits for the Executive and any of his dependents covered at the time of his termination. The health and welfare insurance benefits shall continue until the end of the term remaining under this Agreement when the Executive’s employment terminates.

(b) If (x) under the terms of the applicable policy or policies for the insurance benefits specified in Section 4.2(a) it is not possible to continue coverage for the Executive and his dependents, or (y) when employment termination occurs the Executive is a “specified employee” within the meaning of Section 409A of the Code, if any of the continued insurance coverage benefits specified in Section 4.2(a) would be considered deferred compensation under Section 409A of the Code, and finally, if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available for that particular insurance benefit, the Bank shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s projected cost to maintain that particular insurance benefit (and associated income tax gross-up benefit, if applicable) had the Executive’s employment not terminated, assuming continued coverage for twenty-four (24) months. The lump-sum payment shall be made ten (10) days after employment termination or, if Section 4.1(b) applies, on the first day of the seventh (7^th) month after the month in which the Executive’s employment terminates.

ARTICLE 5

CHANGE IN CONTROL BENEFITS

5.1 Change in Control Benefits. If a Change in Control occurs during the term of this Agreement and, thereafter, the Executive’s employment terminates involuntarily but without Cause or if the Executive voluntarily terminates employment with Good Reason, the Bank shall make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to 2.00 times the Executive’s “base amount” (as such term is defined for purposes of Section 280G of the Code). The payment required under this paragraph is payable no later than ten (10) business days after the Executive’s termination of employment. If the Executive receives payment under Section 5.1, the Executive shall not be entitled to any additional severance benefits under Section 4.1 of this Agreement. In addition to the cash severance benefit provided for under this Section 5.1, the Bank shall provide the Executive with the post-termination insurance coverage described in Section 4.2(a) of this Agreement, subject to the provisions of Section 4.2(b) of this Agreement.

5.2 Change in Control Defined. For purposes of this Agreement “Change in Control” means a change in ownership, change in effective control or change in ownership of a substantial portion of assets of the Bank or The Victory Bancorp, Inc., as defined for purposes of Section 409A of the Code.

5.3 Potential Limitation of Benefits Under Certain Circumstances. In the event that the aggregate payments or benefits to be made or afforded to the Executive in the event of a Change of Control (whether under this Agreement or otherwise) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such payments or benefits shall be reduced to the extent necessary to avoid treatment as an “excess parachute payment”, with the reduction among such payments and benefits to be made first to payments and benefits payable or provided under this Agreement.

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ARTICLE 6

CONFIDENTIALITY AND CREATIVE WORK

6.1 Non-disclosure. The Executive covenants and agrees not to reveal to any person, firm, or corporation any confidential information of any nature concerning the Bank or its business, or anything connected therewith. As used in this Article 6 the term “confidential information” means all of the confidential and proprietary information and trade secrets of the Bank and its affiliates in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to:

(a) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information;

(b) the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information;

(c) the whole or any portion or phase of any marketing or sales information, sales records, customer lists, prices, sales projections, or other sales information; and

(d) trade secrets, as defined from time to time by the laws of Pennsylvania.

This Section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

6.2 Return of Materials. The Executive agrees to immediately deliver or return to the Bank upon termination of his employment, or as soon thereafter as possible, all written information and any other items furnished by the Bank or prepared by the Executive in connection with the Executive’s employment and to immediately delete all electronically stored data of the Bank maintained on the Executive’s personal computers and to return all employer-provided computers or communication devices (i.e., laptop, Blackberry, PDA, etc.). The Executive will retain no copies thereof after termination of the Executive’s employment.

6.3 Creative Work. The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Bank. The Executive hereby assigns to the Bank all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.

6.4 Affiliates’ Confidential Information is Covered; Confidentiality Obligation Survives Termination. For purposes of this Agreement, the term “affiliate” of the Bank includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control of the Bank. The rights and obligations set forth in this Article 6 shall survive termination of this Agreement.

6.5 Injunctive Relief. The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Bank if the Executive fails to observe the obligations imposed by this Article 6. Accordingly, if the Bank institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank, and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at

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law exists. The confidentiality and remedies provisions of this Article 6 shall be in addition to and shall not be deemed to supersede or restrict, limit, or impair the Bank’s rights under applicable state or federal statute or regulation dealing with or providing a remedy for the wrongful disclosure, misuse, or misappropriation of trade secrets or proprietary or confidential information.

ARTICLE 7

COMPETITION AFTER EMPLOYMENT TERMINATION

7.1 Covenant Not to Solicit Employees. The Executive agrees not to, directly or indirectly, solicit or employ the services of any officer or employee of the Bank (including an individual who was an officer or employee of the Bank during the one year period following the Executive’s termination) for one year after the Executive’s employment termination.

7.2 Covenant Not to Compete.

(a) The Executive covenants and agrees not to compete directly or indirectly with the Bank for one year after employment termination. For purposes of this Section 7.2:

(1) the term compete means:

(i) providing financial products or services on behalf of any financial institution for any person residing in the territory;

(ii) assisting (other than through the performance of ministerial or clerical duties) any financial institution in providing financial products or services to any person residing in the territory; or

(iii) inducing or attempting to induce any person who was a customer of the Bank at the date of the Executive’s employment termination to seek financial products or services from another financial institution.

(2) the words directly or indirectly mean:

(i) acting as a consultant, officer, director, independent contractor, or employee of any financial institution in competition with the Bank in the territory, or

(ii) communicating to such financial institution the names or addresses or any financial information concerning any person who was a customer of the Bank when the Executive’s employment terminated.

(3) the term customer means any person to whom the Bank is providing financial products or services on the date of the Executive’s employment termination or within one year thereafter.

(4) the term financial institution means any bank, savings association, or bank or savings association holding company, or any other institution, the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in Section 4(k) of the Bank Holding Company Act of 1956, other than the Bank or any of its affiliated corporations.

(5) financial product or service means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in

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nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Bank or an affiliate on the date of the Executive’s employment termination, including but not limited to banking activities and activities that are closely related and a proper incident to banking.

(6) the term person means any individual or individuals, corporation, partnership, fiduciary or association.

(7) the term territory means the area within a 30-mile radius of any office of the Bank at the date of the Executive’s employment termination.

(b) If any provision of this section or any word, phrase, clause, sentence or other portion thereof (including, without limitation, the geographical and temporal restrictions contained therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid provision or portion shall be modified or deleted so that the provisions hereof, as modified, are legal and enforceable to the fullest extent permitted under applicable law.

(c) The Executive acknowledges that the Bank’s willingness to enter into this Agreement and to make the payments contemplated by Articles 3 and 4 of this Agreement is conditioned on the Executive’s acceptance of the covenants set forth in Articles 6 and 7 of this Agreement and that the Bank would not have entered into this Agreement without such covenants in force.

7.3 Injunctive and Other Relief. Because of the unique character of the services to be rendered by the Executive hereunder, the Executive understands that the Bank would not have an adequate remedy at law for the material breach or threatened breach by the Executive of any one or more of the Executive’s covenants in this Article 7. Accordingly, the Executive agrees that the Bank’s remedies for a breach of this Article 7 include, but are not limited to, (x) forfeiture of any money representing accrued salary, contingent payments, or other fringe benefits (including any amount payable pursuant to Article 4) due and payable to the Executive during the period of any breach by Executive, and (y) a suit in equity by the Bank to enjoin the Executive from the breach or threatened breach of such covenants. The Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. Nothing herein shall be construed to prohibit the Bank from pursuing any other or additional remedies for the breach or threatened breach.

7.4 Article 7 Survives Termination But Is Void After a Change in Control. The rights and obligations set forth in this Article 7 shall survive termination of this Agreement. However, Article 7 shall become null and void effective immediately upon a Change in Control.

ARTICLE 8

MISCELLANEOUS

8.1 Successors and Assigns.

(a) This Agreement shall be binding upon the Bank and any successor to the Bank, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank by purchase, merger, consolidation, reorganization, or otherwise, but this Agreement and the Bank’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank. By agreement in form and substance satisfactory to the Executive, the Bank shall require any successor to all or substantially all of the business or assets of the Bank expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform had no succession occurred.

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(b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c) Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement, except as expressly provided herein. Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this Section 8.1, the Bank shall have no liability to pay any amount to the assignee or transferee.

8.2 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and governed by the internal laws of the Commonwealth of Pennsylvania, without giving effect to any conflict of laws provision or rule that would cause the application of the laws of any jurisdiction other than Pennsylvania. By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in Pennsylvania.

8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive by the Bank and replaces any prior employment agreement between the Bank and the Executive. Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void by the parties.

8.4 Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Bank at the time of the delivery of such notice, and properly addressed to the Bank if addressed to the board of directors of the Bank at the Bank’s executive offices.

87.5 Severability. If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law. If any provisions of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

8.6 Captions and Counterparts. The captions in this Agreement are solely for convenience. The captions do not define, limit, or describe the scope or intent of this Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

8.7 No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment. Moreover, provided the Executive is not in breach of any obligation under Article 6 of this Agreement, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after employment termination.

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8.8 Amendment and Waiver. This Agreement may not be amended, released, discharged, abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of the parties hereto. The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision, nor affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

8.9 Reimbursement of the Executive’s Expenses to Enforce this Agreement. The Bank shall reimburse the Executive for all out-of-pocket expenses, including, without limitation, reasonable attorneys’ fees, incurred by the Executive in connection with successful enforcement by the Executive of the obligations of the Bank to the Executive under this Agreement. Successful enforcement shall mean the grant of an award of money or the requirement that the Bank takes some action specified by this Agreement: (i) as a result of court order; or (ii) otherwise by the Bank following an initial failure of the Bank to pay such money or take such action promptly after written demand therefor from the Executive stating the reason that such money or action was due under this Agreement at or prior to the time of such demand.

8.10 Compliance with Internal Revenue Code Section 409A. The Bank and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code. If any provision of this Agreement does not satisfy the requirements of Section 409A of the Code, the provision shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A of the Code, the Bank shall reform the provision. However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision.

8.12 Effect of Federal Banking Statutes and Regulations. Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359. In addition, the Executive agrees that this Agreement is subject to amendment at any time in order to comply with laws that are applicable to the Bank (including regulations and rules relating to any governmental program in which Company or the Bank may participate).

8.12 Source of Payments. All payments provided for under this Agreement shall be timely paid in cash or check from the general funds of the Bank.

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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.

VICTORY BANK
	Chairman & CEO
For the Board of Directors
EXECUTIVE
Robert H. Schultz

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EX-10.5

Exhibit 10.5

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of June 14, 2012, by and among THE VICTORY BANK (the “Bank”) and ERIC B. OFFNER (the “Executive”).

WHEREAS, the Executive serves in positions of substantial responsibility with the Bank; and

WHEREAS, the Bank and the Executive wish to set forth the terms of the Executive’s continued employment in these positions and enter into this employment agreement; and

WHEREAS, the Executive is willing and desires to continue to serve in these positions with the Bank.

NOW THEREFORE, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree and intend to be legally bound as follows.

ARTICLE 1

EMPLOYMENT

1.1 Employment. The Bank hereby employs the Executive to serve as Executive Vice President and Chief Credit Officer according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement. The Executive hereby accepts continued employment according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement.

1.2 Responsibilities and Duties.

(a) As Executive Vice President and Chief Credit Officer, the Executive will perform all duties and will have all powers associated with the positions, as set forth in any job description provided to the Executive by the Bank or as may be set forth in the bylaws of the Bank. The Executive shall report directly to President and Chief Lending Officer of the Bank.

(b) During the period of his employment hereunder, except for reasonable periods of absence occasioned by illness, reasonable vacation periods, and other reasonable leaves of absence approved by the board of directors of the Bank, the Executive will devote all of his business time, attention, skill and efforts to the faithful performance of his duties under this Agreement, including activities and duties directed by the board of directors. Notwithstanding the preceding sentence, subject to the approval of the board of directors, the Executive may serve as a member of the board of directors of business, community and charitable organizations, provided that in each case the service shall not materially interfere with the performance of his duties under this Agreement, adversely affect the reputation of the Bank or any of its affiliates, or present any conflict of interest. Nothing in this Section 1.2 shall prevent the Executive from managing personal investments and affairs, provided that doing so also does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.

1.3 Term.

(a) The term of this Agreement shall include: (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and continuing for thirty (30) full months thereafter, plus (ii) any and all extensions of the initial term made pursuant to this Section 1.3.

(b) Commencing as of the first anniversary of the Effective Date and continuing as of each anniversary of the Effective Date thereafter, the disinterested members of the board of directors of the Bank may extend the Agreement term for an additional year, so that the remaining term of the Agreement again becomes thirty (30) full months from the applicable anniversary of the Effective Date, unless the Executive elects not to extend the term of this Agreement by giving written notice at least thirty (30) days prior to the applicable anniversary date.

(c) The disinterested members of the board of directors of the Bank will review the Agreement and the Executive’s performance annually for purposes of determining whether to extend the Agreement term and will include the rationale and results of its review in the minutes of the meetings. The board of directors will notify the Executive no earlier than ninety (90) days and no later than thirty (30) days prior to the applicable anniversary date whether it has determined to extend the Agreement.

(d) Nothing in this Agreement shall mandate or prohibit a continuation of the Executive’s employment following the expiration of the term of this Agreement, upon such terms and conditions as the Bank and the Executive may mutually agree.

ARTICLE 2

COMPENSATION AND BENEFITS

2.1 Base Salary and Bonus and Incentive Compensation.

(a) In consideration of the Executive’s performance of the obligations under this Agreement, the Bank shall pay or cause to be paid to the Executive a total salary at the annual rate of not less than $128,000, payable according to the regular payroll practices of the Bank. During the period of this Agreement, the board of directors (or committees thereof) shall review the Executive’s base salary at least annually. Any increase in the Executive’s base salary will become the new “Base Salary” for purposes of this Agreement.

(b) The Executive shall be entitled to incentive compensation in accordance with any program established by the Bank for the Executive or as otherwise may be provided to the Executive at the discretion of the Bank.

2.2 Benefit Plans and Perquisites. For as long as the Executive is employed by the Bank, the Executive shall be eligible (x) to participate in any and all officer or employee compensation, incentive compensation and benefit plans in effect from time to time, including without limitation plans providing retirement, medical, dental, disability, and group life benefits and including incentive, or bonus plans existing on the date of this Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the eligibility requirements for any of the plans, arrangements or benefits, and (y) to receive any and all other fringe and other benefits provided from time to time, including the specific items described in (a)-(c) below.

(a) Reimbursement of business expenses. The Executive shall be entitled to reimbursement for all reasonable business expenses incurred while performing his obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Bank and reasonable expenses for attendance at annual and other periodic meetings of trade associations. Expenses will be reimbursed if they are submitted in accordance with the Bank’s policies and procedures.

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(b) Facilities. The Bank will furnish the Executive with the working facilities and staff customary for executive officers with the comparable title and duties of the Executive, as set forth in Sections 1.1 and 1.2 of this Agreement, and as are necessary for the Executive to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Bank.

(c) Automobile Allowance. During the term of this Agreement, the Bank shall provide the Executive with a automobile to be selected by the Executive. The Executive shall have exclusive use of the automobile for himself and his family. The Bank shall annually include on the Executive’s Form W-2 any amount of income attributable to the Executive’s personal use of the automobile. The Bank shall maintain minimum liability insurance coverage on the automobile and shall have the Executive named as additional insured on the automobile insurance policy. Upon termination of the Executive’s employment hereunder (other than a termination for Cause), he shall have the option of purchasing the vehicle from the Bank for an amount equal to its fair market value. The Executive agrees to maintain the vehicle in accordance with any applicable warranty provisions, and the Bank agrees to reimburse the Executive for maintenance and upkeep, subject to submission of documentation as may be reasonably required by the Bank.

2.3 Vacation; Leave. The Executive shall be entitled to sick leave and paid annual vacation (of at least 25 days total paid time off per year) in accordance with policies established from time to time by the Bank. In addition to paid vacations and other leave, the board of directors may grant the Executive a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the board of directors may determine.

2.4 Indemnification and Liability Insurance.

(a) Indemnification. The Bank agrees to indemnify the Executive (and his heirs, executors, and administrators), and to advance expenses related thereto, to the fullest extent permitted under applicable law and regulations against any and all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of his having been a director or executive of the Bank or any of its affiliates (whether or not he continues to be a director or executive at the time of incurring any such expenses or liabilities). These expenses and liabilities may include, but not be limited to, judgments, court costs, and attorneys’ fees and the costs of reasonable settlements approved by the board of directors, if such action is brought against the Executive in his capacity as an executive or director of the Bank or any of its affiliates. Indemnification for expenses shall not extend to matters for which the Executive has been terminated for Cause. Nothing contained herein shall be deemed to provide indemnification prohibited by applicable law or regulation. Notwithstanding anything herein to the contrary, the obligations of this Section 2.4 shall survive the term of this Agreement by a period of six (6) years.

(b) Insurance. During the period in which indemnification of the Executive is required under this Section 2.4, the Bank shall provide the Executive with coverage under a directors’ and officers’ liability policy at the expense of the Bank, at least equivalent to such coverage provided to directors and senior executives of the Bank.

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ARTICLE 3

EMPLOYMENT TERMINATION

3.1 Termination of Employment.

(a) Death. The Executive’s employment shall terminate automatically at the Executive’s death. If the Executive dies while in active service to the Bank, the Executive’s spouse, or, if there is no surviving spouse, his estate, shall receive any sums due to the Executive as Base Salary and reimbursement of expenses through the end of the month in which his death occurred.

(b) Disability. The board of directors of the Bank or the Executive may terminate the Executive’s employment after having determined the Executive has a Disability. For purposes of this Agreement, “Disability” means the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. The board of directors of the Bank shall determine whether or not the Executive is and continues to be permanently disabled for purposes of this Agreement in good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant. As a condition to any benefits, the board of directors may require the Executive to submit to any physical or mental evaluations and tests as they deem reasonably appropriate. In the event of such Disability, the Executive’s obligation to perform services under this Agreement will terminate. The Bank will pay the Executive, as Disability pay, one hundred percent (100%) of the Executive’s annual Base Salary in effect as of the date of his termination of employment due to Disability. Disability payments will be made in equal installments on a monthly basis, commencing on the first day of the month following the effective date of the Executive’s termination of employment for Disability and ending on the earlier of: (x) the date he returns to full-time employment at the Bank or another employer; (y) his death; or (z) thirty-six months. Disability payments shall be reduced by the amount of any short- or long-term disability benefits payable to the Executive under any other disability programs sponsored by the Bank.

3.2 Involuntary Termination with Cause. The Bank may terminate the Executive’s employment for Cause. If the Executive’s employment terminates for Cause, the Executive shall receive the Base Salary through the date on which the termination of employment becomes effective and reimbursement of expenses to which the Executive is entitled when the termination becomes effective. The Executive shall not be deemed to have been terminated for Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution adopted at a meeting of the board of directors called and held for the purpose, which resolution shall (x) contain findings that the Executive has committed an act constituting Cause, and (y) specify the particulars thereof. The resolution of the board of directors shall be deemed to have been duly adopted if it is adopted by the affirmative vote of a majority of the directors then in office, excluding the Executive. Notice of the meeting and the proposed termination for Cause shall be given to the Executive a reasonable time before the meeting of the board of directors. The Executive and the Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable opportunity to be heard by the board of directors at the meeting. For purposes of this Agreement “Cause” means any of the following:

(1) a material act of dishonesty in performing the Executive’s duties on behalf of the Bank;

(2) a willful misconduct that in the judgment of the board of directors will likely cause economic damage to the Bank or its affiliates or injury to the business reputation of the Bank or its affiliates;

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(3) a breach of fiduciary duty involving personal profit;

(4) the intentional failure to perform stated duties under this Agreement after written notice thereof from the board of directors of the Bank;

(5) a willful violation of any law, rule or regulation (other than minor or routine traffic violations or similar offenses) that reflects adversely on the reputation of the Bank or its affiliates, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order; or

(6) a material breach by the Executive of any provision of this Agreement.

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has acted, or failed to act, with an absence of good faith and without reasonable belief that his action or failure to act was in the best interest of the Bank.

3.3 Voluntary Termination by the Executive Without Good Reason. In addition to his other rights to terminate his employment under this Agreement, the Executive may voluntarily terminate employment during the term of this Agreement upon at least sixty (60) days prior written notice to the board of directors of the Bank. Upon the Executive’s voluntary termination, he will receive only his compensation and vested rights and benefits to the date of his termination of employment. Following his voluntary termination of employment under this Section 3.3, the Executive will be subject to the restrictions set forth in Article 7.

3.4 Involuntary Termination Without Cause and Voluntary Termination with Good Reason. With written notice to the Executive at least thirty (30) days in advance, the Bank may terminate the Executive’s employment without Cause. Termination shall take effect at the end of the notice period. With advance written notice to the Bank as provided in clause (y), the Executive may terminate employment for Good Reason. If the Executive’s employment terminates involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement. For purposes of this Agreement, a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions stated in both clauses (x) and (y) of this Section 3.4 are satisfied:

(x) a voluntary termination by the Executive shall be considered a termination with Good Reason if any of the following occur without the Executive’s written consent, and the term Good Reason shall mean the occurrence of any of the following events without the Executive’s written consent:

(1) a failure to reelect or reappoint the Executive as Executive Vice President and Chief credit Officer of the Bank (provided, however, that a change in the Executive’s position consented to in writing by the Executive in connection with succession planning of the Bank, or otherwise, shall not be deemed a Good Reason);

(2) a material change in the Executive’s positions to become positions of lesser responsibility, importance, or scope from the positions and attributes thereof described in Sections 1.1 and 1.2 of this Agreement (provided, however, that a reduction in duties and responsibilities consented to in writing by the Executive in connection with succession planning of the Bank, or otherwise, shall not be deemed a Good Reason);

(3) a liquidation or dissolution of the Bank, other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of the Executive;

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(4) a material reduction in the Executive’s Base Salary or benefits (or any such reduction following a Change in Control) required to be provided hereunder (other than a reduction that is generally applicable to the Bank’s executive employees or a reduction or elimination of the Executive’s benefits under one or more benefit plans maintained by the Bank as part of a good faith, overall reduction or elimination of such plans or benefits applicable to all participants in a manner that does not discriminate against the Executive (except as such discrimination may be necessary to comply with applicable law));

(5) a relocation of the Executive’s principal place of employment by more than twenty-five (25) miles from its location as of the date of this Agreement; or

(6) a material breach of this Agreement by the Bank.

(y) the Executive must give notice to the Bank of the existence of one or more of the conditions described in clause (x) within sixty (60) days after the initial existence of the condition, and the Bank shall have thirty (30) days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (x) must occur within six (6) months after the initial existence of the condition.

ARTICLE 4

SEVERANCE COMPENSATION

4.1 Cash Severance after Termination Without Cause or Termination for Good Reason.

(a) Subject to the possibility that cash severance after employment termination might be delayed under Section 4.1(b), if the Executive’s employment terminates involuntarily but without Cause or if the Executive terminates employment with Good Reason. The Bank shall pay the Executive, in a single lump sum within ten (10) days of his termination of employment, an amount equal to (i) the Base Salary that would have been paid to him for the remaining term of the Agreement, plus (ii) the amount of the last bonus paid to the Executive multiplied by a fraction, the numerator of which equals the number of full calendar months remaining on the term of the Agreement and the denominator of which equals twelve (12). However, the Bank and the Executive acknowledge and agree that the severance benefits under this Section 4.1 shall not be payable if severance benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement.

(b) If the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) at the time of his termination, and if the cash severance payment under Section 4.1(a) would be considered deferred compensation under Section 409A of the Code, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available, the severance benefits shall be paid to the Executive in a single lump sum without interest on the first day of the seventh (7^th) month after the month in which the Executive’s employment terminates to the extent necessary to comply with Section 409A of the Code. References in this Agreement to Section 409A of the Code include rules, regulations, and guidance of general application issued by the Department of the Treasury under Section 409A of the Code.

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4.2 Post-Termination Insurance Coverage.

(a) If the Executive’s employment terminates involuntarily but without Cause or with Good Reason, the Bank shall continue or cause to be continued at the Bank’s expense medical, dental and life insurance benefits for the Executive and any of his dependents covered at the time of his termination. The health and welfare insurance benefits shall continue until the end of the term remaining under this Agreement when the Executive’s employment terminates.

(b) If (x) under the terms of the applicable policy or policies for the insurance benefits specified in Section 4.2(a) it is not possible to continue coverage for the Executive and his dependents, or (y) when employment termination occurs the Executive is a “specified employee” within the meaning of Section 409A of the Code, if any of the continued insurance coverage benefits specified in Section 4.2(a) would be considered deferred compensation under Section 409A of the Code, and finally, if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available for that particular insurance benefit, the Bank shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s projected cost to maintain that particular insurance benefit (and associated income tax gross-up benefit, if applicable) had the Executive’s employment not terminated, assuming continued coverage for thirty (30) months. The lump-sum payment shall be made ten (10) days after employment termination or, if Section 4.1(b) applies, on the first day of the seventh (7^th) month after the month in which the Executive’s employment terminates.

ARTICLE 5

CHANGE IN CONTROL BENEFITS

5.1 Change in Control Benefits. If a Change in Control occurs during the term of this Agreement and, thereafter, the Executive’s employment terminates involuntarily but without Cause or if the Executive voluntarily terminates employment with Good Reason, the Bank shall make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to 2.50 times the Executive’s “base amount” (as such term is defined for purposes of Section 280G of the Code). The payment required under this paragraph is payable no later than ten (10) business days after the Executive’s termination of employment. If the Executive receives payment under Section 5.1, the Executive shall not be entitled to any additional severance benefits under Section 4.1 of this Agreement. In addition to the cash severance benefit provided for under this Section 5.1, the Bank shall provide the Executive with the post-termination insurance coverage described in Section 4.2(a) of this Agreement, subject to the provisions of Section 4.2(b) of this Agreement.

5.2 Change in Control Defined. For purposes of this Agreement “Change in Control” means a change in ownership, change in effective control or change in ownership of a substantial portion of assets of the Bank or The Victory Bancorp, Inc., as defined for purposes of Section 409A of the Code.

5.3 Potential Limitation of Benefits Under Certain Circumstances. In the event that the aggregate payments or benefits to be made or afforded to the Executive in the event of a Change of Control (whether under this Agreement or otherwise) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such payments or benefits shall be reduced to the extent necessary to avoid treatment as an “excess parachute payment”, with the reduction among such payments and benefits to be made first to payments and benefits payable or provided under this Agreement.

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ARTICLE 6

CONFIDENTIALITY AND CREATIVE WORK

6.1 Non-disclosure. The Executive covenants and agrees not to reveal to any person, firm, or corporation any confidential information of any nature concerning the Bank or its business, or anything connected therewith. As used in this Article 6 the term “confidential information” means all of the confidential and proprietary information and trade secrets of the Bank and its affiliates in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to:

(a) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information;

(b) the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information;

(c) the whole or any portion or phase of any marketing or sales information, sales records, customer lists, prices, sales projections, or other sales information; and

(d) trade secrets, as defined from time to time by the laws of Pennsylvania.

This Section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

6.2 Return of Materials. The Executive agrees to immediately deliver or return to the Bank upon termination of his employment, or as soon thereafter as possible, all written information and any other items furnished by the Bank or prepared by the Executive in connection with the Executive’s employment and to immediately delete all electronically stored data of the Bank maintained on the Executive’s personal computers and to return all employer-provided computers or communication devices (i.e., laptop, Blackberry, PDA, etc.). The Executive will retain no copies thereof after termination of the Executive’s employment.

6.3 Creative Work. The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Bank. The Executive hereby assigns to the Bank all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.

6.4 Affiliates’ Confidential Information is Covered: Confidentiality Obligation Survives Termination. For purposes of this Agreement, the term “affiliate” of the Bank includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control of the Bank. The rights and obligations set forth in this Article 6 shall survive termination of this Agreement.

6.5 Injunctive Relief. The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Bank if the Executive fails to observe the obligations imposed by this Article 6. Accordingly, if the Bank institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank, and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at

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law exists. The confidentiality and remedies provisions of this Article 6 shall be in addition to and shall not be deemed to supersede or restrict, limit, or impair the Bank’s rights under applicable state or federal statute or regulation dealing with or providing a remedy for the wrongful disclosure, misuse, or misappropriation of trade secrets or proprietary or confidential information.

ARTICLE 7

COMPETITION AFTER EMPLOYMENT TERMINATION

7.1 Covenant Not to Solicit Employees. The Executive agrees not to, directly or indirectly, solicit or employ the services of any officer or employee of the Bank (including an individual who was an officer or employee of the Bank during the one year period following the Executive’s termination) for one year after the Executive’s employment termination.

7.2 Covenant Not to Compete.

(a) The Executive covenants and agrees not to compete directly or indirectly with the Bank for one year after employment termination. For purposes of this Section 7.2:

(1) the term compete means:

(i) providing financial products or services on behalf of any financial institution for any person residing in the territory;

(ii) assisting (other than through the performance of ministerial or clerical duties) any financial institution in providing financial products or services to any person residing in the territory; or

(iii) inducing or attempting to induce any person who was a customer of the Bank at the date of the Executive’s employment termination to seek financial products or services from another financial institution.

(2) the words directly or indirectly mean:

(i) acting as a consultant, officer, director, independent contractor, or employee of any financial institution in competition with the Bank in the territory, or

(ii) communicating to such financial institution the names or addresses or any financial information concerning any person who was a customer of the Bank when the Executive’s employment terminated.

(3) the term customer means any person to whom the Bank is providing financial products or services on the date of the Executive’s employment termination or within one year thereafter.

(4) the term financial institution means any bank, savings association, or bank or savings association holding company, or any other institution, the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in Section 4(k) of the Bank Holding Company Act of 1956, other than the Bank or any of its affiliated corporations.

(5) financial product or service means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in

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nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Bank or an affiliate on the date of the Executive’s employment termination, including but not limited to banking activities and activities that are closely related and a proper incident to banking.

(6) the term person means any individual or individuals, corporation, partnership, fiduciary or association.

(7) the term territory means the area within a 30-mile radius of any office of the Bank at the date of the Executive’s employment termination.

(b) If any provision of this section or any word, phrase, clause, sentence or other portion thereof (including, without limitation, the geographical and temporal restrictions contained therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid provision or portion shall be modified or deleted so that the provisions hereof, as modified, are legal and enforceable to the fullest extent permitted under applicable law.

(c) The Executive acknowledges that the Bank’s willingness to enter into this Agreement and to make the payments contemplated by Articles 3 and 4 of this Agreement is conditioned on the Executive’s acceptance of the covenants set forth in Articles 6 and 7 of this Agreement and that the Bank would not have entered into this Agreement without such covenants in force.

7.3 Injunctive and Other Relief. Because of the unique character of the services to be rendered by the Executive hereunder, the Executive understands that the Bank would not have an adequate remedy at law for the material breach or threatened breach by the Executive of any one or more of the Executive’s covenants in this Article 7. Accordingly, the Executive agrees that the Bank’s remedies for a breach of this Article 7 include, but are not limited to, (x) forfeiture of any money representing accrued salary, contingent payments, or other fringe benefits (including any amount payable pursuant to Article 4) due and payable to the Executive during the period of any breach by Executive, and (y) a suit in equity by the Bank to enjoin the Executive from the breach or threatened breach of such covenants. The Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. Nothing herein shall be construed to prohibit the Bank from pursuing any other or additional remedies for the breach or threatened breach.

7.4 Article 7 Survives Termination But Is Void After a Change in Control. The rights and obligations set forth in this Article 7 shall survive termination of this Agreement. However, Article 7 shall become null and void effective immediately upon a Change in Control.

ARTICLE 8

MISCELLANEOUS

8.1 Successors and Assigns.

(a) This Agreement shall be binding upon the Bank and any successor to the Bank, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank by purchase, merger, consolidation, reorganization, or otherwise, but this Agreement and the Bank’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank. By agreement in form and substance satisfactory to the Executive, the Bank shall require any successor to all or substantially all of the business or assets of the Bank expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform had no succession occurred.

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(b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c) Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement, except as expressly provided herein. Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this Section 8.1, the Bank shall have no liability to pay any amount to the assignee or transferee.

8.2 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and governed by the internal laws of the Commonwealth of Pennsylvania, without giving effect to any conflict of laws provision or rule that would cause the application of the laws of any jurisdiction other than Pennsylvania. By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in Pennsylvania.

8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive by the Bank and replaces any prior employment agreement between the Bank and the Executive. Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void by the parties.

8.4 Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Bank at the time of the delivery of such notice, and properly addressed to the Bank if addressed to the board of directors of the Bank at the Bank’s executive offices.

87.5 Severability. If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law. If any provisions of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

8.6 Captions and Counterparts. The captions in this Agreement are solely for convenience. The captions do not define, limit, or describe the scope or intent of this Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

8.7 No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment. Moreover, provided the Executive is not in breach of any obligation under Article 6 of this Agreement, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after employment termination.

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8.8 Amendment and Waiver. This Agreement may not be amended, released, discharged, abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of the parties hereto. The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision, nor affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

8.9 Reimbursement of the Executive’s Expenses to Enforce this Agreement. The Bank shall reimburse the Executive for all out-of-pocket expenses, including, without limitation, reasonable attorneys’ fees, incurred by the Executive in connection with successful enforcement by the Executive of the obligations of the Bank to the Executive under this Agreement. Successful enforcement shall mean the grant of an award of money or the requirement that the Bank takes some action specified by this Agreement: (i) as a result of court order; or (ii) otherwise by the Bank following an initial failure of the Bank to pay such money or take such action promptly after written demand therefor from the Executive stating the reason that such money or action was due under this Agreement at or prior to the time of such demand.

8.10 Compliance with Internal Revenue Code Section 409A. The Bank and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code. If any provision of this Agreement does not satisfy the requirements of Section 409A of the Code, the provision shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A of the Code, the Bank shall reform the provision. However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision.

8.12 Effect of Federal Banking Statutes and Regulations. Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359. In addition, the Executive agrees that this Agreement is subject to amendment at any time in order to comply with laws that are applicable to the Bank (including regulations and rules relating to any governmental program in which Company or the Bank may participate).

8.12 Source of Payments. All payments provided for under this Agreement shall be timely paid in cash or check from the general funds of the Bank.

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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.

VICTORY BANK
	Chairman & CEO
For the Board of Directors
EXECUTIVE
	6-14-12
Eric B. Offner

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EX-10.6

Exhibit 10.6

CHANGE IN CONTROL

SEVERANCE AGREEMENT

THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (the “Agreement”) is entered into as of June 14, 2012, by and between THE VICTORY BANK (the “Bank”) and SAUL S. RIVKIN (the “Executive”).

WHEREAS, the Executive has made significant contributions to the success of the Bank; and

WHEREAS, the Bank wishes to provide additional incentives for the Executive to remain in the employment of the Bank.

NOW THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

1. Termination after a Change in Control.

(a) Cash benefit. Notwithstanding any other provisions in this Agreement, if the Executive’s employment terminates involuntarily, but without Cause, or voluntarily, but with Good Reason, in either case within 12 months after a Change in Control, the Bank shall make a lump-sum payment to the Executive in an amount in cash equal to one (1) times the Executive’s base salary (at the rate in effect immediately prior to the Change in Control or, if higher, the rate in effect when the Executive terminates employment). Unless a delay in payment is required under Section 1(b) of this Agreement, the payment required under this Section 1(a) shall be made within five (5) business days after the Executive’s employment termination. The amount payable to the Executive hereunder shall not be reduced to account for the time value of money or discounted to present value. If the Executive’s employment terminates involuntarily, but without Cause, before the Change in Control occurs but after discussions regarding the Change in Control commence, then for purposes of this Agreement the Executive’s employment shall be deemed to have terminated immediately after the Change in Control and, unless delay is required under Section 1(b) of this Agreement, the Executive shall be entitled to the cash benefit under this Section 1(a) within five (5) business days after the Change in Control.

(b) Payment of the benefit. If, at the time his employment terminates, the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), if the cash severance benefit under Section 1(a) would be considered deferred compensation under Section 409A of the Code, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available, payment of the benefit under Section 1(a) shall be delayed and shall be made to the Executive in a single lump sum without interest on the first business day of the seventh (7^th) month after the month in which the Executive’s employment terminates.

(c) Change in Control.

For purposes of this Agreement “Change in Control” means a change in ownership, change in effective control or change in ownership of a substantial portion of assets of the Bank or The Victory Bancorp, Inc., as defined for purposes of Section 409A of the Code.

(d) Involuntary termination with Cause. For purposes of this Agreement termination of the Executive’s employment shall be considered an involuntary termination with Cause if the Executive shall have been terminated for any of the following reasons:

(1) a material act of dishonesty in performing the Executive’s duties on behalf of the Bank;

(2) a willful misconduct that in the judgment of the board of directors will likely cause economic damage to the Bank or its affiliates or injury to the business reputation of the Bank or its affiliates;

(3) a breach of fiduciary duty involving personal profit;

(4) the intentional failure of the Executive to perform his stated duties after written notice thereof from his supervisor or the board of directors of the Bank; or

(5) a willful violation of any law, rule or regulation (other than minor or routine traffic violations or similar offenses) that reflects adversely on the reputation of the Bank or its affiliates, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order.

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has acted, or failed to act, with an absence of good faith and without reasonable belief that his action or failure to act was in the best interest of the Bank.

(e) Voluntary termination with Good Reason. For purposes of this Agreement a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions stated in both clauses (1) and (2) are satisfied –

(1) a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if any of the following occur without the Executive’s advance written consent, and the term Good Reason shall mean the occurrence of any of the following without the Executive’s advance written consent –

(i) a material diminution of the Executive’s base salary,

(ii) a material diminution of the Executive’s authority, duties, or responsibilities,

(iii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report, or

(iv) a change by more than twenty-five (25) miles in the geographic location at which the Executive must perform services.

(2) the Executive must give notice to the Bank of the existence of one or more of the conditions described in clause (1) within sixty (60) days after the initial existence of the condition, and the Bank shall have thirty (30) days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (1) must occur within six (6) months after the initial existence of the condition.

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2. Continuation of Benefits.

(a) Benefits. Subject to Section 2(b) of this Agreement, if the Executive becomes entitled to a severance benefit pursuant to Section 1(a) of this Agreement, the Bank shall continue or cause to be continued life and health insurance coverage substantially identical to the coverage maintained for the Executive before termination and in accordance with the same schedule prevailing before employment termination. The insurance coverage shall cease twelve (12) months after the Executive’s termination of employment.

(b) Alternative lump-sum cash payment. If (x) under the terms of the applicable policy or policies for the insurance benefits specified in Section 2(a) it is not possible to continue coverage for the Executive and his dependents, or (y) when employment termination occurs the Executive is a “specified employee” within the meaning of Section 409A of the Code, if any of the continued insurance coverage benefits specified in Section 4.2(a) would be considered deferred compensation under Section 409A of the Code, and finally, if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available for that particular insurance benefit, the Bank shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s projected cost to maintain that particular insurance benefit (and associated income tax gross-up benefit, if applicable) had the Executive’s employment not terminated, assuming continued coverage for twelve (12) months. The lump-sum payment shall be made five (5) days after employment termination or, if Section 1(b) applies, on the first day of the seventh (7^th) month after the month in which the Executive’s employment terminates.

3. Termination for Which No Benefits Are Payable. Despite anything in this Agreement to the contrary, the Executive shall be entitled to no benefits under this Agreement if the Executive’s employment terminates with Cause, if the Executive dies while actively employed by the Bank, or if the Executive becomes totally disabled while actively employed by the Bank. For purposes of this Agreement, the Executive will be considered to have become totally disabled if the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. The benefits, if any, payable to the Executive or the Executive’s beneficiary or estate relating to the Executive’s death or disability shall be determined solely by such benefit plans or arrangements as the Bank may have with the Executive relating to death or disability, not by this Agreement.

4. Term of Agreement.

(a) The term of this Agreement shall include: (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and continuing for twelve (12) full months thereafter, plus (ii) any and all extensions of the initial term made pursuant to this Section 4.

(b) Commencing as of the first anniversary of the Effective Date and continuing as of each anniversary of the Effective Date thereafter, the disinterested members of the board of directors of the Bank may extend the Agreement term for an additional year, so that the remaining term of the Agreement again becomes twelve (12) full months from the applicable anniversary of the Effective Date, unless the Executive elects not to extend the term of this Agreement by giving written notice at least thirty (30) days prior to the applicable anniversary date.

5. Limitation of Benefits Under Certain Circumstances. In the event that the aggregate payments or benefits to be made or afforded to the Executive in the event of a Change of Control (whether under this Agreement or otherwise) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such payments or benefits shall

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be reduced to the extent necessary to avoid treatment as an “excess parachute payment”, with the reduction among such payments and benefits to be made first to payments and benefits payable or provided under this Agreement.

6. This Agreement Is Not an Employment Contract. The parties hereto acknowledge and agree that (x) this Agreement is not a management or employment agreement and (y) nothing in this Agreement shall give the Executive any rights or impose any obligations to continued employment by the Bank or any subsidiary or successor of the Bank.

7. Withholding of Taxes. The Bank may withhold from any benefits payable under this Agreement all Federal, state, local or other taxes as may be required by law, governmental regulation, or ruling.

8. Successors and Assigns.

(a) This Agreement shall be binding upon the Bank and any successor to the Bank, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank by purchase, merger, consolidation, reorganization, or otherwise. But, this Agreement and the Bank’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank. By agreement in form and substance satisfactory to the Executive, the Bank shall require any successor to all or substantially all of the business or assets of the Bank expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform had no succession occurred.

(b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c) This Agreement is personal in nature. Without written consent of the other party, neither party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement except as expressly provided in this Section 8. Without limiting the generality of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this Section 8, the Bank shall have no liability to pay any amount to the assignee or transferee.

9. Notices. Any notice under this Agreement shall be deemed to have been effectively made or given if in writing and personally delivered, delivered by mail properly addressed in a sealed envelope, postage prepaid by certified or registered mail, delivered by a reputable overnight delivery service, or sent by facsimile. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Bank at the time of the delivery of the notice, and properly addressed to the Bank if addressed to the board of directors at the Bank’s executive offices.

10. Captions and Counterparts. The headings and subheadings in this Agreement are included solely for convenience and shall not affect the interpretation of this Agreement. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same agreement.

11. Amendments and Waivers. No provision of this Agreement may be modified, waived, or discharged unless the waiver, modification, or discharge is agreed to in a writing signed by the Executive and by the Bank. No waiver by either party hereto at any time of any breach by the other party

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hereto or waiver of compliance with any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

12. Severability. The provisions of this Agreement are severable. The invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions of this Agreement. Any provision held to be invalid or unenforceable shall be reformed to the extent and solely to the extent necessary to make it valid and enforceable.

13. Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and governed by the internal laws of Pennsylvania, without giving effect to any conflict of laws provision or rule that would cause the application of the laws of any jurisdiction other than Pennsylvania. By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in Pennsylvania.

14. Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive concerning the subject matter. No rights are granted to the Executive under this Agreement other than those specifically set forth. No agreements or representations, oral or otherwise, expressed or implied concerning the subject matter hereof have been made by either party that are not set forth expressly in this Agreement. This Agreement supersedes and replaces in its entirety any prior severance or employment agreement between the Bank and the Executive.

15. No Mitigation Required. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall any profits, income, earnings, or other benefits from any source whatsoever create any mitigation, offset, reduction, or any other obligation on the part of the Executive hereunder or otherwise.

16. Internal Revenue Code Section 409A. The Bank and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code. If any provision of this Agreement does not satisfy the requirements of Section 409A of the Code, the provision shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A of the Code, the Bank shall reform the provision. However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision.

17. Effect of Federal Banking Statutes and Regulations. Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359. In addition, the Executive agrees that this Agreement is subject to amendment at any time in order to comply with laws that are applicable to the Bank (including regulations and rules relating to any governmental program in which Company or the Bank may participate).

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18. Source of Payments. All payments provided in this Agreement shall be timely paid in cash or check from the general funds of the Bank. The Company, however, unconditionally guarantees payment and provision of all amounts and benefits due hereunder to Executive and, if such amounts and benefits due from the Bank are not timely paid or provided by the Bank, such amounts and benefits shall be paid or provided by the Company.

IN WITNESS WHEREOF, the parties have executed this Change in Control Severance Agreement as of the date first written above.

THE VICTORY BANK

Chairman & CEO

EXECUTIVE

Saul S. Rivkin

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EX-10.7

Exhibit 10.7

MEMORANDUM

TO:	C Hutt, T Thompson
FROM:	Jim Gillen
DATE:	August 10, 2009
RE:	Bonus Discussion

Per our discussion last week, Chuck’s bonus which is based on the net gain on loan sales will be calculated as follows:

1. Once the 2009 gain on loan sales reaches $434,000 a bonus of $34,000 is guaranteed to be paid out at year end. If the aggregate gain on loan sales does not reach $434,000 in calendar 2009, no bonus will be paid out in 2009. Once the $34,000 bonus is guaranteed, this is the minimum bonus that will be paid regardless of the payout amount listed below in the payout table. For Example, if total gains on loan sales total $550,000 for calendar year 2009, the corresponding payout is listed at $27,500. However, since this amount exceeds the trigger amount of $434,000, the guaranteed payout of $34,000 remains.

2. Chuck’s year-end bonus may exceed $34,000 if, in accordance with the bonus table below, gain on loan sales reach $700,000 for calendar 2009. You can see below the corresponding payout for $700,000 gain on loan sales is $35,000, thus greater than the above referenced $34,000.

3. At Chuck’s discretion he may carve out various bonus amounts for the benefit of other department employees. Should Chuck distribute part of this bonus to Ralph Cirino, he will be “reimbursed” up to a maximum of $2,500. Since it was agreed that the Cirino bonus will not decrease the bonus allocated to Chuck.

Aggregate Gain on Sales	Payout Rate			Payout
$300,000.00		4	%	$	12,000.00
$350,000.00		4	%	$	14,000.00
$400,000.00		4	%	$	16,000.00
$450,000.00		4	%	$	18000.00
$500,000.00		4	%	$	20,000.00
$550,000.00		5	%	$	27,500.00
$600,000.00		5	%	$	30,000.00
$650,000.00		5	%	$	32,500.00
$700,000.00		5	%	$	35,000.00
$750,000.00		5	%	$	37,500.00
$800,000.00		5	%	$	40,000.00
$850,000.00		5	%	$	42,500.00
$900,000.00		5	%	$	45,000.00
$950,000.00		5	%	$	47,500.00
$1,000,000.00		5.5	%	$	55,000.00
$1,100,000.00		5.5	%	$	60,500.00
$1,200,000.00		5.5	%	$	66,000.00

Memorandum

RE: Bonus Discussion

Page 2

Example 1: Assumes $700,000. in annual gain on loan sales and that Ralph Cirino is given a $2,500 bonus.

2009 Aggregate Gain on Loan Sales	Bonus Amount		Amt. Paid R. Cirino		Amt. Paid To C.Hutt		Bonus Add-back		Hutt-Final Bonus
$700,000	$	35,000	$	2,500	$	32,500	$	2,500	$	35,000

Example 2: Assumes $700,000. in annual gain on loan sales and that Ralph Cirino is not given a bonus.

2009 Aggregate Gain on Loan Sales	Bonus Amount		Amt. Paid R. Cirino		Amt. Paid To C.Hutt		Bonus Add-back		Hutt-Final Bonus
$700,000	$	35,000	$	0	$	35,000	$	0	$	35,000

Example 3: Assumes $800,000 in annual gain on loan sales, and that Ralph Cirino is given a $2,500 bonus.

2009 Aggregate Gain on Loan Sales	Bonus Amount		Amt. Paid R. Cirino		Amt. Paid To C.Hutt		Bonus Add-back		Hutt-Final Bonus
$800,000	$	40,000	$	2,500	$	37,500	$	2,500	$	40,000

Example 4. : Assumes $800,000 in annual gain on loan sales, and that Ralph Cirino is not given a bonus.

2009 Aggregate Gain on Loan Sales	Bonus Amount		Amt. Paid R. Cirino		Amt. Paid To C.Hutt		Bonus Add-back		Hutt-Final Bonus
$800,000	$	40,000	$	0	$	40,000	$	0	$	40,000

The trigger amount of $434,000 and guaranteed payout of $34,000 noted in this memorandum apply only to calendar year 2009. If any outstanding questions remain, please don’t hesitate to contact me.

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EX-10.8

Exhibit 10.8

FORM OF

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of [date], by and among VICTORY BANK (the “Bank”), HV BANCORP, INC. (the “Company”), a Pennsylvania corporation and the holding company for the Bank, and [NAME] (the “Executive”).

WHEREAS, the Executive will serve in positions of substantial responsibility with the Bank and the Company; and

WHEREAS, the Bank, the Company and the Executive wish to set forth the terms of the Executive’s employment in these positions and enter into this employment agreement; and

WHEREAS, the Executive is willing and desires to serve in these positions with the Bank and the Company.

NOW THEREFORE, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree and intend to be legally bound as follows.

ARTICLE 1

EMPLOYMENT

1.1 Employment. The Bank hereby employs the Executive to serve as [position] and the Company hereby employs the Executive to serve as [position] according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement. The Executive hereby accepts continued employment according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement.

1.2 Responsibilities and Duties.

(a) As [positions], the Executive shall serve under the boards of directors of the Bank and the Company and will perform all duties and will have all powers associated with the position, as set forth in any job description provided to the Executive by the Bank or by the Company or as may be set forth in the bylaws of the Bank or the Company. The Executive shall report directly to the boards of directors of the Bank and the Company.

(b) During the period of his employment hereunder, except for reasonable periods of absence occasioned by illness, reasonable vacation periods, and other reasonable leaves of absence approved by the boards of directors of the Bank and the Company, the Executive will devote substantially all of his business time, attention, skill and efforts necessary to perform his duties under this Agreement, including activities and duties directed by the boards of directors. Notwithstanding the preceding sentence, subject to the approval of the boards of directors, the Executive may serve as a member of the board of directors of business, community and charitable organizations or conduct affairs related to other business interests, provided that in each case the service shall not materially interfere with the performance of his duties under this Agreement, adversely affect the reputation of the Bank, the Company or any of their affiliates, or present any conflict of interest. Nothing in this Section 1.2 shall prevent the Executive from managing personal investments and affairs, provided that doing so also does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.

1.3 Term.

(a) The term of this Agreement shall include: (i) the initial term, consisting of the period commencing as of the date of the Bank’s conversion from the mutual to stock form of organization (the “Effective Date”) and continuing for thirty-six (36) full months thereafter, plus (ii) any and all extensions of the initial term made pursuant to this Section 1.3.

(b) Commencing as of the first anniversary of the Effective Date and continuing as of each anniversary of the Effective Date thereafter, the disinterested members of the boards of directors of the Bank and the Company may extend the Agreement term for an additional year, so that the remaining term of the Agreement again becomes thirty-six (36) full months from the applicable anniversary of the Effective Date, unless the Executive elects not to extend the term of this Agreement by giving written notice at least thirty (30) days prior to the applicable anniversary date.

(c) The disinterested members of the boards of directors of the Bank and the Company will review the Agreement and the Executive’s performance annually for purposes of determining whether to extend the term of the Agreement and will include the rationale and results of its review in the minutes of the meetings. The boards of directors will notify the Executive no earlier than ninety (90) days and no later than thirty (30) days prior to the applicable anniversary date whether they have determined to extend the Agreement.

(d) Nothing in this Agreement shall mandate or prohibit a continuation of the Executive’s employment following the expiration of the term of this Agreement, upon such terms and conditions as the Bank, the Company and the Executive may mutually agree.

1.4 Service on the Boards of Directors. The Executive currently serves as a member of the boards of directors of the Bank and the Company. The boards of directors of the Bank and the Company shall undertake every lawful effort to ensure that the Executive continues throughout the term of this Agreement to be nominated as a director of the Bank and the Company.

ARTICLE 2

COMPENSATION AND BENEFITS

2.1 Base Salary and Bonus and Incentive Compensation.

(a) In consideration of the Executive’s performance of the obligations under this Agreement, the Bank and the Company shall pay or cause to be paid to the Executive a total salary at the annual rate of not less than $[amount] (the “Base Salary”), payable according to the regular payroll practices of the Bank. During the period of this Agreement, the boards of directors (or committees thereof) shall review the Executive’s Base Salary at least annually, and the Executive shall be entitled to receive annual increases at such percentage or in such amount as the boards of directors, in its sole discretion, may decide. The Bank and the Company shall apportion between them the aggregate Base Salary, based upon the services rendered by the Executive to the Company and the Bank. Any increase in the Executive’s Base Salary will become the new Base Salary for purposes of this Agreement.

(b) The Executive shall be entitled to incentive compensation in accordance with any program established by the Bank or the Company for the Executive or as otherwise may be provided to the Executive at the discretion of the Bank and the Company.

2.2 Benefit Plans and Perquisites During the term of this Agreement, the Executive shall be eligible (x) to participate in any and all officer or employee compensation, incentive compensation and

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benefit plans in effect from time to time, including without limitation plans providing retirement, medical, dental, disability, and group life benefits and including incentive, or bonus plans existing on the date of this Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the eligibility requirements for any of the plans, arrangements or benefits, and (y) to receive any and all other fringe and other benefits provided from time to time, including the specific items described in (a)-(c) below.

(a) Reimbursement of business expenses. The Executive shall be entitled to reimbursement for all reasonable business expenses incurred while performing his obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Bank and the Company and reasonable expenses for attendance at annual and other periodic meetings of trade associations. Expenses will be reimbursed if they are submitted in accordance with the Bank’s policies and procedures.

(b) Facilities. The Bank and the Company will furnish the Executive with the working facilities and staff customary for executive officers with the comparable title and duties of the Executive, as set forth in Sections 1.1 and 1.2 of this Agreement, and as are necessary for the Executive to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Bank.

(c) Automobile Allowance. During the term of this Agreement, the Bank or the Company shall provide the Executive with an automobile to be selected by the Executive. The Executive shall have exclusive use of the automobile for himself and his family. The Bank or the Company shall annually include on the Executive’s Form W-2 any amount of income attributable to the Executive’s personal use of the automobile. The Bank or the Company shall maintain minimum liability insurance coverage on the automobile and shall have the Executive named as additional insured on the automobile insurance policy. Upon termination of the Executive’s employment hereunder (other than a termination for Cause), he shall have the option of purchasing the vehicle from the Bank or the Company for an amount equal to its fair market value. The Executive agrees to maintain the vehicle in accordance with any applicable warranty provisions, and the Bank and the Company agree to reimburse the Executive for maintenance and upkeep, subject to submission of documentation as may be reasonably required by the Bank.

2.3 Vacation; Leave. The Executive shall be entitled to paid time off (of at least 31 days paid time off per year) in accordance with policies established from time to time by the Bank and the Company. In addition to paid vacations and other leave, the boards of directors may grant the Executive a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the boards of directors may determine.

2.4 Indemnification and Liability Insurance.

(a) Indemnification. The Bank and the Company agree to indemnify the Executive (and his heirs, executors, and administrators), and to advance expenses related thereto, to the fullest extent permitted under applicable law and regulations against any and all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of his having been a director or executive of the Bank, the Company or any of their affiliates (whether or not he continues to be a director or executive at the time of incurring any such expenses or liabilities). These expenses and liabilities may include, but not be limited to, judgments, court costs, and attorneys’ fees and the costs of reasonable settlements approved by the boards of directors, if such action is brought against the Executive in his capacity as an executive or director of the Bank, the Company or any of their affiliates. Indemnification for expenses shall not extend to matters for which the Executive has been terminated for Cause. Nothing contained herein shall be deemed to provide

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indemnification prohibited by applicable law or regulation. Notwithstanding anything herein to the contrary, the obligations of this Section 2.4 shall survive the term of this Agreement by a period of six (6) years.

(b) Insurance. During the period in which indemnification of the Executive is required under this Section 2.4, the Bank and the Company shall provide the Executive with coverage under a directors’ and officers’ liability policy at the expense of the Bank and the Company, at least equivalent to such coverage provided to directors and senior executives of the Bank and the Company.

ARTICLE 3

DEATH, DISABILITY AND EMPLOYMENT TERMINATION

3.1 Death or Disability.

(a) Death. The Executive’s employment shall terminate automatically at the Executive’s death. If the Executive dies while in active service to the Bank or the Company, the Executive’s spouse, or, if there is no surviving spouse, his estate, shall receive any sums due to the Executive as Base Salary and reimbursement of expenses through the end of the month in which his death occurred.

(b) Disability. The Executive shall be entitled to receive certain payments in connection with a Disability. For purposes of this Agreement, “Disability” means the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. The boards of directors of the Bank and the Company shall determine whether or not the Executive has a Disability for purposes of this Agreement in good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant, which may include a requirement that the Executive submit to any physical or mental evaluations and tests as they deem reasonably appropriate Commencing on the first day of the second month following the date of the commencement of the Disability, the Executive shall receive an amount equivalent to his monthly Base Salary, as in effect as of the date of Disability (a “Disability Payment”). Disability Payments will be made on the first day of each month thereafter and shall continue until the earliest of: (x) the date he returns to full-time employment at the Bank, the Company or another employer; (y) his death; or (z) thirty-six months. Monthly Disability Payments shall be reduced by the amount of any short- or long-term disability benefits payable to the Executive under any other disability programs sponsored by the Bank or the Company.

3.2 Involuntary Termination with Cause. The Bank and the Company may terminate the Executive’s employment for Cause. If the Executive’s employment terminates for Cause, the Executive shall receive the Base Salary through the date on which the termination of employment becomes effective and reimbursement of expenses to which the Executive is entitled when the termination becomes effective. The Executive shall not be deemed to have been terminated for Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution adopted at a meeting of the boards of directors called and held for the purpose, which resolution shall (x) contain findings that the Executive has committed an act constituting Cause, and (y) specify the particulars thereof. The resolutions of the boards of directors shall be deemed to have been duly adopted if it is adopted by the affirmative vote of a majority of the directors then in office, excluding the Executive. Notice of the meeting and the proposed termination for Cause shall be given to the Executive a reasonable time before the meeting of the boards of directors. The Executive and the Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable opportunity to be heard by the boards of directors at the meeting. For purposes of this Agreement “Cause” means any of the following:

(1) a material act of dishonesty in performing the Executive’s duties on behalf of the Bank or the Company;

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(2) willful misconduct that in the judgment of the board of directors of the Bank or the Company will likely cause economic damage to the Bank, the Company or their affiliates or injury to the business reputation of the Bank, the Company or their affiliates;

(3) a breach of fiduciary duty involving personal profit;

(4) the intentional failure to perform stated duties under this Agreement after written notice thereof from the board of directors of the Bank or the Company;

(5) any felony conviction; or

(6) a material breach by the Executive of any provision of this Agreement.

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has acted, or failed to act, with an absence of good faith and without reasonable belief that his action or failure to act was in the best interest of the Bank or the Company.

3.3 Voluntary Termination by the Executive Without Good Reason. In addition to his other rights to terminate his employment under this Agreement, the Executive may voluntarily terminate employment during the term of this Agreement upon at least sixty (60) days prior written notice to the boards of directors of the Bank and the Company. Upon the Executive’s voluntary termination, he will receive only his compensation and vested rights and benefits to the date of his termination of employment. Following his voluntary termination of employment under this Section 3.3, the Executive will be subject to the restrictions set forth in Article 7.

3.4 Involuntary Termination Without Cause and Voluntary Termination with Good Reason. With written notice to the Executive at least thirty (30) days in advance, the Bank or the Company may terminate the Executive’s employment without Cause. Termination shall take effect at the end of the notice period. With advance written notice to the Bank and the Company as provided in clause (y), the Executive may terminate employment for Good Reason. If the Executive’s employment terminates involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement. For purposes of this Agreement, a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions stated in both clauses (x) and (y) of this Section 3.4 are satisfied:

(x) the term “Good Reason” shall mean the occurrence of any of the following events without the Executive’s written consent:

(1) a failure to reelect or reappoint the Executive as [position] of the Bank or as [position] of the Company (provided, however, that a change in the Executive’s position consented to in writing by the Executive in connection with succession planning of the Bank or the Company, or otherwise, shall not be deemed a Good Reason) nor shall a failure by the board of directors to renew the terms of this Agreement constitute Good Reason;

(2) a failure to renominate the Executive to the board of directors of the Bank or the Company;

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(3) a material change in the Executive’s positions resulting in positions of lesser responsibility, importance, or scope from the positions and attributes thereof described in Sections 1.1 and 1.2 of this Agreement (provided, however, that such a change consented to in writing by the Executive in connection with succession planning of the Bank or the Company, or otherwise, shall not be deemed a Good Reason);

(4) a liquidation or dissolution of the Bank or the Company, other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of the Executive;

(5) a material reduction in the Executive’s Base Salary or benefits (or any such reduction following a Change in Control) required to be provided hereunder (other than a reduction that is generally applicable to the Bank’s or the Company’s executive employees or a reduction or elimination of the Executive’s benefits under one or more benefit plans maintained by the Bank or the Company as part of a good faith, overall reduction or elimination of such plans or benefits applicable to all participants in a manner that does not discriminate against the Executive (except as such discrimination may be necessary to comply with applicable law));

(6) a relocation of the Executive’s principal place of employment by more than twenty-five (25) miles from its location as of the date of this Agreement; or

(7) a material breach of this Agreement by the Bank or the Company.

(y) the Executive must give notice to the Bank and the Company of the existence of one or more of the conditions described in clause (x) within sixty (60) days after the initial existence of the condition, and the Bank and the Company shall have thirty (30) days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (x) must occur within six (6) months after the initial existence of the condition.

ARTICLE 4

SEVERANCE COMPENSATION

4.1 Cash Severance after Termination Without Cause or Termination for Good Reason.

(a) Subject to the possibility that cash severance after employment termination might be delayed under Section 4.1(b), if the Executive’s employment terminates involuntarily without Cause or if the Executive terminates employment with Good Reason, the Bank and the Company shall pay the Executive, in a single lump sum within ten (10) days of his termination of employment, an amount equal to (i) three (3) times his current Base Salary, plus (ii) the amount of the last bonus paid to the Executive multiplied by a fraction, the numerator of which equals the number of full calendar months remaining on the term of the Agreement and the denominator of which equals twelve (12). However, the Bank, the Company and the Executive acknowledge and agree that the severance benefits under this Section 4.1 shall not be payable if severance benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement.

(b) If the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) at the time of his termination, and if the cash severance payment under Section 4.1(a) would be considered deferred compensation under Section 409A of the Code, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available, the severance benefits shall be paid to the Executive in a single lump sum without interest on the first day of the seventh (7^th) month after the month in which the

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Executive’s employment terminates to the extent necessary to comply with Section 409A of the Code. References in this Agreement to Section 409A of the Code include rules, regulations, and guidance of general application issued by the Department of the Treasury under Section 409A of the Code.

4.2 Post-Termination Insurance Coverage.

(a) If the Executive’s employment terminates involuntarily without Cause or with Good Reason, the Bank or the Company shall continue or cause to be continued at the Bank’s or the Company’s expense medical, dental and life insurance benefits for the Executive and any of his dependents covered at the time of his termination. The health and welfare insurance benefits shall continue for a period of thirty-six (36) months from when the Executive’s employment terminates.

(b) In lieu of the applicable benefit set forth in Section 4.2(a), the Bank and the Company shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s or the Company’s projected cost to maintain that particular insurance benefit had the Executive’s employment not terminated, assuming continued coverage for thirty-six (36) months, if any of the following applies:

(i) if, under the terms of the applicable policy or policies for the insurance benefits specified in Section 4.2(a), it is not possible to continue coverage for the Executive and his dependents;

(ii) if, under the terms of the Patient Protection and Affordable Care Act or other applicable law, providing the applicable benefit specified in Section 4.2(a) would result in an excise tax imposed on the Bank or the Company; or

(iii) if any of the continued insurance coverage benefits specified in Section 4.2(a) would be considered deferred compensation under Section 409A of the Code.

Such lump-sum payment shall be made ten (10) days after employment termination or, if when employment termination occurs the Executive is a “specified employee” within the meaning of Section 409A of the Code and 4.2(b)(iii) applies, on the first day of the seventh (7th) month after the month in which the Executive’s employment terminates.

ARTICLE 5

CHANGE IN CONTROL BENEFITS

5.1 Change in Control Benefits. If a Change in Control occurs during the term of this Agreement and, thereafter, the Executive’s employment terminates involuntarily without Cause or if the Executive voluntarily terminates employment with Good Reason, the Bank and the Company shall make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to (i) three (3) times his current Base Salary, plus (ii) the amount of the last bonus paid to the Executive multiplied by a fraction, the numerator of which equals the number of full calendar months remaining on the term of the Agreement and the denominator of which equals twelve (12). The payment required under this paragraph is payable no later than ten (10) business days after the Executive’s termination of employment, subject to the delay set forth in Section 4.1(b) of this Agreement if the Executive is a “specified employee.” If the Executive receives payment under Section 5.1, the Executive shall not be entitled to any additional severance benefits under Section 4.1 of this Agreement. In addition to the cash severance benefit provided for under this Section 5.1, the Bank or the Company shall provide the Executive with the post-termination insurance coverage described in Section 4.2(a) of this Agreement, subject to the provisions of Section 4.2(b) of this Agreement.

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5.2 Change in Control Defined. For purposes of this Agreement, “Change in Control” of the Company or the Bank shall be deemed to have occurred if and when:

(i) a change in control of the Company occurs, of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”), or any successor thereto, whether or not any security of the Company is registered under Exchange Act; provided that, without limitation, such a Change in Control shall be deemed to have occurred if any person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities;

(ii) during any period of two consecutive years, individuals (the “Continuing Directors”) who at the beginning of such period constitute the board of directors (the “Existing Board”) of the Company cease for any reason to constitute at least two-thirds thereof, provided that any individual whose election or nomination for election as a member of the Existing Board was approved by a vote of at least two-thirds of the Continuing Directors then in office shall be considered a Continuing Director unless her or his initial assumption of office occurs as a result of an actual or threatened contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies by or on behalf of someone other than a Continuing Director;

(iii) the Company or the Bank transfers substantially all of its assets to another corporation or entity which is not an affiliate of the Company or the Bank;

(iv) any person other than the Company acquires ownership, holding or the power to vote 25% or more of the combined voting power of the Bank;

(v) the Company or the Bank is merged or consolidated with another corporation or entity and, as a result of such merger or consolidation, less than sixty percent (60%) of the combined voting power in the surviving or resulting corporation is owned by the former shareholders of the Company or the Bank; or

(vi) a change in the ownership of the Company or the Bank, a change in the effective control of the Company or the Bank or a change in the ownership of a substantial portion of the assets of the Company or the Bank, in each case as provided under Section 409A of the Code .

In no event, however, shall a Change in Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank or a subsidiary of either of them, by the Company, the Bank, any subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 5, the term “person” shall include the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

5.3 Contingent Reduction of Parachute Payments. If there is a Change in Control that would cause any payment or distribution by the Bank, the Company or any other person or entity to the Executive or for the Executive’s benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (each, a “Payment,” and collectively, the “Payments”) to be

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subject to the excise tax imposed by Section 4999 of the Code (such excise tax, together with any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), then the Executive will receive whichever of the following gives the Executive the highest net after-tax amount (after taking into account federal, state, local and social security taxes): (1) the Payments or (b) one dollar less than the amount of the Payments that would subject the Executive to the Excise Tax (the “Safe Harbor Amount”). If a reduction in the Payments is necessary so that the Payments equal the Safe Harbor Amount and none of the Payments constitutes a “deferral of compensation” within the meaning of and subject to Section 409A of the Code (“Nonqualified Deferred Compensation”), then the reduction shall occur in the manner the Executive elects in writing prior to the date of payment. If any Payment constitutes Nonqualified Deferred Compensation or if the Executive fails to elect an order, then the Payments to be reduced will be determined in a manner which has the least economic cost to the Executive and, to the extent the economic cost is equivalent, will be reduced in the inverse order of when payment would have been made to the Executive, until the reduction is achieved. All determinations required to be made under this Section 5.3, including whether and when the Safe Harbor Amount is required and the amount of the reduction of the Payments and the assumptions to be utilized in arriving at such determination, shall be made by a certified public accounting firm designated by the Bank or the Company (the “Accounting Firm”). All fees and expenses of the Accounting firm shall be borne solely by the Bank or the Company. Any determination by the Accounting Firm shall be binding upon the Bank, the Company and the Executive.

ARTICLE 6

CONFIDENTIALITY AND CREATIVE WORK

6.1 Non-disclosure. The Executive covenants and agrees not to reveal to any person, firm, or corporation any confidential information of any nature concerning the Bank or the Company or their business, or anything connected therewith. As used in this Article 6 the term “confidential information” means all of the confidential and proprietary information and trade secrets of the Bank, the Company and their affiliates in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to:

(a) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information;

(b) the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information;

(c) the whole or any portion or phase of any marketing or sales information, sales records, customer lists, prices, sales projections, or other sales information; and

(d) trade secrets, as defined from time to time by the laws of Pennsylvania.

This Section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

6.2 Return of Materials. The Executive agrees to immediately deliver or return to the Bank and the Company upon termination of his employment, or as soon thereafter as possible, all written information and any other items furnished by the Bank or the Company or prepared by the Executive in connection with the Executive’s employment and to immediately delete (except to the extent provided below) all electronically stored data of the Bank and the Company maintained on the Executive’s personal computers and to return all employer-provided computers or communication devices (i.e.,

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laptop, Blackberry, PDA, etc.). The Executive will retain no copies thereof after termination of the Executive’s employment; provided, however, that the Executive shall be entitled to retain any list of names and related contact information with whom the Executive has had personal contact during or prior to his employment with the Bank and the Company.

6.3 Creative Work. The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Bank or the Company. The Executive hereby assigns to the Bank and the Company all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.

6.4 Affiliates’ Confidential Information is Covered; Confidentiality Obligation Survives Termination. For purposes of this Agreement, the term “affiliate” includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control of the Bank or the Company. The rights and obligations set forth in this Article 6 shall survive termination of this Agreement.

6.5 Injunctive Relief. The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Bank and the Company if the Executive fails to observe the obligations imposed by this Article 6. Accordingly, if the Bank or the Company institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank or the Company, and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. The confidentiality and remedies provisions of this Article 6 shall be in addition to and shall not be deemed to supersede or restrict, limit, or impair the Bank’s or the Company’s rights under applicable state or federal statute or regulation dealing with or providing a remedy for the wrongful disclosure, misuse, or misappropriation of trade secrets or proprietary or confidential information.

ARTICLE 7

COMPETITION AFTER EMPLOYMENT TERMINATION

7.1 Covenant Not to Solicit Employees. The Executive agrees not to, directly or indirectly, solicit or employ the services of any officer or employee of the Bank or the Company (including an individual who was an officer or employee of the Bank or the Company during the one year period following the Executive’s termination) for one year after the Executive’s employment termination.

7.2 Covenant Not to Compete.

(a) The Executive covenants and agrees not to compete directly or indirectly with the Bank or the Company for one year after employment termination. For purposes of this Section 7.2:

(1) the term “compete” means:

(i) providing financial products or services on behalf of any financial institution for any person residing in the territory;

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(ii) assisting (other than through the performance of ministerial or clerical duties) any financial institution in providing financial products or services to any person residing in the territory; or

(iii) inducing or attempting to induce any person who was a customer of the Bank at the date of the Executive’s employment termination to seek financial products or services from another financial institution.

(2) the words “directly” or “indirectly” mean:

(i) acting as a consultant, officer, director, independent contractor, or employee of any financial institution in competition with the Bank or the Company in the territory, or

(ii) communicating to such financial institution the names or addresses or any financial information concerning any person who was a customer of the Bank when the Executive’s employment terminated.

(3) the term “customer” means any person to whom the Bank is providing financial products or services on the date of the Executive’s employment termination or within one year thereafter.

(4) the term “financial institution” means any bank, savings association, or bank or savings association holding company, or any other institution, the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in Section 4(k) of the Bank Holding Company Act of 1956, other than the Bank or any of its affiliated corporations.

(5) “financial product or service” means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Bank or an affiliate on the date of the Executive’s employment termination, including but not limited to banking activities and activities that are closely related and a proper incident to banking.

(6) the term “person” means any individual or individuals, corporation, partnership, fiduciary or association.

(7) the term “territory” means the area within a 30-mile radius of any office of the Bank at the date of the Executive’s employment termination.

(b) If any provision of this section or any word, phrase, clause, sentence or other portion thereof (including, without limitation, the geographical and temporal restrictions contained therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid provision or portion shall be modified or deleted so that the provisions hereof, as modified, are legal and enforceable to the fullest extent permitted under applicable law.

(c) The Executive acknowledges that the Bank’s and the Company’s willingness to enter into this Agreement and to make the payments contemplated by Articles 3 and 4 of this Agreement is conditioned on the Executive’s acceptance of the covenants set forth in Articles 6 and 7 of this Agreement and that neither the Bank nor the Company would not have entered into this Agreement without such covenants in force.

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7.3 Injunctive and Other Relief. Because of the unique character of the services to be rendered by the Executive hereunder, the Executive understands that the Bank and the Company would not have an adequate remedy at law for the material breach or threatened breach by the Executive of any one or more of the Executive’s covenants in this Article 7. Accordingly, the Executive agrees that the Bank’s and the Company’s remedies for a breach of this Article 7 include, but are not limited to, (x) forfeiture of any money representing accrued salary, contingent payments, or other fringe benefits (including any amount payable pursuant to Article 4) due and payable to the Executive during the period of any breach by Executive, and (y) a suit in equity by the Bank or the Company to enjoin the Executive from the breach or threatened breach of such covenants. The Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank or the Company and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. Nothing herein shall be construed to prohibit the Bank or the Company from pursuing any other or additional remedies for the breach or threatened breach.

7.4 Applicability of Article 7. The rights and obligations set forth in this Article 7 shall apply only if the Executive terminates employment voluntarily and without Good Reason pursuant to Section 3.3 of this Agreement and, in that case, the rights and obligations shall survive termination of this Agreement. However, Article 7 shall become null and void effective immediately upon a Change in Control.

ARTICLE 8

MISCELLANEOUS

8.1 Successors and Assigns.

(a) This Agreement shall be binding upon the Bank and the Company and any successors to the Bank and the Company, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank or the Company by purchase, merger, consolidation, reorganization, or otherwise, but this Agreement and the Bank’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank and the Company. By agreement in form and substance satisfactory to the Executive, the Bank and the Company shall require any successor to all or substantially all of the business or assets of the Bank and the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform had no succession occurred.

(b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c) Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement, except as expressly provided herein. Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this Section 8.1, neither the Bank nor the Company shall have liability to pay any amount to the assignee or transferee.

8.2 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and governed by the internal laws of the Commonwealth of Pennsylvania, without giving effect to any conflict of laws provision or rule that would cause the application of the laws of any jurisdiction other than Pennsylvania. By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in Pennsylvania.

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8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive by the Bank and the Company and replaces any prior employment agreement between the Bank and the Company and the Executive. Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void by the parties.

8.4 Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Bank and the Company at the time of the delivery of such notice, and properly addressed to the Bank if addressed to the boards of directors of the Bank or the Company at the Bank’s or the Company’s executive offices.

8.5 Severability. If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law. If any provisions of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

8.6 Captions and Counterparts. The captions in this Agreement are solely for convenience. The captions do not define, limit, or describe the scope or intent of this Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

8.7 No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment. Moreover, provided the Executive is not in breach of any obligation under Article 6 of this Agreement, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after employment termination.

8.8 Amendment and Waiver. This Agreement may not be amended, released, discharged, abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of the parties hereto. The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision, nor affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

8.9 Reimbursement of the Executive’s Expenses to Enforce this Agreement. The Bank and the Company shall reimburse the Executive for all out-of-pocket expenses, including, without limitation, reasonable attorneys’ fees, incurred by the Executive in connection with enforcement by the Executive of the obligations of the Bank and the Company to the Executive under this Agreement.

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8.10 Compliance with Internal Revenue Code Section 409A.

(a) The Bank, the Company and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code. If any provision of this Agreement does not satisfy the requirements of Section 409A of the Code, the provision shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A of the Code, the Bank and the Company shall reform the provision. However, the Bank and the Company shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank and the Company shall not be required to incur any additional compensation expense as a result of the reformed provision.

(b) Notwithstanding anything to the contrary in this Agreement, with respect to any amounts payable to Executive under this Agreement in connection with a termination of Executive’s employment that would be considered “non-qualified deferred compensation” under Section 409A of the Code, a termination of employment shall be considered to have occurred under this Agreement only upon Executive’s “separation from service” with the Bank and the Company as such term is defined in Treasury Regulation Section 1.409A 1(h), and any successor provision thereto.

(c) Notwithstanding anything to the contrary in this Agreement or in any Bank or Company policy with respect to such payments, in-kind benefits and reimbursements provided under this Agreement during any tax year of Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of Executive and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to Executive as soon as administratively practicable following such submission in accordance with the Bank’s or the Company’s policies regarding reimbursements, but in no event later than the last day of Executive’s taxable year following the taxable year in which the expense was incurred. This Section 8.10(c) shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Executive.

8.12 Effect of Federal Banking Statutes and Regulations. Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank or the Company whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359. In addition, the Executive agrees that this Agreement is subject to amendment at any time in order to comply with laws that are applicable to the Bank (including regulations and rules relating to any governmental program in which Company or the Bank may participate).

8.12 Source of Payments. All payments provided for under this Agreement shall be timely paid in cash or check from the general funds of the Bank or the Company.

8.13 Allocation of Obligations as Between the Bank and the Company. The parties understand that the Executive will perform substantial services for the Bank and the Company. Unless otherwise determined by the boards of directors of the Bank and the Company, the Executive shall not be entitled to compensation in addition to the compensation set forth in this Agreement as a result of the Executive’s serving as an officer of any affiliate of the Bank or the Company. The compensation, benefits and severance payments provided under this Agreement represent the total sums due the Executive by the Bank, the Company and any affiliate, and the Bank, the Company and any affiliate shall apportion between them the amounts to be paid under this Agreement, based upon the services rendered by the

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Executive to each of entities, respectively. Any entitlement of the Executive to severance compensation or other termination benefits under this Agreement shall be determined on the basis of the aggregate compensation payable to the Executive by the affiliates and the Bank and the Company, and liability therefor shall be apportioned between the affiliates and the Bank and the Company in the same manner as compensation paid to the Executive for services to each of them.

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.

VICTORY BANK

For the Board of Directors

HV BANCORP, INC.

For the Board of Directors

EXECUTIVE

[Name]

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EX-10.9

Exhibit 10.9

FORM OF

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of [date], by and among VICTORY BANK (the “Bank”), HV BANCORP, INC. (the “Company”), a Pennsylvania corporation and the holding company for the Bank, and [NAME] (the “Executive”).

WHEREAS, the Executive will serve in positions of substantial responsibility with the Bank and the Company; and

WHEREAS, the Bank, the Company and the Executive wish to set forth the terms of the Executive’s employment in these positions and enter into this employment agreement; and

WHEREAS, the Executive is willing and desires to serve in these positions with the Bank and the Company.

NOW THEREFORE, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree and intend to be legally bound as follows.

ARTICLE 1

EMPLOYMENT

1.1 Employment. The Bank hereby employs the Executive to serve as [position] and the Company hereby employs the Executive to serve as [position] according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement. The Executive hereby accepts continued employment according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of this Agreement.

1.2 Responsibilities and Duties.

(a) As [positions], the Executive shall serve under the boards of directors of the Bank and the Company and will perform all duties and will have all powers associated with the position, as set forth in any job description provided to the Executive by the Bank or by the Company or as may be set forth in the bylaws of the Bank or the Company. The Executive shall report directly to the boards of directors of the Bank and the Company.

(b) During the period of his employment hereunder, except for reasonable periods of absence occasioned by illness, reasonable vacation periods, and other reasonable leaves of absence approved by the boards of directors of the Bank and the Company, the Executive will devote substantially all of his business time, attention, skill and efforts necessary to perform his duties under this Agreement, including activities and duties directed by the boards of directors. Notwithstanding the preceding sentence, subject to the approval of the boards of directors, the Executive may serve as a member of the board of directors of business, community and charitable organizations or conduct affairs related to other business interests, provided that in each case the service shall not materially interfere with the performance of his duties under this Agreement, adversely affect the reputation of the Bank, the Company or any of their affiliates, or present any conflict of interest. Nothing in this Section 1.2 shall prevent the Executive from managing personal investments and affairs, provided that doing so also does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.

1.3 Term.

(a) The term of this Agreement shall include: (i) the initial term, consisting of the period commencing as of the date of the Bank’s conversion from the mutual to stock form of organization (the “Effective Date”) and continuing for thirty-six (36) full months thereafter, plus (ii) any and all extensions of the initial term made pursuant to this Section 1.3.

(b) Commencing as of the first anniversary of the Effective Date and continuing as of each anniversary of the Effective Date thereafter, the disinterested members of the boards of directors of the Bank and the Company may extend the Agreement term for an additional year, so that the remaining term of the Agreement again becomes thirty-six (36) full months from the applicable anniversary of the Effective Date, unless the Executive elects not to extend the term of this Agreement by giving written notice at least thirty (30) days prior to the applicable anniversary date.

(c) The disinterested members of the boards of directors of the Bank and the Company will review the Agreement and the Executive’s performance annually for purposes of determining whether to extend the term of the Agreement and will include the rationale and results of its review in the minutes of the meetings. The boards of directors will notify the Executive no earlier than ninety (90) days and no later than thirty (30) days prior to the applicable anniversary date whether they have determined to extend the Agreement.

(d) Nothing in this Agreement shall mandate or prohibit a continuation of the Executive’s employment following the expiration of the term of this Agreement, upon such terms and conditions as the Bank, the Company and the Executive may mutually agree.

1.4 Service on the Boards of Directors. The Executive currently serves as a member of the boards of directors of the Bank and the Company. The boards of directors of the Bank and the Company shall undertake every lawful effort to ensure that the Executive continues throughout the term of this Agreement to be nominated as a director of the Bank and the Company.

ARTICLE 2

COMPENSATION AND BENEFITS

2.1 Base Salary and Bonus and Incentive Compensation.

(a) In consideration of the Executive’s performance of the obligations under this Agreement, the Bank and the Company shall pay or cause to be paid to the Executive a total salary at the annual rate of not less than $[amount] (the “Base Salary”), payable according to the regular payroll practices of the Bank. During the period of this Agreement, the boards of directors (or committees thereof) shall review the Executive’s Base Salary at least annually, and the Executive shall be entitled to receive annual increases at such percentage or in such amount as the boards of directors, in its sole discretion, may decide. The Bank and the Company shall apportion between them the aggregate Base Salary, based upon the services rendered by the Executive to the Company and the Bank. Any increase in the Executive’s Base Salary will become the new Base Salary for purposes of this Agreement.

(b) The Executive shall be entitled to incentive compensation in accordance with any program established by the Bank or the Company for the Executive or as otherwise may be provided to the Executive at the discretion of the Bank and the Company.

2.2 Benefit Plans and Perquisites During the term of this Agreement, the Executive shall be eligible (x) to participate in any and all officer or employee compensation, incentive compensation and

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benefit plans in effect from time to time, including without limitation plans providing retirement, medical, dental, disability, and group life benefits and including incentive, or bonus plans existing on the date of this Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the eligibility requirements for any of the plans, arrangements or benefits, and (y) to receive any and all other fringe and other benefits provided from time to time, including the specific items described in (a)-(c) below.

(a) Reimbursement of business expenses. The Executive shall be entitled to reimbursement for all reasonable business expenses incurred while performing his obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Bank and the Company and reasonable expenses for attendance at annual and other periodic meetings of trade associations. Expenses will be reimbursed if they are submitted in accordance with the Bank’s policies and procedures.

(b) Facilities. The Bank and the Company will furnish the Executive with the working facilities and staff customary for executive officers with the comparable title and duties of the Executive, as set forth in Sections 1.1 and 1.2 of this Agreement, and as are necessary for the Executive to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Bank.

(c) Automobile Allowance. During the term of this Agreement, the Bank or the Company shall provide the Executive with an automobile to be selected by the Executive. The Executive shall have exclusive use of the automobile for himself and his family. The Bank or the Company shall annually include on the Executive’s Form W-2 any amount of income attributable to the Executive’s personal use of the automobile. The Bank or the Company shall maintain minimum liability insurance coverage on the automobile and shall have the Executive named as additional insured on the automobile insurance policy. Upon termination of the Executive’s employment hereunder (other than a termination for Cause), he shall have the option of purchasing the vehicle from the Bank or the Company for an amount equal to its fair market value. The Executive agrees to maintain the vehicle in accordance with any applicable warranty provisions, and the Bank and the Company agree to reimburse the Executive for maintenance and upkeep, subject to submission of documentation as may be reasonably required by the Bank.

2.3 Vacation; Leave. The Executive shall be entitled to paid time off (of at least 31 days paid time off per year) in accordance with policies established from time to time by the Bank and the Company. In addition to paid vacations and other leave, the boards of directors may grant the Executive a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the boards of directors may determine.

2.4 Indemnification and Liability Insurance.

(a) Indemnification. The Bank and the Company agree to indemnify the Executive (and his heirs, executors, and administrators), and to advance expenses related thereto, to the fullest extent permitted under applicable law and regulations against any and all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of his having been a director or executive of the Bank, the Company or any of their affiliates (whether or not he continues to be a director or executive at the time of incurring any such expenses or liabilities). These expenses and liabilities may include, but not be limited to, judgments, court costs, and attorneys’ fees and the costs of reasonable settlements approved by the boards of directors, if such action is brought against the Executive in his capacity as an executive or director of the Bank, the Company or any of their affiliates. Indemnification for expenses shall not extend to matters for which the Executive has been terminated for Cause. Nothing contained herein shall be deemed to provide

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indemnification prohibited by applicable law or regulation. Notwithstanding anything herein to the contrary, the obligations of this Section 2.4 shall survive the term of this Agreement by a period of six (6) years.

(b) Insurance. During the period in which indemnification of the Executive is required under this Section 2.4, the Bank and the Company shall provide the Executive with coverage under a directors’ and officers’ liability policy at the expense of the Bank and the Company, at least equivalent to such coverage provided to directors and senior executives of the Bank and the Company.

ARTICLE 3

DEATH, DISABILITY AND EMPLOYMENT TERMINATION

3.1 Death or Disability.

(a) Death. The Executive’s employment shall terminate automatically at the Executive’s death. If the Executive dies while in active service to the Bank or the Company, the Executive’s spouse, or, if there is no surviving spouse, his estate, shall receive any sums due to the Executive as Base Salary and reimbursement of expenses through the end of the month in which his death occurred.

(b) Disability. The Executive shall be entitled to receive certain payments in connection with a Disability. For purposes of this Agreement, “Disability” means the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. The boards of directors of the Bank and the Company shall determine whether or not the Executive has a Disability for purposes of this Agreement in good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant, which may include a requirement that the Executive submit to any physical or mental evaluations and tests as they deem reasonably appropriate Commencing on the first day of the second month following the date of the commencement of the Disability, the Executive shall receive an amount equivalent to his monthly Base Salary, as in effect as of the date of Disability (a “Disability Payment”). Disability Payments will be made on the first day of each month thereafter and shall continue until the earliest of: (x) the date he returns to full-time employment at the Bank, the Company or another employer; (y) his death; or (z) thirty-six months. Monthly Disability Payments shall be reduced by the amount of any short- or long-term disability benefits payable to the Executive under any other disability programs sponsored by the Bank or the Company.

3.2 Involuntary Termination with Cause. The Bank and the Company may terminate the Executive’s employment for Cause. If the Executive’s employment terminates for Cause, the Executive shall receive the Base Salary through the date on which the termination of employment becomes effective and reimbursement of expenses to which the Executive is entitled when the termination becomes effective. The Executive shall not be deemed to have been terminated for Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution adopted at a meeting of the boards of directors called and held for the purpose, which resolution shall (x) contain findings that the Executive has committed an act constituting Cause, and (y) specify the particulars thereof. The resolutions of the boards of directors shall be deemed to have been duly adopted if it is adopted by the affirmative vote of a majority of the directors then in office, excluding the Executive. Notice of the meeting and the proposed termination for Cause shall be given to the Executive a reasonable time before the meeting of the boards of directors. The Executive and the Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable opportunity to be heard by the boards of directors at the meeting. For purposes of this Agreement “Cause” means any of the following:

(1) a material act of dishonesty in performing the Executive’s duties on behalf of the Bank or the Company;

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(2) willful misconduct that in the judgment of the board of directors of the Bank or the Company will likely cause economic damage to the Bank, the Company or their affiliates or injury to the business reputation of the Bank, the Company or their affiliates;

(3) a breach of fiduciary duty involving personal profit;

(4) the intentional failure to perform stated duties under this Agreement after written notice thereof from the board of directors of the Bank or the Company;

(5) any felony conviction; or

(6) a material breach by the Executive of any provision of this Agreement.

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has acted, or failed to act, with an absence of good faith and without reasonable belief that his action or failure to act was in the best interest of the Bank or the Company.

3.3 Voluntary Termination by the Executive Without Good Reason. In addition to his other rights to terminate his employment under this Agreement, the Executive may voluntarily terminate employment during the term of this Agreement upon at least sixty (60) days prior written notice to the boards of directors of the Bank and the Company. Upon the Executive’s voluntary termination, he will receive only his compensation and vested rights and benefits to the date of his termination of employment. Following his voluntary termination of employment under this Section 3.3, the Executive will be subject to the restrictions set forth in Article 7.

3.4 Involuntary Termination Without Cause and Voluntary Termination with Good Reason. With written notice to the Executive at least thirty (30) days in advance, the Bank or the Company may terminate the Executive’s employment without Cause. Termination shall take effect at the end of the notice period. With advance written notice to the Bank and the Company as provided in clause (y), the Executive may terminate employment for Good Reason. If the Executive’s employment terminates involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement. For purposes of this Agreement, a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions stated in both clauses (x) and (y) of this Section 3.4 are satisfied:

(x) the term “Good Reason” shall mean the occurrence of any of the following events without the Executive’s written consent:

(1) a failure to reelect or reappoint the Executive as [position] of the Bank or as [position] of the Company (provided, however, that a change in the Executive’s position consented to in writing by the Executive in connection with succession planning of the Bank or the Company, or otherwise, shall not be deemed a Good Reason) nor shall a failure by the board of directors to renew the terms of this Agreement constitute Good Reason;

(2) a failure to renominate the Executive to the board of directors of the Bank or the Company;

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(3) a material change in the Executive’s positions resulting in positions of lesser responsibility, importance, or scope from the positions and attributes thereof described in Sections 1.1 and 1.2 of this Agreement (provided, however, that such a change consented to in writing by the Executive in connection with succession planning of the Bank or the Company, or otherwise, shall not be deemed a Good Reason);

(4) a liquidation or dissolution of the Bank or the Company, other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of the Executive;

(5) a material reduction in the Executive’s Base Salary or benefits (or any such reduction following a Change in Control) required to be provided hereunder (other than a reduction that is generally applicable to the Bank’s or the Company’s executive employees or a reduction or elimination of the Executive’s benefits under one or more benefit plans maintained by the Bank or the Company as part of a good faith, overall reduction or elimination of such plans or benefits applicable to all participants in a manner that does not discriminate against the Executive (except as such discrimination may be necessary to comply with applicable law));

(6) a relocation of the Executive’s principal place of employment by more than twenty-five (25) miles from its location as of the date of this Agreement; or

(7) a material breach of this Agreement by the Bank or the Company.

(y) the Executive must give notice to the Bank and the Company of the existence of one or more of the conditions described in clause (x) within sixty (60) days after the initial existence of the condition, and the Bank and the Company shall have thirty (30) days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (x) must occur within six (6) months after the initial existence of the condition.

ARTICLE 4

SEVERANCE COMPENSATION

4.1 Cash Severance after Termination Without Cause or Termination for Good Reason.

(a) Subject to the possibility that cash severance after employment termination might be delayed under Section 4.1(b), if the Executive’s employment terminates involuntarily without Cause or if the Executive terminates employment with Good Reason, the Bank and the Company shall pay the Executive, in a single lump sum within ten (10) days of his termination of employment, an amount equal to (i) three (3) times his current Base Salary, plus (ii) the amount of the last bonus paid to the Executive multiplied by a fraction, the numerator of which equals the number of full calendar months remaining on the term of the Agreement and the denominator of which equals twelve (12). However, the Bank, the Company and the Executive acknowledge and agree that the severance benefits under this Section 4.1 shall not be payable if severance benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement.

(b) If the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) at the time of his termination, and if the cash severance payment under Section 4.1(a) would be considered deferred compensation under Section 409A of the Code, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available, the severance benefits shall be paid to the Executive in a single lump sum without interest on the first day of the seventh (7^th) month after the month in which the

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Executive’s employment terminates to the extent necessary to comply with Section 409A of the Code. References in this Agreement to Section 409A of the Code include rules, regulations, and guidance of general application issued by the Department of the Treasury under Section 409A of the Code.

4.2 Post-Termination Insurance Coverage.

(a) If the Executive’s employment terminates involuntarily without Cause or with Good Reason, the Bank or the Company shall continue or cause to be continued at the Bank’s or the Company’s expense medical, dental and life insurance benefits for the Executive and any of his dependents covered at the time of his termination. The health and welfare insurance benefits shall continue for a period of thirty-six (36) months from when the Executive’s employment terminates.

(b) In lieu of the applicable benefit set forth in Section 4.2(a), the Bank and the Company shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s or the Company’s projected cost to maintain that particular insurance benefit had the Executive’s employment not terminated, assuming continued coverage for thirty-six (36) months, if any of the following applies:

(i) if, under the terms of the applicable policy or policies for the insurance benefits specified in Section 4.2(a), it is not possible to continue coverage for the Executive and his dependents;

(ii) if, under the terms of the Patient Protection and Affordable Care Act or other applicable law, providing the applicable benefit specified in Section 4.2(a) would result in an excise tax imposed on the Bank or the Company; or

(iii) if any of the continued insurance coverage benefits specified in Section 4.2(a) would be considered deferred compensation under Section 409A of the Code.

Such lump-sum payment shall be made ten (10) days after employment termination or, if when employment termination occurs the Executive is a “specified employee” within the meaning of Section 409A of the Code and 4.2(b)(iii) applies, on the first day of the seventh (7th) month after the month in which the Executive’s employment terminates.

ARTICLE 5

CHANGE IN CONTROL BENEFITS

5.1 Change in Control Benefits. If a Change in Control occurs during the term of this Agreement and, thereafter, the Executive’s employment terminates involuntarily without Cause or if the Executive voluntarily terminates employment with Good Reason, the Bank and the Company shall make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to (i) three (3) times his current Base Salary, plus (ii) the amount of the last bonus paid to the Executive multiplied by a fraction, the numerator of which equals the number of full calendar months remaining on the term of the Agreement and the denominator of which equals twelve (12). The payment required under this paragraph is payable no later than ten (10) business days after the Executive’s termination of employment, subject to the delay set forth in Section 4.1(b) of this Agreement if the Executive is a “specified employee.” If the Executive receives payment under Section 5.1, the Executive shall not be entitled to any additional severance benefits under Section 4.1 of this Agreement. In addition to the cash severance benefit provided for under this Section 5.1, the Bank or the Company shall provide the Executive with the post-termination insurance coverage described in Section 4.2(a) of this Agreement, subject to the provisions of Section 4.2(b) of this Agreement.

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5.2 Change in Control Defined. For purposes of this Agreement, “Change in Control” of the Company or the Bank shall be deemed to have occurred if and when:

(i) a change in control of the Company occurs, of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”), or any successor thereto, whether or not any security of the Company is registered under Exchange Act; provided that, without limitation, such a Change in Control shall be deemed to have occurred if any person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities;

(ii) during any period of two consecutive years, individuals (the “Continuing Directors”) who at the beginning of such period constitute the board of directors (the “Existing Board”) of the Company cease for any reason to constitute at least two-thirds thereof, provided that any individual whose election or nomination for election as a member of the Existing Board was approved by a vote of at least two-thirds of the Continuing Directors then in office shall be considered a Continuing Director unless her or his initial assumption of office occurs as a result of an actual or threatened contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies by or on behalf of someone other than a Continuing Director;

(iii) the Company or the Bank transfers substantially all of its assets to another corporation or entity which is not an affiliate of the Company or the Bank;

(iv) any person other than the Company acquires ownership, holding or the power to vote 25% or more of the combined voting power of the Bank;

(v) the Company or the Bank is merged or consolidated with another corporation or entity and, as a result of such merger or consolidation, less than sixty percent (60%) of the combined voting power in the surviving or resulting corporation is owned by the former shareholders of the Company or the Bank; or

(vi) a change in the ownership of the Company or the Bank, a change in the effective control of the Company or the Bank or a change in the ownership of a substantial portion of the assets of the Company or the Bank, in each case as provided under Section 409A of the Code .

In no event, however, shall a Change in Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank or a subsidiary of either of them, by the Company, the Bank, any subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 5, the term “person” shall include the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

5.3 Contingent Reduction of Parachute Payments. If there is a Change in Control that would cause any payment or distribution by the Bank, the Company or any other person or entity to the Executive or for the Executive’s benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (each, a “Payment,” and collectively, the “Payments”) to be

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subject to the excise tax imposed by Section 4999 of the Code (such excise tax, together with any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), then the Executive will receive whichever of the following gives the Executive the highest net after-tax amount (after taking into account federal, state, local and social security taxes): (1) the Payments or (b) one dollar less than the amount of the Payments that would subject the Executive to the Excise Tax (the “Safe Harbor Amount”). If a reduction in the Payments is necessary so that the Payments equal the Safe Harbor Amount and none of the Payments constitutes a “deferral of compensation” within the meaning of and subject to Section 409A of the Code (“Nonqualified Deferred Compensation”), then the reduction shall occur in the manner the Executive elects in writing prior to the date of payment. If any Payment constitutes Nonqualified Deferred Compensation or if the Executive fails to elect an order, then the Payments to be reduced will be determined in a manner which has the least economic cost to the Executive and, to the extent the economic cost is equivalent, will be reduced in the inverse order of when payment would have been made to the Executive, until the reduction is achieved. All determinations required to be made under this Section 5.3, including whether and when the Safe Harbor Amount is required and the amount of the reduction of the Payments and the assumptions to be utilized in arriving at such determination, shall be made by a certified public accounting firm designated by the Bank or the Company (the “Accounting Firm”). All fees and expenses of the Accounting firm shall be borne solely by the Bank or the Company. Any determination by the Accounting Firm shall be binding upon the Bank, the Company and the Executive.

ARTICLE 6

CONFIDENTIALITY AND CREATIVE WORK

6.1 Non-disclosure. The Executive covenants and agrees not to reveal to any person, firm, or corporation any confidential information of any nature concerning the Bank or the Company or their business, or anything connected therewith. As used in this Article 6 the term “confidential information” means all of the confidential and proprietary information and trade secrets of the Bank, the Company and their affiliates in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to:

(a) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information;

(b) the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information;

(c) the whole or any portion or phase of any marketing or sales information, sales records, customer lists, prices, sales projections, or other sales information; and

(d) trade secrets, as defined from time to time by the laws of Pennsylvania.

This Section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

6.2 Return of Materials. The Executive agrees to immediately deliver or return to the Bank and the Company upon termination of his employment, or as soon thereafter as possible, all written information and any other items furnished by the Bank or the Company or prepared by the Executive in connection with the Executive’s employment and to immediately delete (except to the extent provided below) all electronically stored data of the Bank and the Company maintained on the Executive’s personal computers and to return all employer-provided computers or communication devices (i.e.,

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laptop, Blackberry, PDA, etc.). The Executive will retain no copies thereof after termination of the Executive’s employment; provided, however, that the Executive shall be entitled to retain any list of names and related contact information with whom the Executive has had personal contact during or prior to his employment with the Bank and the Company.

6.3 Creative Work. The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Bank or the Company. The Executive hereby assigns to the Bank and the Company all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.

6.4 Affiliates’ Confidential Information is Covered; Confidentiality Obligation Survives Termination. For purposes of this Agreement, the term “affiliate” includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control of the Bank or the Company. The rights and obligations set forth in this Article 6 shall survive termination of this Agreement.

6.5 Injunctive Relief. The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Bank and the Company if the Executive fails to observe the obligations imposed by this Article 6. Accordingly, if the Bank or the Company institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank or the Company, and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. The confidentiality and remedies provisions of this Article 6 shall be in addition to and shall not be deemed to supersede or restrict, limit, or impair the Bank’s or the Company’s rights under applicable state or federal statute or regulation dealing with or providing a remedy for the wrongful disclosure, misuse, or misappropriation of trade secrets or proprietary or confidential information.

ARTICLE 7

COMPETITION AFTER EMPLOYMENT TERMINATION

7.1 Covenant Not to Solicit Employees. The Executive agrees not to, directly or indirectly, solicit or employ the services of any officer or employee of the Bank or the Company (including an individual who was an officer or employee of the Bank or the Company during the one year period following the Executive’s termination) for one year after the Executive’s employment termination.

7.2 Covenant Not to Compete.

(a) The Executive covenants and agrees not to compete directly or indirectly with the Bank or the Company for one year after employment termination. For purposes of this Section 7.2:

(1) the term “compete” means:

(i) providing financial products or services on behalf of any financial institution for any person residing in the territory;

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(ii) assisting (other than through the performance of ministerial or clerical duties) any financial institution in providing financial products or services to any person residing in the territory; or

(iii) inducing or attempting to induce any person who was a customer of the Bank at the date of the Executive’s employment termination to seek financial products or services from another financial institution.

(2) the words “directly” or “indirectly” mean:

(i) acting as a consultant, officer, director, independent contractor, or employee of any financial institution in competition with the Bank or the Company in the territory, or

(ii) communicating to such financial institution the names or addresses or any financial information concerning any person who was a customer of the Bank when the Executive’s employment terminated.

(3) the term “customer” means any person to whom the Bank is providing financial products or services on the date of the Executive’s employment termination or within one year thereafter.

(4) the term “financial institution” means any bank, savings association, or bank or savings association holding company, or any other institution, the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in Section 4(k) of the Bank Holding Company Act of 1956, other than the Bank or any of its affiliated corporations.

(5) “financial product or service” means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Bank or an affiliate on the date of the Executive’s employment termination, including but not limited to banking activities and activities that are closely related and a proper incident to banking.

(6) the term “person” means any individual or individuals, corporation, partnership, fiduciary or association.

(7) the term “territory” means the area within a 30-mile radius of any office of the Bank at the date of the Executive’s employment termination.

(b) If any provision of this section or any word, phrase, clause, sentence or other portion thereof (including, without limitation, the geographical and temporal restrictions contained therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid provision or portion shall be modified or deleted so that the provisions hereof, as modified, are legal and enforceable to the fullest extent permitted under applicable law.

(c) The Executive acknowledges that the Bank’s and the Company’s willingness to enter into this Agreement and to make the payments contemplated by Articles 3 and 4 of this Agreement is conditioned on the Executive’s acceptance of the covenants set forth in Articles 6 and 7 of this Agreement and that neither the Bank nor the Company would not have entered into this Agreement without such covenants in force.

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7.3 Injunctive and Other Relief. Because of the unique character of the services to be rendered by the Executive hereunder, the Executive understands that the Bank and the Company would not have an adequate remedy at law for the material breach or threatened breach by the Executive of any one or more of the Executive’s covenants in this Article 7. Accordingly, the Executive agrees that the Bank’s and the Company’s remedies for a breach of this Article 7 include, but are not limited to, (x) forfeiture of any money representing accrued salary, contingent payments, or other fringe benefits (including any amount payable pursuant to Article 4) due and payable to the Executive during the period of any breach by Executive, and (y) a suit in equity by the Bank or the Company to enjoin the Executive from the breach or threatened breach of such covenants. The Executive hereby waives the claim or defense that an adequate remedy at law is available to the Bank or the Company and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. Nothing herein shall be construed to prohibit the Bank or the Company from pursuing any other or additional remedies for the breach or threatened breach.

7.4 Applicability of Article 7. The rights and obligations set forth in this Article 7 shall apply only if the Executive terminates employment voluntarily and without Good Reason pursuant to Section 3.3 of this Agreement and, in that case, the rights and obligations shall survive termination of this Agreement. However, Article 7 shall become null and void effective immediately upon a Change in Control.

ARTICLE 8

MISCELLANEOUS

8.1 Successors and Assigns.

(a) This Agreement shall be binding upon the Bank and the Company and any successors to the Bank and the Company, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank or the Company by purchase, merger, consolidation, reorganization, or otherwise, but this Agreement and the Bank’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank and the Company. By agreement in form and substance satisfactory to the Executive, the Bank and the Company shall require any successor to all or substantially all of the business or assets of the Bank and the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform had no succession occurred.

(b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c) Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement, except as expressly provided herein. Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this Section 8.1, neither the Bank nor the Company shall have liability to pay any amount to the assignee or transferee.

8.2 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and governed by the internal laws of the Commonwealth of Pennsylvania, without giving effect to any conflict of laws provision or rule that would cause the application of the laws of any jurisdiction other than Pennsylvania. By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in Pennsylvania.

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8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive by the Bank and the Company and replaces any prior employment agreement between the Bank and the Company and the Executive. Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void by the parties.

8.4 Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Bank and the Company at the time of the delivery of such notice, and properly addressed to the Bank if addressed to the boards of directors of the Bank or the Company at the Bank’s or the Company’s executive offices.

8.5 Severability. If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law. If any provisions of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

8.6 Captions and Counterparts. The captions in this Agreement are solely for convenience. The captions do not define, limit, or describe the scope or intent of this Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

8.7 No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment. Moreover, provided the Executive is not in breach of any obligation under Article 6 of this Agreement, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned or benefits provided as the result of employment of the Executive or as a result of the Executive being self-employed after employment termination.

8.8 Amendment and Waiver. This Agreement may not be amended, released, discharged, abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of the parties hereto. The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision, nor affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

8.9 Reimbursement of the Executive’s Expenses to Enforce this Agreement. The Bank and the Company shall reimburse the Executive for all out-of-pocket expenses, including, without limitation, reasonable attorneys’ fees, incurred by the Executive in connection with enforcement by the Executive of the obligations of the Bank and the Company to the Executive under this Agreement.

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8.10 Compliance with Internal Revenue Code Section 409A.

(a) The Bank, the Company and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code. If any provision of this Agreement does not satisfy the requirements of Section 409A of the Code, the provision shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A of the Code, the Bank and the Company shall reform the provision. However, the Bank and the Company shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank and the Company shall not be required to incur any additional compensation expense as a result of the reformed provision.

(b) Notwithstanding anything to the contrary in this Agreement, with respect to any amounts payable to Executive under this Agreement in connection with a termination of Executive’s employment that would be considered “non-qualified deferred compensation” under Section 409A of the Code, a termination of employment shall be considered to have occurred under this Agreement only upon Executive’s “separation from service” with the Bank and the Company as such term is defined in Treasury Regulation Section 1.409A 1(h), and any successor provision thereto.

(c) Notwithstanding anything to the contrary in this Agreement or in any Bank or Company policy with respect to such payments, in-kind benefits and reimbursements provided under this Agreement during any tax year of Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of Executive and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to Executive as soon as administratively practicable following such submission in accordance with the Bank’s or the Company’s policies regarding reimbursements, but in no event later than the last day of Executive’s taxable year following the taxable year in which the expense was incurred. This Section 8.10(c) shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Executive.

8.12 Effect of Federal Banking Statutes and Regulations. Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank or the Company whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359. In addition, the Executive agrees that this Agreement is subject to amendment at any time in order to comply with laws that are applicable to the Bank (including regulations and rules relating to any governmental program in which Company or the Bank may participate).

8.12 Source of Payments. All payments provided for under this Agreement shall be timely paid in cash or check from the general funds of the Bank or the Company.

8.13 Allocation of Obligations as Between the Bank and the Company. The parties understand that the Executive will perform substantial services for the Bank and the Company. Unless otherwise determined by the boards of directors of the Bank and the Company, the Executive shall not be entitled to compensation in addition to the compensation set forth in this Agreement as a result of the Executive’s serving as an officer of any affiliate of the Bank or the Company. The compensation, benefits and severance payments provided under this Agreement represent the total sums due the Executive by the Bank, the Company and any affiliate, and the Bank, the Company and any affiliate shall apportion between them the amounts to be paid under this Agreement, based upon the services rendered by the

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Executive to each of entities, respectively. Any entitlement of the Executive to severance compensation or other termination benefits under this Agreement shall be determined on the basis of the aggregate compensation payable to the Executive by the affiliates and the Bank and the Company, and liability therefor shall be apportioned between the affiliates and the Bank and the Company in the same manner as compensation paid to the Executive for services to each of them.

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.

VICTORY BANK

For the Board of Directors

HV BANCORP, INC.

For the Board of Directors

EXECUTIVE

[Name]

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EX-10.10

Exhibit 10.10

FORM OF

CHANGE IN CONTROL

SEVERANCE AGREEMENT

THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (the “Agreement”) is entered into as of [date], by and between VICTORY BANK (the “Bank”) and [                    ] (the “Executive”).

WHEREAS, the Executive has made significant contributions to the success of the Bank; and

WHEREAS, the Bank wishes to provide additional incentives for the Executive to remain in the employment of the Bank.

NOW THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

1. Termination after a Change in Control.

(a) Cash benefit. Notwithstanding any other provisions in this Agreement, if the Executive’s employment terminates involuntarily, but without Cause, or voluntarily, but with Good Reason, in either case within 12 months after a Change in Control, the Bank shall make a lump-sum payment to the Executive in an amount in cash equal to one (1) times the Executive’s base salary (at the rate in effect immediately prior to the Change in Control or, if higher, the rate in effect when the Executive terminates employment). Unless a delay in payment is required under Section 1(b) of this Agreement, the payment required under this Section 1(a) shall be made within five (5) business days after the Executive’s employment termination. The amount payable to the Executive hereunder shall not be reduced to account for the time value of money or discounted to present value. If the Executive’s employment terminates involuntarily, but without Cause, before the Change in Control occurs but after discussions regarding the Change in Control commence, then for purposes of this Agreement the Executive’s employment shall be deemed to have terminated immediately after the Change in Control and, unless delay is required under Section 1(b) of this Agreement, the Executive shall be entitled to the cash benefit under this Section 1(a) within five (5) business days after the Change in Control.

(b) Payment of the benefit. If, at the time his employment terminates, the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), if the cash severance benefit under Section 1(a) would be considered deferred compensation under Section 409A of the Code, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available, payment of the benefit under Section 1(a) shall be delayed and shall be made to the Executive in a single lump sum without interest on the first business day of the seventh (7^th) month after the month in which the Executive’s employment terminates.

(c) Change in Control.

For purposes of this Agreement “Change in Control” means a change in ownership, change in effective control or change in ownership of a substantial portion of assets of the Bank or HV Bancorp, Inc., as defined for purposes of Section 409A of the Code.

(d) Involuntary termination with Cause. For purposes of this Agreement termination of the Executive’s employment shall be considered an involuntary termination with Cause if the Executive shall have been terminated for any of the following reasons:

(1) a material act of dishonesty in performing the Executive’s duties on behalf of the Bank;

(2) a willful misconduct that in the judgment of the board of directors will likely cause economic damage to the Bank or its affiliates or injury to the business reputation of the Bank or its affiliates;

(3) a breach of fiduciary duty involving personal profit;

(4) the intentional failure of the Executive to perform his stated duties after written notice thereof from his supervisor or the board of directors of the Bank; or

(5) a willful violation of any law, rule or regulation (other than minor or routine traffic violations or similar offenses) that reflects adversely on the reputation of the Bank or its affiliates, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order.

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has acted, or failed to act, with an absence of good faith and without reasonable belief that his action or failure to act was in the best interest of the Bank.

(e) Voluntary termination with Good Reason. For purposes of this Agreement a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions stated in both clauses (1) and (2) are satisfied –

(1) a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if any of the following occur without the Executive’s advance written consent, and the term Good Reason shall mean the occurrence of any of the following without the Executive’s advance written consent –

(i) a material diminution of the Executive’s base salary,

(ii) a material diminution of the Executive’s authority, duties, or responsibilities,

(iii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report, or

(iv) a change by more than twenty-five (25) miles in the geographic location at which the Executive must perform services.

(2) the Executive must give notice to the Bank of the existence of one or more of the conditions described in clause (1) within sixty (60) days after the initial existence of the condition, and the Bank shall have thirty (30) days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (1) must occur within six (6) months after the initial existence of the condition.

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2. Continuation of Benefits.

(a) Benefits. Subject to Section 2(b) of this Agreement, if the Executive becomes entitled to a severance benefit pursuant to Section 1(a) of this Agreement, the Bank shall continue or cause to be continued life and health insurance coverage substantially identical to the coverage maintained for the Executive before termination and in accordance with the same schedule prevailing before employment termination. The insurance coverage shall cease twelve (12) months after the Executive’s termination of employment.

(b) Alternative lump-sum cash payment. If (x) under the terms of the applicable policy or policies for the insurance benefits specified in Section 2(a) it is not possible to continue coverage for the Executive and his dependents, or (y) when employment termination occurs the Executive is a “specified employee” within the meaning of Section 409A of the Code, if any of the continued insurance coverage benefits specified in Section 4.2(a) would be considered deferred compensation under Section 409A of the Code, and finally, if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available for that particular insurance benefit, the Bank shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s projected cost to maintain that particular insurance benefit (and associated income tax gross-up benefit, if applicable) had the Executive’s employment not terminated, assuming continued coverage for twelve (12) months. The lump-sum payment shall be made five (5) days after employment termination or, if Section 1(b) applies, on the first day of the seventh (7^th) month after the month in which the Executive’s employment terminates.

3. Termination for Which No Benefits Are Payable. Despite anything in this Agreement to the contrary, the Executive shall be entitled to no benefits under this Agreement if the Executive’s employment terminates with Cause, if the Executive dies while actively employed by the Bank, or if the Executive becomes totally disabled while actively employed by the Bank. For purposes of this Agreement, the Executive will be considered to have become totally disabled if the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. The benefits, if any, payable to the Executive or the Executive’s beneficiary or estate relating to the Executive’s death or disability shall be determined solely by such benefit plans or arrangements as the Bank may have with the Executive relating to death or disability, not by this Agreement.

4. Term of Agreement.

(a) The term of this Agreement shall include: (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and continuing for twelve (12) full months thereafter, plus (ii) any and all extensions of the initial term made pursuant to this Section 4.

(b) Commencing as of the first anniversary of the Effective Date and continuing as of each anniversary of the Effective Date thereafter, the disinterested members of the board of directors of the Bank may extend the Agreement term for an additional year, so that the remaining term of the Agreement again becomes twelve (12) full months from the applicable anniversary of the Effective Date, unless the Executive elects not to extend the term of this Agreement by giving written notice at least thirty (30) days prior to the applicable anniversary date.

5. Limitation of Benefits Under Certain Circumstances. In the event that the aggregate payments or benefits to be made or afforded to the Executive in the event of a Change of Control (whether under this Agreement or otherwise) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such payments or benefits shall

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be reduced to the extent necessary to avoid treatment as an “excess parachute payment”, with the reduction among such payments and benefits to be made first to payments and benefits payable or provided under this Agreement.

6. This Agreement Is Not an Employment Contract. The parties hereto acknowledge and agree that (x) this Agreement is not a management or employment agreement and (y) nothing in this Agreement shall give the Executive any rights or impose any obligations to continued employment by the Bank or any subsidiary or successor of the Bank.

7. Withholding of Taxes. The Bank may withhold from any benefits payable under this Agreement all Federal, state, local or other taxes as may be required by law, governmental regulation, or ruling.

8. Successors and Assigns.

(a) This Agreement shall be binding upon the Bank and any successor to the Bank, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank by purchase, merger, consolidation, reorganization, or otherwise. But, this Agreement and the Bank’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank. By agreement in form and substance satisfactory to the Executive, the Bank shall require any successor to all or substantially all of the business or assets of the Bank expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform had no succession occurred.

(b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c) This Agreement is personal in nature. Without written consent of the other party, neither party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement except as expressly provided in this Section 8. Without limiting the generality of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by Executive’s will or by the laws of descent and distribution. If the Executive attempts an assignment or transfer that is contrary to this Section 8, the Bank shall have no liability to pay any amount to the assignee or transferee.

9. Notices. Any notice under this Agreement shall be deemed to have been effectively made or given if in writing and personally delivered, delivered by mail properly addressed in a sealed envelope, postage prepaid by certified or registered mail, delivered by a reputable overnight delivery service, or sent by facsimile. Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the address of the Executive on the books and records of the Bank at the time of the delivery of the notice, and properly addressed to the Bank if addressed to the board of directors at the Bank’s executive offices.

10. Captions and Counterparts. The headings and subheadings in this Agreement are included solely for convenience and shall not affect the interpretation of this Agreement. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same agreement.

11. Amendments and Waivers. No provision of this Agreement may be modified, waived, or discharged unless the waiver, modification, or discharge is agreed to in a writing signed by the Executive and by the Bank. No waiver by either party hereto at any time of any breach by the other party

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hereto or waiver of compliance with any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

12. Severability. The provisions of this Agreement are severable. The invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions of this Agreement. Any provision held to be invalid or unenforceable shall be reformed to the extent and solely to the extent necessary to make it valid and enforceable.

13. Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and governed by the internal laws of Pennsylvania, without giving effect to any conflict of laws provision or rule that would cause the application of the laws of any jurisdiction other than Pennsylvania. By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in Pennsylvania.

14. Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive concerning the subject matter. No rights are granted to the Executive under this Agreement other than those specifically set forth. No agreements or representations, oral or otherwise, expressed or implied concerning the subject matter hereof have been made by either party that are not set forth expressly in this Agreement. This Agreement supersedes and replaces in its entirety any prior severance or employment agreement between the Bank and the Executive.

15. No Mitigation Required. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall any profits, income, earnings, or other benefits from any source whatsoever create any mitigation, offset, reduction, or any other obligation on the part of the Executive hereunder or otherwise.

16. Internal Revenue Code Section 409A. The Bank and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Section 409A of the Code. If any provision of this Agreement does not satisfy the requirements of Section 409A of the Code, the provision shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A of the Code, the Bank shall reform the provision. However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision.

17. Effect of Federal Banking Statutes and Regulations. Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359. In addition, the Executive agrees that this Agreement is subject to amendment at any time in order to comply with laws that are applicable to the Bank (including regulations and rules relating to any governmental program in which Company or the Bank may participate).

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18. Source of Payments. All payments provided in this Agreement shall be timely paid in cash or check from the general funds of the Bank. The Company, however, unconditionally guarantees payment and provision of all amounts and benefits due hereunder to Executive and, if such amounts and benefits due from the Bank are not timely paid or provided by the Bank, such amounts and benefits shall be paid or provided by the Company.

IN WITNESS WHEREOF, the parties have executed this Change in Control Severance Agreement as of the date first written above.

VICTORY BANK

EXECUTIVE

[                    ]

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EX-10.11

Exhibit 10.11

HV BANCORP, INC.

EMPLOYEE STOCK OWNERSHIP PLAN

(Effective                    , 2014)

HV BANCORP, INC.

EMPLOYEE STOCK OWNERSHIP PLAN

HV Bancorp, Inc., (“Company”), a Pennsylvania corporation and the holding company for Huntingdon Valley Bank, a federally chartered stock savings bank, has adopted the HV Bancorp, Inc., Employee Stock Ownership Plan (the “Plan”).

IN WITNESS WHEREOF, the Company has adopted effective January 1, 2014, and caused this instrument to be executed by its duly authorized officer on the date set forth below.

Date of Execution:                     , 2014

HV BANCORP, INC.

By

Title:

Table of Contents

		Page
Section 1.	Plan Identity		1
1.1	Name		1
1.2	Purpose		1
1.3	Effective Date		1
1.4	Fiscal Period		1
1.5	Single Plan for All Employers		1
1.6	Interpretation of Provisions		1
Section 2.	Definitions		1
Section 3.	Eligibility for Participation		9
3.1	Initial Eligibility		9
3.2	Definition of Eligibility Year		9
3.3	Terminated Employees		9
3.4	Certain Employees Ineligible		9
3.5	Participation and Reparticipation		10
3.6	Omission of Eligible Employee		10
3.7	Inclusion of Ineligible Employee		10
3.8	Treatment of Qualified Military Service		10
Section 4.	Contributions and Credits		11
4.1	Discretionary Contributions		11
4.2	Contributions for Stock Obligations		11
4.3	Conditions as to Contributions		12
4.4	Rollover Contributions		12
Section 5.	Limitations on Contributions and Allocations		12
5.1	Limitation on Annual Additions		12
5.2	Effect of Limitations		14
5.3	Limitations as to Certain Participants		14
5.4	Erroneous Allocations		15
Section 6.	Trust Fund and Its Investment		15
6.1	Creation of Trust Fund		15
6.2	Stock Fund and Investment Fund		15
6.3	Acquisition of Stock		15
6.4	Participants’ Option to Diversify		16
6.5	Post-Service Investments		17
Section 7.	Voting Rights and Dividends on Stock		18
7.1	Voting and Tendering of Stock		18
7.2	Application of Dividends		18

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Section 8.	Adjustments to Accounts	20
8.1	ESOP Allocations	20
8.2	Charges to Accounts	21
8.3	Stock Fund Account	21
8.4	Investment Fund Account	21
8.5	Adjustment to Value of Trust Fund	21
8.6	Participant Statements	22
Section 9.	Vesting of Participants’ Interests	22
9.1	Vesting in Accounts	22
9.2	Computation of Vesting Years	22
9.3	Full Vesting Upon Certain Events	23
9.4	Full Vesting Upon Plan Termination	24
9.5	Forfeiture, Repayment, and Restoral	24
9.6	Accounting for Forfeitures	25
9.7	Vesting and Nonforfeitability	25
Section 10.	Payment of Benefits	25
10.1	Benefits for Participants	25
10.2	Time for Distribution	26
10.3	Marital Status	30
10.4	Delay in Benefit Determination	30
10.5	Accounting for Benefit Payments	30
10.6	Options to Receive Stock	31
10.7	Restrictions on Disposition of Stock	32
10.8	Continuing Loan Provisions; Creations of Protections and Rights	32
10.9	Direct Rollover of Eligible Distribution	32
10.10	Waiver of 30-Day Period After Notice of Distribution	33
Section 11.	Rules Governing Benefit Claims and Review of Appeals	33
11.1	Claim for Benefits	33
11.2	Notification by Committee	34
11.3	Claims Review Procedure	34
Section 12.	The Committee and its Functions	34
12.1	Authority of Committee	34
12.2	Identity of Committee	35
12.3	Duties of Committee	35
12.4	Valuation of Stock	35
12.5	Compliance with ERISA	35
12.6	Action by Committee	36
12.7	Execution of Documents	36
12.8	Adoption of Rules	36
12.9	Responsibilities to Participants	36
12.10	Alternative Payees in Event of Incapacity	36
12.11	Indemnification by Employers	36
12.12	Nonparticipation by Interested Member	36

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Section 13.	Adoption, Amendment, or Termination of the Plan	37
13.1	Adoption of Plan by Other Employers	37
13.2	Plan Adoption Subject to Qualification	37
13.3	Right to Amend or Terminate	37
Section 14.	Miscellaneous Provisions	38
14.1	Plan Creates No Employment Rights	38
14.2	Nonassignability of Benefits	38
14.3	Nonassignability of Benefits	38
14.4	Treatment of Expenses	38
14.5	Number and Gender	38
14.6	Nondiversion of Assets	38
14.7	Separability of Provisions	38
14.8	Service of Process	38
14.9	Governing State Law	39
14.10	Employer Contributions Conditioned on Deductibility	39
14.11	Unclaimed Accounts	39
14.12	Qualified Domestic Relations Order	39
14.13	Use of Electronic Media to Provide Notices and Make Participant Elections	40
Section 15.	Top-Heavy Provisions	40
15.1	Top-Heavy Plan	40
15.2	Definitions	40
15.3	Top-Heavy Rules of Application	42
15.4	Minimum Contributions	43
15.5	Top-Heavy Provisions Control in Top-Heavy Plan	43

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HUNTINGDON VALLEY BANK

EMPLOYEE STOCK OWNERSHIP PLAN

Section 1. Plan Identity.

1.1 Name. The name of this Plan is “HV Bancorp, Inc. Employee Stock Ownership Plan.”

1.2 Purpose. The purpose of this Plan is to describe the terms and conditions under which contributions made pursuant to the Plan will be credited and paid to Participants and Beneficiaries.

1.3 Effective Date. The Plan is adopted effective January 1, 2014.

1.4 Fiscal Period. This Plan shall be operated on the basis of the calendar year for the purpose of keeping the Plan’s books and records and distributing or filing any reports or returns required by law. This shall be the period from January 1 through December 30, and each period of 12 consecutive months beginning on January 1 of each succeeding year.

1.5 Single Plan for All Employers. This Plan shall be treated as a single plan with respect to all participating Employers for the purpose of crediting contributions and forfeitures and distributing benefits, determining whether there has been any termination of Service, and applying the limitations set forth in Section 5.

1.6 Interpretation of Provisions. The Employers intend this Plan and the Trust Agreement to be a qualified stock bonus plan under Section 401(a) of the Code and an employee stock ownership plan within the meaning of Section 407(d)(6) of ERISA and Section 4975(e)(7) of the Code. The Plan is intended to have its assets invested primarily in qualifying employer securities of one or more Employers within the meaning of Section 407(d)(5) of ERISA, and to satisfy any requirement under ERISA or the Code applicable to such a plan. Accordingly, the Plan and Trust Agreement shall be interpreted and applied in a manner consistent with this intent and shall be administered at all times and in all respects in a nondiscriminatory manner.

Section 2. Definitions.

The following capitalized words and phrases shall have the meanings specified when used in this Plan and in the Trust Agreement, unless the context clearly indicates otherwise:

“Account” means a Participant’s interest in the assets accumulated under this Plan as expressed in terms of a separate account balance which is periodically adjusted to reflect his Employer’s contributions, the Plan’s investment experience, and distributions and forfeitures.

“Active Participant” means a Participant who has satisfied the eligibility requirements under Section 3 and who has at least 1,000 Hours of Service during the current Plan Year. However, a Participant shall not qualify as an Active Participant unless (i) he is in active Service with an Employer as of the last day of the Plan Year, (ii) he is on a Recognized Absence as of such date, or (iii) his Service terminated during the Plan Year by reason of Disability, death, or Normal Retirement.

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Notwithstanding the foregoing, for the initial Plan Year only, “Active Participant” means an Employee who is in active Service with an Employer as of the last day of the initial Plan Year (or meets the one of the requirements set forth in (i), (ii) or (iii) of the preceding paragraph) and has at least one Hour of Service during such initial Plan Year.

“Bank” means Huntingdon Valley Bank, and any entity which succeeds to the business of Huntington Valley Bank.

“Beneficiary” means the entities or individuals who are designated by a Participant to receive benefits payable under the Plan on the Participant’s death. In the absence of any designation or if all the designated Beneficiaries shall die before the Participant dies or shall die before all benefits have been paid, the Participant’s Beneficiary shall be his surviving Spouse, if any, or his estate if he is not survived by a Spouse. The Committee may rely upon the advice of the Participant’s executor or administrator as to the identity of the Participant’s Spouse.

No election by a married Participant of a different Beneficiary shall be valid unless the election is accompanied by the Spouse’s written consent, which (i) must acknowledge the effect of the election, (ii) must explicitly provide either that the designated Beneficiary may not subsequently be changed by the Participant without the Spouse’s further consent, or that it may be changed without such consent, and (iii) must be witnessed by the Committee, its representative, or a notary public. (This requirement shall not apply if the Participant establishes to the Committee’s satisfaction that the Spouse may not be located.)

“Break in Service” means any Plan Year, or, for the initial eligibility computation period under Section 3.2, the 12-consecutive month period beginning on the first day of which an Employee has an Hour of Service, in which an Employee has 500 or fewer Hours of Service. Solely for this purpose, an Employee shall be considered employed for his normal hours of paid employment during a Recognized Absence (said Employee shall not be credited with more than 501 Hours of Service to avoid a Break in Service), unless he does not resume his Service at the end of the Recognized Absence. Further, if an Employee is absent for any period (i) by reason of the Employee’s pregnancy, (ii) by reason of the birth of the Employee’s child, (iii) by reason of the placement of a child with the Employee in connection with the Employee’s adoption of the child, or (iv) for purposes of caring for such child for a period beginning immediately after such birth or placement, the Employee shall be credited with the Hours of Service which would normally have been credited but for such absence, up to a maximum of 501 Hours of Service. Hours of Service shall be credited only in the year in which the absence from work begins, if a Participant would be prevented from incurring a one-year Break in Service in such year solely because the period of absence is treated as Hours of Service, or in any other case, in the immediately following year.

“Code” means the Internal Revenue Code of 1986, as amended.

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“Committee” means the committee responsible for the administration of this Plan in accordance with Section 12. Until the Committee is appointed, the Trustee shall carry out the duties and responsibilities of the Committee.

“Company” means HV Bancorp, Inc., the holding company of the Bank, and any successor entity which succeeds to the business of the Company and adopts this Plan as its own pursuant to Section 13.1 of the Plan. The Company is a C-corporation as such term is defined under Section 1361 of the Code.

“Disability” means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. An individual shall not be considered to be permanently and totally disabled unless he furnishes proof of the existence thereof in such form and manner, and at such times, as the Committee may require.

“Eligible Employee” means an Employee, other than an Employee identified in Section 3.4, who has performed 1,000 Hours of Service in the applicable Eligibility Year in accordance with Section 3.2 and who has attained age 21.

Notwithstanding the foregoing, for the initial Plan Year only “Eligible Employee” means an Employee, other than an Employee identified in Section 3.4, who has performed at least one Hour of Service in the initial Plan Year and who has attained age 21.

“Employee” means any individual who is or has been employed or self-employed by an Employer. “Employee” also means an individual employed by a leasing organization who, pursuant to an agreement between an Employer and the leasing organization, has performed services for the Employer and any related persons (within the meaning of Section 414(n)(6) of the Code) on a substantially full-time basis for more than one year, if such services are performed under the primary direction or control of the Employer. However, such a “leased employee” shall not be considered an Employee if (i) he participates in a money purchase pension plan sponsored by the leasing organization which provides for immediate participation, immediate full vesting, and an annual contribution of at least 10 percent of the Employee’s 415 Compensation, and (ii) leased employees do not constitute more than 20 percent of the Employer’s total work force (including leased employees, but excluding Highly Compensated Employees and any other Employees who have not performed services for the Employer on a substantially full-time basis for at least one year).

“Employer” means the Company or any affiliate within the purview of Section 414(b), (c) or (m) and 415(h) of the Code, any other corporation, partnership, or proprietorship which adopts this Plan with the Company’s consent pursuant to Section 13.1, and any entity which succeeds to the business of any Employer and adopts the Plan pursuant to Section 13.1. As of the effective date of the Plan, Huntingdon Valley Bank, is the only Employer other than the Company.

“Entry Date” means the Effective Date of the Plan and the first day of each month of each Plan Year after the Effective Date.

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“415 Compensation” means:

(a) Compensation actually paid or made available in gross income during such Limitation Year.

(b) Any elective deferral as defined in Code Section 402(g)(3) (any Employer contributions made on behalf of a Participant to the extent not includible in gross income and any Employer contributions to purchase an annuity contract under Code Section 403(b) under a salary reduction agreement) and any amount which is contributed or deferred by the Employer at the election of the Participant and which is not includible in gross income of the Participant by reason of Code Section 125 (including any “deemed” Code Section 125 compensation) (Cafeteria Plan), Code Section 457 or 132(f)(4) shall also be included in the definition of 415 Compensation.

(c) Differential wage payments (as defined in Code Section 3401(h)), but only to the extent the payments do not exceed the amount the individual would have received had he or she continued to perform services for the Employer.

(d) Payments made within 2 ¹⁄₂ months after severance from employment will be 415 Compensation within the meaning of Code Section 415(c)(3) if they are payments that, absent a severance from employment, would have been paid to the Employee if the Employee continued in employment with the Employer and are regular compensation for services during the Employee’s regular working hours, compensation for services outside the Employee’s regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar compensation. 415 Compensation does not include payments made within 2 ¹⁄₂ months after severance from employment if they are payments for accrued bona fide sick, vacation, or other leave, but only if the Employee would have been able to use the leave if employment had continued. Any payments not described above are not considered Compensation if paid after severance from employment, even if they are paid within 2 ¹⁄₂ months following severance from employment, except for payments to an individual who does not currently perform services for the Employer by reason of qualified military service (within the meaning of Code Section 414(u)(1)) to the extent these payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the Employer rather than entering qualified military service.

(e) 415 Compensation in excess of $260,000 (as indexed after 2014) shall be disregarded for all Participants. For purposes of this sub-section, the $260,000 limit shall be referred to as the “applicable limit” for the Plan Year in question. The $260,000 limit shall be adjusted for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code, effective for the Plan Year which begins within the applicable calendar year. For purposes of the applicable limit, 415 Compensation shall be prorated over short Plan Years and only compensation for the portion of the Plan Year during which the individual was a Participant shall be taken into account.

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“Highly Compensated Employee” for any Plan Year means an Employee who, during either that or the immediately preceding Plan Year was at any time a five percent owner of the Employer (as described in Code Section 416(i)(1)) or, during the immediately preceding Plan Year, had 415 Compensation exceeding $115,000 (the limit for 2013, which determines Highly Compensated Employees for 2014) and was among the most highly compensated one-fifth of all Employees (the $115,000 amount is adjusted at the same time and in the same manner as under Code Section 415(d)). For these purposes, “the most highly compensated one-fifth of all Employees” shall be determined by taking into account all individuals working for all related Employer entities described in the definition of “Service,” but excluding any individual who has not completed six months of Service, who normally works fewer than 17 1/2 hours per week or in fewer than six months per year, who has not reached age 21, whose employment is covered by a collective bargaining agreement, or who is a nonresident alien who receives no earned income from United States sources. The applicable year for which a determination is being made is called a “determination year” and the preceding 12-month period is called a look-back year.

“Hours of Service” means hours to be credited to an Employee under the following rules:

(a) Each hour for which an Employee is paid or is entitled to be paid for services to an Employer is an Hour of Service.

(b) Each hour for which an Employee is directly or indirectly paid or is entitled to be paid for a period of vacation, holidays, illness, disability, lay-off, jury duty, temporary military duty, or leave of absence is an Hour of Service. However, except as otherwise specifically provided, no more than 501 Hours of Service shall be credited for any single continuous period which an Employee performs no duties. No more than 501 Hours of Service will be credited under this paragraph for any single continuous period (whether or not such period occurs in a single computation period). Further, no Hours of Service shall be credited on account of payments made solely under a plan maintained to comply with worker’s compensation, unemployment compensation, or disability insurance laws, or to reimburse an Employee for medical expenses.

(c) Each hour for which back pay (ignoring any mitigation of damages) is either awarded or agreed to by an Employer is an Hour of Service. However, no more than 501 Hours of Service shall be credited for any single continuous period during which an Employee would not have performed any duties. The same Hours of Service will not be credited both under paragraph (a) or (b) as the case may be, and under this paragraph (c). These hours will be credited to the employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award agreement or payment is made.

(d) Hours of Service shall be credited in any one period only under one of the foregoing paragraphs (a), (b) and (c); an Employee may not get double credit for the same period.

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(e) If an Employer finds it impractical to count the actual Hours of Service for any class or group of non-hourly Employees, each Employee in that class or group shall be credited with one of the following, in the discretion of the Plan Administrator: (1) 190 Hours of Services for each month in which he has at least one hour of service; (2) 95 Hours of Service for each semi-monthly pay period in which he has at least one hour of service; (3) 90 Hours of Service for each bi-weekly pay period in which he has at least one hour of service; (4) 45 Hours of Services for each weekly pay period in which he has at least one hour of service; or (5) 10 Hours of Service for each for each day in which he has at least one hour of service. However, an Employee shall be credited only for his normal working hours during a paid absence.

(f) Hours of Service to be credited on account of a payment to an Employee (including back pay) shall be recorded in the period of Service for which the payment was made. If the period overlaps two or more Plan Years, the Hours of Service credit shall be allocated in proportion to the respective portions of the period included in the several Plan Years. However, in the case of periods of 31 days or less, the Administrator may apply a uniform policy of crediting the Hours of Service to either the first Plan Year or the second.

(g) In all respects an Employee’s Hours of Service shall be counted as required by Section 2530.200b-2(b) and (c) of the Department of Labor’s regulations under Title I of ERISA.

“Investment Fund” means that portion of the Trust Fund consisting of assets other than Stock. Notwithstanding the above, assets from the Investment Fund may be used to purchase Stock in the open market or otherwise, or used to pay on the Stock Obligation, and shares so purchased will be allocated to a Participant’s Stock Fund.

“Investment Fund Accounts” means that portion of a Participants Account consisting of assets other than Stock as described in Section 8.4 of the Plan.

“Normal Retirement” means retirement on or after the Participant’s Normal Retirement Date.

“Normal Retirement Date” means the Participant’s 65^th birthday.

“Participant” means any Eligible Employee who is an Active Participant participating in the Plan, or Eligible Employee or former Employee who was previously an Active Participant and still has a balance credited to his Account.

“Plan Administrator” means the Committee.

“Plan Compensation” means all remuneration received by an Employee for services performed for the Employer that is required to be reported on Form W-2. Compensation shall include any amount deferred under a salary deferral agreement which is not includible in the gross income of a Participant under Code Section 125 in connection with a cafeteria plan, Code Section 402(e)(3) in connection with a cash or deferred plan, Code Section 402(h)(1)(B) in connection with a simplified employee pension plan, and Code Section 403(b) in connection with a tax-sheltered annuity plan. A Participant’s wages include all remuneration paid to an Employee by the Employer (in the course of the Employer’s trade or business) for which the

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Employer is required to furnish the Employee a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Such amount must be determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed. For purposes of applying the limitations of this paragraph, compensation paid or made available during a Limitation year shall include any elective deferral (as defined in Code Section 402(g)(3)) or Roth elective deferrals, and any amount which is contributed or deferred by the Employer at the election of the Employee and which is not includible in the gross income of the Employee by reasons of Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(1), 403(b), or 457. Plan Compensation shall exclude differential wage payments (as defined in Code Section 3401(h)). Plan Compensation in excess of $260,000 (as indexed after 2014 pursuant to Section 401(a)(17)(B) of the Code) shall be disregarded for all Participants. For purposes of the limit in the preceding sentence, Plan Compensation shall be prorated over short Plan Years, and only compensation for the portion of the Plan Year during which the individual was a Participant shall be taken into account.

“Plan Year” means the twelve-month period commencing January 1 and ending December 31 and each period of 12 consecutive months beginning on January 1 of each succeeding year.

“Qualified Military Service” means any period of duty on a voluntary or involuntary basis in the United States Armed Forces, the Army National Guard and Air National Guard when engaged in active duty for training, inactive duty for training or full-time National Guard duty, the commissioned corps of the Public Health Service and any other category of persons designated by the President of the United States in time of war or emergency. Such periods of duty shall include active duty, active duty for training, initial active duty for training, inactive duty training, full-time National Guard duty and absence from employment for an examination to determine fitness for such duty.

“Recognized Absence” means a period for which —

(a) an Employer grants an Employee a leave of absence for a limited period, but only if an Employer grants such leave on a nondiscriminatory basis; or

(b) an Employee is temporarily laid off by an Employer because of a change in business conditions; or

(c) an Employee is on Qualified Military Service.

“Service” means an Employee’s period(s) of employment or self-employment with an Employer, excluding for initial eligibility purposes any period in which the individual was a nonresident alien and did not receive from an Employer any earned income which constituted income from sources within the United States. An Employee’s Service shall include any Service that constitutes Service with a predecessor Employer within the meaning of Section 414(a) of the Code, provided, however, that Service with an acquired entity shall not be considered Service under the Plan unless required by applicable law or agreed to by the parties to such transaction. An Employee’s Service shall also include any Service with an entity which is not an Employer, but only either (i) in which the other entity is a member of a controlled group of corporations or

7

is under common control with other trades and businesses within the meaning of Section 414(b) or 414(c) of the Code, and a member of the controlled group or one of the trades and businesses is an Employer, (ii) in which the other entity is a member of an affiliated service group within the meaning of Section 414(m) of the Code, and a member of the affiliated service group is an Employer, or (iii) all Employers aggregated with the Employer under Section 414(o) of the Code. Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to Qualified Military Service will be provided in accordance with Section 414(u) of the Code.

“Spouse” means the individual, if any, to whom a Participant is lawfully married on the date benefit payments to the Participant are to begin, or on the date of the Participant’s death, if earlier. A former Spouse shall be treated as the Spouse or surviving Spouse to the extent provided under a qualified domestic relations order as described in Section 414(p) of the Code.

“Stock” means common stock issued by the Employer (or by a corporation which is a member of the same controlled group) which is “readily tradable on an established securities market” (as defined in Notice 2011-19). If there is no common stock which meets the requirements above, the term “stock” shall mean common stock issued by the employer (or by a corporation which is a member of the same controlled group) having a combination of voting power and dividend rights equal to or in excess of:

(i) that class of common stock of the employer (or of any other such corporation) having the greatest voting power, and

(ii) that class of common stock of the employer (or of any other such corporation) having the greatest dividend rights.

“Stock Fund Account” The portion of a Participant’s Account that reflects such Participant’s interest in Stock held under the Plan as described in Section 8.3 of the Plan.

“Stock Obligation” means an indebtedness arising from any extension of credit to the Plan or the Trust which satisfies the requirements set forth in Section 6.3 and which was obtained for any or all of the following purposes:

(i) to acquire qualifying Employer securities as defined in Treasury Regulations Section 54.4975-12;

(ii) to repay such Stock Obligation; or

(iii) to repay a prior exempt loan.

“Trust” or “Trust Fund” means the trust fund created under this Plan.

“Trust Agreement” means the agreement between the Company and the Trustee concerning the Trust Fund. If any assets of the Trust Fund are held in a co-mingled trust fund with assets of other qualified retirement plans, “Trust Agreement” shall be deemed to include the trust agreement governing that co-mingled trust fund. With respect to the allocation of investment responsibility for the assets of the Trust Fund, the provisions of Section 2 of the Trust Agreement are incorporated herein by reference.

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“Trustee” means one or more corporate persons or individuals selected from time to time by the Company to serve as trustee or co-trustees of the Trust Fund.

“Unallocated Stock Fund” means that portion of the Stock Fund consisting of the Plan’s holding of Stock which has been acquired in exchange for one or more Stock Obligations and which has not yet been allocated to the Participant’s Accounts in accordance with Section 4.2.

“Valuation Date” means, for so long as there is a generally-recognized market for the Stock (as determined under Notice 2011-19), each business day. If at any time there shall be no generally-recognized market for the Stock, then “Valuation Date” shall mean the last day of the Plan Year and each other date as of which the Committee shall determine the investment experience of the Investment Fund and adjust the Participants’ Accounts accordingly.

“Valuation Period” means the period following a Valuation Date and ending with the next Valuation Date.

“Vesting Year” means a unit of Service credited to a Participant pursuant to Section 9.2 for purposes of determining his vested interest in his Account.

Section 3. Eligibility for Participation.

3.1 Initial Eligibility. An Eligible Employee shall enter the Plan as of the Entry Date coincident with or next following the last day of the Eligible Employee’s first Eligibility Year and attainment of age 21.

3.2 Eligibility Year. “Eligibility Year” means an applicable eligibility period (as defined below) in which the Eligible Employee has completed 1,000 Hours of Service for the Employer. For this purpose:

(i) an Eligible Employee’s first “eligibility period” is the 12-consecutive month period beginning on the first day on which he has an Hour of Service; and

(ii) his subsequent eligibility periods will be 12-consecutive month periods beginning on each January 1 after that first day of Service.

3.3 Terminated Employees. No Employee shall have any interest or rights under this Plan if he is never in active Service with an Employer on or after the Effective Date.

3.4 Certain Employees Ineligible.

3.4-1. No Employee shall participate in the Plan while his Service is covered by a collective bargaining agreement between an Employer and the Employee’s collective bargaining representative if (i) retirement benefits have been the subject of good faith bargaining between the Employer and the representative and (ii) the collective bargaining agreement does not provide for the Employee’s participation in the Plan.

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3.4-3. Employees who are nonresident aliens with no earned income (within the meaning of Code Section 911(d)(2)) from the Employer which constitutes income from sources within the United States (within the meaning of Code Section 861(a)(3)) are not eligible to participate in the Plan.

3.4-4. An Eligible Employee may elect not to participate in the Plan, provided, however, such election is made solely to meet the requirements of Code Section 409(n). For an election to be effective for a particular Plan Year, the Eligible Employee or Participant must file the election in writing with the Plan Administrator no later than the last day of the Plan Year for which the election is to be effective. The Employer may not make a contribution under the Plan for the Eligible Employee or for the Participant for the Plan Year for which the election is effective, nor for any succeeding Plan Year, unless the Eligible Employee or Participant re-elects to participate in the Plan. The Eligible Employee or Participant may elect again not to participate, but not earlier than the first Plan Year following the Plan Year in which the re-election was first effective.

3.5 Participation and Reparticipation. Subject to the satisfaction of the foregoing requirements, an Eligible Employee shall participate in the Plan during each period of his Service from the date on which he first becomes eligible until his termination. For this purpose, an Eligible Employee who returns before five (5) consecutive one year Breaks in Service who previously satisfied the initial eligibility requirements or who returns after five (5) consecutive one year Breaks in Service with a vested Account balance in the Plan shall re-enter the Plan as of the date of his return to Service with an Employer.

3.6 Omission of Eligible Employee. If, in any Plan Year, any Eligible Employee who should be included as a Participant in the Plan is erroneously omitted and discovery of such omission is not made until after a contribution by his Employer for the year has been made, the Employer shall make a subsequent contribution with respect to the omitted Eligible Employee in the amount which the said Employer would have contributed regardless of whether or not it is deductible in whole or in part in any taxable year under applicable provisions of the Code.

3.7 Inclusion of Ineligible Employee. If, in any Plan Year, any person who should not have been included as a Participant in the Plan is erroneously included and discovery of such incorrect inclusion is not made until after a contribution for the year has been made, the Employer shall not be entitled to recover the contribution made with respect to the ineligible person regardless of whether or not a deduction is allowable with respect to such contribution. In such event, the amount contributed with respect to the ineligible person shall constitute a forfeiture for the fiscal year in which the discovery is made. Any person who, after the close of a Plan Year, is retroactively treated by the Company, an affiliated company or any other party as an Employee for such prior Plan Year shall not, for purposes of the Plan, be considered an Employee for such prior Plan Year unless expressly so treated as such by the Company.

3.8 Treatment of Qualified Military Service. Notwithstanding any provision of this Plan to the contrary, contributions, benefits, and service credit with respect to Qualified Military Service will be provided in accordance with Code Section 414(u).

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Section 4. Contributions and Credits.

4.1 Discretionary Contributions

4.1-1. The Employer shall from time to time contribute, with respect to a Plan Year, such amounts as it may determine from time to time. The Employer shall have no obligation to contribute any amount under this Plan except as so determined in its sole discretion. The Employer’s contributions and available forfeitures for a Plan Year shall be credited as of the last day of the year to the Accounts of the Active Participants in the manner set forth in Section 8.1-2.

4.1-2. Upon a Participant’s reemployment after performing Qualified Military Service, the Employer shall make an additional contribution on behalf of such Participant that would have been made on his or her behalf during the Plan Year or Years corresponding to the Participant’s Qualified Military Service.

4.2 Contributions for Stock Obligations. If the Trustee, upon instructions from the Committee, incurs any Stock Obligation upon the purchase of Stock, the Employer may contribute for each Plan Year an amount sufficient to cover all payments of principal and interest as they come due under the terms of the Stock Obligation. If there is more than one Stock Obligation, the Employer shall designate the one to which any contribution is to be applied. Investment earnings realized on Employer contributions and any dividends paid by the Employer on Stock held in the Unallocated Stock Fund, shall be applied to the Stock Obligation related to that Stock, subject to Section 7.2.

In each Plan Year in which Employer contributions, earnings on contributions, or dividends on Stock in the Unallocated Stock Fund are used as payments under a Stock Obligation, a certain number of shares of the Stock acquired with that Stock Obligation which is then held in the Unallocated Stock Fund shall be released for allocation among the Participants. The number of shares released shall bear the same ratio to the total number of those shares then held in the Unallocated Stock Fund (prior to the release) as (i) the principal and interest payments made on the Stock Obligation in the current Plan Year bears to (ii) the sum of (i) above, and the remaining principal and interest payments required (or projected to be required on the basis of the interest rate in effect at the end of the Plan Year) to satisfy the Stock Obligation.

At the direction of the Committee, the current and projected payments of interest under a Stock Obligation may be ignored in calculating the number of shares to be released in each year if (i) the Stock Obligation provides for annual payments of principal and interest at a cumulative rate that is not less rapid at any time than level annual payments of such amounts for 10 years, (ii) the interest included in any payment is ignored only to the extent that it would be determined to be interest under standard loan amortization tables, and (iii) the term of the Stock Obligation, by reason of renewal, extension, or refinancing, has not exceeded 10 years from the original acquisition of the Stock.

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4.3 Conditions as to Contributions. Employers’ contributions shall in all events be subject to the limitations set forth in Section 5. Contributions may be made in the form of cash, or securities and other property to the extent permissible under ERISA, including Stock, and shall be held by the Trustee in accordance with the Trust Agreement. In addition to the provisions of Section 13.2 for the return of an Employer’s contributions in connection with a failure of the Plan to qualify initially under the Code, any amount contributed by an Employer due to a good faith mistake of fact, or based upon a good faith but erroneous determination of its deductibility under Section 404 of the Code, shall be returned to the Employer within one year after the date on which the contribution was originally made, or within one year after its nondeductibility has been finally determined. However, the amount to be returned shall be reduced to take account of any adverse investment experience within the Trust Fund in order that the balance credited to each Participant’s Account is not less that it would have been if the contribution had never been made.

4.4 Rollover Contributions. This Plan shall not accept a direct rollover or rollover contribution of an “eligible rollover distribution” as such term is defined in Section 10.9-1 of the Plan.

Section 5. Limitations on Contributions and Allocations.

5.1 Limitation on Annual Additions. Notwithstanding anything herein to the contrary, allocation of Employer contributions for any Plan Year shall be subject to the following:

5.1-1 If allocation of Employer contributions in accordance with Section 4.1 will result in an allocation of more than one-third the total contributions for a Plan Year to the Accounts of Highly Compensated Employees, then allocation of such amount shall be adjusted so that such excess will not occur.

5.1-2 After adjustment, if any, required by the preceding paragraph, the annual additions during any Plan Year to any Participant’s Account under this and any other defined contribution plans maintained by the Employer or an affiliate (within the purview of Section 414(b), (c) and (m) and Section 415(h) of the Code, which affiliate shall be deemed the Employer for this purpose) shall not exceed the lesser of $52,000 (or such other dollar amount which results from cost-of-living adjustments under Section 415(d) of the Code after 2014) (the “dollar limitation”) or 100 percent of the Participant’s 415 Compensation for such limitation year (the “percentage limitation”). In the event Stock is released from the Unallocated Stock Fund and allocated to a Participant’s account for a particular Plan Year, the Employer may determine for such year that an annual addition shall be calculated on the basis of the fair market value of the Stock so released and allocated (such fair market value to be based on the valuation as of the Valuation Date immediately preceding the Plan Year in respect of which the release and allocation are made) if the annual addition, as so calculated, is lower than the annual addition calculated on the basis of Employer contributions. The percentage limitation shall not apply to any contribution for medical benefits after severance from employment (within the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as an annual addition. If, as a result of the allocation of forfeitures, a reasonable error in

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estimating a Participant’s annual compensation, a reasonable error in determining the amount of elective deferrals (within the meaning of Code Section 402(g)(3)) that may be made with respect to any individual under the limits of Code Section 415, or under other limited facts and circumstances that the Commissioner of the Internal Revenue Service finds justify the availability of the rules set forth in this paragraph, the annual additions under the terms of the Plan for a particular Participant would cause the limitations of Code Section 415 applicable to that Participant for the limitation year to be exceeded, the Plan may only correct such excess in accordance with the Employee Plans Compliance Resolution System (EPCRS) as set forth in Revenue Procedure 2013-12 or any subsequent guidance.

5.1-3 For purposes of this Section 5.1, the “annual addition” to a Participant’s Accounts means the sum of (i) Employer contributions, (ii) Employee contributions, if any, and (iii) forfeitures. For these purposes, annual additions to a defined contribution plan shall not include the allocation of the excess amounts remaining in the Unallocated Stock Fund subsequent to a sale of stock from such fund in accordance with a transaction described in Section 8.1 of the Plan. Notwithstanding the foregoing, “annual additions” shall not include a restorative payment in accordance with Treasury Regulation Section 1.415(c)-1(b)(2)(ii)(C) that is made to restore losses to the Plan resulting from actions by a fiduciary for which there is a reasonable risk of liability for breach of fiduciary duty under ERISA or other applicable federal and state law.

5.1-4 Notwithstanding the foregoing, if no more than one-third of the Employer contributions to the Plan for a year which are deductible under Section 404(a)(9) of the Code are allocated to Highly Compensated Employees (within the meaning of Section 414(q) of the Internal Revenue Code), the limitations imposed herein shall not apply to:

(i) forfeitures of Employer securities (within the meaning of Section 409 of the Code) under the Plan if such securities were acquired with the proceeds of a loan described in Section 404(a)(9)(A) of the Code); or

(ii) Employer contributions to the Plan which are deductible under Section 404(a)(9)(B) and charged against a Participant’s Account.

5.1-5 If the Employer contributes amounts, on behalf of Eligible Employees covered by this Plan, to other “defined contribution plans” as defined in Section 3(34) of ERISA, the limitation on annual additions provided in this Section shall be applied to annual additions in the aggregate to this Plan and to such other plans. Reduction of annual additions, where required, shall be accomplished first by reductions under such other plan pursuant to the directions of the named fiduciary for administration of such other plans or under priorities, if any, established under the terms of such other plans and then by allocating any remaining excess for this Plan in the manner and priority set out above with respect to this Plan.

5.1-6 A “limitation year” shall mean each 12 consecutive month period ending on December 31.

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5.2 Effect of Limitations. The Committee shall take whatever action may be necessary from time to time to assure compliance with the limitations set forth in Section 5.1. Specifically, the Committee shall see that each Employer restricts its contributions for any Plan Year to an amount which, taking into account the amount of available forfeitures, may be completely allocated to the Participants consistent with those limitations. Where the limitations would otherwise be exceeded by any Participant, further allocations to the Participant shall be curtailed to the extent necessary to satisfy the limitations. Where an excessive amount is contributed on account of a mistake as to one or more Participants’ compensation, or there is an amount of forfeitures which may not be credited in the Plan Year in which it becomes available, the amount shall be corrected in accordance with Section 5.1-2 of the Plan. If it is determined at any time that the Committee and/or Trustee has erred in accepting and allocating any contributions or forfeitures under this Plan, or in allocating net gain or loss pursuant to Section 8, then the Committee, in a uniform and nondiscriminatory manner, shall determine the manner in which such error shall be corrected and shall promptly advise the Trustee in writing of such error and of the method for correcting such error. The Accounts of any or all Participants may be revised, if necessary, in order to correct such error.

5.3 Limitations as to Certain Participants. Aside from the limitations set forth in Section 5.1, if the Plan acquires any Stock in a transaction as to which a selling shareholder or the estate of a deceased shareholder is claiming the benefit of Section 1042 of the Code, the Committee shall see that none of such Stock, and no other assets in lieu of such Stock, are allocated to the Accounts of certain Participants in order to comply with Section 409(n) of the Code.

This restriction shall apply at all times to a Participant who owns (taking into account the attribution rules under Section 318(a) of the Code, without regard to the exception for employee plan trusts in Section 318(a)(2)(B)(i)) more than 25 percent of any class of stock of a corporation which issued the Stock acquired by the Plan, or another corporation within the same controlled group, as defined in Section 409(l)(4) of the Code (any such class of stock hereafter called a “Related Class”). For this purpose, a Participant who owns more than 25 percent of any Related Class at any time within the one year preceding the Plan’s purchase of the Stock shall be subject to the restriction as to all allocations of the Stock, but any other Participant shall be subject to the restriction only as to allocations which occur at a time when he owns more than 25 percent of any Related Class.

Further, this restriction shall apply to the selling shareholder claiming the benefit of Section 1042 and any other Participant who is related to such a shareholder within the meaning of Section 267(b) of the Code, during the period beginning on the date of sale and ending on the later of (1) the date that is ten years after the date of sale, or (2) the date of the Plan allocation attributable to the final payment of acquisition indebtedness incurred in connection with the sale.

This restriction shall not apply to any Participant who is a lineal descendant of a selling shareholder if the aggregate amounts allocated under the Plan for the benefit of all such descendants do not exceed five percent of the Stock acquired from the shareholder.

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5.4 Erroneous Allocations. No Participant shall be entitled to any annual additions or other allocations to his Account in excess of those permitted under Section 5. If it is determined at any time that the Plan Administrator and/or Trustee have erred in accepting and allocating any contributions or forfeitures under this Plan, or in allocating investment adjustments, or in excluding or including any person as a Participant, then the Plan Administrator, in a uniform and nondiscriminatory manner, shall determine the manner in which such error shall be corrected, after taking into consideration Sections 3.6 and 3.7 and any revenue procedure or other notice published by the Internal Revenue Service regarding permissible correction methods, if applicable, and shall promptly advise the Trustee in writing of such error and of the method for correcting such error. The Accounts of any or all Participants may be revised, if necessary, in order to correct such error.

Section 6. Trust Fund and Its Investment.

6.1 Creation of Trust Fund. All amounts received under the Plan from Employers and investments shall be held as the Trust Fund pursuant to the terms of this Plan and of the Trust Agreement between the Company and the Trustee. The benefits described in this Plan shall be payable only from the assets of the Trust Fund, and none of the Company, any other Employer, its board of directors or trustees, its stockholders, its officers, its employees, the Committee, and the Trustee shall be liable for payment of any benefit under this Plan except from the Trust Fund.

6.2 Stock Fund and Investment Fund. The Trust Fund held by the Trustee shall be divided into the Stock Fund, consisting entirely of Stock, and the Investment Fund, consisting of all assets of the Trust other than Stock. The Trustee shall have no investment responsibility for the Stock Fund, but shall accept any Employer contributions made in the form of Stock, and shall acquire, sell, exchange, distribute, and otherwise deal with and dispose of Stock in accordance with the instructions of the Committee. The Trustee shall have full responsibility for the investment of the Investment Fund, except to the extent such responsibility may be delegated from time to time to one or more investment managers pursuant to Section 2.3 of the Trust Agreement, or to the extent the Committee directs the Trustee to purchase Stock with the assets in the Investment Fund.

6.3 Acquisition of Stock. From time to time the Committee may, in its sole discretion, direct the Trustee to acquire Stock from the issuing Employer or from shareholders, including shareholders who are or have been Employees, Participants, or fiduciaries with respect to the Plan. The Trustee shall pay for such Stock no more than its fair market value, which shall be determined conclusively by the Committee pursuant to Section 12.4. The Committee may direct the Trustee to finance the acquisition of Stock by incurring or assuming indebtedness to the seller or another party, which indebtedness shall be called a “Stock Obligation.” The term “Stock Obligation” shall refer to a loan made to the Plan by a disqualified person within the meaning of Section 4975(e)(2) of the Code, or a loan to the Plan which is guaranteed by a disqualified person. A Stock Obligation includes a direct loan of cash, a purchase-money transaction, and an assumption of an obligation of a tax-qualified employee stock ownership plan under Section 4975(e)(7) of the Code (“ESOP”). For these purposes, the term “guarantee” shall include an unsecured guarantee and the use of assets of a disqualified person as collateral for a loan, even though the use of assets may not be a guarantee under applicable state law. An

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amendment of a Stock Obligation in order to qualify as an “exempt loan” is not a refinancing of the Stock Obligation or the making of another Stock Obligation. The term “exempt loan” refers to a loan that is primarily for the benefit of the Plan participants and their beneficiaries and that satisfies the provisions of this paragraph. A “non-exempt loan” fails to satisfy this paragraph. Any Stock Obligation shall be subject to the following conditions and limitations:

6.3-1 A Stock Obligation shall be for a specific term, shall not be payable on demand except in the event of default, and shall bear a reasonable rate of interest.

6.3-2 A Stock Obligation may, but need not, be secured by a collateral pledge of either the Stock acquired in exchange for the Stock Obligation, or the Stock previously pledged in connection with a prior Stock Obligation which is being repaid with the proceeds of the current Stock Obligation. No other assets of the Plan and Trust may be used as collateral for a Stock Obligation, and no creditor under a Stock Obligation shall have any right or recourse to any Plan and Trust assets other than Stock remaining subject to a collateral pledge.

6.3-3 Any pledge of Stock to secure a Stock Obligation must provide for the release of pledged Stock in connection with payments on the Stock obligations in the ratio prescribed in Section 4.2.

6.3-4 Repayments of principal and interest on any Stock Obligation shall be made by the Trustee only from Employer cash contributions designated for such payments, from earnings on such contributions, and from cash dividends received on Stock, in the last case, however, subject to the further requirements of Section 7.2. The payment on the Stock Obligation during the Plan Year must not exceed an amount equal to the sum of contributions and earnings received during such year or prior to such year, less such payments in prior years. Such contributions and earnings must be accounted for separately in the books and accounts of the Plan until the Stock Obligation is fully repaid.

6.3-5 In the event of default of a Stock Obligation, the value of Plan assets transferred in satisfaction of the Stock Obligation must not exceed the amount of the default. If the lender is a disqualified person within the meaning of Section 4975 of the Code, a Stock Obligation must provide for a transfer of Plan assets upon default only upon and to the extent of the failure of the Plan to meet the payment schedule of said Stock Obligation. For purposes of this paragraph, the making of a guarantee does not make a person a lender.

6.4 Participants’ Option to Diversify. The Committee shall provide for a procedure under which each Participant may, during the qualified election period, elect to “diversify” a portion of the Stock allocated to his Account, as provided in Section 401(a)(28)(B) of the Code. An election to diversify must be made on the prescribed form and filed with the Committee within the period specified herein. For each of the first five (5) Plan Years in the qualified election period, the Participant may elect to diversify an amount which does not exceed 25% of the number of shares allocated to his Account since the inception of the Plan, less all shares with respect to which an election under this Section has already been made. For the last year of the qualified election period, the Participant may elect to have up to 50 percent of the value of his

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Account committed to other investments, less all shares with respect to which an election under this Section has already been made. The term “qualified election period” shall mean the six (6) Plan Year period beginning with the first Plan Year in which a Participant has both attained age 55 and completed 10 years of participation in the Plan. A Participant’s election to diversify his Account may be made within each year of the qualified election period and shall continue for the 90-day period immediately following the last day of each year in the qualified election period. Once a Participant makes such election, the Plan must complete diversification in accordance with such election within 90 days after the end of the period during which the election could be made for the Plan Year. In the discretion of the Committee, the Plan may satisfy the diversification requirement by any of the following methods:

6.4-1 The Plan may distribute all or part of the amount subject to the diversification election.

6.4-2 The Plan may offer the Participant at least three other distinct investment options, if available under the Plan. The other investment options shall be designed to satisfy the requirements of Regulations under Section 404(c) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

6.4-3 The Plan may transfer the portion of the Participant’s Account subject to the diversification election to another qualified defined contribution plan of the Employer that offers at least three investment options satisfying the requirements of the Regulations under Section 404(c) of ERISA, such as the Huntingdon Valley Bank 401(K) Profit Sharing Plan Trust.

6.5 Post-Service Investments (a) . If any part of a Participant’s Account is retained in the Trust after his Service ends, his Accounts will continue to be treated as described in Section 8. However, unless the Participant was an Active Participant during a portion of the Plan Year at issue, such Accounts shall not be credited with any additional contributions. To the extent that sufficient liquid assets are held by the Trust (i.e., other than Stock), the Committee shall diversify the Accounts of terminated Participants and invest such amounts in Trust assets other than Stock. Any diversification or investment of a terminated Participant’s Accounts made pursuant to this Section 6.5 shall be made under the following method:

6.5-1 Transfer and Exchange. The Committee shall annually execute an exchange between terminated Participants’ Stock held in the terminated Participants’ Stock Fund Account and cash or other Trust assets held in one or more Active Participants’ Accounts, but only if the aggregate fair market value of the Stock held in the terminated Participants’ Stock Fund Account exceeds $5,000, but only to the extent that cash or other liquid assets are held in Active Participants’ Investment Fund Accounts. The value of the Stock shall be determined based on the most recent fair market value of the Stock as of last applicable Valuation Date. Stock subject to the exchange shall be credited evenly to the Active Participants’ Investment Fund Accounts, and cash or other assets shall be debited pro rata from each of the Active Participants’ Investment Fund Accounts, based on the fair market value of such Accounts on of the date of the transfer; however, no exchanges shall occur with respect to any Stock that has been diversified in part or in whole in accordance with Sections 401(a)(28)(B) or 401(a)(35) of the Code, as applicable.

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Section 7. Voting Rights and Dividends on Stock.

7.1 Voting and Tendering of Stock.

7.1-1. The Trustee generally shall vote all shares of Stock held under the Plan in accordance with the written instructions of the Committee. However, if any Employer has a registration-type class of securities within the meaning of Section 409(e)(4) of the Code, or if a matter submitted to the holders of the Stock involves a merger, consolidation, recapitalization, reclassification, liquidation, dissolution, or sale of substantially all assets of an entity, then (i) the shares of Stock which have been allocated to Participants’ Accounts shall be voted by the Trustee in accordance with the Participants’ written instructions, and (ii) the Trustee shall vote any unallocated Stock, allocated Stock for which it has received no voting instructions, and Stock for which Participants vote to “abstain,” in the same proportions as it votes the allocated Stock for which it has received instructions from Participants. In the event no shares of Stock have been allocated to Participants’ Accounts at the time Stock is to be voted and any exempt loan which may be outstanding is not in default, each Participant shall be deemed to have one share of Stock allocated to his or her Account, for the sole purpose of providing the Trustee with voting instructions.

Notwithstanding any provision hereunder to the contrary, all unallocated shares of Stock must be voted by the Trustee in a manner determined by the Trustee to be for the exclusive benefit of the Participants and Beneficiaries. Whenever such voting rights are to be exercised, the Employers shall provide the Trustee, in a timely manner, with the same notices and other materials as are provided to other holders of the Stock, which the Trustee shall distribute to the Participants. The Participants shall be provided with adequate opportunity to deliver their instructions to the Trustee regarding the voting of Stock allocated to their Accounts. The instructions of the Participants’ with respect to the voting of allocated shares hereunder shall be confidential.

7.1-2 In the event of a tender offer, Stock shall be tendered by the Trustee in the same manner as set forth above in Section 7.1-1 with respect to the voting of Stock. Notwithstanding any provision hereunder to the contrary, Stock must be tendered by the Trustee in a manner determined by the Trustee to be for the exclusive benefit of the Participants and Beneficiaries.

7.2 Application of Dividends.

7.2-1 Stock Dividends. Stock Dividends that are received by the Trustee in the form of additional Stock shall be retained in the Stock Fund, and shall be allocated among the Participants’ Accounts and the Unallocated Stock Fund in accordance with their holdings of the Stock on which the dividends are paid.

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7.2-2 Cash Dividends. The treatment of dividends paid in cash shall be determined after consideration to whether the cash dividends are paid on Stock held in Participants’ Accounts or the Unallocated Stock Fund.

(i) On Stock in Participants’ Accounts. (A) Employer Exercises Discretion. Dividends on Stock credited to Participants’ Accounts which are received by the Trustee in the form of cash shall, at the direction of the Employer paying the dividends, either (I) be credited to the Accounts in accordance with Section 8.4(iii) and invested as part of the Investment Fund; (II) be distributed immediately to the Participants in proportion with the Participants’ Stock Fund Account balance; (III) be distributed to the Participants within 90 days of the close of the Plan Year in which paid in proportion with the Participants’ Stock Fund Account balance; or (IV) be used to make payments on the Stock Obligation. If dividends on Stock allocated to a Participant’s Account are used to repay the Stock Obligation, Stock with a fair market value equal to the dividends so used must be allocated to such Participant’s Account in lieu of the dividends.

(B) Participant Exercises Discretion over Dividend. In addition, in the sole discretion of the Employer, the Employer may grant Participants the right to elect: (I) to have cash dividends paid on shares of Stock credited to such Participants’ Stock Fund Accounts distributed to the Participant, or (II) to leave the cash dividends allocated to the Participant’s Account in the Plan, to be credited to the Stock Fund Account and invested in shares of Stock. Dividends on which such election may be made will be fully vested in the Participant (even if not otherwise vested, absent the ability to make such election). Accordingly, the Employer may choose to offer this election only to Participants who are fully vested in their Account. In the event the Employer elects to give Participants the right to determine the treatment of such dividends, the Participant’s election shall be made by filing with the Committee the appropriate written direction as provided by the Committee at such time and in accordance with such procedures and limitations which the Committee may from time to time establish; provided, however, that the procedures established by the Committee shall provide a reasonable opportunity to change the election at least annually, may establish a default election if a Participant fails to make an affirmative election within the time established for making elections, may provide that the election is applicable for the Plan Year and cannot be revoked with respect to such Plan Year, shall otherwise be implemented in a manner such that the dividends paid or reinvested will constitute “applicable dividends” which may be deducted under Code Section 404(k), and are in accordance with applicable guidance issued or to be issued by the Secretary of the Treasury. If the Employer elects to give Participants the right to exercise the discretion in this Section 7.2-2(i)(B), the ability to make such election shall be available to the Participant with respect to dividends paid for the entire Plan Year.

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(ii) On Stock in the Unallocated Stock Fund. Dividends received on shares of Stock held in the Unallocated Stock Fund shall be applied to the repayment of principal and interest then due on the Stock Obligation used to acquire such shares. If the amount of dividends exceeds the amount needed to repay such principal and interest (including any prepayments of principal and interest deemed advisable by the Employer), then in the sole discretion of the Committee, the excess shall: (A) be allocated to Active Participants on a non-discriminatory basis, consistent with Section 7.2-2(i) above, and in the discretion of the Committee, treated as a dividend described in such Section, or (B) be deemed to be general earnings of the Trust Fund and used for paying appropriate Plan or Trust related expenditures for the Plan Year. Notwithstanding the foregoing, dividends paid on a share of Stock may not be used to make payments on a particular Stock Obligation unless the share was acquired with the proceeds of such loan or a refinancing of such loan.

Section 8. Adjustments to Accounts.

8.1 ESOP Allocations. Amounts available for allocation for a particular Plan Year will be divided into two categories. The first category relates to shares of Stock released from the Unallocated Stock Fund attributable to using cash dividends to make Stock Obligation payments. The second category relates to contributions made by the Employer, shares of Stock released from the Unallocated Stock Fund on the basis of Employer contributions (or on the basis of the complete repayment of the Stock Obligation through the sale or other disposition of Stock in the Unallocated Stock Fund) and amounts forfeited from Stock Fund Accounts pursuant to Section 9.5.

8.1-1. Shares of Stock attributable to the first category will be allocated to the Stock Fund Accounts of eligible Participants as follows:

(i) first, if dividends paid on shares of Stock held in Participants’ Stock Fund Accounts are used to make payments on a Stock Obligation, there shall be allocated to each such account a number of shares of Stock released from the Unallocated Stock Fund with a fair market value (determined as of the Valuation Date coincident with or immediately preceding the loan payment date) that at least equals the amount of dividends so used;

(ii) second, if necessary, any remaining shares of Stock shall be applied to reinstate amounts forfeited from Stock Fund Accounts of former employees who are entitled to a reinstatement under Section 9.5; and

(iii) finally, any remaining shares of Stock shall be allocated as a general investment gain in proportion to the number of shares held in the Active Participants’ Stock Fund Accounts as of the last Valuation Date of the Plan Year for which they are allocated in the same manner as described in Section 7.2-2(i).

8.1-2. Shares of Stock or cash attributable to the second category (i.e., Employer contributions, Stock released from the Unallocated Stock Fund on the basis of Employer contributions, and amounts forfeited) will be allocated to the Stock Fund Accounts or Investment Fund Accounts, as the case may be, pro rata, in proportion to the Plan Compensation of each Active Participant that was earned by such Participant during the period of the Plan Year in which such person participated in the Plan compared to total Plan Compensation for all Active Participants.

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8.1-3. Shares of Stock or cash attributable to contributions made under Section 4.1-2 shall be allocated specifically to the Participants on whose behalf such contributions were made.

8.2 Charges to Accounts. When a Valuation Date occurs, any distributions made to or on behalf of any Participant or Beneficiary since the last preceding Valuation Date shall be charged to the proper Accounts maintained for that Participant or Beneficiary.

8.3 Stock Fund Account. Subject to the provisions of Sections 5 and 8.1, as of the last day of each Plan Year, the Trustee shall credit to each Participant’s Stock Fund Account: (i) the Participant’s allocable share of Stock purchased by the Trustee or contributed by the Employer to the Trust Fund for that year; (ii) the Participant’s allocable share of the Stock that is released from the Unallocated Stock Fund for that year; (iii) the Participant’s allocable share of any forfeitures of Stock arising under the Plan during that year; and (iv) any stock dividends declared and paid during that year on Stock credited to the Participant’s Stock Fund Account.

If, in any Plan Year during which an outstanding Stock Obligation exists, the Employer directs the Trustee to sell or otherwise dispose of a number of shares of Stock in the Unallocated Stock Fund sufficient to repay, in its entirety, the Stock Obligations, and following such repayment, there remains Stock or other assets in the Unallocated Stock Fund, such Stock or other assets shall be allocated as of the last day of the Plan Year in which the repayment occurred as earnings of the Plan to Active Participants, in proportion to the number of shares held in Active Participants’ Stock Fund Accounts.

8.4 Investment Fund Account. Subject to the provisions of Sections 5 and 8.1 as of the last day of each Plan Year, the Trustee shall credit to each Participant’s Investment Fund Account: (i) the Participant’s allocable share of any contribution for that year made by the Employer in cash or in property other than Stock that is not used by the Trustee to purchase Employer Stock or to make payments due under a Stock Obligation; (ii) the Participant’s allocable share of any forfeitures from the Investment Fund Accounts of other Participants arising under the Plan during that year; (iii) any cash dividends paid during that year on Stock credited to the Participant’s Stock Fund Account, other than dividends which are paid directly to the Participant and other than dividends which are used to repay Stock Obligation; and (iv) the share of the net income or loss of the Trust Fund properly allocable to that Participant’s Investment Fund Account, as provided in Section 8.5.

8.5 Adjustment to Value of Trust Fund. As of the last day of each Plan Year, the Trustee shall determine: (i) the net worth of that portion of the Trust Fund which consists of properties other than Stock (the “Investment Fund”); and (ii) the increase or decrease in the net worth of the Investment Fund since the last day of the preceding Plan Year. The net worth of the Investment Fund shall be the fair market value of all properties held by the Trustee under the Trust Agreement other than Stock, net of liabilities other than liabilities to Participants and their beneficiaries. The Trustee shall allocate to the Investment Fund Account of each Participant that percentage of the increase or decrease in the net worth of the Investment Fund equal to the ratio which the balances credited to the Participant’s Investment Fund Account bear to the total amount credited to all Participants’ Investment Fund Accounts. This allocation shall be made after application of Section 7.2, but before application of Sections 5.1, 8.1, and 8.4.

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8.6 Participant Statements. Each Plan Year, the Trustee will provide each Participant with a statement of his or her Account balances, and the vested percentage thereof, as of the last day of the Plan Year.

Section 9. Vesting of Participants’ Interests.

9.1 Vesting in Accounts. A Participant’s vested interest in his Account shall be based on his Vesting Years in accordance with the following table, subject to this Section 9:

Vesting Years	Percentage of Interest Vested
Fewer than 1		0	%
1 but fewer than 2		33	%
2 but fewer than 3		66	%
3 or more		100	%

9.2 Computation of Vesting Years. For purposes of this Plan, a “Vesting Year” means generally a Plan Year in which an Eligible Employee has performed at least 1,000 Hours of Service, beginning with the first Plan Year in which the Eligible Employee has completed an Hour of Service with the Employer, and including Service with other Employers as provided in the definition of “Service.” Notwithstanding the above, an Eligible Employee who was employed with the Employer prior to the Effective Date shall receive credit for vesting purposes for each calendar year, up to            years of continuous employment with the Employer in which such Eligible Employee completed 1,000 Hours of Service (such years shall also be referred to as “Vesting Years”). However, a Participant’s Vesting Years shall be computed subject to the following conditions and qualifications:

9.2-1 A Participant’s Vesting Years shall not include any Service prior to the date on which an Employee attains age 18.

9.2-2 To the extent applicable, a Participant’s vested interest in his Account accumulated before five (5) consecutive one year Breaks in Service shall be determined without regard to any Service after such five consecutive Breaks in Service. Further, if a Participant has five (5) consecutive one year Breaks in Service before his interest in his Account has become vested to some extent, pre-Break in Service years of Service shall not be required to be taken into account for purposes of determining his post-Break in Service vested percentage.

9.2-3 To the extent applicable, in the case of a Participant who has five (5) or more consecutive one year Breaks in Service, the Participant’s pre-Break in Service will count in vesting of the Employer-derived post-Break in Service accrued benefit only if either:

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(i) such Participant has any nonforfeitable interest in the accrued benefit attributable to Employer contributions at the time of severance from employment; or

(ii) upon returning to Service the number of consecutive one year Breaks in Service is less than the number of years of Service.

9.2-4 Notwithstanding any provision of the Plan to the contrary, calculation of service for determining Vesting Years with respect to Qualified Military Service will be provided in accordance with Section 414(u) of the Code.

9.2-5 To the extent applicable, if any amendment changes the vesting schedule, including an automatic change to or from a top-heavy vesting schedule, any Participant with three (3) or more Vesting Years may, by filing a written request with the Employer, elect to have his vested percentage computed under the vesting schedule in effect prior to the amendment. The election period must begin not later than the later of sixty (60) days after the amendment is adopted, the amendment becomes effective, or the Participant is issued written notice of the amendment by the Employer or the Committee.

9.3 Full Vesting Upon Certain Events.

9.3-1 Notwithstanding Section 9.1, a Participant’s interest in his Account shall fully vest on the Participant’s Normal Retirement Date. The Participant’s interest in his or her Account shall also fully vest in the event that his Service is terminated by Disability or by death. Participants who die while performing Qualified Military Service shall be deemed to be fully vested, in accordance with the Heroes Earnings Assistance and Relief Tax Act of 2008 (“HEART”).

9.3-2 The Participant’s interest in his Account shall also fully vest in the event of a “Change in Control.” For these purposes, “Change in Control” shall mean: (i) a change in control of the Company, of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”) or any successor thereto, whether or not any security of the Company is registered under Exchange Act; provided that, without limitation, such a Change in Control shall be deemed to have occurred if any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, or securities of the Company representing 25% or more of the combined voting power of the Company then outstanding securities; (ii) during any period of two consecutive years, individuals (the “Continuing Directors”) who at the beginning of such period constitute the Board of Directors (the “Existing Board”) of the Company cease for any reason to constitute at least two-thirds thereof, provided that any individual whose election or nomination for election as a member of the Existing Board was approved by a vote of at least two-thirds of the Continuing Directors then in office shall be considered a Continuing Director unless his or her initial assumption of office occurs as a result of an actual or threatened contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies by or on behalf of someone other than a Continuing Director; or (iii) the acquisition of ownership, holding or power to vote more than 25% of the voting stock of the Bank by any person other than the Company.

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9.3-3 Upon a Change in Control described in Section 9.3-2, the Plan shall be terminated and the Plan Administrator shall direct the Trustee to sell a sufficient amount of Stock from the Unallocated Stock Fund to repay any outstanding Stock Obligation in full. The proceeds of such sale shall be used to repay such Stock Obligation. After repayment of the Stock Obligation, all remaining shares in the Unallocated Stock Fund (or the proceeds thereof, if applicable) shall be deemed to be earnings and shall be allocated in accordance with the requirements of Section 8.3.

9.4 Full Vesting Upon Plan Termination. Notwithstanding Section 9.1, a Participant’s interest in his Account shall fully vest upon termination of this Plan or upon the permanent and complete discontinuance of contributions by his Employer. In the event of a partial termination, the interest of each affected Participant shall fully vest with respect to that part of the Plan which is terminated. A partial termination of the Plan shall be determined by the Internal Revenue Service Commissioner based on the facts and circumstances of the particular case in accordance with Code Section 411(d)(3) and the Treasury Regulations issued thereunder.

9.5 Forfeiture, Repayment, and Restoral. If a Participant’s Service terminates before his interest in his Account is fully vested, that portion which has not vested shall be forfeited after a one-year Break in Service. If a Participant’s Service terminates prior to having any portion of his Account become vested, such Participant shall be deemed to have received a distribution of his vested interest immediately upon his termination of Service.

If a Participant who has suffered a forfeiture of the nonvested portion of his Account returns to Service before he has five (5) consecutive one-year Breaks in Service, the nonvested portion shall be restored, provided that, if the Participant had received a distribution of his vested Account balance, the entire amount distributed shall be repaid prior to such restoral. The Participant may repay such amount at any time within five years after he has returned to Service. The amount repaid shall be credited to his Account at the time it is repaid; an additional amount equal to that portion of his Account which was previously forfeited shall be restored to his Account at the same time from other Employees’ forfeitures and, if such forfeitures are insufficient, then from amounts allocated in accordance with Section 8.1-1(ii), and if insufficient, then from a special contribution by his Employer for that year. A Participant who was deemed to have received a distribution of his vested interest in the Plan shall have his Account restored as of the first day on which he performs an Hour of Service after his return.

In addition, if a Participant did not receive a distribution of his vested Account balance but his non-vested Account balance was forfeited after a one-year Break in Service, such nonvested Account balance shall be restored if the Plan terminates before the Participant has a five-year Break in Service. If the Participant did not receive a distribution of his vested Account balance, any forfeiture restored shall include earnings that would have been credited to the Account but for the forfeiture.

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9.6 Accounting for Forfeitures. If a portion of a Participant’s Account is forfeited, Stock allocated to said Participant’s Account shall be forfeited only after other assets are forfeited. If interests in more than one class of Stock have been allocated to a Participant’s Account, the Participant must be treated as forfeiting the same proportion of each class of Stock. A forfeiture shall be charged to the Participant’s Account as of the first day of the first Valuation Period in which the forfeiture becomes certain pursuant to Section 9.5. Except as otherwise provided in that Section, a forfeiture shall be added to the contributions of the terminated Participant’s Employer which are to be credited to other Participants pursuant to Section 4.1 as of the last day of the Plan Year in which the forfeiture becomes certain.

9.7 Vesting and Nonforfeitability. A Participant’s interest in his Account which has become vested shall not be forfeited for any reason.

Section 10. Payment of Benefits.

10.1 Benefits for Participants. For a Participant whose Service ends for any reason, distribution will be made to or for the benefit of the Participant or, in the case of the Participant’s death, his Beneficiary, by payment in a lump sum or installments, in accordance with Section 10.2. Prior to any such distribution, any Participant entitled to a distribution will receive a form upon which the Participant can elect the form and manner of such distribution (e.g., whether to receive the distribution directly or transfer such distribution to an individual retirement account or other tax-qualified plan), a special tax notice regarding the consequences of such distribution, and, if applicable, that the Participant has the right not to consent to a distribution at such time.

If a Participant so desires, he may direct how his benefits are to be paid to his Beneficiary. Notice to the Participant with regard to having the right to elect the manner in which his vested Account balance will be distributed to him may be given up to 180 days before the first day of the first period for which an amount is payable. If a deceased Participant did not file a direction with the Committee, the Participant’s benefits shall be distributed to his Beneficiary in a lump sum. Notwithstanding any provision to the contrary, if the value of a Participant’s vested Account balance at the time of any distribution does not exceed $1,000, then such Participant’s vested Account shall be distributed, without regard to whether the Participant consents, in a lump sum within 60 days after the end of the Plan Year in which employment terminates. If the value of a Participant’s vested Account balance is in excess of $5,000, then his benefits shall not be paid prior to his Normal Retirement Date unless he elects an early payment date in a written election filed with the Committee. A Participant may modify such an election at any time, provided any new benefit payment date is at least 30 days after a modified election is delivered to the Committee. Failure of a Participant to consent to a distribution prior his Normal Retirement Date shall be deemed to be an election to defer commencement of payment of any benefit under this section. Notwithstanding the foregoing, unless a Participant elects to receive a distribution, the Plan administrator shall transfer accounts of $1,000 or more, but not exceeding $5,000, in a direct rollover to an individual retirement account designated by the Plan Administrator in accordance with Code Section 401(a)(31)(B) and the Treasury Regulations thereunder. All distributions of $5,000 or less that are made pursuant to this Section without the Participant’s consent shall be made in cash.

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10.2 Time for Distribution.

10.2-1 A Participant’s Account will be distributed following his termination of Service, but only at the time and in the manner determined by the Committee. The Committee shall establish a nondiscriminatory written distribution policy which satisfies the requirements of this Section 10, and such policy may be modified by the Committee from time to time in a nondiscriminatory manner.

The following alternative modes of distribution may be selected by the Committee (after considering the liquid assets of the Company and the Trust):

(i) Distribution of a Participant’s Account in a single lump sum; or

(ii) Distribution of a Participant’s Account in substantially equal, annual installments over a period not exceeding five years (provided that the period over which installments may be distributed may be extended an additional year (up to an additional five years) for each $1,050,000 or fraction thereof by which his Account exceeds $1,050,000 (as adjusted after 2014 for increases in the cost of living pursuant to Section 409(o)(2) of the Code)); or

(iii) Any combination of the foregoing.

10.2-2 If the Participant and, if applicable, with the consent of the Participant’s spouse, elects the distribution of the Participant’s Account balance in the Plan, distribution shall commence no later than one year after the close of the Plan Year in which the Participant severs employment by reason of attainment of Normal Retirement Age under the Plan, Disability, or death, or which is the sixth Plan Year following the Plan Year in which the Participant otherwise severs employment, except that this clause shall not apply if the Participant is reemployed by the Employer before distribution is required to begin. Furthermore, the preceding sentence shall not apply to the extent that a Participant’s Account consist of Stock that was acquired pursuant to a Stock Obligation, if the Committee elects to defer distribution of this portion of the Participants’ Accounts that is attributable to such Stock until the Plan Year following the Plan Year in which the Stock Obligation has been fully repaid.

10.2-3 Unless the Participant elects otherwise, the distribution of the balance of a Participant’s Account shall commence not later than the 60th day after the latest of the close of the Plan Year in which—

(i) the Participant attains the age of 65;

(ii) occurs the tenth anniversary of the year in which the Participant commenced participation in the Plan; or

(iii) the Participant terminates his Service with the Employer.

10.2-4 Minimum Distribution Requirements.

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(i) Time and Manner of Distribution:

(A) Required Beginning Date. The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s Required Beginning Date.

(B) Death of Participant before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows:

(I) if the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, then, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 1/2, if later.

(II) if the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, then, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

(III) if there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(IV) if the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 10.2-4(i)(B), other than Section 10.2-4 (i)(B)(I), will apply if the surviving spouse were the Participant.

For purposes of this Section 10.2-4 (i)(B) and Section 10.2-4 (iii), unless Section 10.2-4 (i)(B)(IV) applies, distributions are considered to begin on the Participant’s Required Beginning Date. If Section 10.2-4 (i)(B)(IV) applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Section 10.2-4 (i)(B)(I).

(C) Forms of Distribution. Unless the Participant’s interest is distributed in a lump sum on or before the Required Beginning Date, as of the first distribution calendar year distributions will be made in accordance with Sections 10.2-4 (ii) and Section 10.2-4 (iii).

(ii) Required Minimum Distributions During Participant’s Lifetime.

(A) Amount of Required Minimum Distribution for Each Distribution Calendar Year. During the Participant’s lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of:

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(I) the quotient obtained by dividing the Participant’s Account Balance by the distribution period in the Uniform Lifetime Table (as set forth in Section 1.401(a)(9)-9 of the Treasury Regulations), using the Participant’s age as of the Participant’s birthday in the Distribution Calendar Year; or

(II) if the Participant’s sole Designated Beneficiary for the Distribution Calendar Year is the Participant’s spouse, the quotient obtained by dividing the Participant’s Account Balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s and spouse’s ages as of the Participant’s and spouse’s birthdays in the Distribution Calendar Year.

(B) Lifetime Required Minimum Distributions Continue through Year of Participant’s Death. Required minimum distributions will be determined under this Section 10.2-4 beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant’s date of death.

(iii) Required Minimum Distributions After Participant’s Death.

(A) Death On or After Date Distributions Begin.

(I) Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the longer of the remaining Life Expectancy of the Participant or the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as follows:

The Participant’s remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar Year after the year of the Participant’s death using the surviving spouse’s age as of the spouse’s birthday in that year. For Distribution Calendar Years after the year of the surviving spouse’s death, the remaining Life Expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year.

If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using the age of the Beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent year.

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(II) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the Participant’s remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(B) Death before Date Distributions Begin.

(I) Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as provided in Section 10.2-4 (iii)(A).

(II) No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(III) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 10.2-4(i)(B)(I), this Section 10.2-4 (iii)(B) will apply as if the surviving spouse were the Participant.

(v) Definitions.

(A) “Designated Beneficiary.” The individual who is designated as the Beneficiary under the Plan and is the Designated Beneficiary under Section 401(a)(9) of the Code and Section 1.401(a)(9)-4, Q&A-1 of the Treasury Regulations.

(B) “Distribution Calendar Year.” A calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year which contains the Participant’s required beginning date. For distributions beginning after the Participant’s death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin

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under Section 10.2-4(i)(B). The required minimum distribution for the Participant’s first Distribution Calendar Year will be made on or before the Participant’s required beginning date. The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Participant’s required beginning date occurs, will be made on or before December 31 of that Distribution Calendar Year.

(C) “Life Expectancy.” Life Expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury Regulations.

(D) “Participant’s Account Balance.” The Account balance as of the last Valuation Date in the calendar year immediately preceding the Distribution Calendar Year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the Account balance as of dates in the valuation calendar year after the Valuation Date and decreased by distributions made in the valuation calendar year after the Valuation Date. The Account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the Distribution Calendar Year if distributed or transferred in the valuation calendar year.

(E) “Required Beginning Date.” The Required Beginning Date shall be, with respect to a 5-percent owner (as defined in Code Section 416), not later than April 1 of the calendar year next following the calendar year in which the Participant attains age 70 1/2, and (2) with respect to all other Participants, the Required Beginning Date shall be not later than April 1 of the calendar year following the calendar year in which the Participant attains age 70 1/2, or, if later, the year in which the Participant retires.

10.3 Marital Status. The Committee, the Plan, the Trustee, and the Employers shall be fully protected and discharged from any liability to the extent of any benefit payments made as a result of the Committee’s good faith and reasonable reliance upon information obtained from a Participant and his Employer as to his marital status.

10.4 Delay in Benefit Determination. If the Committee is unable to determine the benefits payable to a Participant or Beneficiary on or before the latest date prescribed for payment pursuant to Section 10.1 or 10.2, the benefits shall in any event be paid within 60 days after they can first be determined, with whatever makeup payments may be appropriate in view of the delay.

10.5 Accounting for Benefit Payments. Any benefit payment shall be charged to the Participant’s Account as of the first day of the Valuation Period in which the payment is made.

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10.6 Options to Receive Stock. Unless ownership of virtually all Stock is restricted to active Employees and qualified retirement plans for the benefit of Employees pursuant to the certificates of incorporation or by-laws of the Employers issuing Stock, a terminated Participant or the Beneficiary of a deceased Participant may instruct the Committee to distribute the Participant’s entire vested interest in his Account in the form of Stock. In that event, the Committee shall apply the Participant’s vested interest in the Investment Fund to purchase sufficient Stock from the Stock Fund or from any owner of Stock to make the required distribution. In all other cases, other than as specifically set forth in Section 10.1, the Participant’s vested interest in the Stock Fund shall be distributed in shares of Stock, and his vested interest in the Investment Fund shall be distributed in cash. If Stock acquired with the proceeds of a Stock Obligation available for distribution consists of more than one class of Stock, the Participant (or Beneficiary, if applicable) must receive substantially the same proportion of each such class.

Any Participant who receives Stock pursuant to Section 10.1, and any person who has received Stock from the Plan or from such a Participant by reason of the Participant’s death or incompetence, by reason of divorce or separation from the Participant, or by reason of a rollover contribution described in Section 402(c)(5) of the Code, shall have the right to require the Employer which issued the Stock to purchase the Stock for its current fair market value (hereinafter referred to as the “put right”). The put right shall be exercisable by written notice to the Committee during the first 60 days after the Stock is distributed by the Plan, and, if not exercised in that period, during the first 60 days in the following Plan Year after the Committee has communicated to the Participant its determination as to the Stock’s current fair market value. However, the put right shall not apply to the extent that the Stock, at the time the put right would otherwise be exercisable, “readily tradable on an established securities market” (as defined under Notice 2011-19). Similarly, the put option shall not apply with respect to the portion of a Participant’s Account which the Employee elected to have reinvested under Code Section 401(a)(28)(B). If the put right is exercised, the Trustee may, if so directed by the Committee in its sole discretion, assume the Employer’s rights and obligations with respect to purchasing the Stock. Notwithstanding anything herein to the contrary, in the case of a plan established by a bank (as defined in Code Section 581), the put option shall not apply if prohibited by a federal or state law and Participants are entitled to elect their benefits be distributed in cash.

The Employer or the Trustee, as the case may be, may elect to pay for the Stock in equal periodic installments, not less frequently than annually, over a period beginning not later than 30 days after the exercise of the put right and not exceeding five years, with adequate security and interest at a reasonable rate on the unpaid balance, all such terms to be set forth in a promissory note delivered to the seller with normal terms as to acceleration upon any uncured default.

Nothing contained herein shall be deemed to obligate any Employer to register any Stock under any federal or state securities law or to create or maintain a public market to facilitate the transfer or disposition of any Stock. The put right described herein may only be exercised by a person described in the second preceding paragraph, and may not be transferred with any Stock to any other person. As to all Stock purchased by the Plan in exchange for any Stock Obligation, the put right shall be nonterminable. The put right for Stock acquired through a Stock Obligation shall continue with respect to such Stock after the Stock Obligation is repaid or the Plan ceases to be an employee stock ownership plan.

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10.7 Restrictions on Disposition of Stock. Except in the case of Stock which is “readily tradable on an established securities market” (as defined under Notice 2011-19), a Participant who receives Stock pursuant to Section 10.1, and any person who has received Stock from the Plan or from such a Participant by reason of the Participant’s death or incompetence, by reason of divorce or separation from the Participant, or by reason of a rollover contribution described in Section 402(c)(5) of the Code, shall, prior to any sale or other transfer of the Stock to any other person, first offer the Stock to the issuing Employer and to the Plan at the greater of (i) its current fair market value, or (ii) the purchase price offered in good faith by an independent third party purchaser. This restriction shall apply to any transfer, whether voluntary, involuntary, or by operation of law, and whether for consideration or gratuitous. Either the Employer or the Trustee may accept the offer within 14 days after it is delivered. Any Stock distributed by the Plan shall bear a conspicuous legend describing the right of first refusal under this Section 10.7, as well as any other restrictions upon the transfer of the Stock imposed by federal and state securities laws and regulations. The Company may require that a Participant entitled to a distribution of Stock execute an appropriate stock transfer agreement (evidencing the right of first refusal) prior to receiving a certificate for Stock.

10.8 Continuing Loan Provisions; Creations of Protections and Rights. Except as otherwise provided in Sections 10.6 and 10.7 and this Section, no shares of Employer Stock held or distributed by the Trustee may be subject to a put, call or other option, or buy-sell arrangement. The provisions of this Section shall continue to be applicable to such Stock even if the Plan ceases to be an employee stock ownership plan under Section 4975(e)(7) of the Code.

10.9 Direct Rollover of Eligible Distribution. A Participant or distributee may elect, at the time and in the manner prescribed by the Trustee or the Committee, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the Participant or distributee in a direct rollover.

10.9-1 An “eligible rollover” is any distribution that does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the Participant and the Participant’s Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code Section 401(a)(9); any hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the Code; and the portion of any distribution that is not included in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). A portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code, or to a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that agrees to separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

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10.9-2 An “eligible retirement plan” is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), a deemed individual retirement account described in Code Section 408(q), an annuity plan described in Code Section 403(a), a Roth individual retirement account in accordance with Code Section 408A(e), or a qualified trust described in Code Section 401(a), that accepts the distributee’s eligible rollover distribution. An eligible retirement plan shall also include an annuity contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the Code which is maintained by a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan.

10.9-3 A “direct rollover” is a payment by the Plan to the eligible retirement plan specified by the distributee.

10.9-4 The term “distributee” shall refer to a deceased Participant’s Spouse or a Participant’s former Spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), and shall include non-spouse Beneficiaries pursuant to Code Section 402(c)(11). In the case of a non-spouse beneficiary who has been designated by the Participant or who has otherwise been identified as his beneficiary, a direct rollover may be made only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code (“IRA”) that is established on behalf of the designated beneficiary and that will be treated as an inherited IRA pursuant to the provisions of Section 402(c)(11) of the Code.

10.9-5 The Administrator shall provide Participants or other distributes of eligible rollover distributions with a written notice designed to comply with the requirements of Code Section 402(f). Such notice shall be provided within a reasonable period of time before making an eligible rollover distribution. Such notice may be provided up to 180 days before the first day of the first period for which an amount is payable.

10.10 Waiver of 30-Day Period After Notice of Distribution. If a distribution is one to which Sections 401(a)(11) and 417 of the Code do not apply, such distribution may commence less than 30 days after the notice required under Treasury Regulations Section 1.411(a)-11(c) is given, provided that:

(i) the Trustee or Committee, as applicable, clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular option); and

(ii) the Participant, after receiving the notice, affirmatively elects a distribution.

Section 11. Rules Governing Benefit Claims and Review of Appeals.

11.1 Claim for Benefits. Any Participant or Beneficiary who qualifies for the payment of benefits shall file a claim for his benefits with the Committee on a form provided by the Committee. The claim, including any election of an alternative benefit form, shall be filed at least 30 days before the date on which the benefits are to begin. If a Participant or Beneficiary fails to file a claim by the day before the date on which benefits become payable, he shall be presumed to have filed a claim for payment for the Participant’s benefits in the standard form prescribed by Sections 10.1 or 10.2.

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11.2 Notification by Committee. Within 90 days after receiving a claim for benefits (or within 180 days, if special circumstances require an extension of time and written notice of the extension is given to the Participant or Beneficiary within 90 days after receiving the claim for benefits), the Committee shall notify the Participant or Beneficiary whether the claim has been approved or denied. If the Committee denies a claim in any respect, the Committee shall set forth in a written notice to the Participant or Beneficiary:

(i) each specific reason for the denial;

(ii) specific references to the pertinent Plan provisions on which the denial is based;

(iii) a description of any additional material or information which could be submitted by the Participant or Beneficiary to support his claim, with an explanation of the relevance of such information; and

(iv) an explanation of the claims review procedures set forth in Section 11.3.

11.3 Claims Review Procedure. Within 60 days after a Participant or Beneficiary receives notice from the Committee that his claim for benefits has been denied in any respect, he may file with the Committee a written notice of appeal setting forth his reasons for disputing the Committee’s determination. In connection with his appeal the Participant or Beneficiary or his representative may inspect or purchase copies of pertinent documents and records to the extent not inconsistent with other Participants’ and Beneficiaries’ rights of privacy. Within 60 days after receiving a notice of appeal from a prior determination (or within 120 days, if special circumstances require an extension of time and written notice of the extension is given to the Participant or Beneficiary and his representative within 60 days after receiving the notice of appeal), the Committee shall furnish to the Participant or Beneficiary and his representative, if any, a written statement of the Committee’s final decision with respect to his claim, including the reasons for such decision and the particular Plan provisions upon which it is based.

Section 12. The Committee and its Functions.

12.1 Authority of Committee. The Committee shall be the “plan administrator” within the meaning of ERISA and shall have exclusive responsibility and authority to control and manage the operation and administration of the Plan, including the interpretation and application of its provisions, except to the extent such responsibility and authority are otherwise specifically (i) allocated to the Company, the Bank, the Employers, or the Trustee under the Plan and Trust Agreement; (ii) delegated in writing to other persons by the Company, the Bank, the Employers, the Committee, or the Trustee; or (iii) allocated to other parties by operation of law. The Committee shall have exclusive responsibility regarding decisions concerning the payment of benefits under the Plan. The Committee shall have no investment responsibility with respect to the Investment Fund except to the extent, if any, specifically provided in the Trust Agreement. In the discharge of its duties, the Committee may employ accountants, actuaries, legal counsel, and other agents (who also may be employed by an Employer or the Trustee in the same or some other capacity) and may pay their reasonable expenses and compensation.

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12.2 Identity of Committee. The Committee shall consist of two or more individuals selected by the Bank. Any individual, including a director, trustee, shareholder, officer, or Employee of an Employer, shall be eligible to serve as a member of the Committee. The Bank shall have the power to remove any individual serving on the Committee at any time without cause upon 10 days written notice, and any individual may resign from the Committee at any time upon 10 days written notice to the Bank. The Bank shall notify the Trustee of any change in membership of the Committee.

12.3 Duties of Committee. The Committee shall keep whatever records may be necessary to implement the Plan and shall furnish whatever reports may be required from time to time by the Bank. The Committee shall furnish to the Trustee whatever information may be necessary to properly administer the Trust. The Committee shall see to the filing with the appropriate government agencies of all reports and returns required of the Plan under ERISA and other laws.

Further, the Committee shall have exclusive responsibility and authority with respect to the Plan’s holdings of Stock and shall direct the Trustee in all respects regarding the purchase, retention, sale, exchange, and pledge of Stock and the creation and satisfaction of Stock Obligations. The Committee shall at all times act consistently with the Company’s long-term intention that the Plan, as an employee stock ownership plan, be invested primarily in Stock. Subject to the direction of the board as to the application of Employer contributions to Stock Obligations, and subject to the provisions of Sections 6.4 and 10.6 as to Participants’ rights under certain circumstances to have their Accounts invested in Stock or in assets other than Stock, the Committee shall determine in its sole discretion the extent to which assets of the Trust shall be used to repay Stock Obligations, to purchase Stock, or to invest in other assets to be selected by the Trustee or an investment manager. No provision of the Plan relating to the allocation or vesting of any interests in the Stock Fund or the Investment Fund shall restrict the Committee from changing any holdings of the Trust, whether the changes involve an increase or a decrease in the Stock or other assets credited to Participants’ Accounts. In determining the proper extent of the Trust’s investment in Stock, the Committee shall be authorized to employ investment counsel, legal counsel, appraisers, and other agents and to pay their reasonable expenses and compensation.

12.4 Valuation of Stock. If the valuation of any Stock is not established by reported trading on a generally recognized public market, the valuation of such Stock shall be determined by an independent appraiser. For purposes of the preceding sentence, the term “independent appraiser” means any appraiser meeting requirements similar to the requirements of the regulations prescribed under Section 170(a)(1) of the Code.

12.5 Compliance with ERISA. The Committee shall perform all acts necessary to comply with ERISA. Each individual member or employee of the Committee shall discharge his duties in good faith and in accordance with the applicable requirements of ERISA.

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12.6 Action by Committee. All actions of the Committee shall be governed by the affirmative vote of a number of members which is a majority of the total number of members currently appointed, including vacancies.

12.7 Execution of Documents. Any instrument executed by the Committee shall be signed by any member of the Committee.

12.8 Adoption of Rules. The Committee shall adopt such rules and regulations of uniform applicability as it deems necessary or appropriate for the proper administration and interpretation of the Plan.

12.9 Responsibilities to Participants. The Committee shall determine which Employees qualify to enter the Plan. The Committee shall furnish to each Eligible Employee whatever summary plan descriptions, summary annual reports, and other notices and information may be required under ERISA. The Committee also shall determine when a Participant or his Beneficiary qualifies for the payment of benefits under the Plan. The Committee shall furnish to each such Participant or Beneficiary whatever information is required under ERISA (or is otherwise appropriate) to enable the Participant or Beneficiary to make whatever elections may be available pursuant to Sections 6 and 10, and the Committee shall provide for the payment of benefits in the proper form and amount from the assets of the Trust Fund. The Committee may decide in its sole discretion to permit modifications of elections and to defer or accelerate benefits to the extent consistent with applicable law and the best interests of the individuals concerned.

12.10 Alternative Payees in Event of Incapacity. If the Committee finds at any time that an individual qualifying for benefits under this Plan is a minor or is incompetent, the Committee may direct the benefits to be paid, in the case of a minor, to his parents, his legal guardian, or a custodian for him under the Uniform Gifts to Minors Act, or, in the case of an incompetent, to his spouse, or his legal guardian, the payments to be used for the individual’s benefit. The Committee and the Trustee shall not be obligated to inquire as to the actual use of the funds by the person receiving them under this Section 12.10, and any such payment shall completely discharge the obligations of the Plan, the Trustee, the Committee, and the Employers to the extent of the payment.

12.11 Indemnification by Employers. Except as separately agreed in writing, the Committee, and any member or employee of the Committee, shall be indemnified and held harmless by the Employer, jointly and severally, to the fullest extent permitted by ERISA, and subject to and conditioned upon compliance with 12 C.F.R. Section 545.121, to the extent applicable, against any and all costs, damages, expenses, and liabilities reasonably incurred by or imposed upon it or him in connection with any claim made against it or him or in which it or he may be involved by reason of its or his being, or having been, the Committee, or a member or employee of the Committee, to the extent such amounts are not paid by insurance.

12.12 Nonparticipation by Interested Member. Any member of the Committee who also is a Participant in the Plan shall take no part in any determination specifically relating to his own participation or benefits, unless his abstention would leave the Committee incapable of acting on the matter.

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Section 13. Adoption, Amendment, or Termination of the Plan.

13.1 Adoption of Plan by Other Employers. With the consent of the Bank, any entity may become a participating Employer under the Plan by (i) taking such action as shall be necessary to adopt the Plan; (ii) becoming a party to the Trust Agreement establishing the Trust Fund; and (iii) executing and delivering such instruments and taking such other action as may be necessary or desirable to put the Plan into effect with respect to the entity’s Employees.

13.2 Plan Adoption Subject to Qualification. Notwithstanding any other provision of the Plan, the adoption of the Plan and the execution of the Trust Agreement are conditioned upon their being determined initially by the Internal Revenue Service to meet the qualification requirements of Section 401(a) of the Code, so that the Employers may deduct currently for federal income tax purposes their contributions to the Trust and so that the Participants may exclude the contributions from their gross income and recognize income only when they receive benefits. In the event that this Plan is held by the Internal Revenue Service not to qualify initially under Section 401(a), the Plan may be amended retroactively to the earliest date permitted by U.S. Treasury Regulations in order to secure qualification under Section 401(a). If this Plan is held by the Internal Revenue Service not to qualify initially under Section 401(a) either as originally adopted or as amended, each Employer’s contributions to the Trust under this Plan (including any earnings thereon) shall be returned to it and this Plan shall be terminated. In the event that this Plan is amended after its initial qualification and the Plan as amended is held by the Internal Revenue Service not to qualify under Section 401(a), the amendment may be modified retroactively to the earliest date permitted by U.S. Treasury Regulations in order to secure approval of the amendment under Section 401(a).

13.3 Right to Amend or Terminate. The Company intends to continue this Plan as a permanent program. However, each participating Employer separately reserves the right to suspend, supersede, or terminate the Plan at any time and for any reason, as it applies to that Employer’s Employees, and the Company reserves the right to amend, suspend, supersede, merge, consolidate, or terminate the Plan at any time and for any reason, as it applies to the Employees of each Employer. No amendment, suspension, supersession, merger, consolidation, or termination of the Plan shall (i) reduce any Participant’s or Beneficiary’s proportionate interest in the Trust Fund; (ii) reduce or restrict, either directly or indirectly, the benefit provided any Participant prior to the amendment; or (iii) divert any portion of the Trust Fund to purposes other than the exclusive benefit of the Participants and their Beneficiaries prior to the satisfaction of all liabilities under the Plan. Moreover, there shall not be any transfer of assets to a successor plan or merger or consolidation with another plan unless, in the event of the termination of the successor plan or the surviving plan immediately following such transfer, merger, or consolidation, each participant or beneficiary would be entitled to a benefit equal to or greater than the benefit he would have been entitled to if the plan in which he was previously a participant or beneficiary had terminated immediately prior to such transfer, merger, or consolidation. Following a termination of this Plan by the Company, the Trustee shall continue to administer the Trust and pay benefits in accordance with the Plan as amended from time to time and the Committee’s instructions.

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Section 14. Miscellaneous Provisions.

14.1 Plan Creates No Employment Rights. Nothing in this Plan shall be interpreted as giving any Employee the right to be retained as an Employee by an Employer, or as limiting or affecting the rights of an Employer to control its Employees or to terminate the Service of any Employee at any time and for any reason, subject to any applicable employment or collective bargaining agreements.

14.2 Nonassignability of Benefits. No assignment, pledge, or other anticipation of benefits from the Plan will be permitted or recognized by the Employer, the Committee, or the Trustee. Moreover, benefits from the Plan shall not be subject to attachment, garnishment, or other legal process for debts or liabilities of any Participant or Beneficiary, to the extent permitted by law. This prohibition on assignment or alienation shall apply to any judgment, decree, or order (including approval of a property settlement agreement) which relates to the provision of child support, alimony, or property rights to a present or former spouse, child or other dependent of a Participant pursuant to a state domestic relations or community property law, unless the judgment, decree, or order is determined by the Committee to be a qualified domestic relations order within the meaning of Section 414(p) of the Code, as more fully set forth in Section 14.12 hereof.

14.3 Nonassignability of Benefits. The liability of the Employer with respect to Participants under this Plan shall be limited to making contributions to the Trust from time to time, in accordance with Section 4.

14.4 Treatment of Expenses. All expenses incurred by the Committee and the Trustee in connection with administering this Plan and Trust Fund shall be paid by the Trustee from the Trust Fund to the extent the expenses have not been paid or assumed by the Employer or by the Trustee. The Committee may determine that, and shall inform the Trustee when, reasonable expenses may be charged directly to the Account or Accounts of a Participant or group of Participants to whom or for whose benefit such expenses are allocable, subject to the guidelines set forth in Field Assistance Bulletin 2003-03, to the extent not superseded, or any successor directive, guidance, or regulations issued by the Department of Labor.

14.5 Number and Gender. Any use of the singular shall be interpreted to include the plural, and the plural the singular. Any use of the masculine, feminine, or neuter shall be interpreted to include the masculine, feminine, or neuter, as the context shall require.

14.6 Nondiversion of Assets. Except as provided in Sections 5.2 and 14.12, under no circumstances shall any portion of the Trust Fund be diverted to or used for any purpose other than the exclusive benefit of the Participants and their Beneficiaries prior to the satisfaction of all liabilities under the Plan.

14.7 Separability of Provisions. If any provision of this Plan is held to be invalid or unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if the invalid or unenforceable provision had not been included in the Plan.

14.8 Service of Process. The agent for the service of process upon the Plan shall be the president of the Bank, or such other person as may be designated from time to time by the Bank.

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14.9 Governing State Law. This Plan shall be interpreted in accordance with the laws of the State of Maryland to the extent those laws are applicable under the provisions of ERISA.

14.10 Employer Contributions Conditioned on Deductibility. Employer Contributions to the Plan are conditioned on deductibility under Code Section 404. In the event that the Internal Revenue Service shall determine that all or any portion of an Employer Contribution is not deductible under that Section, the nondeductible portion shall be returned to the Employer within one year of the disallowance of the deduction.

14.11 Unclaimed Accounts. Neither the Employer nor the Trustees shall be under any obligation to search for, or ascertain the whereabouts of, any Participant or Beneficiary. The Employer or the Trustees, by certified or registered mail addressed to his last known address of record with the Employer, shall notify any Participant or Beneficiary that he is entitled to a distribution under this Plan, and the notice shall quote the provisions of this Section. If the Participant or Beneficiary fails to claim his benefits or make his whereabouts known in writing to the Employer or the Trustees within seven (7) calendar years after the date of notification, the benefits of the Participant or Beneficiary under the Plan will be disposed of as follows:

(i) If the whereabouts of the Participant is unknown but the whereabouts of the Participant’s Beneficiary is known to the Trustees, distribution will be made to the Beneficiary.

(ii) If the whereabouts of the Participant and his Beneficiary are unknown to the Trustees, the Plan will forfeit the benefit, provided that the benefit is subject to a claim for reinstatement if the Participant or Beneficiary makes a claim for the forfeited benefit.

Any payment made pursuant to the power herein conferred upon the Trustees shall operate as a complete discharge of all obligations of the Trustees, to the extent of the distributions so made.

14.12 Qualified Domestic Relations Order. Section 14.2 shall not apply to a “qualified domestic relations order” defined in Code Section 414(p), and such other domestic relations orders permitted to be so treated under the provisions of the Retirement Equity Act of 1984. Further, to the extent provided under a “qualified domestic relations order,” a former Spouse of a Participant shall be treated as the Spouse or surviving Spouse for all purposes under the Plan.

In the case of any domestic relations order received by the Plan:

(i) The Employer or the Committee shall promptly notify the Participant and any other alternate payee of the receipt of such order and the Plan’s procedures for determining the qualified status of domestic relations orders; and

(ii) Within a reasonable period after receipt of such order, the Employer or the Committee shall determine whether such order is a qualified domestic relations order and notify the Participant and each alternate payee of such determination. The Employer or the Committee shall establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders.

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During any period in which the issue of whether a domestic relations order is a qualified domestic relations order is being determined (by the Employer or Committee, by a court of competent jurisdiction, or otherwise), the Employer or the Committee shall segregate in a separate account in the Plan or in an escrow account the amounts which would have been payable to the alternate payee during such period if the order had been determined to be a qualified domestic relations order. If within eighteen (18) months the order (or modification thereof) is determined to be a qualified domestic relations order, the Employer or the Committee shall pay the segregated amounts (plus any interest thereon) to the person or persons entitled thereto. If within eighteen (18) months it is determined that the order is not a qualified domestic relations order, or the issue as to whether such order is a qualified domestic relations order is not resolved, then the Employer or the Committee shall pay the segregated amounts (plus any interest thereon) to the person or persons who would have been entitled to such amounts if there had been no order. Any determination that an order is a qualified domestic relations order which is made after the close of the eighteen (18) month period shall be applied prospectively only. The term “alternate payee” means any Spouse, former Spouse, child or other dependent of a Participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefit payable under a Plan with respect to such Participant.

14.13 Use of Electronic Media to Provide Notices and Make Participant Elections. Pursuant to Treasury Regulations Section 1.401(a)-21, the Plan may elect to use electronic media to provide notices required to be provided to Participants under the Plan and will accept elections from Participants communicated to the Plan using such electronic media.

Section 15. Top-Heavy Provisions.

15.1 Top-Heavy Plan. This Plan is top-heavy if any of the following conditions exist:

(i) If the top-heavy ratio for this Plan exceeds sixty percent (60%) and this Plan is not part of any required aggregation group or permissive aggregation group;

(ii) If this Plan is a part of a required aggregation group (but is not part of a permissive aggregation group) and the aggregate top-heavy ratio for the group of Plans exceeds sixty percent (60%); or

(iii) If this Plan is a part of a required aggregation group and part of a permissive aggregation group and the aggregate top-heavy ratio for the permissive aggregation group exceeds sixty percent (60%).

15.2 Definitions.

In making this determination, the Committee shall use the following definitions and principles:

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15.2-1 The “Determination Date,” with respect to the first Plan Year of any plan, means the last day of that Plan Year, and with respect to each subsequent Plan Year, means the last day of the preceding Plan Year. If any other plan has a Determination Date which differs from this Plan’s Determination Date, the top-heaviness of this Plan shall be determined on the basis of the other plan’s Determination Date falling within the same calendar years as this Plan’s Determination Date.

15.2-2 A “Key Employee” means any employee or former employee (including any deceased employee) who at any time during the plan year that includes the determination date was an officer of the employer having annual compensation greater than $160,000 (as adjusted under Section 416(i)(1) of the Code), a 5-percent owner of the employer, or a 1-percent owner of the employer having annual compensation of more than $160,000. For this purpose, annual compensation means compensation within the meaning of Section 415(c)(3) of the Code. The determination of who is a key employee will be made in accordance with Section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder.

15.2-3 A “Non-key Employee” means an Employee who at any time during the five years ending on the top-heavy Determination Date for the Plan Year has received compensation from an Employer and who has never been a Key Employee, and the Beneficiary of any such Employee.

15.2-4 A “required aggregation group” includes (a) each qualified Plan of the Employer in which at least one Key Employee participates in the Plan Year containing the Determination Date and (b) any other qualified Plan of the Employer which enables a Plan described in (a) to meet the requirements of Code Sections 401(a)(4) or 410. For purposes of the preceding sentence, a qualified Plan of the Employer includes a terminated Plan maintained by the Employer within the period ending on the Determination Date. In the case of a required aggregation group, each Plan in the group will be considered a top-heavy Plan if the required aggregation group is a top-heavy group. No Plan in the required aggregation group will be considered a top-heavy Plan if the required aggregation group is not a top-heavy group. All Employers aggregated under Code Sections 414(b), (c) or (m) or (o) (but only after the Code Section 414(o) regulations become effective) are considered a single Employer.

15.2-5 A “permissive aggregation group” includes the required aggregation group of Plans plus any other qualified Plan(s) of the Employer that are not required to be aggregated but which, when considered as a group with the required aggregation group, satisfy the requirements of Code Sections 401(a)(4) and 410 and are comparable to the Plans in the required aggregation group. No Plan in the permissive aggregation group will be considered a top-heavy Plan if the permissive aggregation group is not a top-heavy group. Only a Plan that is part of the required aggregation group will be considered a top-heavy Plan if the permissive aggregation group is top-heavy.

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15.3 Top-Heavy Rules of Application.

For purposes of determining the value of Account balances and the present value of accrued benefits the following provisions shall apply:

15.3-1 The value of Account balances and the present value of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the twelve (12) month period ending on the Determination Date.

15.3-2 For purposes of testing whether this Plan is top-heavy, the present value of an individual’s accrued benefits and an individual’s Account balances is counted only once each year.

15.3-3 The Account balances and accrued benefits of a Participant who is not presently a Key Employee but who was a Key Employee in a Plan Year beginning on or after January 1, 1984 will be disregarded.

15.3-4 Employer contributions attributable to a salary reduction or similar arrangement will be taken into account. Employer matching contributions also shall be taken into account for purposes of satisfying the minimum contribution requirements of Section 416(c)(2) of the Code and the Plan.

15.3-5 When aggregating Plans, the value of Account balances and accrued benefits will be calculated with reference to the Determination Dates that fall within the same calendar year.

15.3-6 The present values of accrued benefits and the amounts of account balances of an employee as of the determination date shall be increased by the distributions made with respect to the employee under the plan and any plan aggregated with the plan under Section 416(g)(2) of the Code during the 1-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the plan under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than severance from employment, death, or disability, this provision shall be applied by substituting “five (5) year period” for “one (1) year period.”

15.3-7 Accrued benefits and Account balances of an individual shall not be taken into account for purposes of determining the top-heavy ratios if the individual has performed no services for the Employer during the one (1) year period ending on the applicable Determination Date. Compensation for purposes of this subparagraph shall not include any payments made to an individual by the Employer pursuant to a qualified or non-qualified deferred compensation plan.

15.3-8 The present value of the accrued benefits or the amount of the Account balances of any Employee participating in this Plan shall not include any rollover contributions or other transfers voluntarily initiated by the Employee except as described below. If this Plan transfers or rolls over funds to another Plan in a transaction voluntarily initiated by the Employee, then this Plan shall count the distribution for purposes of determining Account balances or the present value of accrued benefits. A transfer incident to a merger or consolidation of two or more Plans of the Employer (including Plans of related Employers treated as a single Employer under Code Section 414), or a transfer or rollover between Plans of the Employer, shall not be considered as voluntarily initiated by the Employee.

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15.4 Minimum Contributions. For any Top-Heavy Year, each Employer shall make a special contribution on behalf of each Participant to the extent that the total allocations to his Account pursuant to Section 4 is less than the lesser of:

(i) three percent of his 415 Compensation for that year, or

(ii) the highest ratio of such allocation to 415 Compensation received by any Key Employee for that year. For purposes of the special contribution of this Section 15.4, a Key Employee’s 415 Compensation shall include amounts the Key Employee elected to defer under a qualified 401(k) arrangement. Such a special contribution shall be made on behalf of each Participant who is employed by an Employer on the last day of the Plan Year, regardless of the number of his Hours of Service, and shall be allocated to his Account.

If the Employer maintains a qualified plan in addition to this Plan and more than one such plan is determined to be Top-Heavy, a minimum contribution or a minimum benefit shall be provided in one of such other plans, including a plan that consists solely of a cash or deferred arrangement which meets the requirements of Section 401(k)(12) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) of the Code are met.

15.5 Top-Heavy Provisions Control in Top-Heavy Plan. In the event this Plan becomes top-heavy and a conflict arises between the top-heavy provisions herein set forth and the remaining provisions set forth in this Plan, the top-heavy provisions shall control.

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EX-16.1

Exhibit 16.1

May 12, 2014

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Ladies and Gentlemen:

We have read the disclosures under the heading “Changes in and Disagreements with Accounts on Accounting and Financial Disclosures-HV Bank” in the Registration Statement on Form S-1 of HV Bancorp, Inc. and agree with the statements contained in the second and third paragraphs therein. We have no basis to agree or disagree with other statements of the registrant contained under the heading “Changes in and Disagreements with Accountants on Accounting and Financial Disclosures-HV Bank.”

Very truly yours,

EX-16.2

Exhibit 16.2

May 12, 2014

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Ladies and Gentlemen:

We have read the disclosures under the heading “Changes in and Disagreements with Accounts on Accounting and Financial Disclosures-Victory Bancorp” in the Registration Statement on Form S-1 of HV Bancorp, Inc. and agree with the statements contained in the second and third paragraphs therein. We have no basis to agree or disagree with other statements of the registrant contained under the heading “Changes in and Disagreements with Accountants on Accounting and Financial Disclosures-Victory Bancorp.”

Very truly yours,

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

HV Bancorp, Inc.

Huntingdon Valley, Pennsylvania

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated September 30, 2013, relating to the financial statements of Huntingdon Valley Bank, which is contained in that Prospectus.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO USA, LLP

Philadelphia, Pennsylvania

May 12, 2014

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We hereby consent to the use in this Registration Statement on Form S-1 of HV Bancorp, Inc., of our report dated September 30, 2013, relating to the financial statements of Huntingdon Valley Bank which appears in such Registration Statement.

Pittsburgh, Pennsylvania

May 12, 2014

EX-23.3

Exhibit 23.3

Consent of Independent Auditor

The Victory Bancorp, Inc.

Limerick, Pennsylvania

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated March 27, 2014, relating to the consolidated financial statements, which is contained in that Prospectus.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO USA, LLP

Harrisburg, Pennsylvania

May 12, 2014

EX-23.4

Exhibit 23.4

Consent of Independent Registered Public Accounting Firm

We hereby consent to the use in this Registration Statement, on Form S-1 of HV Bancorp, Inc., of our report dated March 22, 2013 relating to the consolidated financial statements of The Victory Bancorp which appears in such Registration Statement.

Pittsburgh, Pennsylvania

May 12, 2014

EX-23.8

Exhibit 23.8

FELDMAN FINANCIAL ADVISORS, INC.

1001 CONNECTICUT AVENUE, NW — SUITE 840

WASHINGTON, DC 20036

202-467-6862 — (FAX) 202-467-6963

May 9, 2014

Board of Trustees

Huntingdon Valley Bank

3501 Masons Mill Road, Suite 401

Huntingdon Valley, Pennsylvania 19006

Members of the Board:

We hereby consent to the use of our firm’s name in the Application for Conversion, and amendments thereto, filed by Huntingdon Valley Bank and HV Bancorp, Inc. with the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Pennsylvania Department of Banking and Securities. We also consent to the use of our firm’s name in the Registration Statement on Form S-1, and amendments thereto, filed by HV Bancorp, Inc. with the Securities and Exchange Commission. Additionally, we consent to the inclusion of, summary of, and reference to our Pro Forma Conversion Valuation Appraisal Report in such filings and amendments, including the Prospectus of HV Bancorp, Inc.

Sincerely,

FELDMAN FINANCIAL ADVISORS, INC.

EX-99.1

Exhibit 99.1

FELDMAN FINANCIAL ADVISORS, INC.

1001 CONNECTICUT AVENUE, NW — SUITE 840

WASHINGTON, DC 20036

202-467-6862 — (FAX) 202-467-6963

May 21, 2013

Confidential

Board of Directors

Huntingdon Valley Bank

3501 Masons Mill Road, Suite 401

Huntingdon Valley, Pennsylvania 19006

Members of the Board:

This letter sets forth the agreement (“Agreement”) between Huntingdon Valley Bank (“Huntingdon” or the “Bank”) and Feldman Financial Advisors, Inc. (“FFA”), whereby Huntingdon has engaged FFA to provide an independent appraisal of the estimated aggregate pro forma market value (the “Valuation”) of the shares of common stock that are to be sold and issued by the Bank (or, if applicable, its newly formed holding company) in connection with the conversion (“Conversion”) of the Bank from the mutual form of organization to the stock form and its simultaneous acquisition of Victory Bank.

FFA agrees to deliver the Valuation, in a written report, to Huntingdon at the address above on or before a mutually agreed upon date. Further, FFA agrees to perform such other services as are necessary or required of the independent appraiser in connection with comments from Huntingdon’s regulatory authorities and subsequent updates of the Valuation as from time to time may be necessary, both after initial approval by Huntingdon’s regulatory authorities and prior to the time the Conversion is completed. If requested, FFA will assist Huntingdon in responding to all regulatory inquiries regarding the Valuation and will also assist Huntingdon at all meetings with the regulatory authorities concerning the Valuation.

Huntingdon agrees to pay FFA a professional consulting fee for FFA’s appraisal services related to preparation of the initial appraisal report and subsequent appraisal updates. Huntingdon also agrees to reimburse FFA for certain out-of-pocket expenses necessary and incident to the completion of the services described above. These expenses shall not exceed $2,000 without the prior consent of Huntingdon. Reimbursable expenses for copying, report reproduction, data materials, express mail delivery, and travel shall be paid to FFA as incurred and billed. Payment of the professional consulting fee shall be made according to the following schedule:

• $10,000 upon execution of this Agreement;

• $50,000 upon delivery of the completed appraisal report to Huntingdon; and,

• $ 8,500 upon completion of each updated appraisal as necessary.

FELDMAN FINANCIAL ADVISORS, INC.

Board of Directors

Huntingdon Valley Bank

May 21, 2013

Page 2

If, during the course of the Conversion, unforeseen events occur so as to materially change the nature of the work content of the appraisal services described above such that FFA must supply services beyond that contemplated at the time this contract was executed, the terms of this Agreement shall be subject to renegotiation by Huntingdon and FFA. Such unforeseen events shall include, but not be limited to, material changes in regulations governing the Conversion, material changes in mutual-to-stock appraisal guidelines or processing procedures as administered by the relevant regulatory authorities, major changes in Huntingdon’s management or operating policies, and excessive delays or suspension of processing of the Conversion.

In the event Huntingdon shall for any reason discontinue the Conversion prior to delivery of the completed appraisal report and payment of the progress payment fee totaling $50,000, Huntingdon agrees to compensate FFA according to FFA’s standard billing rates for consulting appraisal services based on accumulated and verifiable time expended, provided that the total of such charges shall not exceed $60,000 plus reimbursable expenses.

In order to induce FFA to render the aforesaid services, Huntingdon agrees to the following:

1. Huntingdon agrees to supply FFA such information with respect to Huntingdon’s business and financial condition as FFA may reasonably request in order for FFA to perform the appraisal services. Such information shall include, without limitation: annual financial statements, periodic regulatory filings and material agreements, corporate books and records, and such other documents as are material for the performance by FFA of the appraisal services.

2. Huntingdon hereby represents and warrants to FFA (i) that to its best knowledge any information provided to FFA by or on behalf of Huntingdon, will not, at any relevant time, contain any untrue statement of a material fact or fail to state a material fact necessary to make the information or statements therein not false or misleading, (ii) that Huntingdon will not use the product of FFA’s services in any manner, including in a proxy or offering circular, in connection with any untrue statement of a material fact or in connection with the failure to state a material fact necessary to make other statements not false or misleading, and (iii) that all documents incorporating or relying upon FFA’s services or the product of FFA’s services will otherwise comply with all applicable federal and state laws and regulations.

FELDMAN FINANCIAL ADVISORS, INC.

Board of Directors

Huntingdon Valley Bank

May 21, 2013

Page 3

3. Any valuations or opinions issued by FFA may be included in its entirety in any communication by Huntingdon in any regulatory application, proxy statement or offering prospectus; however, such valuations or opinions may not be excerpted or otherwise publicly referred to without FFA’s prior written consent nor shall FFA be publicly referred to without FFA’s prior written consent; however, such consent shall not be unreasonably withheld.

4. FFA’s Valuation will be based upon Huntingdon’s representation that the information contained in the Conversion application and additional information furnished to us by Huntingdon and its independent auditors is truthful, accurate, and complete in all material respects. FFA will not independently verify the financial statements and other information provided by Huntingdon and its independent auditors, nor will FFA independently value the assets or liabilities of Huntingdon. The Valuation will consider Huntingdon only as a going concern and will not be considered as an indication of the liquidation value of Huntingdon.

5. FFA’s Valuation is not intended, and must not be represented to be, a recommendation of any kind as to the advisability of purchasing shares of common stock in the Conversion. Moreover, because the Valuation is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, FFA will give no assurance that persons who purchase shares of common stock in the Conversion will thereafter be able to sell such shares at prices related to FFA’s Valuation.

6. Huntingdon agrees to indemnify FFA and its affiliates and all persons employed by or associated with FFA or its affiliates against all claims, liabilities and related expenses, as incurred, arising out of this engagement, unless, upon final adjudication, such claims, liabilities and expenses are found to have resulted primarily from FFA’s bad faith or willful misconduct. No termination, completion or modification hereof shall limit or affect such indemnification obligation. In the event FFA becomes aware of a claim or a possible claim arising out of this Agreement, it shall notify Huntingdon as soon as possible. Huntingdon will attempt to resolve the claim. In the event Huntingdon is not able to resolve the claim, it has the option to retain legal counsel on behalf of FFA to defend the claim.

FELDMAN FINANCIAL ADVISORS, INC.

Board of Directors

Huntingdon Valley Bank

May 21, 2013

Page 4

7. Huntingdon and FFA are not affiliated, and neither Huntingdon nor FFA has an economic interest in, or is held in common with, the other and has not derived a significant portion of its gross revenues, receipts or net income for any period from transactions with the other. It is understood that FFA is not a seller of securities within the scope of any federal or state securities law and any report prepared by FFA shall not be used as an offer or solicitation with respect to the purchase or sale of any security, it being understood that the foregoing shall not be construed to prohibit the filing of any such report as part of the Application for Conversion or Securities and Exchange Commission and blue sky filings or customary references thereto in applications, filings, proxy statements and prospectuses.

Please acknowledge your concurrence with the foregoing by signing as indicated below and returning to FFA a signed copy of this Agreement and the $10,000 initial payment.

Sincerely,

Feldman Financial Advisors, Inc.

Trent R. Feldman

President

Agreed to and Accepted for
Huntingdon Valley Bank
Name:	Travis J. Thompson
Title:	President and Chief Executive Officer
Date:

EX-99.2

Exhibit 99.2

FELDMAN FINANCIAL ADVISORS, INC.

1001 CONNECTICUT AVENUE, NW — SUITE 840

WASHINGTON, DC 20036

202-467-6862 — (FAX) 202-467-6963

May 9, 2014

Board of Trustees

Huntingdon Valley Bank

3501 Masons Mill Road, Suite 401

Huntingdon Valley, Pennsylvania 19006

Members of the Board:

It is the opinion of Feldman Financial Advisors, Inc., that the subscription rights to be received by the eligible account holders and other eligible subscribers of Huntingdon Valley Bank (the “Bank”), pursuant to the Plan of Conversion (the “Plan”) adopted by the Board of Trustees of the Bank, do not have any ascertainable market value at the time of distribution or at the time the rights are exercised in the subscription offering.

In connection with the Plan, the Bank will convert from the mutual to stock form of organization, issue all of its capital stock to a newly formed holding company, HV Bancorp, Inc. (the “Company”), and the Company will offer shares of its common stock for sale in a subscription offering to eligible account holders and other eligible subscribers. Any shares of common stock that remain unsubscribed for in the subscription offering will be offered by the Company for sale in a community offering to certain members of the general public.

Our opinion is based on the fact that the subscription rights are acquired by the recipients without cost, are nontransferable and of short duration, and afford the recipients the right only to purchase shares of common stock of the Company at a price equal to its aggregate estimated pro forma market value, which will be the same price at which any unsubscribed shares will be purchased in the community offering.

Sincerely,

FELDMAN FINANCIAL ADVISORS, INC.

EX-99.3

Exhibit 99.3

FELDMAN FINANCIAL ADVISORS, INC.

1001 CONNECTICUT AVENUE, NW —  SUITE 840

WASHINGTON, DC 20036

202-467-6862 — (FAX) 202-467-6963

HV Bancorp, Inc.

Proposed Holding Company for

Huntingdon Valley Bank

Huntingdon Valley, Pennsylvania

Pro Forma Conversion Valuation

Appraisal Report

Valued as of April 15, 2014

Prepared By

Feldman Financial Advisors, Inc.

Washington, DC

FELDMAN FINANCIAL ADVISORS, INC.

1001 CONNECTICUT AVENUE, NW —  SUITE 840

WASHINGTON, DC 20036

202-467-6862 — (FAX) 202-467-6963

April 15, 2014

Board of Trustees

Huntingdon Valley Bank

3501 Masons Mill Road, Suite 401

Huntingdon Valley, Pennsylvania 19006

At your request, we have completed and hereby provide an independent appraisal (“Appraisal”) of the estimated pro forma market value of HV Bancorp, Inc. (“HV Bancorp”) in connection with the simultaneous conversion of Huntingdon Valley Bank (“HV Bank”) from the mutual to stock form of ownership, the change in HV Bank’s charter from a Pennsylvania-chartered savings bank to a Pennsylvania-chartered commercial bank, the issuance of HV Bank’s capital stock to HV Bancorp, the offering of shares of common stock of HV Bancorp for sale to certain members of HV Bank, an employee benefit plan of HV Bank, and other members of the general public (collectively referred to herein as the “conversion”).

Immediately after the completion of the conversion, HV Bancorp expects to acquire by merger The Victory Bancorp, Inc. (“Victory Bancorp”), the holding company for The Victory Bank (“Victory Bank”). Upon consummation of the merger, HV Bank will change its corporate title to “Victory Bank.” This Appraisal is furnished pursuant to the regulatory filing by HV Bank and HV Bancorp of the Application for Conversion (“Application”) with the Pennsylvania Department of Banking and Securities, the Federal Deposit Insurance Corporation (“FDIC”), and the Board of Governors of the Federal Reserve System (“FRB”).

Feldman Financial Advisors, Inc. (“Feldman Financial”) is a financial consulting and economic research firm that specializes in financial valuations and analyses of business enterprises and securities in the thrift, banking, and mortgage industries. The background of Feldman Financial is presented in Exhibit I. In preparing the Appraisal, we conducted an analysis of HV Bank that included discussions with HV Bank’s management, HV Bank’s legal counsel, Jones Walker LLP, and HV Bank’s independent auditor, BDO USA, LLP. We also reviewed, among other factors, the economy in HV Bank’s primary market area and compared HV Bank’s financial condition and operating performance with that of selected publicly traded thrift institutions. We reviewed conditions in the securities markets in general and in the market for thrift institution common stocks in particular.

We have also analyzed the pro forma financial impact of HV Bancorp’s pending acquisition of Victory Bancorp based on financial data set forth in the Application, the review of audited and unaudited financial information of Victory Bancorp, and discussions with Victory Bancorp’s management. In addition, where appropriate, we considered information based on other available published sources that we believe are reliable; however, we cannot guarantee the accuracy and completeness of such information.

FELDMAN FINANCIAL ADVISORS, INC.

Board of Trustees

Huntingdon Valley Bank

April 15, 2014

Page Two

The Appraisal is based on HV Bank’s representation that the information contained in the Application and additional information furnished to us by HV Bank, Victory Bancorp, and their respective independent auditors are truthful, accurate, and complete. We did not independently verify the financial statements and other information provided by HV Bank, Victory Bancorp, and their independent auditors, nor did we independently value the assets or liabilities of HV Bank or Victory Bancorp. The Appraisal considers HV Bancorp only as a going concern and should not be considered as an indication of the liquidation value of HV Bancorp.

Plan of Conversion

On December 12, 2013, the Board of Trustees of HV Bank unanimously adopted a Plan of Conversion from mutual to stock form of organization. Pursuant to the Plan of Conversion, HV Bank will convert from the mutual to the stock form of organization and will become the wholly owned subsidiary of HV Bancorp, a new Pennsylvania corporation. HV Bancorp will own all of the capital stock of HV Bank upon completion of the conversion. All of the common stock of HV Bancorp will be owned by public shareholders, including former shareholders of Victory Bancorp who receive shares of HV Bancorp in the merger. The Plan of Conversion provides that shares of common stock of HV Bank will be offered for sale in a subscription offering to eligible members of HV Bank and to its employee stock ownership plan (“ESOP”), and, if necessary, to members of the general public through a community offering and, possibly, through a syndicate of registered broker-dealers. In any community offering, preference will be given to persons residing in the Pennsylvania counties of Montgomery, Bucks, and Philadelphia.

Merger Agreement

HV Bank, HV Bancorp, and Victory Bancorp entered into an Agreement and Plan of Reorganization on December 12, 2013 pursuant to which HV Bancorp will acquire Victory Bancorp. As part of the acquisition, Victory Bank will merge with and into HV Bank, with HV Bank as the resulting entity. Upon consummation of the merger, HV Bank will change its corporate title to “Victory Bank.” In connection with the merger, Victory Bancorp’s shareholders will receive the right to exchange each share of Victory Bancorp common stock for 0.6794 of a share of HV Bancorp common stock, and under certain limited circumstances, a combination of HV Bancorp common stock and cash. In addition, Victory Bancorp Series E convertible preferred stock shareholders will be given the opportunity to convert shares of Series E preferred stock as follows: (i) exchange their shares of Series E preferred stock into Victory Bancorp subordinated debt; (ii) if permitted by the terms of Series E preferred stock and any necessary regulatory approvals, be redeemed by Victory Bancorp for cash as par on or prior to the closing date of the merger; or (iii) convert into the right to receive one share of HV Bancorp preferred stock having similar terms, subject to certain limitations. Victory Bancorp Series F preferred stock that was issued to the U.S. Treasury under the Small Business Lending Fund (“SBLF”) program will be exchanged for HV Bancorp Series B preferred stock having similar terms.

FELDMAN FINANCIAL ADVISORS, INC.

Board of Trustees

Huntingdon Valley Bank

April 15, 2014

Page Three

In the event that the aggregate amount of HV Bancorp common stock issued to Victory Bancorp shareholders in the merger, when added to the aggregate number of shares of HV Bancorp common stock to be purchased by Victory Bancorp shareholders in the conversion offering, would result in Victory Bancorp shareholders owning an amount of HV Bancorp common stock in excess of 48.5% on a pro forma basis, then HV Bancorp will pay to Victory Bancorp shareholders an amount of HV Bancorp common stock and cash, on a pro rata basis, sufficient to reduce the aggregate ownership of Victory Bancorp shareholders below the ownership limitation. In accordance with the merger agreement, Victory Bancorp shareholders will not own more than 48.5% of HV Bancorp after consummation of the merger. The 48.5% ownership limitation of former Victory Bancorp shareholders is a regulatory condition to approval of the conversion offering and the merger.

The merger agreement was the result of arm’s-length negotiations between the managements and boards of the parties, with the assistance and advice of their respective financial advisors and legal counsel. Consummation of the merger is subject to satisfaction of a number of conditions, including receipt of all required regulatory approvals, completion of HV Bank’s conversion to stock form as a state-chartered commercial bank and simultaneous holding company formation, and approval of the merger by Victory Bancorp’s stockholders.

Based on the shares outstanding at December 31, 2013, and the terms of the merger with Victory Bancorp, between 800,485 and 1,046,804 shares of HV Bancorp common stock would be issued to Victory Bancorp common shareholders in the merger in exchange for their Victory Bancorp common stock at a ratio of 0.6794 of a share of HV Bancorp for each outstanding share of Victory Bancorp common stock. In addition, under certain conditions, up to $1.8 million of cash may be paid as consideration in the merger with Victory Bancorp.

Valuation Conclusion

It is our opinion that, as of April 15, 2014, the estimated aggregate pro forma market value of the shares to be issued by HV Bancorp, inclusive of common stock to be issued to Victory Bancorp’s shareholders in connection with the pending merger, was $19,417,480 at the midpoint of the range (the “Valuation Range”), equal to 1,941,748 shares of common stock at a per share value of $10.00. At the midpoint, it is assumed that 1,000,000 shares of common stock will be sold in the offering by HV Bancorp and 941,748 shares of HV Bancorp common stock will be part of the merger consideration issued to shareholders of Victory Bancorp.

FELDMAN FINANCIAL ADVISORS, INC.

Board of Trustees

Huntingdon Valley Bank

April 15, 2014

Page Four

The range of shares sold in the offering reflects a 15% decrease from the midpoint to determine the minimum and a 15% increase from the midpoint to determine the maximum. Assuming an additional 15% increase above the maximum results in the adjusted maximum. Based on the foregoing valuation, the corresponding Valuation Range of pro forma outstanding shares and pro forma market values assuming an offering price of $10.00 per share is shown on the following page:

	Sold in Conversion Offering			Issued in Merger(1)			Pro Forma Combined Total
HV Bancorp, Inc.
Shares of Common Stock
Minimum		850,000			800,485			1,650,485
Midpoint		1,000,000			941,748			1,941,748
Maximum		1,150,000			1,046,804			2,196,804
Adjusted Maximum		1,322,500			1,046,804			2,369,304
Pro Forma Market Value
Minimum	$	8,500,000		$	8,004,850		$	16,504,850
Midpoint	$	10,000,000		$	9,417,480		$	19,417,480
Maximum	$	11,500,000		$	10,468,040		$	21,968,040
Adjusted Maximum	$	13,225,000		$	10,468,040		$	23,693,040
Outstanding % of Shares
Minimum		51.50	%		48.50	%		100.00	%
Midpoint		51.50	%		48.50	%		100.00	%
Maximum		52.35	%		47.65	%		100.00	%
Adjusted Maximum		55.82	%		44.18	%		100.00	%

⁽¹⁾ As discussed in the preliminary prospectus of HV Bancorp, assumes that at levels equal to or below the midpoint of the offering range, 81% of Victory Bancorp Series E stockholders convert their preferred shares into Victory Bancorp common stock prior to the merger and 19% convert their preferred shares into subordinated debt. At levels above the midpoint of the offering range, it is assumed that 100% of the Series E preferred shares are exchanged for Victory Bancorp common stock. In the event that the aggregate HV Bancorp common stock shares to be issued in the merger, when added to the aggregate HV Bancorp common stock shares purchased by holders of Victory Bancorp common stock in the conversion offering, would result in Victory Bancorp shareholders owning in excess of 48.5% of the outstanding HV Bancorp common stock, then HV Bancorp will substitute cash in an amount sufficient to reduce the ownership level to comply with this limitation. In order to ensure that Victory Bancorp shareholders, in the aggregate, do not own HV Bancorp common stock in excess of the 48.5% limit, Series E preferred shareholders who are Victory Bancorp directors and senior management have entered into commitments pursuant to which they have agreed to exchange a certain percentage of shares of Victory Bancorp Series E preferred stock held by each of them for subordinated debt.

Our Appraisal is not intended, and must not be construed, to be a recommendation of any kind as to the advisability of purchasing shares of common stock in the conversion offering. Moreover, because the Appraisal is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of stock in the conversion offering will thereafter be able to sell such shares at prices related to the foregoing estimate of the aggregate pro forma market value.

FELDMAN FINANCIAL ADVISORS, INC.

Board of Trustees

Huntingdon Valley Bank

April 15, 2014

Page Five

Feldman Financial is not a seller of securities within the meaning of any federal or state securities laws and any report prepared by Feldman Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. Except for the fee that we shall receive from HV Bank for preparing this Appraisal, we are independent of HV Bank, HV Bancorp, Victory Bancorp, and their respective boards and officers. We are also independent of other professional firms engaged by HV Bank, HV Bancorp, and Victory Bancorp to assist with the stock offering and pending merger.

The Valuation Range reported herein will be updated as appropriate. These updates will consider, among other factors, any developments or changes in the operating performance and financial condition of HV Bank and Victory Bancorp, management policies, terms of the merger, and current conditions in the securities markets for financial institution common stocks. Should any such new developments or changes be material, in our opinion, to the pro forma valuation of the common stock of HV Bancorp, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in detail at that time.

Respectfully submitted,

Feldman Financial Advisors, Inc.

Trent R. Feldman

President

Peter W. L. Williams

Principal

FELDMAN FINANCIAL ADVISORS, INC.

TABLE OF CONTENTS

TAB			PAGE
	INTRODUCTION			1
I.	Chapter One – OVERVIEW OF FINANCIAL PERFORMANCE
	General Profile of Huntingdon Valley Bank			4
	Financial Condition			11
	Income and Expense Trends			20
	Interest Rate Risk Management			29
	Asset Quality			32
	Office Properties			35
	Market Area			37
	General Profile of Victory Bancorp			45
	Pro Forma Impact of the Merger and Conversion			49
II.	Chapter Two – COMPARISONS WITH PUBLICLY TRADED THRIFTS
	General Overview			56
	Selection Criteria			57
	Recent Financial Comparisons			61
III.	Chapter Three – MARKET VALUE ADJUSTMENTS
	General Overview			76
	Earnings Prospects			77
	Financial Condition			79
	Market Area			80
	Management			81
	Dividend Policy			82
	Liquidity of the Issue			83
	Subscription Interest			83
	Recent Acquisition Activity			85
	Effect of Government Regulations and Regulatory Reform			87
	Stock Market Conditions			88
	Adjustments Conclusion			93
	Valuation Approach			93
	Valuation Conclusion			97
IV.	Appendix – EXHIBITS
	I	Background of Feldman Financial Advisors, Inc		I-1
	II-1	Consolidated Balance Sheets		II-1
	II-2	Consolidated Income Statements		II-2
	II-3	Loan Portfolio Composition		II-3
	II-4	Net Lending Activity		II-4
	II-5	Investment Portfolio Composition		II-5
	II-6	Deposit Account Distribution		II-6
	II-7	Borrowed Funds Distribution		II-7
	II-8	Consolidated Balance Sheets (Victory Bancorp)		II-8
	II-9	Consolidated Income Statements (Victory Bancorp)		II-9
	III	Financial and Market Data for All Public Thrifts		III-1
	IV-1	Pro Forma Assumptions for Conversion Stock Offering		IV-1
	IV-2	Pro Forma Conversion Valuation Range		IV-2
	IV-3	Pro Forma Conversion Analysis at the Midpoint Valuation		IV-4
	IV-4	Comparative Valuation Ratio Differential		IV-5

i

FELDMAN FINANCIAL ADVISORS, INC.

LIST OF TABLES

TAB			PAGE
I.	Chapter One – OVERVIEW OF FINANCIAL PERFORMANCE
	Table 1	Selected Financial Condition Data		11
	Table 2	Relative Balance Sheet Concentrations		12
	Table 3	Income Statement Summary		21
	Table 4	Selected Financial Ratios and Other Data		22
	Table 5	Income Statement Ratios		24
	Table 6	Yield and Cost Summary		25
	Table 7	Net Portfolio Value Analysis		31
	Table 8	Non-performing Assets Summary		33
	Table 9	Allowance for Loan Loss Summary		34
	Table 10	Branch Office Deposit Data		36
	Table 11	Selected Demographic Data		39
	Table 12	Deposit Market Share in the Philadelphia MSA		42
	Table 13	Deposit Market Share in Montgomery County, Pennsylvania		43
	Table 14	Residential Mortgage Lending Share in the Philadelphia MSA		44
	Table 15	Selected Financial Condition and Operating Data (Victory Bancorp)		46
	Table 16	Selected Financial Ratios and Other Data (Victory Bancorp)		47
	Table 17	Pro Forma Consolidated Balance Sheet		52
	Table 18	Pro Forma Consolidated Income Statement		54
II.	Chapter Two – COMPARISONS WITH PUBLICLY TRADED THRIFTS
	Table 19	Comparative Group Operating Summary		60
	Table 20	Key Financial Comparisons		63
	Table 21	General Operating Characteristics		70
	Table 22	Summary Financial Performance Ratios		71
	Table 23	Income and Expense Analysis		72
	Table 24	Yield-Cost Structure and Growth Rates		73
	Table 25	Balance Sheet Composition		74
	Table 26	Regulatory Capital, Credit Risk, and Loan Composition		75
III.	Chapter Three – MARKET VALUE ADJUSTMENTS
	Table 27	Summary of Pennsylvania Bank and Thrift Acquisition Activity		86
	Table 28	Comparative Stock Index Performance		88
	Table 29	Summary of Recent Standard Conversion Stock Offerings		91
	Table 30	Comparative Pro Forma Market Valuation Analysis		99

ii

FELDMAN FINANCIAL ADVISORS, INC.

INTRODUCTION

As requested, we have completed and hereby provide an independent appraisal (“Appraisal”) of the estimated pro forma market value of HV Bancorp, Inc. (“HV Bancorp”) in connection with the simultaneous conversion of Huntingdon Valley (“HV Bank”) from the mutual to stock form of ownership, the change in HV Bank’s charter from a Pennsylvania-chartered savings bank to a Pennsylvania-chartered commercial bank, the issuance of HV Bank’s capital stock to HV Bancorp, the offering of shares of common stock of HV Bancorp for sale to certain members of HV Bank, the employee stock ownership plan (“ESOP”) of HV Bank, and other members of the general public (collectively referred to herein as the “conversion”).

Immediately after the completion of the conversion, HV Bancorp expects to acquire by merger The Victory Bancorp, Inc. (“Victory Bancorp”), the holding company for The Victory Bank (“Victory Bank”). Upon consummation of the merger, HV Bank will change its corporate title to “Victory Bank.” This Appraisal is furnished pursuant to the regulatory filing by HV Bank and HV Bancorp of the Application for Conversion (“Application”) with the Pennsylvania Department of Banking and Securities, the Federal Deposit Insurance Corporation (“FDIC”), and the Board of Governors of the Federal Reserve System (“FRB”).

The estimated pro forma market value is defined as the price at which HV Bancorp’s common stock, immediately upon completion of the stock offering and merger with Victory Bancorp, would change hands between a willing buyer and a willing seller, when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts.

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Feldman Financial Advisors, Inc. (“Feldman Financial”) is a financial consulting and economic research firm that specializes in financial valuations and analyses of business enterprises and securities in the thrift, banking, and mortgage industries. The background of Feldman Financial is presented in Exhibit I. In preparing the Appraisal, we conducted an analysis of HV Bank that included discussions with HV Bank’s management, HV Bank’s legal counsel, Jones Walker LLP, and HV Bank’s independent auditor, BDO USA, LLP. We also reviewed, among other factors, the economy in HV Bank’s primary market area and compared HV Bank’s financial condition and operating performance with that of selected publicly traded thrift institutions. We reviewed conditions in the securities markets in general and in the market for thrift institution common stocks in particular.

We have also analyzed the pro forma financial impact of HV Bancorp’s pending acquisition of Victory Bancorp based on financial data set forth in the Application, the review of audited and unaudited financial information of Victory Bancorp, and discussions with Victory Bancorp’s management. In addition, where appropriate, we considered information based on other available published sources that we believe are reliable; however, we cannot guarantee the accuracy and completeness of such information.

The Appraisal is based on HV Bank’s representation that the information contained in the Application and additional information furnished to us by HV Bank, Victory Bancorp, and their respective independent auditors are truthful, accurate, and complete. We did not independently verify the financial statements and other information provided by HV Bank, Victory Bancorp, and their independent auditors, nor did we independently value the assets or liabilities of HV Bank of Victory Bancorp. The Appraisal considers HV Bancorp only as a going concern and should not be considered as an indication of the liquidation value of HV Bancorp.

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Our Appraisal is not intended, and must not be construed, to be a recommendation of any kind as to the advisability of purchasing shares of common stock in the conversion offering. Moreover, because the Appraisal is necessarily based on estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the conversion offering will hereafter be able to sell such shares at prices related to the foregoing estimate of the aggregate pro forma market value.

Feldman Financial is not a seller of securities within the meaning of any federal and state securities laws and any report prepared by Feldman Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. Except for the fee that we shall receive from HV Bank for preparing this Appraisal, we are independent of HV Bank, HV Bancorp, Victory Bancorp, and their respective boards and officers. We are also independent of other professional firms engaged by HV Bank and HV Bancorp to assist with the conversion offering.

The Valuation Range reported herein will be updated as appropriate. These updates will consider, among other factors, any developments or changes in the operating performance and financial condition of HV Bank and Victory Bancorp, management policies, terms of the merger, and current conditions in the securities markets for financial institution common stocks. Should any such new developments or changes be material, in our opinion, to the pro forma valuation of the common stock of HV Bancorp, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in detail at that time.

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I. OVERVIEW OF FINANCIAL PERFORMANCE

General Profile of Huntingdon Valley Bank

Huntingdon Valley Bank, or HV Bank, was organized under the laws of the Commonwealth of Pennsylvania in 1871. HV Bank is a community-oriented mutual savings institution offering a variety of financial products and services to meet the needs of the communities it serves. HV Bank operates five branch offices located in Montgomery, Bucks and Philadelphia counties, Pennsylvania. It aims to deliver personalized service and respond promptly to customer needs and inquiries. HV Bank believes that its community orientation is attractive to its customers and distinguishes it from larger banks that operate in its market area. HV Bank’s principal business consists of attracting retail deposits from the general public in the areas surrounding its banking offices and investing those deposits, together with funds generated from operations, primarily in one- to four-family residential mortgage loans. HV Bank also invests in various investment securities and its revenue is derived primarily from interest income on loans and investments. HV Bank’s primary sources of funds are deposits and principal and interest payments on loans and securities.

HV Bank was founded in 1871 as a loan and building association with the name “Huntingdon Valley Perpetual Savings and Building Association.” Five years later, the name of the association was changed to “Huntingdon Valley Building & Loan Association.” In 1951, the association converted to a federal thrift charter and changed its name to “Huntingdon Valley Federal Savings & Loan Association.” In 1997, the savings and loan association changed its name to “Huntingdon Valley Federal Savings Bank.” In January 2000, the savings bank changed its corporate name to “Huntingdon Valley Bank.” The change in corporate title

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signified HV Bank’s desire to broaden and expand its services and strengthen its community presence. On July 1, 2003, Huntingdon Valley Bank converted from a federally chartered mutual savings bank to a Pennsylvania-chartered mutual savings bank.

At December 31, 2013, HV Bank had total assets of $163.4 million, net total loans of $79.5 million, total deposits of $140.6 million, and total equity capital of $10.3 million or 6.28% of total assets. HV Bank is regulated by the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corporation (“FDIC”) and its deposits are insured up to applicable legal limits by the FDIC. HV Bank is a member of the Federal Home Loan Bank (“FHLB”) System.

Business Strategy after the Conversion and the Merger

HV Bank’s business strategy after the conversion stock offering and merger is to operate and grow a profitable commercial bank. As a result of the merger, HV Bancorp will be a larger, more diversified bank with a management team and operating strategy that will draw from both business strategies currently being used at HV Bank and Victory Bank. HV Bank believes that the proposed merger offers unique operating and strategic benefits. The following highlights some of the key points of HV Bank’s operating strategy for the combined enterprise.

Pursuing loan portfolio expansion and diversification with an emphasis on credit risk management to opportunities to increase the portfolio of commercial and other loans that provide higher returns. HV Bank’s loan portfolio includes commercial real estate and commercial business loans. At December 31, 2013, HV Bank had $13.2 million of commercial real estate and commercial business loans, representing 17.3% of total loans. Commercial loans help diversify HV Bank’s loan portfolio and help improve the interest rate sensitivity of its assets. The merger with Victory Bank will significantly increase HV Bank’s commercial loan

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portfolio and origination capability. With the additional capital raised in the conversion offering, HV Bank intends to continue to pursue commercial lending opportunities. HV Bank’s maximum loan to-one borrower limit will increase from $1.7 million at December 31, 2013 to $3.7 million following completion of the stock offering (assuming the midpoint of the offering range) and merger, although HV Bank does not expect to have any lending relationships that would reach this limit.

Maintaining asset quality through conservative underwriting standards and diligent collection efforts. HV Bank believes that maintaining high asset quality is a key to long-term financial success. HV Bank has sought to grow and diversify its loan portfolio. HV Bank uses underwriting standards that it believes are conservative, and it diligently monitors collection efforts. At December 31, 2013, HV Bank’s non-accrual loans were 2.6% of its total loan portfolio. Although it intends to continue efforts to originate commercial real estate and commercial business loans after the conversion offering, HV Bank intends to maintain its philosophy of managing loan exposures through a prudent approach to lending.

Serving small- and middle-market commercial and retail customers with a significant focus on electronic delivery of services. HV Bank expects to utilize technology to increase profitability through greater productivity and cost control, and to provide new and better products and services. HV Bank expects to leverage Victory Bank’s middle-market commercial relationships and implement strategic hires of established commercial managers. HV Bank will seek to leverage the technological delivery platform employed by Victory Bank, including the use of remote deposit capture to enhance customers’ banking experience. After completion of the merger and the stock offering, HV Bank intends to operate and grow the combined enterprise into a high-technology commercial bank serving small businesses and professional practices,

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with a significant focus on electronic delivery of services, while continuing to emphasize residential real estate lending. HV Bank will seek to utilize technology to increase productivity and provide new and better products and services. HV Bank also plans to analyze the profitability of these new technologies, products and services, and allocate its resources to those areas that it believes offer the greatest future potential, including cost control.

Continuing to originate residential mortgage loans that are primarily sold in the secondary mortgage market. HV Bank will continue to provide products and services that meet the needs of its residential lending customers in its primary market area. HV Bank offers both fixed-rate and adjustable-rate residential mortgage loans, with a variety of terms to meet its customers’ needs, which it primarily sells into the secondary mortgage market.

Building profitable business and consumer relationships by providing superior customer service with an emphasis on increasing transaction deposit account and deposit balances. HV Bank is a full-service financial services institution offering its customers a broad range of loan and deposit products. HV Bank continues to seek to increase the commercial real estate and commercial business loans that it originates and anticipates serving a greater percentage of the small businesses in its market area. HV Bank offers a broad array of services, including internet banking, mobile banking, account-related text messaging, remote check capture, automated clearinghouse (“ACH”) processing, and merchant credit card processing, among other conveniences.

HV Bank provides and plans to continue to emphasize superior customer service as a means to attract and maintain customers. HV Bank aims to deliver personalized service and to respond with flexibility to customer needs. It believes that a solid banking relationship is best facilitated by the primary transaction account. HV Bank intends to focus resources on growing

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profitable business and consumer relationship by emphasizing the primary transaction account. The primary transaction account becomes connected to automated payment links in the form of direct debits and direct deposits and, coupled with superior customer service, tends to create a relationship between the banking organization and the customer. HV Bank believes that many opportunities remain to deliver what its customers want in the form of service and convenience, and intends to continue to promote its transaction accounts, particularly when it originates loans to its customers.

Reasons for the Conversion and the Offering

HV Bank has determined that the primary reasons for the conversion and the stock offering are to:

• facilitate the merger with Victory Bancorp;

• raise capital to support the future growth of HV Bank by hiring experienced bankers with extensive market relationships and by successful implementation of electronic delivery channels;

• enhance profitability and earnings by investing and leveraging the offering proceeds, primarily through the acquisition of Victory Bancorp and also through traditional funding and commercial banking activities; and

• attract and retain highly qualified officers, other employees, and directors through, in part, the use of equity compensation plans, and to enhance current compensation programs.

In addition, in the stock holding company structure, HV Bancorp will have greater flexibility in structuring mergers and acquisitions. Potential sellers often want a stock component for at least part of the acquisition consideration. The new stock holding company structure will enable HV Bancorp to offer stock or cash consideration, or a combination thereof, and will therefore enhance its ability to compete with other bidders when acquisition opportunities arise. Other than the merger with Victory Bancorp, HV Bancorp has no current arrangements or agreements to acquire other commercial banks, savings institutions, financial service companies, or branch offices.

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The offering will afford directors, officers, and employees of HV Bank the opportunity to become shareholders, which HV Bank believes to be an effective performance incentive and an effective means of attracting and retaining qualified personnel. The offering also will provide customers of HV Bank and its local community members with an opportunity to acquire shares of the common stock of HV Bancorp.

HV Bancorp also intends to establish an ESOP that will purchase an amount of shares in the subscription offering equal to 6.0% of the total shares of common stock issued in the stock offering, including shares issued to Victory Bancorp’s shareholders in the merger. Subsequently, HV Bancorp intends to adopt and request shareholder approval of one or more stock-based incentive plans, including a restricted stock plan (“RSP”) and a stock option plan, no earlier than six months after the completion of the conversion.

Reasons for the Merger

The Board of Trustees of HV Bank believes that the merger will enhance the competitive position of HV Bank by enabling it to expand its franchise in Montgomery, Chester, Berks, Bucks, and Philadelphia counties. The merger with Victory Bancorp will facilitate a key step in the execution of HV Bank’s business strategy to increase market share in HV Bank’s primary market area through the acquisition or purchase of deposits, as well as expanding HV Bank’s commercial lending activity. The combination of HV Bank and Victory Bank will provide customers of both institutions with convenient access to their accounts by increasing the number of branches available in their market areas.

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The merger, combined with the stock offering, will create a larger and more competitive retail distribution platform, and will enhance HV Bank’s ability to grow its loan portfolio, thus reducing its dependency on lower-yielding investment products. The terms of the merger agreement were the result of arm’s-length negotiations between HV Bank and Victory Bancorp. In their deliberations and in making their determinations, HV Bank’s Board of Trustees and Victory Bancorp’s Board of Directors considered many factors including the factors described above, as well as the following:

• information concerning the financial condition, results of operations, capital levels, asset quality, and prospects of HV Bank and Victory Bancorp, including consideration of each institution’s historical and projected results of operation and financial condition and a review of Victory Bancorp’s financial performance by comparison to peer group;

• the anticipated impact the stock offering and merger will have on HV Bancorp’s ability to increase market share through organic growth;

• the general structure of the transaction and the perceived compatibility of the respective management teams and business philosophies of HV Bank and Victory Bank, which both boards believe will facilitate integration of the operations of the two companies;

• the belief that the merger will enhance each banking organization’s franchise value by the expansion of its branch network and by enhancing its ability to compete in its primary market area; and

• the long-term growth strategies of both financial institutions.

The remainder of Chapter I examines in more detail the performance trends of HV Bank and recent management initiatives. The discussion is supplemented by the exhibits in the Appendix. Exhibit II-1 summarizes HV Bank’s balance sheets as of the fiscal years ended June 30, 2012 and 2013 and as of December 31, 2013. Exhibit II-2 presents HV Bank’s income statements for the fiscal years ended June 30, 2012 and 2013 and the six months ended December 31, 2012 and 2013.

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Financial Condition

Table 1 presents selected data concerning HV Bank’s financial position as of June 30, 2012 and 2013 and December 31, 2013. Table 2 displays relative balance sheet concentrations for HV Bank as of the corresponding periods.

Table 1

Selected Financial Condition Data

As of June 30, 2012 and 2013 and December 31, 2013

(Dollars in Thousands)

	December 31, 2013		June 30,
			2013		2012
Total assets	$	163,423	$	153,373	$	155,914
Cash and cash equivalents		22,898		7,073		11,011
Investment securities		51,259		51,807		49,110
Total loans, net(1)		79,534		83,865		86,007
Total deposits		140,631		133,540		133,717
Total borrowings		10,759		7,031		8,204
Total equity capital		10,261		10,566		11,627

⁽¹⁾  Includes loans held for sale.

Source: HV Bancorp, preliminary prospectus.

Asset Composition

HV Bank’s total assets amounted to $163.4 million at December 31, 2013, reflecting an increase of 6.5% from $153.4 million at June 30, 2013. HV Bank’s asset base had expanded to $174.9 million at June 30, 2005, but declined in the succeeding years to $143.3 million at June 30, 2008 as HV Bank sought to strengthen its capital ratios against the backdrop of declining profitability. In recent periods, HV Bank’s asset total has remained relatively stable with only modest growth. Cash and investments continue to comprise a relatively large percentage of the balance sheet, measuring 45.5% of total assets at December 31, 2013. HV Bank relies primarily on deposits as its chief funding source, supplemented to a limited degree by borrowings.

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Table 2

Relative Balance Sheet Concentrations

As of June 30, 2012 and 2013 and December 31, 2013

(Percent of Total Assets)

	December 31, 2013 (%)		June 30,
			2013		2012
			(%)		(%)
Cash and cash equivalents		14.01		4.61		7.06
Investment securities		31.53		33.78		31.50
Total loans, net(1)		48.67		54.68		55.16
Other assets		5.79		6.93		6.28
Total assets		100.00		100.00		100.00
Total deposits		86.05		87.07		85.76
Total borrowings		6.58		4.58		5.26
Other liabilities		1.09		1.46		1.52
Total liabilities		93.72		93.11		92.54
Total equity capital		6.28		6.89		7.46
Total liabilities and equity		100.00		100.00		100.00

⁽¹⁾  Includes loans held for sale.

Source: HV Bancorp, preliminary prospectus; Feldman Financial calculations.

Total assets increased by $10.0 million, or 6.5%, to $163.4 million at December 31, 2013, from $153.4 million at June 30, 2013. The increase was primarily a result of an increase in cash and cash equivalents of $15.8 million funded by an increase in deposit liabilities of $5.1 million and additional FHLB advances of $4.0 million. The increase in cash and cash equivalents was offset by a $5.5 million decrease in loans held for sale.

Total assets decreased by $2.5 million, or 1.6%, to $153.4 million at June 30, 2013, from $155.9 million at June 30, 2012. The decrease was the result of a decrease in cash and cash equivalents of $3.9 million and a decrease in loans held for sale of $7.1 million. This was offset partially by an increase in loans receivable of $5.0 million and an increase in investment securities of $2.7 million.

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As presented in Exhibit II-3, HV Bank’s current loan portfolio includes real estate mortgage loans as core products. The largest components of HV Bank’s loan portfolio are residential mortgage loans, commercial mortgage loans, home equity loans, and home equity lines of credit (“HELOCs”). Residential mortgage loans remain the largest category type within HV Bank’s loan portfolio, although commercial real estate loans occupy an increasing concentration of the overall portfolio compared to historical levels. For the year ended June 30, 2013, HV Bank originated $106.2 million of total loans, of which $103.5 million represented residential mortgage loans and $1.5 million consisted of commercial real estate loans. For the six months ended December 31, 2013, HV Bank originated $42.0 million of total loans, of which $40.5 million were residential mortgage loans and $1.1 million were commercial real estate loans.

At December 31, 2013, residential one- to four-family loans totaled $54.9 million or 72.0% of total loans. While HV Bank has traditionally originated and serviced the bulk of its residential lending for its own portfolio, in the past several years, due to concerns of interest rate risk in a historically low interest rate environment, HV Bank has sold a significant portion of its originated mortgage loans and loan servicing to third-party investors in the secondary market. For the year ended June 30, 2012 and 2013, total originations of loans held for sale were $142.5 million and $90.0 million, respectively. Gains on sale of loans totaled $1.8 million and $1.7 million for the year ended June 30, 2012 and 2013, respectively. For the six months ended December 31, 2013, total originations of loans held for sale amounted to $35.9 million with gains on sale of loans totaling $1.0 million for the same period. This compares to $46.8 million in total originations of loans held for sale with gains on sale of loans totaling $930,000 for the six months ended December 31, 2012.

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HV Bank generates loans through its existing customers, referrals, real estate brokers, and other marketing efforts. HV Bank generally has limited its real estate loan originations to the financing of properties located within its market area. HV Bank’s residential mortgage loans generally have terms of 15, 20, or 30 years and consist of fixed-rate and adjustable-rate mortgage (“ARM”) loans. HV Bank does not offer “interest only” loans, where the borrower pays interest for an initial period after which the loan converts to a fully amortizing loan, nor does it offer “option ARM” or negative amortization loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan. HV Bank also does not make loans that are known as “sub-prime” or “Alt-A” loans.

HV Bank’s home equity loans and HELOCs are secured by second mortgages on owner-occupied one- to four-family residences. The maximum loan-to-value of these loans generally is 80%. At December 31, 2013, home equity loans and HELOCs secured by second mortgages totaled $8.1 million or 10.7% of total loans. Home equity loans consist of fixed-rate loans with terms up to a maximum of 20 years. At December 31, 2013, home equity loans totaled $2.5 million. HELOCs are adjustable monthly and tied to the prime rate. At December 31, 2013, HELOCs totaled $5.6 million.

HV Bank is also engaged in the origination of loans secured by commercial real estate, including multi-family dwellings. The current portfolio of these loans amounted to $12.4 million or 16.3% of total loans at December 31, 2013. The current loan-to-value ratio of these loans generally does not exceed 80% and these loans typically include personal guarantees. Loans secured by commercial real estate generally have larger loan balances and bear more credit risk than one- to four-family mortgage loans. The increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the impact

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of local and general economic conditions on the borrower’s ability to repay the loan, and the increased difficulty of evaluating and monitoring these types of loans. However, commercial real estate loans generally have higher interest rates than one- to four-family residential loans.

HV Bank provides commercial business loans that demonstrate the ability to repay the debt through corporate cash flows. A majority of HV Bank’s commercial business loans are secured by assignment of corporate assets and include personal guarantees of the business owners. At December 31, 2013, commercial business loans amounted to $787,000 or 1.0% of total loans. Underwriting standards for commercial business loans include a review of the applicant’s tax returns, financial statements, credit history, and an assessment of the applicant’s ability to meet existing obligations and payments on the proposed loan based on cash flows generated by the applicant’s business. HV Bank typically requires a principal of the company obtaining a commercial business loan to personally sign the note as a co-borrower or guarantor.

Commercial business loans generally have higher interest rates and shorter terms than one- to four-family residential loans, but they also may involve higher average balances, increased difficulty of loan monitoring, and a higher risk of default since their repayment generally depends on the successful operation of the borrower’s business. HV Bank anticipates that its proposed merger with Victory Bank will allow HV Bank to increase its portfolio of commercial and other loans that provide higher returns than residential mortgage loans.

On a limited basis, HV Bank originates residential construction loans to individuals for the construction and permanent financing of their personal residences. Construction loans to individuals are made on the same general terms as one- to four-family mortgage loans, but provide for the payment of interest only during the construction phase, which is usually six months. At the end of the construction phase, the loan converts to a permanent mortgage loan.

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Prior to making a commitment to fund a construction loan, HV Bank requires an appraisal of the property by an independent appraiser. HV Bank also reviews and inspects each project prior to disbursement of funds during the term of the construction loan. Loan proceeds are disbursed after inspection of the project based on percentage of completion. At December 31, 2013, HV Bank had no construction loans outstanding. When market conditions improve, HV Bank anticipates an expansion of its construction and land development loan activity.

Exhibit II-5 presents a summary of HV Bank’s investment portfolio as of June 30, 2012 and 2013 and December 31, 2013. HV Bank’s investment portfolio has consisted primarily of U.S. Government securities, corporate notes, collateralized mortgage obligations (“CMOs”), mortgage-backed securities (“MBS”), and municipal securities. HV Bank’s investment objectives are to (i) maintain high asset quality, (ii) provide and maintain liquidity, (iii) establish an acceptable level of interest rate and credit risk, (iv) provide an alternate source of low-risk investments when demand for loans is weak, and (v) generate a favorable return. At December 31, 2013, the held-to-maturity portfolio, which is carried at amortized cost, totaled $5.0 million or 3.1% of total assets and the available-for-sale portfolio, which is carried at fair value, totaled $46.2 million, or 38.3% of total assets. As of December 31, 2013, HV Bank also held $21.7 million in cash and due from banks, $1.2 million in interest-bearing deposits with other banks, and $910,000 in stock of the FHLB of Pittsburgh.

HV Bank also invests in bank-owned life insurance (“BOLI”) policies as a mechanism for funding various employee benefit costs. HV Bank is the beneficiary of these policies that insure the lives of certain of its current and former officers. The cash surrender value (“CSV”) of the insurance policies is recognized as an asset on the balance sheet and changes in the CSV are recorded as non-interest income on the income statement. The CSV of the BOLI amounted to $3.6 million or 2.2% of total assets as of December 31, 2013.

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Liability Composition

Deposits are HV Bank’s major external source of funds for lending and investment purposes. In addition to deposits, funds are also derived primarily from principal and interest payments on loans and sources of borrowed debt. Loan repayments are a relatively stable source of funds, while deposit inflows and outflows are significantly influenced by general interest rates, money market conditions, and competition. Borrowings may also be used on a short-term basis to compensate for reductions in the availability of funds from other sources and may be used on a longer-term basis for general business purposes.

Exhibit II-6 presents a summary of HV Bank’s deposit composition as of June 30, 2012 and 2013 and December 31, 2013. Total deposits increased by 5.3% to $140.6 million at December 31, 2013, compared to $133.5 million at June 30, 2013. Deposits are generated primarily from within HV Bank’s market area. HV Bank relies on competitive pricing and customer service to attract and retain deposits. In addition, it offers a variety of deposit accounts with a range of interest rates and terms. Deposit accounts consist of savings accounts, demand checking accounts, interest-bearing and non-interest bearing NOW accounts, money market deposit accounts, and certificates of deposit.

HV Bank’s deposit base at December 31, 2013 comprised $93.1 million of transaction accounts (66.2% of total deposits) and $47.6 million of certificate accounts (33.8% of total deposits). Included in the transaction accounts were NOW accounts ($32.6 million or 23.2% of total deposits), savings accounts ($30.1 million or 21.4%), money market deposit accounts ($25.4 million or 18.0%), and checking accounts ($5.1 million or 3.6%). HV Bank has placed an

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emphasis on attracting and retaining transaction deposit accounts. Additionally, in recent years, there has been a trend of customers shifting certificate deposits to more liquid deposit accounts due to low interest rates. The relative proportion of transaction accounts to deposits has expanded from 63.0% at June 30, 2012 to 66.2% at December 31, 2013. Certificates of deposit in denomination of $100,000 or more amounted to $22.6 million or 16.1% of total deposits at December 31, 2013. HV Bank did not have any brokered deposits outstanding as of December 31, 2013.

HV Bank utilizes borrowings as a supplemental source of funds when they can be invested profitably or to meet asset/liability management objectives. As shown in Exhibit II-7, HV Bank’s current borrowings consist of advances from the FHLB of Pittsburgh and securities sold under agreement to repurchase. In addition, HV Bank has the ability to borrow funds from the discount window of the Federal Reserve Bank of Philadelphia and a credit facility with Atlantic Community Banker’s Bank (“ACBB”), a correspondent bank. As of December 31, 2013, HV Bank had short-term and long-term credit facilities with the FHLB with a maximum borrowing capacity of approximately $69.7 million. HV Bank had fixed-rate FHLB advances outstanding in the amount of $7.0 million with a weighted average cost of 0.72% at December 31, 2013. HV Bank also accesses borrowings through overnight repurchase agreements, which are collateralized by MBS and CMOs. As of December 31, 2013, the repurchase agreements outstanding totaled $3.8 million with a weighted average cost of 0.14%.

HV Bank has historically maintained adequate capital levels. Due to restrained profitability and an increase in the unrealized losses related to the available-for-sale securities portfolio, HV Bank’s total equity declined from $11.6 million or 7.46% of total assets at June 30, 2012 to $10.3 million or 6.28% of total assets at December 31, 2013. HV Bank’s capital levels

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remain above the minimum regulatory requirements. HV Bank’s regulatory capital ratios of Tier 1 Leverage Capital, Tier 1 Risk-based Capital, and Total Risk-based Capital were 6.85%, 12.30%, and 12.84%, respectively, as of December 31, 2013. In comparison, the minimum regulatory requirements for HV Bank under FDIC guidelines were 4.0%, 4.0%, and 8.0%, and the threshold requirements for regulatory “well capitalized” levels were 5.0%, 6.0%, and 10.0%, respectively. Based on these regulatory capital ratios and requirements, HV Bank was considered well capitalized as of December 31, 2013.

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Income and Expense Trends

Table 3 displays the main components of HV Bank’s earnings performance for the fiscal years ended June 30, 2012 and 2013 and the six months ended December 31, 2012 and 2013. Table 4 presents a summary of selected operating ratios. Table 5 displays HV Bank’s income and expense ratios as a percent of average assets. Table 6 presents HV Bank’s weighted average yields on interest-earning assets and weighted average costs of interest-bearing liabilities.

General Overview

HV Bank has exhibited a record of moderate profitability in recent years, reflecting a trend of net interest income not covering operating expense and relying on gains on sales of loans and securities to deliver positive earnings. HV Bank’s return on average assets (“ROA”) measured 0.60% and 0.08% for the fiscal years ended June 30, 2012 and 2013. HV Bank’s earnings decreased from $912,000 in fiscal 2012 to $123,000 in fiscal 2013. HV Bank’s net interest margin has been restrained by its relative large concentration of investment security holdings. For the six months ended December 31, 2013, HV Bank’s earnings amounted to $55,000, representing an annualized ROA of 0.07%.

Six Months Ended December 31, 2012 and 2013

Net income was $55,000 for the six months ended December 31, 2013 as compared to $169,000 for the six months ended December 31, 2012. The annualized ROA declined to 0.07% for the recent six-month period versus 0.22% for the corresponding period a year ago. The $114,000 decrease in earnings reflected a $291,000 decrease in non-interest income, chiefly related to a decline in gains on sale of securities. Net interest income and non-interest expense did not change materially in the recent six-month period as compared to a year ago.

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Table 3

Income Statement Summary

For the Years Ended June 30, 2012 and 2013

And the Six Months Ended December 31, 2012 and 2013

(Dollars in Thousands)

	Six Months Ended December 31,					Year Ended June 30,
	2013			2012		2013			2012
Total interest income	$	2,545		$	2,569	$	4,994		$	5,545
Total Interest expense		435			521		982			1,121
Net interest income		2,110			2,048		4,012			4,334
Provision (credit) for loan losses		(31	)		80		120			178
Net interest income after provision		2,141			1,968		3,892			4,156
Non-interest income		1,202			1,493		2,700			2,749
Non-interest expense		3,253			3,220		6,511			6,103
Income before income taxes		91			241		81			802
Income tax expense (benefit)		36			72		(42	)		(110	)
Net income	$	55		$	169	$	123		$	912

Source: HV Bancorp, preliminary prospectus.

Net interest income for the six months ended December 31, 2013 totaled $2.1 million compared to $2.0 million for the six months ended December 31, 2012, an increase of $62,000, or 3.0%. The increase in net interest income was primarily due to a decrease in interest expense, which declined by $86,000, or 16.5%, during this period primarily due to a decline of 15 basis points in the cost of interest-bearing liabilities from 0.81% to 0.66%. Concurrently, the yield on interest-earning assets only fell by 9 basis points from 3.50% to 3.41%. As a result, HV Bank’s net interest spread improved by 6 basis points from 2.69% to 2.75%. Due to an improvement in asset quality as reflected by a lower level of non-accrual loans of $2.0 million at December 31, 2013 versus $2.5 million at December 31, 2012, HV Bank recorded a $31,000 credit for loan losses in the recent six-month period versus a $80,000 provision in the prior year’s period.

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FELDMAN FINANCIAL ADVISORS, INC.

Table 4

Selected Financial Ratios and Other Data

As of or For the Years Ended June 30, 2012 and 2013

And As of or For the Six Months Ended December 31, 2013

	As of or For the Six Months Ended December 31, 2013			As of or For the Year Ended June 30,
				2013			2012
Performance Ratios:
Return on average assets (ROA)		0.07	%		0.08	%		0.60	%
Return on average equity (ROE)		1.05	%		1.07	%		8.42	%
Interest rate spread(1)		2.75	%		2.68	%		2.98	%
Net interest margin(2)		2.83	%		2.74	%		3.06	%
Non-interest expense to average assets		4.11	%		4.18	%		4.03	%
Efficiency ratio		98.2	%		97.0	%		86.2	%
Average interest-earning assets to average interest-bearing liabilities		112.7	%		109.0	%		109.2	%
Loans to deposits		53.9	%		62.8	%		64.3	%
Asset Quality Ratios:
Non-performing assets to total assets(3)		1.6	%		2.4	%		2.6	%
Non-performing loans to total loans		2.7	%		1.7	%		2.5	%
Allowance for loan losses to non-performing loans		24.1	%		40.2	%		21.7	%
Allowance for loan losses to total loans		0.6	%		0.7	%		0.6	%
Net charge-offs as a percentage of average loans outstanding		0.1	%		0.0	%		0.4	%
Capital Ratios:
Average equity to average assets		6.6	%		7.4	%		7.1	%
Equity to total assets at end of period		6.3	%		6.9	%		7.5	%
Total capital to risk-weighted assets		12.8	%		12.9	%		13.9	%
Tier 1 capital to risk-weighted assets		12.3	%		12.3	%		13.3	%
Tier 1 capital to average assets		6.9	%		7.2	%		7.5	%
Other Data:
Number of full-service offices		4			5			5
Number of employees		63			62			71

⁽¹⁾ Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

⁽²⁾ The net interest margin represents net interest income as a percent of average interest-earning assets for the period.

⁽³⁾ Non-performing assets consist of non-performing loans and real estate owned.

Source: HV Bancorp, preliminary prospectus.

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FELDMAN FINANCIAL ADVISORS, INC.

Non-interest income amounted to $1.2 million for the six months ended December 31, 2013, which was a decrease of $291,000 or 19.5% from $1.5 million for the six months ended December 31, 2012. Customer service charges and fees decreased by $11,000 or 5.9% from $119,000 for the six months ended December 31, 2012 to $108,000 for six months ended December 31, 2013. Gains on sale of loans increased by $72,000 or 7.7% from $930,000 for the six months ended December 31, 2012 to $1.0 million for the six months ended December 31, 2013. Gains on sale of investment securities decreased from $334,000 for the six months ended December 31, 2012 to a loss of $2,000 for the six months ended December 31, 2013, as sales of investment securities were $347,000 for the six months ended December 31, 2013 compared to sales of $15.3 million for the six months ended December 31, 2012. The annualized ratio of non-interest income to average assets decreased to 1.52% for the six months ended December 31, 2013 from 1.91% for the six months ended December 31, 2012.

Non-interest expense increased by $33,000 or 1.0% to $3.3 million for the six months ended December 31, 2013 from $3.2 million for the six months ended December 31, 2012. Salaries and employment expenses decreased by $48,000, or 3.1%, to $1.5 million for the six months ended December 31, 2013, from $1.6 million for the six months ended December 31, 2012, primarily the result of decreased bonuses and loan officer commission expense related to reduced sales volume in the mortgage operation. Occupancy expense decreased by $47,000, or 9.0% from $522,000 for the six months ended December 31, 2012 to $475,000 for the six months ended December 31, 2013. Real estate owned expense increased by $21,000 from $167,000 in the six months ended December 31, 2012 to $186,000 for the six months ended December 31, 2013, as a result of the preparation of a property for settlement. Professional fees increased $113,000 or 65.3% from $173,000 for the six months ended December 31, 2012, to

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FELDMAN FINANCIAL ADVISORS, INC.

$286,000 for the six months ended December 31, 2013, largely due to $120,000 in expenses associated with the merger transaction. The annualized ratio of non-interest expense to average assets was relatively unchanged at 4.11% for the six months ended December 31, 2013 as compared to 4.12% for the six months ended December 31, 2012.

Table 5

Income Statement Ratios

For the Years Ended June 30, 2012 and 2013

And the Six Months Ended December 31, 2012 and 2013

(Percent of Average Assets)

	Six Months Ended December 31,					Year Ended June 30,
	2013(1)			2012(1)		2013			2012
Total interest income		3.21			3.29		3.21			3.66
Total Interest expense		0.55			0.67		0.63			0.80
Net interest income		2.66			2.62		2.58			2.86
Provision (credit) for loan losses		(0.04	)		0.10		0.08			0.12
Net interest income after provision		2.70			2.52		2.50			2.74
Non-interest income		1.52			1.91		1.73			1.82
Non-interest expense		4.11			4.12		4.18			4.03
Income before income taxes		0.11			0.31		0.05			0.53
Income tax expense (benefit)		0.04			0.09		(0.03	)		(0.07	)
Net income		0.07			0.22		0.08			0.60

⁽¹⁾  Ratios for the six months ended December 31, 2012 and 2013 are annualized.

Source: HV Bancorp, preliminary prospectus; Feldman Financial calculations.

Fiscal Years Ended June 30, 2012 and 2013

Net income decreased by $789,000, or 86.5%, to $123,000 for the fiscal year ended June 30, 2013, from $912,000 for the fiscal year ended June 30, 2012. Net interest income decreased $322,000, or 7.4%, to $4.0 million for the year ended June 30, 2013 from $4.3 million for the year ended June 30, 2012. The provision for loan losses decreased by $58,000, or 32.6%, to $120,000 for the year ended June 30, 2013, from $178,000 for the year ended June 30, 2012.

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FELDMAN FINANCIAL ADVISORS, INC.

Non-interest income decreased by $49,000 or 1.8%, while non-interest expense increased by $408,000 or 6.7% from fiscal 2012 to 2013. The resulting income tax benefit decreased by $68,000 from $110,000 in fiscal 2012 to $42,000 in fiscal 2013.

Table 6

Yield and Cost Summary

For the Years Ended June 30, 2012 and 2013

And the Six Months Ended December 31, 2012 and 2013

	Six Months Ended December 31,						Year Ended June 30,
	2013(1)			2012(1)			2013			2012
Weighted Average Yields
Loans		4.83	%		5.08	%		4.96	%		5.29	%
Cash and cash equivalents		0.29			0.33			0.34			0.21
Investment securities		2.14			1.95			1.88			2.78
FHLB stock		1.18			0.29			0.30			0.08
Total interest-earning assets		3.41			3.50			3.42			3.92
Weighted Average Costs
NOW accounts		0.20			0.25			0.19			0.27
Money market deposit accounts		0.24			0.28			0.24			0.43
Savings accounts		0.24			0.25			0.22			0.30
Certificates of deposit		1.36			1.63			1.58			1.81
Repurchase agreements		0.10			0.09			0.10			0.12
FHLB advances		0.90			1.53			1.33			1.90
Total interest-bearing liabilities(2)		0.66			0.81			0.73			0.93
Net interest spread(3)		2.75			2.69			2.68			2.98
Net interest margin(4)		2.83			2.79			2.74			3.06

⁽¹⁾  Ratios for the six-month periods have been annualized.

⁽²⁾  Excludes non-interest bearing deposits.

⁽³⁾ Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of average interest-bearing liabilities.

⁽⁴⁾ Represents net interest income as a percentage of average interest-earning assets.

Source: HV Bancorp, preliminary prospectus.

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FELDMAN FINANCIAL ADVISORS, INC.

Net interest income decreased by $322,000, or 7.4%, to $4.0 million for fiscal 2013 from $4.3 million for fiscal 2012. The decrease primarily resulted from the decline in the net interest margin, which decreased 32 basis points from 3.06% for fiscal 2012 to 2.74% for fiscal 2013. Loan interest income decreased from $4.4 million for the year ended June 30, 2012 to $3.9 million for the year ended June 30, 2013, a decrease of $451,000. This was primarily the result of the yield on loans decreasing 33 basis points from 5.29% for fiscal 2012 to 4.96% for fiscal 2013. The average loan balances also decreased from $83.0 million for fiscal 2012 to $79.6 million for fiscal 2013. Investment and liquidity interest income decreased from $1.1 million for fiscal 2012 to $1.0 million for fiscal 2013. The decrease in investment and liquidity interest income was mainly the result of a decrease in the yield on investment securities decreasing from 2.78% to 1.88% over the corresponding periods. This decreased yield resulted primarily from the sale of $32.4 million of available-for-sale securities, which generated a $592,000 gain on sale of investments for the year ended June 30, 2013. Interest expense paid on deposits for the year ended June 30, 2013 was $938,000 compared to $1.1 million during the same period in 2012. The decrease in interest expense was primarily driven by the general reduction in rates across the deposit products of HV Bank, reflecting competitive market conditions and the overall interest rate environment.

For the year ended June 30, 2013, the average yield on interest-earning assets was 3.42%, compared to 3.92% for the year ended June 30, 2012. The average cost of interest-bearing liabilities was 0.73% for the year ended June 30, 2013, compared to 0.93% for the year ended June 30, 2012. As a result, the net interest rate spread was 2.68% for fiscal 2013, compared to 2.98% for fiscal 2012. The net interest margin declined from 3.06% in fiscal 2012 to 2.74% for fiscal 2013.

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FELDMAN FINANCIAL ADVISORS, INC.

The provision for loan losses decreased $58,000, or 32.6%, to $120,000 for fiscal 2013 from $178,000 for fiscal 2012. The primary factor that contributed to the decrease in the provision was a decrease in non-accrual loans, which declined from $2.2 million as of June 30, 2012 to $1.4 million as of June 30, 2013. HV Bank recorded net charge-offs of $332,000 and $13,000 for the years ended June 30, 2012 and June 30, 2013, respectively.

Non-interest income amounted to $2.70 million for fiscal 2013, which was a decrease of $49,000, or 1.8% from $2.75 million for the year ended June 30, 2012. Gains on sale of loans decreased $88,000 from $1.8 million for fiscal 2012 to $1.7 million for fiscal 2013. This decrease was due to the lower volumes of loan originations and sales related to loans designated as held for sale. Gains on sale of investment securities increased $64,000 from $528,000 in fiscal 2012 to $592,000 in fiscal 2013. The ratio of non-interest income to average assets declined moderately from 1.82% for fiscal 2012 to 1.73% in fiscal 2013.

Non-interest expense increased by $408,000, or 6.7% to $6.5 million for the year ended June 30, 2013, from $6.1 million for the year ended June 30, 2012. The ratio of non-interest expense to average assets increased from 4.03% to 4.18%. Salaries and employee benefits increased by $456,000, or 16.6%, to $3.2 million for fiscal 2013 from $2.8 million for fiscal 2012. The increase in salaries and employment expenses was primarily the result of increased commissions for loan officers. Occupancy expenses decreased by $108,000, or 9.5% from $1.1 million for fiscal 2012 to $1.0 million for fiscal 2013. Data processing expenses increased by $60,000, or 10.5%, from $573,000 for fiscal 2012 to $633,000 for fiscal 2013. This increase was due to enhancements to HV Bank’s technology systems. Real estate owned expense decreased $285,000, or 43.3%, from $658,000 for fiscal 2012 to $373,000 in fiscal 2013 as a result of the resolution of a number of properties acquired through foreclosures. Professional fees increased

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FELDMAN FINANCIAL ADVISORS, INC.

$112,000, or 38.4%, from $292,000 in fiscal 2012 to $404,000 for fiscal 2013 due to increased compliance costs and fees as well as professional fees incurred in the resolution of foreclosures. Other operating expenses increased by $168,000, or 31.8%, from $528,000 for the year ended June 30, 2012, to $696,000 for the year ended June 30, 2013. The escalation in other operating expenses was primarily the result of increased marketing expenses and advertising costs.

The total income tax benefit decreased $68,000, or 61.8%, to $(42,000) for the year ended June 30, 2013, from $(110,000) for the year ended June 30, 2012. This decrease was primarily due to the change in valuation allowance on the deferred tax asset of $335,000. HV Bank’s ROA declined from 0.60% for the year ended June 30, 2012 to 0.08% for the year ended June 30, 2013. HV Bank’s return on average equity (“ROE”) declined from 8.42% for the year ended June 30, 2012 to 1.07% for the year ended June 30, 2013.

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FELDMAN FINANCIAL ADVISORS, INC.

Interest Rate Risk Management

Because the net present value of the majority of its assets and liabilities are sensitive to changes in interest rates, HV Bank’s most significant form of market risk is interest rate risk. HV Bank is vulnerable to an increase in interest rates to the extent that its interest-bearing liabilities mature or reprice more quickly than its interest-earning assets. As a result, a principal part of HV Bank’s business strategy is to manage interest rate risk and limit the exposure of its net interest income to changes in market interest rates. The Board of Trustees is responsible for evaluating the interest rate risk inherent in HV Bank’s assets and liabilities, for determining the level of risk that is appropriate, given HV Bank’s business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Trustees.

HV Bank has emphasized the origination of fixed-rate mortgage loans in its portfolio in order to maximize its net interest income and control credit risk. Because of its investment in such loans, HV Bank has accepted increased exposure to interest rate fluctuations. In a period of rising interest rates, HV Bank’s net interest rate spread and net interest income may be negatively affected. HV Bank seeks to manage and mitigate its exposure to interest rate risk in the following ways:

• maintaining adequate levels of short-term liquid assets (totaling $22.9 million in cash and cash equivalents at December 31, 2013);

• lengthening the weighted average maturity of liabilities through retail deposit pricing strategies and the use of FHLB advances;

• investing in shorter- to medium-term securities and in securities with adjustable-rate features, thereby providing for increased interest rates prior to maturity according to a predetermined schedule; and

• maintaining adequate levels of capital.

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FELDMAN FINANCIAL ADVISORS, INC.

In the future, HV Bank intends to take additional steps to reduce interest rate risk, including investing cash flows from investment securities in higher yielding assets such as commercial loans and lines of credit, which will afford the ability to option to reprice the asset in the shorter term.

HV Bank’s goal is to manage asset and liability positions to moderate the effects of interest rate fluctuations on net interest income and the net present value of equity (“NPV”). Table 7 presents, as of December 31, 2013, the estimated changes in HV Bank’s net portfolio value that would result from the designated instantaneous changes in the U.S. Treasury yield curve. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay.

As shown in Table 7, HV Bank’s net present value of equity would be negatively impacted by an immediate increase in interest rates from current levels. Table 7 indicates that HV Bank’s NPV was $15.1 million as of December 31, 2013 (compared to HV Bank’s stated total equity of $10.5 million as of December 31, 2013). Based upon the assumptions utilized, an immediate 100 basis point increase in market interest rates would result in a $3.4 million decrease or 22.3% reduction in NPV. However, an immediate 100 basis point decrease would have a positive impact of $2.2 million on NPV, representing an increase of 14.9%.

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FELDMAN FINANCIAL ADVISORS, INC.

Table 7

Net Portfolio Value Analysis

As of December 31, 2013

(Dollars in Thousands)

	Net Present Value of Equity(2)								NPV as a % of Present Value of Assets(3)
Change in Interest Rates(1) (basis points)	Estimated Net Present Value of Equity		Change from Base (000s)			Change from Base (%)			NPV Ratio (%)			Change in NPV (basis points)
+ 300	$	6,670	$	(8,407	)		(55.8	)%		4.3	%		-470
+ 200		8,910		(6,167	)		(40.9	)%		5.6	%		-340
+ 100		11,711		(3,366	)		(22.3	)%		7.2	%		-180
0		15,077		—			—			9.0	%		—
- 100		17,323		2,246			14.9	%		10.2	%		120

⁽¹⁾  Assumes an instantaneous uniform change in interest rates at all maturities.

⁽²⁾ NPV is the discounted present value of expected cash flows from assets, liabilities, and off-balance sheet contracts.

⁽³⁾  Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

Source: HV Bancorp, preliminary prospectus.

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FELDMAN FINANCIAL ADVISORS, INC.

Asset Quality

Table 8 summarizes HV Bank’s total non-performing assets (“NPAs”) as of June 30, 2012 and 2013 and December 31, 2013. Historically, HV Bank has exhibited a sound record of asset quality until experiencing an upturn in NPAs during calendar 2009 and 2010 due to the national and regional decline in real estate market conditions. Total NPAs increased from zero at June 30, 2008 to $5.9 million at June 30, 2009, reflecting a ratio of 4.14% of total assets. Since that time period, improvements in real estate market conditions and more stringent underwriting and collection efforts at HV Bank have resulted in decreases in the level of non-performing assets. As of December 31, 2013, HV Bank’s non-performing assets totaled $2.6 million and comprised $2.0 million of non-performing loans (“NPLs”) and $566,000 of real estate owned (“REO”). The ratio of non-performing assets to total assets was 1.58% at December 31, 2013, as compared to 2.38% at June 30, 2013 and 2.74% at June 30, 2012.

In order to reflect the risk inherent in the loan portfolio, HV Bank maintains an allowance for loan losses. A summary of HV Bank’s recent provision and net charge-off activity is included in the allowance for loan loss summary presented in Table 9. As of December 31, 2013, HV Bank’s allowance for loans losses amounted to $485,000, measuring 0.64% of loans receivable (excluding loans held for sale) and 24.1% of NPLs. The provision for loan losses decreased from $178,000 in fiscal 2012 to $120,000 for fiscal 2013. For the six months ended December 31, 2013, HV Bank recorded a $31,000 credit for loan losses instead of a provision. The largest concentration of the loan loss allowance at December 31, 2013 represented reserves established against the commercial real estate and residential mortgage loan portfolios.

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FELDMAN FINANCIAL ADVISORS, INC.

Table 8

Non-performing Assets Summary

As of June 30, 2012 and 2013 and December 31, 2013

(Dollars in Thousands)

	Dec. 31,			June 30,
	2013			2013			2012
Non-accrual loans(1)
Consumer:
Residential mortgage	$	957		$	564		$	622
Home equity and HELOCs		379			198			222
Other consumer		—			—			—
Commercial:
Commercial real estate		679			683			1,343
Commercial business		—			—			—
Construction - residential		—			—			—
Total non-performing loans		2,015			1,445			2,187
Real estate owned		566			2,199			1,824
Total non-performing assets	$	2,581		$	3,644		$	4,011
Ratios:
Non-performing loans to total loans		2.7	%		1.9	%		3.5	%
Non-performing assets to total assets		1.6	%		2.4	%		2.7	%

⁽¹⁾  There were no troubled debt restructurings in non-accrual loans for the above periods.

Source: HV Bancorp, preliminary prospectus.

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FELDMAN FINANCIAL ADVISORS, INC.

Table 9

Allowance for Loan Loss Summary

For the Years Ended June 30, 2012 and 2013

And the Six Months Ended December 31, 2012 and 2013

(Dollars in Thousands)

	Six Months Ended December 31,						Year Ended June 30,
	2013			2012			2013			2012
Allowance for loan losses at beginning of period	$	581		$	474		$	474		$	628
Provision (credit) for loan losses		(31	)		80			120			178
Charge-offs
Residential mortgage		62			—			—			12
Home equity and HELOCs		—			—			1			—
Other consumer		3			1			—			3
Commercial real estate		—			12			12			362
Commercial business		—			—			—			—
Construction - residential		—			—			—			—
Unallocated reserve		—			—			—			—
Total charge-offs		65			13			13			377
Total recoveries		—			—			—			45
Net charge-offs		65			13			13			332
Allowance for loan losses at end of period	$	485		$	541		$	581		$	474
Allowance for loan losses to non-performing loans(1)		24.1	%		21.8	%		40.2	%		19.4	%
Allowance for loan losses to loans receivable(1)		0.6	%		0.7	%		0.8	%		0.7	%
Net charge-offs to average loans receivable		0.1	%		0.0	%		0.0	%		0.4	%

⁽¹⁾ Data measured at end of period.

Source: HV Bancorp, preliminary prospectus.

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FELDMAN FINANCIAL ADVISORS, INC.

Office Properties

HV Bank conducts its executive administrative operations from the headquarters office located at 3501 Masons Mill Road, Suite 401, Huntingdon Valley, Pennsylvania. HV Bank operates four full-service branch offices, one limited service office, and an administrative office located in Montgomery, Bucks and Philadelphia counties. HV Bank closed a branch office located at 2190 York Road, Jamison, Pennsylvania on November 29, 2013. HV Bank also has a loan production office in Warminster, Pennsylvania. The net book value of the premises, land and equipment of HV Bank was $1.8 million at December 31, 2013. A map of HV Bank’s office network is presented below along with the location of Victory Bank’s single office.

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FELDMAN FINANCIAL ADVISORS, INC.

Table 10 provides deposit data for HV Bank’s branch offices from June 30, 2008 to June 30, 2013. HV Bank’s total deposits increased by a compound annual growth rate (“CAGR”) of 2.6% over this five-year period with the bulk of the deposit increase occurring at the Bucks County branch offices in Warrington and Plumsteadville. As of June 30, 2013, HV Bank’s branch with the largest deposit amount was the Huntingdon Valley office located at 2617 Huntingdon Pike with total deposits of $56.9 million, followed by the Huntingdon Valley office located at 1990 County Line Road with total deposits of $27.0 million. As noted previously, the Jamison branch office was closed in November 2013.

Table 10

Branch Office Deposit Data

(Dollars in Thousands)

		June 30,						‘08-13			‘12-13
Address	City	2008 ($000s)		2012 ($000s)		2013 ($000s)		CAGR (%)			CAGR (%)
Montgomery County
2617 Huntingdon Pike	Huntingdon Valley	$	57,564	$	58,360	$	56,948		-0.2	%		2.5	%
1990 County Line Road	Huntingdon Valley		23,512		27,812		27,007		2.8	%		3.0	%
Bucks County
Rt. 611 & Street Road	Warrington		16,479		23,613		24,202		8.0	%		-2.4	%
5725 Easton Road	Plumsteadville		7,037		15,456		16,715		18.9	%		-7.5	%
2190 York Road(1)	Jamison		13,467		9,632		9,049		-7.6	%		6.4	%
Philadelphia County
8580 Verree Road	Philadelphia		2,253		2,712		3,138		6.9	%		-13.6	%
Total Deposits		$	120,312	$	137,585	$	137,059		2.6	%		0.4	%

⁽¹⁾ Branch office was closed on November 29, 2013.

Source: SNL Financial.

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FELDMAN FINANCIAL ADVISORS, INC.

Market Area

Overview of Market Area

HV Bank is headquartered in Huntingdon Valley, Pennsylvania, which is located in the northwest suburban area of metropolitan Philadelphia. HV Bank primarily serves communities located in Montgomery, Bucks and Philadelphia counties in Pennsylvania from its four full-service retail banking offices, two limited service branch offices, one loan production office, and one administrative office. The total population of the three counties served by HV Bank was approximately 3.0 million in 2012. Victory Bank operates an office in Montgomery County as well as a loan processing office in Wyomissing (Berks County), Pennsylvania. The merger will add a single branch office location in western Montgomery County to HV Bank’s branch network and provide access to additional population centers for HV Bank.

The Philadelphia metropolitan area’s economy is heavily based upon manufacturing, refining, health care, food and financial services. The city is home to many Fortune 500 companies, including cable television and internet provider Comcast; insurance companies CIGNA and Lincoln Financial Group; energy company Sunoco; food services company Aramark; paper and packaging company Crown Holdings Incorporated; diversified producer Rohm and Haas Company; the pharmaceutical company Glaxo SmithKline; the helicopter division of Boeing Co.; and automotive parts retailer Pep Boys. The city is also home to many hospitals, universities and colleges.

Table 11 presents comparative demographic data for the United States, the state of Pennsylvania, the Philadelphia Metropolitan Statistical Area (“MSA”), Montgomery County, and Bucks County. The Philadelphia MSA is composed of the Philadelphia, PA metropolitan division, the Camden, NJ metropolitan division, and the Wilmington, DE-MD-NJ metropolitan

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FELDMAN FINANCIAL ADVISORS, INC.

division. The Philadelphia metropolitan division includes the Pennsylvania counties of Bucks, Chester, Delaware, Montgomery, and Philadelphia. The Camden metropolitan division includes the New Jersey counties of Burlington, Camden, and Gloucester. The Wilmington metropolitan division includes New Castle County-DE, Cecil County-MD, and Salem County-NJ.

Montgomery County is a suburban county northwest of the city of Philadelphia. Its estimated 2012 population of approximately 807,000 made it the third most populous county in Pennsylvania after Philadelphia and Allegheny counties. Montgomery County’s median household income of $74,136 in 2012 ranked it second after Chester County among all Pennsylvania counties. Over the five years from 2012 to 2017, Montgomery County’s population is expected to expand by 2.3%, ahead of the Pennsylvania and Philadelphia MSA projected growth rates of 1.5% and 1.8%, respectively. Montgomery County’s economic base is very diverse and its top private sector employers include Main Line Health Systems, Abington Health, Lockheed Martin, SmithKline Beecham, Schering Corporation, and Giant Food Stores.

Bucks County had an estimated 2012 population of approximately 629,000 and ranked fourth among all counties in Pennsylvania. Bucks County’s median household income of $73,557 in 2012 ranked it third in the state. Over the past two decades, the economy of Bucks County has continued to shift away from manufacturing and agriculture to health care, professional services, and retail trade. The unemployment rates in Montgomery and Bucks counties generally follow the national and statewide trends, but are consistently lower. The unemployment rates in December 2013 for Montgomery and Bucks counties were 5.1% and 5.6%, respectively, below the national and state rates of 6.7% and 6.2%, respectively.

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Table 11

Selected Demographic Data

	United States			Pennsylvania			Philadelphia MSA			Montgomery County			Bucks County
Total Population
2012 - Current		313,129,017			12,807,296			6,011,545			806,827			629,397
2017 - Projected		323,986,227			12,997,575			6,120,409			825,595			633,763
% Change 2010-12		1.42	%		0.83	%		0.77	%		0.87	%		0.66	%
% Change 2012-17		3.47	%		1.49	%		1.81	%		2.33	%		0.69	%
Age Distribution, 2012
0 - 14 Age Group		19.65	%		17.70	%		18.87	%		18.59	%		18.38	%
15 - 34 Age Group		27.42	%		25.87	%		27.24	%		23.94	%		22.49	%
35 - 54 Age Group		27.07	%		27.16	%		27.71	%		28.80	%		29.98	%
55 - 69 Age Group		16.64	%		17.97	%		16.58	%		17.51	%		18.69	%
70 + Age Group		9.22	%		11.31	%		9.61	%		11.16	%		10.46	%
Median Age (years)		37.3			40.5			38.2			40.9			42.3
Total Households
2012 - Current		118,208,713			5,046,383			2,275,804			310,707			235,430
2017 - Projected		122,665,498			5,142,006			2,323,211			318,366			239,153
% Change 2012-17		3.77	%		1.89	%		2.08	%		2.47	%		1.58	%
Household Income, 2012
< $25,000		24.67	%		25.09	%		21.85	%		14.31	%		13.21	%
$25,000 - $49,999		25.15	%		25.51	%		21.57	%		18.75	%		18.60	%
$50,000 - $99,000		29.93	%		30.89	%		30.11	%		31.67	%		33.28	%
$100,000 - $199,999		16.28	%		15.02	%		20.92	%		26.01	%		27.11	%
$200,000+		3.97	%		3.49	%		5.55	%		9.26	%		7.81	%
Median Household Income
2012 - Current	$	50,157		$	49,167		$	57,132		$	74,136		$	73,557
2017 - Projected	$	56,895		$	57,204		$	69,239		$	84,663		$	84,159
% Change 2012-17		13.43	%		16.35	%		21.19	%		14.20	%		14.41	%
Average Household Income
2012 - Current	$	68,162		$	65,815		$	78,256		$	95,929		$	94,029
2017 - Projected	$	77,137		$	75,896		$	90,465		$	112,071		$	109,013
% Change 2012-17		13.17	%		15.32	%		15.60	%		16.83	%		15.94	%
Per Capita Income
2012 - Current	$	26,409		$	26,715		$	30,381		$	37,574		$	35,502
2017 - Projected	$	29,882		$	30,823		$	35,107		$	43,856		$	41,477
% Change 2012-17		13.15	%		15.38	%		15.56	%		16.72	%		16.83	%

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FELDMAN FINANCIAL ADVISORS, INC.

Table 11 (continued)

	United States			Pennsylvania			Philadelphia MSA			Montgomery County			Bucks County
Total Housing Units
2012 - Current		133,455,832			5,601,278			2,450,602			328,299			246,675
2017 - Projected		138,191,185			5,691,179			2,495,845			335,563			250,084
2017 - Projected		3.55	%		1.61	%		1.85	%		2.21	%		1.38	%
Housing Units, 2012
Owner Occupied		75,420,523			3,410,873			1,514,704			221,434			177,613
Renter Occupied		42,788,190			1,635,510			761,100			89,273			57,817
Vacant		15,247,119			554,895			174,798			17,592			11,245
Owner Occupied		56.51	%		60.89	%		61.81	%		67.45	%		72.00	%
Renter Occupied		32.06	%		29.20	%		31.06	%		27.19	%		23.44	%
Vacant		11.42	%		9.91	%		7.13	%		5.36	%		4.56	%
Unemployment Rates
December 2012		7.8	%		7.9	%		8.3	%		6.7	%		7.2	%
December 2013		6.7	%		6.2	%		6.4	%		5.1	%		5.6	%
% Change		-14.1	%		-21.5	%		-22.9	%		-23.9	%		-22.2	%

Source: SNL Financial and ESRI.

Market Share Analysis

Table 12 displays branch deposit data for the top 25 financial institutions in the Philadelphia MSA as of June 30, 2013. HV Bank ranked 75^th in the Philadelphia MSA out of 117 financial institutions and had total deposits of $137.1 million with a market share of 0.04%. Previously, as of June 30, 2012, HV Bank ranked 78^th in the Philadelphia MSA with total deposits of $137.6 million and a market share of 0.05%. HV Bank’s deposits decreased by 0.4% between June 30, 2012 and 2013, while the total deposits in the Philadelphia MSA increased by 6.2% from $301.7 billion to $327.4 billion over the same period. The top five financial institutions (Capital One Bank, TD Bank, Wells Fargo Bank, HSBC Bank, and PNC Bank) held

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$236.1 billion or 73.0% of the deposit market in the Philadelphia MSA. The merger of HV Bank and Victory Bancorp would have increased the combined company’s market ranking to 54^th in the Philadelphia MSA and a market share of 0.08% as of June 30, 2013.

Table 13 displays branch deposit data as of June 30, 2013 for the financial institutions operating in Montgomery County, Pennsylvania. With deposits of $84.0 million in Montgomery County branch locations as of June 30, 2013 and a market share of 0.35%, HV Bank ranked 27th in the Montgomery County out of 42 financial institutions. The merger of HV Bank and Victory Bancorp would have increased the combined company’s market ranking to 20^th in Montgomery County and a market share of 0.85%. The top five financial institutions (Wells Fargo Bank, TD Bank, Citizens Bank, PNC Bank, and First Niagara Bank) held $14.7 billion or 65.0% of the deposit total of $24.3 billion in Montgomery County.

Table 14 provides residential mortgage market share data for the top 25 lenders in the Philadelphia MSA as ranked by the dollar-amount of loans funded in calendar 2012. Wells Fargo Bank ranked as the leading residential lender in the MSA, funding $6.5 billion (15.6% market share) of the total $41.9 billion of residential loans funded in 2012. JPMorgan Chase, Trident Mortgage, Quicken Loans, and Bank of America were included among the top five residential lenders. HV Bank ranked 75^th in the Philadelphia MSA with $125.2 million of residential loans funded and a market share of 0.3%. Previously, HV Bank ranked 51^st in 2011 with a market share of 0.3% based on residential loans funded of $122.0 million. Victory Bank, which focuses mainly on commercial related lending, ranked 330^th in the Philadelphia MSA in 2012 with residential loan originations totaling $5.6 million. The average loan size in the Philadelphia MSA amounted to approximately $208,000 in 2011 and $220,000 in 2012.

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Table 12

Deposit Market Share in the Philadelphia MSA

Data as of June 30, 2013

Rank	Financial Institution	Type	Branch Count		Deposit Market Share (%)		Total Deposits ($000)
1	Capital One Financial Corp. (VA)	Bank		1		27.30		87,477,784
2	Toronto-Dominion Bank (TD Bank)	Bank		153		25.59		81,981,505
3	Wells Fargo & Co. (CA)	Bank		207		8.64		27,678,901
4	HSBC Holdings Plc (HSBC Bank)	Bank		4		6.83		21,869,888
5	PNC Financial Services Group (PA)	Bank		182		5.34		17,111,142
6	RBS Group Plc (Citizens Bank)	Bank		188		5.31		17,011,995
7	Bank of America Corp. (NC)	Bank		98		2.44		7,813,792
8	M&T Bank Corp. (NY)	Bank		57		1.68		5,371,143
9	Banco Santander (Santander Bank)	Bank		72		1.28		4,101,637
10	Citigroup Inc. (NY)	Bank		12		1.25		3,994,462
11	Beneficial Mutual Bancorp (PA)	Thrift		60		1.18		3,777,354
12	Susquehanna Bancshares, Inc. (PA)	Bank		62		0.95		3,028,995
13	WSFS Financial Corp. (DE)	Thrift		31		0.86		2,746,737
14	Fulton Financial Corp. (PA)	Bank		57		0.72		2,321,349
15	First Niagara Financial Group (NY)	Bank		46		0.65		2,075,387
16	National Penn Bancshares, Inc. (PA)	Bank		45		0.60		1,924,198
17	Univest Corp. of Pennsylvania (PA)	Bank		39		0.59		1,896,033
18	Firstrust Savings Bank (PA)	Thrift		20		0.54		1,725,130
19	Comenity Bank (DE)	Bank		1		0.52		1,659,188
20	Bryn Mawr Bank Corp. (PA)	Bank		27		0.49		1,555,354
21	Customers Bancorp, Inc (PA)	Bank		8		0.33		1,051,882
22	Hudson City Bancorp, Inc. (NJ)	Thrift		5		0.28		882,695
23	Republic First Bancorp, Inc. (PA)	Bank		14		0.26		821,790
24	FNB Bancorp, Inc. (PA)	Bank		17		0.22		720,627
25	FSB Bankshares Corporation (PA)	Thrift		12		0.22		690,625
54	HV Bank / Victory - Combined	Bank		7		0.08		258,563
75	Huntingdon Valley Bank (PA)	Thrift		6		0.04		137,059
81	Victory Bancorp, Inc. (PA)	Bank		1		0.04		121,504
	Total (117 financial institutions)			1,831		100.00		320,375,327

Source: SNL Financial.

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Table 13

Deposit Market Share in Montgomery County, Pennsylvania

Data as of June 30, 2013

Rank	Financial Institution	Type	Branch Count		Deposit Market Share (%)		Total Deposits ($000)
1	Wells Fargo & Co. (CA)	Bank		43		18.89		4,585,914
2	Toronto-Dominion Bank (TD Bank)	Bank		24		14.39		3,495,041
3	RBS Group Plc (Citizens Bank)	Bank		40		13.15		3,193,064
4	PNC Financial Services Group (PA)	Bank		25		8.38		2,035,370
5	First Niagara Financial Group (NY)	Bank		26		5.69		1,382,772
6	Univest Corp. of Pennsylvania (PA)	Bank		21		5.61		1,362,079
7	Susquehanna Bancshares Inc. (PA)	Bank		20		3.67		890,161
8	Firstrust Savings Bank (PA)	Thrift		7		3.34		811,223
9	Bryn Mawr Bank Corp. (PA)	Bank		6		3.08		746,998
10	Banco Santander (Santander Bank)	Bank		17		3.00		729,432
11	Bank of America Corp. (NC)	Bank		18		2.30		557,345
12	Harleysville Savings Financial (PA)	Thrift		8		2.21		537,503
13	National Penn Bancshares, Inc. (PA)	Bank		11		2.11		512,383
14	Beneficial Mutual Bancorp (PA)	Thrift		8		1.80		436,338
15	Continental Bank Holdings, Inc (PA)	Bank		11		1.69		409,745
16	Fox Chase Bancorp, Inc. (PA)	Thrift		2		1.14		276,452
17	Ambler Savings Bank (PA)	Thrift		7		1.13		275,131
18	Royal Bancshares of PA (PA)	Bank		5		1.05		255,563
19	Hatboro Federal Savings FA (PA)	Thrift		1		0.90		217,439
20	HV Bank / Victory - Combined	Thrift		3		0.85		205,469
20	Republic First Bancorp Inc. (PA)	Bank		4		0.84		203,066
21	Penn Liberty Financial Corp. (PA)	Bank		3		0.79		191,400
22	Tompkins Financial Corporation (NY)	Bank		5		0.71		171,934
23	Victory Bancorp, Inc. (PA)	Bank		1		0.50		121,514
24	Phoenixville Federal Bank & Trust (PA)	Thrift		3		0.49		119,801
25	QNB Corp. (PA)	Bank		2		0.40		97,886
27	Huntingdon Valley Bank (PA)	Thrift		2		0.35		83,955
	Total (42 financial institutions)			344		100.00		24,281,112

Source: SNL Financial.

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Table 14

Residential Mortgage Market Share in the Philadelphia MSA

Data for the Year Ended December 31, 2012

Rank	Company	Type	No. of Funded Loans		Total Market Share (%)		Total Funded Loans ($000)
1	Wells Fargo & Co. (CA)	Bank		29,112		15.63		6,547,602
2	JPMorgan Chase & Co. (NY)	Bank		10,421		4.62		1,933,696
3	Trident Mortgage Co. LP (PA)	Mtg. Bank		6,556		3.86		1,616,181
4	Quicken Loans Inc. (MI)	Mtg. Bank		6,312		3.30		1,384,545
5	Bank of America Corp. (NC)	Bank		5,189		2.81		1,179,371
6	RBS Citizens NA (RI)	Bank		5,559		2.41		1,009,457
7	TD Bank NA (DE)	Bank		5,043		2.12		888,944
8	PNC Financial Services Group (PA)	Bank		4,893		2.03		849,192
9	Citigroup Inc. (NY)	Bank		4,510		1.91		798,947
10	Santander Bank N.A. (MA)	Bank		2,686		1.77		740,540
11	Ally Bank (UT)	Bank		3,331		1.65		689,892
12	Gateway Funding (PA)	Mtg. Bank		3,061		1.63		684,886
13	Provident Funding Group Inc (CA)	Mtg. Bank		2,360		1.41		590,545
14	Police & Fire FCU (PA)	Credit Union		4,493		1.20		503,943
15	New York Community Bancorp (NY)	Thrift		855		1.17		489,973
16	M&T Bank Corp. (NY)	Bank		1,182		1.07		448,826
17	PHH Corp. (NJ)	Mtg. Bank		1,935		0.97		407,291
18	New Penn Financial LLC (PA)	Mtg. Bank		1,785		0.97		405,028
19	Meridian Bank (PA)	Bank		1,622		0.93		388,000
20	Guaranteed Rate Inc. (IL)	Mtg. Bank		1,663		0.92		385,069
21	Allied Mortgage Group Inc. (PA)	Mtg. Bank		1,843		0.92		384,203
22	Walker & Dunlop Inc. (MD)	Mtg. Bank		26		0.89		374,086
23	Hudson City Bancorp Inc. (NJ)	Thrift		577		0.80		335,669
24	Univest Corp. of Pennsylvania (PA)	Bank		1,726		0.77		322,375
25	Cardinal Financial Co L.P. (PA)	Mtg. Bank		1,300		0.71		295,916
74	HV Bank / Victory - Combined	Thrift		731		0.31		130,762
75	Huntingdon Valley Bank (PA)	Thrift		711		0.30		125,180
330	Victory Bank (PA)	Bank		20		0.01		5,582
	Total			190,436		100.00		41,898,357

Source: SNL Financial.

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FELDMAN FINANCIAL ADVISORS, INC.

General Profile of Victory Bancorp

Victory Bancorp is a bank holding company that owns 100% of the outstanding capital stock of Victory Bank, a Pennsylvania-chartered commercial bank that was established in January 2008. Victory Bank operates a full-service commercial and consumer banking business in Montgomery County, Pennsylvania. Victory Bank originates secured and unsecured commercial loans, commercial mortgage loans, consumer loans, construction loans, small business loans, and automobile loans. Victory Bank offers an enhanced delivery system option of telephone banking and Internet banking. Other services include safe deposit facilities, remote deposit capture, wire transfers, two drive-through facilities, 24-hour depositories, and an ATM.

Since its inception, Victory Bank has focused on a strategic niche of operating as a local community bank with special expertise in serving the borrowing, cash management and depository, needs of small- to medium-sized business and professional practices, and providing responsive and personalized service to its customers. Due to the consolidation of financial institutions in Pennsylvania and in Montgomery County, Victory Bank saw a significant opportunity for a locally focused bank to provide a full range of financial services to small- and middle-market commercial and retail customers. By offering highly professional, personalized banking products and service delivery methods and employing advanced banking technologies, Victory Bank seeks to distinguish itself from larger, regional banks operating in the local market. At December 31, 2013, Victory Bancorp had total assets of $141.3 million, net total loans of $129.3 million, total deposits of $120.1 million, and total equity capital of $13.0 million or 9.17% of total assets. Exhibit II-8 summarizes Victory Bancorp’s consolidated balance sheets as of the years ended December 31, 2011 to 2013.

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Exhibit II-9 displays Victory Bancorp’s consolidated income statements for the years ended December 31, 2011 to 2013. Table 15 below presents selected financial condition and operating data for Victory Bancorp as of or for the years ended December 31, 2012 and 2013 and Table 16 displays selected financial ratios for Victory Bancorp.

Table 15

Selected Financial Condition and Operating Data

Victory Bancorp

As of or For the Years Ended December 31, 2012 and 2013

(Dollars in Thousands)

	December 31,
	2013		2012
Total assets	$	141,319	$	127,296
Cash and cash equivalents		2,389		5,577
Investment securities		1,901		4,885
Total loans, net		129,337		109,158
Total deposits		120,126		112,338
Total borrowings		7,665		2,000
Total equity capital		12,958		12,552

	Year Ended December 31,
	2013		2012
Total interest income	$	6,839	$	5,707
Total Interest expense		1,030		1,074
Net interest income		5,809		4,633
Provision for loan losses		348		472
Net interest income after provision		5,461		4,161
Non-interest income		969		369
Non-interest expense		5,247		4,057
Income before income taxes		1,183		473
Income tax expense (benefit)		473		(1,060	)
Net income		710		1,533
Preferred stock dividends		218		217
Net income available to common shareholders	$	492	$	1,316

Source: Victory Bancorp, financial statements.

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FELDMAN FINANCIAL ADVISORS, INC.

Table 16

Selected Financial Ratios and Other Data

Victory Bancorp

As of or For the Years Ended December 31, 2012 and 2013

	As of or For the Year Ended December 31,
	2013			2012
Performance Ratios:
Return on average assets (ROA)		0.52	%		1.32	%
Return on average equity (ROE)		5.55	%		13.43	%
Interest rate spread(1)		4.36	%		4.04	%
Net interest margin(2)		4.53	%		4.24	%
Non-interest expense to average assets		3.86	%		3.49	%
Efficiency ratio		77.4	%		81.1	%
Average interest-earning assets to average interest-bearing liabilities		121.1	%		120.3	%
Loans to deposits		109.0	%		98.3	%
Asset Quality Ratios:
Non-performing assets to total assets(3)		0.35	%		1.32	%
Non-performing loans to total loans		0.38	%		1.52	%
Allowance for loan losses to non-performing loans		334.00	%		79.69	%
Allowance for loan losses to total loans		1.27	%		1.21	%
Net charge-offs as a percentage of average loans outstanding		(0.02	%)		(0.22	%)
Capital Ratios:
Average equity to average assets		9.40	%		9.83	%
Equity to total assets at end of period		9.17	%		9.86	%
Total capital to risk-weighted assets		10.20	%		10.32	%
Tier 1 capital to risk-weighted assets		8.95	%		9.14	%
Tier 1 capital to average assets		8.20	%		8.50	%
Other Data:
Number of full-service offices		1			1
Number of employees		30			27

⁽¹⁾ Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

⁽²⁾ The net interest margin represents net interest income as a percent of average interest-earning assets for the period.

⁽³⁾ Non-performing assets consist of non-performing loans and real estate owned.

Source: HV Bancorp, preliminary prospectus.

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FELDMAN FINANCIAL ADVISORS, INC.

Victory Bancorp’s balance sheet at December 31, 2013 was heavily concentrated in loans, which amounted to $129.3 million or 91.5% of total assets. Commercial loans totaled 75.8% of Victory Bancorp’s loan portfolio and comprised commercial term, commercial mortgage, and commercial line loans. Its assets are funded chiefly by deposits, which included $97.3 million (81.0% of total deposits) of transaction accounts and $22.8 million (19.0% of total deposits) of certificate accounts. The asset quality of Victory Bancorp has remained sound, as the NPAs measured 0.35% of total assets at December 31, 2013. As of December 31, 2013, Victory Bancorp’s equity capital amounted to $13.0 million, or 9.17% of total assets, and included preferred stock of $6.0 million and common equity of $6.9 million. The preferred stock included $2.6 million of Series E convertible shares bearing a dividend rate of 7.0% and $3.4 million of Series F non-convertible shares issued to the U.S. Treasury under the SBLF and bearing a current dividend rate of 1.0%.

Victory Bancorp’s net income declined from $1.5 million for the year ended December 31, 2012 to $710,000 for the year ended December 31, 2013. Pre-tax earnings actually increased from $473,000 to $1.2 million over the corresponding periods. Victory Bancorp recorded an income tax benefit of $1.1 million in the 2012 period related to a decrease in the deferred tax asset valuation allowance, and recorded an income tax expense of $473,000 in the 2013 period. Victory Bancorp’s ROA declined from 1.32% for the year ended December 31, 2012 to 0.52% for the year ended December 31, 2013. The earnings of Victory Bancorp are driven by its strong net interest margin, which is supported by the large concentration of commercial loans on the balance sheet funded primarily by transaction deposit accounts. The net interest margin increased from 4.24% to 4.53% over the year ended December 31, 2012 to 2013.

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Pro Forma Impact of the Merger and Conversion

HV Bank has formed HV Bancorp to be the holding company of HV Bank upon completion of its conversion from the mutual to stock form of organization. As part of the conversion, HV Bancorp will raise additional capital through the offering for sale the shares of common stock of HV Bancorp. Upon completion of the offering, HV Bancorp will own 100% of the outstanding shares of common stock of HV Bank. In connection with the mutual to stock conversion, HV Bank will also change its charter from a Pennsylvania-chartered mutual savings bank to a Pennsylvania-chartered commercial bank.

In conjunction with the conversion, HV Bancorp will complete the acquisition of Victory Bancorp that will entail the merger of Victory Bank into HV Bank. Upon consummation of the merger, HV Bank will change its corporate title to “Victory Bank.” Pursuant to the terms of the merger, Victory Bancorp’s shareholders will receive the right to exchange each share of Victory Bancorp common stock for 0.6794 of a share of HV Bancorp common stock or, under certain limited circumstances, a combination of HV Bancorp common stock and cash. In addition, Series E preferred stockholders of Victory Bancorp will be given the opportunity to convert their shares as follows: (i) exchange their shares for Victory Bancorp subordinated debt that HV Bancorp will assume upon completion of the merger; (ii) be redeemed by Victory Bancorp for cash at par on or prior the closing date of the merger; or (iii) if not exchanged for subordinated debt, redeemed for cash, or converted into Victory Bancorp stock prior to merger closing, their Series E preferred shares will be converted into HV Bancorp Series A preferred stock having similar terms. Victory Bancorp Series F preferred stock issued under the SBLF program will be exchanged for HV Bancorp Series B preferred stock having similar terms.

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Subject to the above terms and the agreed upon limitations, the existing shareholders of Victory Bancorp immediately prior to the merger will not own in excess of 48.5% of the common stock of HV Bancorp on a pro forma basis. Table 17 presents the consolidated pro forma balance sheet of HV Bancorp at December 31, 2013, giving effect to the conversion stock offering at the midpoint ($10.0 million) of the valuation range and the merger with Victory Bancorp. This pro forma presentation provides for compliance that Victory Bancorp shareholders own a maximum of 48.5% of the pro forma outstanding shares and therefore assumes, at the minimum midpoint of the offering range, that 81% of the Series E convertible preferred stock is exchanged for common stock and the remaining 19% of the Series E convertible preferred stock is converted into newly issued subordinated debt. Assuming 81% of the shares of Series E preferred stock are converted to common stock, the aggregate deal cost of the merger will be approximately $9.8 million.

As shown on Table 17, total assets would increase from $163.4 million for HV Bank at December 31, 2013 to $312.3 million on a pro forma combined basis. The combined company’s ratio of total loans to assets increases to 67.3% as compared to 48.7% for HV Bank, reflecting the substantial concentration of loans on the balance sheet of Victory Bancorp. Intangible assets, consisting of goodwill and the core deposit intangible, resulting from the merger are estimated at $834,000 in this presentation. The combined company’s ratio of tangible equity to tangible assets advances to 9.36% (compared to 6.28% for HV Bank before the conversion and merger) and its ratio of tangible common equity to tangible assets increases to 8.26% (compared to 6.28% for HV Bank). Table 17 also includes a summary of the estimated fair adjustments utilized in recording the accounting for the merger under the purchase method.

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FELDMAN FINANCIAL ADVISORS, INC.

Table 18 presents the pro forma consolidated income statement of HV Bancorp for the last twelve months (“LTM”) ended December 31, 2013, giving effect to the conversion stock offering at the midpoint of the valuation range and the merger with Victory Bancorp. Net income of HV Bank for the LTM ended December 31, 2013 amounted to $9,000, which would increase to $156,000 for HV Bancorp on a pro forma combined basis. Over the same time period, Victory Bancorp’s net income amounted to $710,000 before payment of preferred stock dividends and $492,000 after preferred dividends. The incremental contribution of Victory Bancorp’s earnings is offset by additional expenses related to HV Bancorp’s stock-benefit plans and the effect of certain fair valuation adjustments that reduce earnings. Core earnings, which exclude the effect of non-recurring income (such as securities gains), non-recurring expense (such as merger expenses), and intangibles amortization expense, increase from a deficit of $81,000 at HV Bank for the LTM ended December 31, 2013 to $252,000 for HV Bancorp on a pro forma basis. The operating performance ratios also improve as reflected by the increase in LTM ROA to 0.05% from 0.01%, the net interest margin advancing to 3.39% from 2.74%, and the efficiency ratio improving to 93.7% from 103.2%. The pro forma presentation in Table 18 does not consider any operating cost savings or revenue synergies that might result from the merger.

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Table 17

Pro Forma Consolidated Balance Sheet

HV Bancorp, Inc. – After Conversion Midpoint Offering and Merger

As of December 31, 2013

(Dollars in Thousands)

	HV Bank Historical 12/31/13			Midpoint Offering Adjust.			Victory Bancorp Historical 12/31/13			Merger Adjust.			Pro Forma HV Bancorp
Cash and securities	$	74,157		$	7,042	(1)	$	4,290		$	(747	)(4)	$	84,742
Total loans, net		79,534			—			129,337			1,286	(5)		210,157
Restricted invest. in bank stocks		910			—			627			—			1,537
Bank-owned life insurance		3,617			—			1,306			—			4,923
Premises and equipment		1,793			—			3,960			(477	)(6)		5,276
Goodwill		—			—			—			140	(7)		140
Core deposit intangible		—			—			—			694	(8)		694
Other assets		3,412			—			1,799			(429	)(9)		4,782
Total assets	$	163,423		$	7,042		$	141,319		$	467		$	312,251
Total deposits	$	140,631		$	—		$	120,126		$	263	(10)	$	261,020
Borrowed funds		10,759			—			7,665			(22	)(11)		18,402
Subordinated debt		—			—			—			497	(12)		497
Other liabilities		1,772			—			570			—			2,342
Total liabilities		153,162			—			128,361			738			282,261
Preferred stock		—			—			6,047			(2,616	)(12)		3,431
Common stock and paid-in capital		—			8,984	(2)		10,246			(829	)(13)		18,401
Retained earnings		11,502			—			(3,356	)		3,195	(14)		11,341
Accum. other comp. income (loss)		(1,241	)		—			21			(21	)(15)		(1,241	)
Unearned ESOP stock		—			(1,165	)(3)		—			—			(1,165	)
Unearned RSP stock		—			(777	)(3)		—			—			(777	)
Total equity		10,261			7,042			12,958			(271	)		29,990
Total liabilities and equity	$	163,423		$	7,042		$	141,319		$	467		$	312,251
Total equity / assets		6.28	%					9.17	%					9.60	%
Tangible equity / assets		6.28	%					9.17	%					9.36	%
Tangible common equity / assets		6.28	%					4.89	%					8.26	%
Cash and securities / assets		45.38	%					3.04	%					27.14	%
Total loans / assets		48.67	%					91.52	%					67.30	%
Total loans / deposits		56.56	%					107.67	%					80.51	%

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Table 17

Pro Forma Consolidated Balance Sheet (continued)

⁽¹⁾ Net investable proceeds from offering midpoint, after offering expenses and funded stock purchases by ESOP and RSP.

⁽²⁾ Issuance of common stock in offering, net of offering expenses.

⁽³⁾ Contra-equity account established to reflect the stock benefit plans (ESOP and RSP). The ESOP plans to purchase an amount of common stock in the offering equal to 6% of the total shares to be outstanding after the merger. Subject to shareholder approval, the RSP plans to purchase an amount of common stock equal to 4% of the total outstanding shares.

⁽⁴⁾  Includes the cash portion of the merger consideration, transaction expense, and settlement of warrants.

⁽⁵⁾  Fair value adjustment to loan portfolio of Victory Bancorp.

⁽⁶⁾  Market value adjustment to the land and building of Victory Bancorp.

⁽⁷⁾  Excess of purchase price over fair value of net assets acquired.

⁽⁸⁾  Core deposit intangible representing the economic value of the acquired core deposit base.

⁽⁹⁾  Deferred tax asset created as a result of purchase accounting.

⁽¹⁰⁾  Fair value adjustment to certificates of deposit acquired in the merger.

⁽¹¹⁾  Fair value adjustment to borrowings acquired in the merger.

⁽¹²⁾  Reflects conversion of 81% of Series E preferred shares of Victory Bancorp into right to receive HV Bancorp common stock and 19% of Series E preferred shares into subordinated debt.

⁽¹³⁾  Reflects elimination of historical common stock and paid-in capital account of Victory Bancorp and issuance of HV Bancorp common stock to Victory Bancorp shareholders as merger consideration.

⁽¹⁴⁾  Reflects elimination of historical retained deficit account of Victory Bancorp and deduction of HV Bancorp merger expenses.

⁽¹⁵⁾  Reflects elimination of historical accumulated other comprehensive income account of Victory Bancorp.

Source: HV Bancorp, preliminary prospectus; Feldman Financial.

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Table 18

Pro Forma Consolidated Income Statement

HV Bancorp, Inc. – After Conversion Midpoint Offering and Merger

As of December 31, 2013

(Dollars in Thousands)

	HV Bank Historical 12/31/13			Midpoint Offering Adjust.			Victory Bancorp Historical 12/31/13			Merger Adjust.			Pro Forma HV Bancorp
Total interest income	$	4,970		$	124	(1)	$	6,839		$	(459	)(4)	$	11,474
Total interest expense		896			—			1,030			(88	)(5)		1,838
Net interest income		4,074			124			5,809			(371	)		9,636
Provision for loan losses		9			—			348			—			357
Net interest income after prov.		4,065			124			5,461			(371	)		9,279
Non-interest operating income		2,153			—			924			—			3,077
Securities gains, net		256			—			45			—			301
Non-interest income		2,409			—			969			—			3,378
Non-interest operating expense		6,424			331	(2)		5,049			108	(6)		11,912
Intangibles amortization expense		—			—			—			129	(7)		129
Non-recurring expense		120			—			198			—			318
Non-interest expense		6,544			331			5,247			237			12,359
Income before income taxes		(69	)		(207	)		1,183			(608	)		299
Income tax expense (benefit)		(78	)		(37	)(3)		473			(215	)(3)		143
Net income		9			(170	)		710			(393	)		156
Preferred stock dividends		—			—			218			(184	)(8)		34
Net income available to common	$	9		$	(170	)	$	492		$	(209	)	$	122
Return on average assets - ROA		0.01	%					0.52	%					0.05	%
Return on average equity - ROE		0.08	%					5.55	%					0.51	%
Core ROA		-0.05	%					0.60	%					0.08	%
Core ROE		-0.74	%					6.34	%					0.83	%
Net interest margin		2.74	%					4.53	%					3.39	%
Efficiency ratio		103.16	%					74.99	%					93.70	%
Non-interest income / avg. assets		1.54	%					0.71	%					1.13	%
Non-interest expense / avg. assets		4.18	%					3.86	%					4.12	%

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FELDMAN FINANCIAL ADVISORS, INC.

Table 18

Pro Forma Consolidated Income Statement (continued)

⁽¹⁾  Interest income from reinvestment of net cash proceeds from offering midpoint, reflecting estimated pretax yield of 1.75% that approximates the yield on a five-year U.S. Treasury security as of December 31, 2013.

⁽²⁾  Reflects the expense impact of the stock benefit plans, including the ESOP, RSP, and stock option plan.

⁽³⁾  Assumes a marginal income tax rate of 34.0% on taxable income and tax-deductible expense.

⁽⁴⁾  Adjustment to interest income to reflect amortization of yield component of fair adjustment to acquired loan portfolio and opportunity cost of funding the cash portion of the merger consideration and the merger transaction expenses.

⁽⁵⁾  Adjustment to interest expense to reflect accretion premium on certificates of deposit, amortization of discount on acquired borrowings, and incremental cost of newly issued subordinated debt.

⁽⁶⁾  Adjustment to non-interest operating expense to reflect increased Pennsylvania shares tax and reduced depreciation expense related to fair value write-down of fixed assets.

⁽⁷⁾  Amortization of core deposit intangible asset assuming expected life of approximately 11 years utilizing the double declining balance method.

⁽⁸⁾  Reflects the elimination of all cash dividends on Series E preferred stock. Remaining preferred dividends reflect cash dividends paid on the $3.4 million of SBLF Series F preferred stock at an annual rate of 1.0%.

Source: HV Bancorp, preliminary prospectus; Feldman Financial.

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FELDMAN FINANCIAL ADVISORS, INC.

II. COMPARISONS WITH PUBLICLY TRADED THRIFTS

General Overview

The comparative market approach provides a sound basis for determining estimates of going-concern valuations where a regular and active market exists for the stocks of peer institutions. The comparative market approach was utilized in determining the estimated pro forma market value of HV Bancorp because: (i) reliable market and financial data are readily available for comparable institutions; (ii) the comparative market method is accepted by the applicable regulatory guidelines; and (iii) other alternative valuation methods (such as income capitalization, discounted cash flow, or liquidation analysis) are unlikely to produce a valuation relevant to the future trading patterns of the related equity interest. The generally employed valuation method in initial public offerings, where possible, is the comparative market approach, which also can be relied upon to determine pro forma market value in a thrift stock conversion.

The comparative market approach derives valuation benchmarks from the trading patterns of selected peer institutions that, due to certain factors such as financial performance and operating strategies, enable the appraiser to estimate the potential value of the subject institution in a stock conversion offering. The pricing and trading history of recent initial public offerings of thrifts are also examined to provide evidence of the “new issue discount” that must be considered. In Chapter II, our valuation analysis focuses on the selection and comparison of HV Bank with a comparable group of publicly traded thrift institutions (the “Comparative Group”). Chapter III will detail any additional discounts or premiums that we believe are appropriate to HV Bancorp’s pro forma market value.

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Selection Criteria

Selected market price and financial performance data for all public thrifts listed on major stock exchanges are shown in Exhibit III. The list excludes companies that are subject to being acquired under a pending merger transaction and companies that have a majority ownership interest controlled by a mutual holding company (“MHC”). Several criteria, discussed below, were used to select the individual members of the Comparative Group from the overall universe of publicly traded thrifts.

• Operating characteristics – An institution’s operating characteristics are the most important factors because they affect investors’ expected rates of return on a company’s stock under various business/economic scenarios, and they influence the market’s general perception of the quality and attractiveness of a given company. Operating characteristics, which may vary in importance during the business cycle, include financial variables such as profitability, balance sheet growth, capitalization, asset quality, and other factors such as lines of business and management strategies.

• Degree of marketability and liquidity – Marketability of a stock reflects the relative ease and promptness with which a security may be sold when desired, at a representative current price, without material concession in price merely because of the necessity of sale. Marketability also connotes the existence of buying interest as well as selling interest and is usually indicated by trading volumes and the spread between the bid and asked price for a security. Liquidity of the stock issue refers to the organized market exchange process whereby the security can be converted into cash. We attempted to limit our selection to companies that have access to a regular trading market or price quotations, and therefore only considered companies listed on major stock exchanges. We eliminated for consideration companies with market prices that were materially influenced by announced acquisitions or other unusual circumstances. However, the expectation of continued industry consolidation is currently embedded in thrift equity valuations.

• Geographic Location – The region of the country where a company operates is also of importance in selecting the comparative group. The operating environment for thrift institutions varies from region to region with respect to business and economic environments, real estate market conditions, speculative takeover activity, and investment climates. Economic and investor climates can also vary greatly within a region, particularly due to takeover activity.

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The operations of HV Bank fit the general profile of a diversifying thrift institution, concentrating primarily on real estate lending in its local market and relying significantly on core deposits and certificate of deposit accounts as funding sources. Residential mortgage loans remain a core product in HV Bank’s loan portfolio. However, HV Bank has increasingly expanded its loan mix through the origination of commercial real estate loans and, to a lesser extent, commercial business loans and construction loans.

In determining the Comparative Group composition, we focused chiefly on HV Bank’s asset size, capital level, credit risk profile, and geographic location. Attempting to concentrate on HV Bank’s performance characteristics and to develop a meaningful number of comparables for valuation purposes, we expanded the geographic criterion for comparable thrifts beyond the Mid-Atlantic region of the United States; however, primary consideration was accorded to comparable thrifts located in Pennsylvania and other Mid-Atlantic states. As with any composition of a group of comparable companies, the selection criteria were broadened sufficiently to assemble a meaningful number of members:

• Publicly traded thrift – stockholder-owned thrift whose shares are traded on the NYSE, NYSE MKT, or NASDAQ stock markets.

• Non-acquisition target – company is not subject to a pending acquisition.

• Excludes mutual holding companies – company’s majority ownership interest is not held by an MHC.

• Seasoned trading issue – company has been traded publicly for a minimum of one full year.

• Asset size – total assets less than $500 million.

• Credit risk exposure – ratio of total non-performing assets to total assets less than or equal to 3.0%.

• Geographic location – preference for companies based in the Mid-Atlantic region, with consideration also granted to companies in adjacent regions.

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FELDMAN FINANCIAL ADVISORS, INC.

As a result of applying the stated criteria, the screening process produced a reliable representation of publicly traded thrifts. A general operating summary of the ten companies included in the Comparative Group is presented in Table 19. All of the selected companies are traded on the NASDAQ market. The Comparative Group ranged in asset size from $263.0 million at Georgetown Bancorp to $425.5 million at Alliance Bancorp. The median asset size of the Comparative Group was $303.0 million, compared to HV Bank’s total assets of $163.4 million at December 31, 2013. The asset size criterion was extended to encapsulate a meaningful number of comparables since only a few number of small publicly held thrifts trade on the major stock exchanges. However, four of the selected comparables have total assets less than $300 million: Georgetown Bancorp at $263.0 million, Poage Bankshares at $289.2 million, Athens Bancshares at $294.8 million, and Wolverine Bancorp at $297.8 million.

Four of the members of the Comparative Group are located in Mid-Atlantic states: Alliance Bancorp, Polonia Bancorp, and WVS Financial in Pennsylvania, and Hamilton Bancorp in Maryland. Polonia Bancorp, which completed its conversion from a mutual holding company to a full stock company in November 2012, is headquartered in Huntingdon Valley, Pennsylvania, similar to HV Bank. Three of the members of the Comparative Group are located in the Midwest, two in the Southeast, and one in New England.

In comparison to recent performance trends of the aggregate public thrift industry, the Comparative Group generally exhibited comparable profitability and asset quality ratios and higher capital levels. While some differences inevitably may exist between HV Bank and the individual companies, we believe that the selected Comparative Group on the whole provides a meaningful basis of financial comparison for valuation purposes.

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Table 19

Comparative Group Operating Summary

As of December 31, 2013

Company	Headquarters Location	Number of Offices	Conversion Offering Date	Total Assets ($Mil.)		Tang. Equity/ Assets (%)
Huntingdon Valley Bank	Huntingdon Valley, PA	5	NA	$	163.4		6.28
Victory Bancorp, Inc.	Limerick, PA	1	NA		141.3		9.17
Comparative Group
Alliance Bancorp, Inc.	Broomall, PA	8	01/18/11		425.5		16.49
Athens Bancshares Corp.	Athens, TN	7	01/07/10		294.8		13.89
Georgetown Bancorp, Inc.	Georgetown, MA	3	07/12/12		263.0		11.00
Hamilton Bancorp, Inc.	Towson, MD	5	10/10/12		300.5		19.70
Jacksonville Bancorp, Inc.	Jacksonville, IL	6	07/15/10		318.4		12.17
LSB Financial Corp.	Lafayette, IN	5	02/03/95		367.6		11.08
Poage Bankshares, Inc.	Ashland, KY	6	09/13/11		289.2		19.93
Polonia Bancorp, Inc.	Huntingdon Valley, PA	6	11/13/12		305.6		13.19
Wolverine Bancorp, Inc.	Midland, MI	4	01/20/11		297.8		20.26
WVS Financial Corp.	Pittsburgh, PA	6	11/29/93		314.0		10.28

Source: Huntingdon Valley Bank; Victory Bancorp; SNL Financial.

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Recent Financial Comparisons

Table 20 summarizes certain key financial comparisons between HV Bank and the Comparative Group. Tables 21 through 26 contain the detailed financial comparisons of HV Bank with the individual Comparative Group companies based on measures of profitability, income and expense components, yield-cost structure, capital levels, balance sheet composition, asset quality, and growth rates. Historical financial performance ratios for Victory Bancorp are also displayed. In addition, pro forma financial ratios are presented for HV Bancorp giving effect to the conversion and the merger based on the pro forma financial statements as of December 31, 2013 in Table 17 and Table 18. Financial data for HV Bank, Victory Bancorp, the Comparative Group, and All Public Thrift aggregate were utilized for the latest available period as of or for the LTM ended December 31, 2013.

HV Bank’s LTM ROA was 0.01%, reflecting breakeven profitability results that trailed the Comparative Group median of 0.42% and the All Public Thrift median of 0.58%. HV Bank’s lower ROA was attributable mainly to a lower net interest margin and a higher level of operating expense. HV Bank’s LTM ROE was 0.08% and positioned below the Comparative Group median of 3.00%. Only two Comparative Group members reported an LTM ROA below that of HV Bank. Hamilton Bancorp and Polonia Bancorp sustained net losses with ROA performances of -0.38% and -0.09%, respectively. On a pro forma basis assuming the midpoint of the offering range, HV Bancorp reflects an LTM ROA of 0.05% and ROE of 0.51%

Based on core earnings as adjusted to exclude securities gains and merger-related expenses, HV Bank’s core ROA measured -0.05% versus the Comparative Group median of 0.52% and the All Public Thrift median of 0.58%. HV Bank’s core earnings for the LTM period excluded $256,000 of pre-tax gains on sales of investment securities and $120,000 of merger-related

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expenses. HV Bank’s LTM core ROE of -0.74% also lagged the Comparative Group median of 2.57% and the All Public Thrift median of 4.46%. The LTM core ROA for HV Bancorp on a pro forma basis was 0.08% and the LTM core ROE was 0.83%.

As shown in Table 20, HV Bank’s net interest margin of 2.74% was surpassed by the Comparative Group median of 3.35% and the All Public Thrift median of 3.27%. HV Bank’s net interest margin has been restrained by its large concentration of investment securities, which generally are lower yielding compared to loans. Two of the Comparative Group members, Hamilton Bancorp and WVS Financial, exhibited net interest margins comparable to or lower than that of HV Bank and both also had large levels of investment securities on their respective balance sheets.

HV Bank’s weighted average yield on earning assets measured 3.34% for the LTM period, measuring below the Comparative Group median of 4.09%. HV Bank’s weighted average cost of funding liabilities at 0.61% was below the Comparative Group median of 0.78%. Accordingly, HV Bank’s net interest spread of 2.73% was lower than the Comparative Group median of 3.25%. On a pro forma basis, HV Bancorp displays a net interest spread of 3.35% as the larger concentration of loans to assets at Victory Bancorp would have the effect of increasing HV Bancorp’s yield on earning assets to 4.03% as compared to 3.34% for HV Bank.

HV Bank’s non-interest operating income (excluding securities gains and other non-recurring income) totaled 1.37% of average assets for the LTM period, noticeably outperforming the Comparative Group and All Public Thrift medians of 0.71% and 0.68%, respectively. Gains on sale of loans have been a significant contributor to HV Bank’s non-interest revenue.

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Table 20

Key Financial Comparisons

Huntingdon Valley Bank and the Comparative Group

As of For the Last Twelve Months Ended December 31, 2013

(Ratios in Percent)

	HV Bank			Victory Bancorp		Pro Forma HV Bancorp(1)		Comp. Group Median		All Public Thrift Median
Profitability
LTM ROA		0.01			0.52		0.05		0.42		0.58
LTM ROE		0.08			5.55		0.51		2.52		4.68
Core ROA		(0.05	)		0.60		0.08		0.52		0.58
Core ROE		(0.74	)		6.34		0.83		2.57		4.46
Income and Expense (% of avg. assets)
Total Interest Income		3.17			5.03		3.82		3.84		3.03
Total Interest Expense		0.57			0.76		0.61		0.65		0.65
Net Interest Income		2.60			4.27		3.21		3.17		3.03
Provision for Loan Losses		0.01			0.26		0.12		0.19		0.11
Other Operating Income		1.37			0.68		0.93		0.71		0.68
Securities Gains and Non-rec. Income		0.16			0.03		0.10		0.00		0.01
General and Administrative Expense		4.10			3.71		3.97		3.09		2.90
Intangibles Amortization Expense		0.00			0.00		0.04		0.00		0.00
Non-recurring Expense		0.08			0.15		0.11		0.00		0.00
Pre-tax Core Earnings(1)		(0.13	)		0.98		0.05		0.51		0.88
Net Interest Margin		2.74			4.40		3.39		3.35		3.27
Efficiency Ratio		103.16			74.99		93.70		78.54		74.79
Yield-Cost Data
Yield on Earning Assets		3.34			5.34		4.03		4.09		3.98
Cost of Funding Liabilities		0.61			0.85		0.69		0.78		0.77
Net Interest Spread		2.73			4.49		3.35		3.25		3.23
Asset Utilization (% of avg. total assets)
Average Earning Assets		95.00			94.24		94.80		94.61		93.79
Average Funding Liabilities		93.48			89.02		89.37		84.22		86.17
Average Net Earnings Assets		1.51			5.22		5.43		10.36		7.42
Average Equity		6.99			9.40		10.16		14.93		12.73

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Table 20 (continued)

Key Financial Comparisons

Huntingdon Valley Bank and the Comparative Group

As of For the Last Twelve Months Ended December 31, 2013

(Ratios in Percent)

	HV Bank			Victory Bancorp		Pro Forma HV Bancorp(1)		Comp. Group Median		All Public Thrift Median
Balance Sheet Composition (% of total assets)
Cash and Securities		45.93			3.48		27.63		28.52		23.11
Loans Receivable, net		48.67			91.52		67.30		68.23		69.84
Real Estate Owned		0.35			0.00		0.18		0.13		0.21
Intangible Assets		0.00			0.00		0.27		0.00		0.01
Other Assets		5.05			5.00		4.62		5.35		4.80
Total Deposits		86.05			85.00		83.59		75.67		75.13
Borrowed Funds		6.58			5.42		6.05		6.53		11.62
Other Liabilities		1.08			0.40		0.75		1.02		0.98
Total Equity		6.28			9.17		9.60		13.57		12.25
Loan Portfolio (% of total loans)
Residential Mortgage Loans		86.21			27.91		49.99		39.59		38.33
Other Real Estate Mortgage Loans		13.03			45.76		33.37		42.47		40.35
Non-mortgage Loans		0.76			26.33		16.64		13.80		16.13
Growth Rates
Total Assets		3.48			11.02		9.48		0.95		2.36
Total Loans, Net		(0.77	)		18.49		11.01		3.90		5.34
Total Deposits		2.04			6.93		4.34		1.40		1.09
Regulatory Capital Ratios
Tier 1 Leverage Ratio		6.85			8.20		8.45		11.32		11.98
Tier 1 Risk-based Capital Ratio		12.30			8.95		11.70		21.23		18.05
Total Risk-based Capital Ratio		12.84			10.20		11.97		22.29		19.43
Credit Risk Ratios
Non-performing Loans / Total Loans		2.52			0.38		1.19		2.18		2.27
Non-performing Assets / Total Assets		1.58			0.35		0.99		1.57		1.81
Reserves / Total Loans		0.61			1.27		0.23		1.54		1.20
Reserves / Non-performing Loans		24.07			334.00		19.31		71.53		57.66

⁽¹⁾ Assumes completion of the merger and the conversion offering at the midpoint.

⁽²⁾ Core earnings exclude securities gains, intangibles amortization expense, and non-recurring items.

Source: Huntingdon Valley Bank; Victory Bancorp; SNL Financial; Feldman Financial.

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For the LTM ended December 31, 2013, HV Bank’s gains on sale of loans amounted to $1.8 million or 1.12% of average assets. As previously noted, HV Bank also generated gains on sale of securities that amounted to $256,000 or 0.16% of average assets, which exceeded the corresponding production of securities gains and non-recurring income as reflected by the Comparative Group median of 0.00% and All Public Thrift median of 0.01%.

HV Bank’s operating expense ratio at 4.10% of average assets for the LTM period substantially exceeded the Comparative Group median of 3.09% and All Public Thrift median of 2.90%. HV Bank operates a relatively large branch network for a depository institution of its size. HV Bank’s average branch size was $28.1 million in deposits at December 31, 2013, compared to the Comparative Group median branch size of $42.6 million, which presents greater economies of scale opportunities. HV Bank’s efficiency ratio (non-interest expense less intangibles amortization expense as a percent of the sum of net interest income and non-interest operating income) was 103.2% for the recent LTM period, comparing unfavorably to the Comparative Group and All Public Thrift medians of 78.5% and 74.8%, respectively. (The efficiency ratio can be evaluated as the amount of operating expense required to generate a dollar of operating revenue.) Polonia Bancorp at 98.5% and Hamilton Bancorp at 94.4% exhibited the highest efficiency ratios among the Comparative Group companies. On a pro forma basis, HV Bancorp exhibited an efficiency ratio of 93.7%.

HV Bank’s lower net interest margin and higher operating expense ratio place it at a competitive disadvantage in generating profitability levels approaching industry norms. As a result, non-interest income generated primarily from gains on sale of loans and securities have been important sources of revenue to deliver positive earnings. For the LTM period ended December 31, 2013, HV Bank’s net interest income of $4.1 million did not cover its total non- interest expense of $6.5 million. HV Bank’s total non-interest income of $2.4 million for the LTM period narrowed this gap but only delivered marginally breakeven profits for HV Bank.

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HV Bank’s efficiency ratio was higher (more unfavorable) than each of the corresponding ratios reported by all of the Comparative Group companies. As a noteworthy contrast, it is common for smaller financial institutions to exhibit higher efficiency ratios since economies of scale are more challenging to achieve.

HV Bank historically has recorded moderate levels of provision for loan losses, reflecting a record of satisfactory asset quality and recent trends reflecting modest expansion of its loan portfolio. HV Bank’s provision for loan losses amounted to 0.01% of average assets for the LTM ended December 31, 2013, lower than the Comparative Group median of 0.19% and All Public Thrift median of 0.11%.

Table 25 profiles the overall balance sheet composition of HV Bank versus that of the Comparative Group. HV Bank’s ratio of cash and securities to total assets was 45.9%, measuring above the medians of 28.5% for the Comparative Group and 23.1% for All Public Thrifts. HV Bank’s net total loans amounted to 48.7% of total assets as of December 31, 2013, below the medians of 68.2% for the Comparative Group and 69.8% for All Public Thrifts. HV Bank had no goodwill or other intangible assets on its balance sheet as of December 31, 2013. HV Bank’s 0.35% ratio of real estate owned to total assets slightly exceeded the Comparative Group and All Public Thrift medians of 0.13% and 0.21%, respectively. HV Bank’s level of other assets was comparable to the medians reported by the Comparative Group and All Public Thrifts.

On a pro forma basis as of December 31, 2013, HV Bancorp’s ratio of cash and securities measured 27.6% and paralleled the Comparative Group median of 28.5%. Also, HV Bancorp’s

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pro forma ratio of loans to assets approximated 67.3% and was similar to the Comparative Group median of 68.2%. As a result of the merger, HV Bancorp will record intangible assets measuring 0.3% of total assets on a pro forma basis as of December 31, 2013.

HV Bank had not made considerable strides toward diversifying its loan portfolio away from the traditional thrift institution model’s reliance on residential mortgages as evidenced by the loan composition data displayed in Table 26. HV Bank’s level of residential mortgage loans (including home equity loans secured by residential properties) measured 86.2% of total loans as of December 31, 2013, compared to the Comparative Group median of 39.6% based on regulatory financial data. HV Bank’s concentration of other real estate mortgage loans, which include commercial real estate mortgages and construction loans, measured 13.0% of total loans and was lower than the Comparative Group median of 42.5% and All Public Thrift median of 40.4%. HV Bank’s ratio of non-mortgage loans, which include commercial business loans and other consumer loans, amounted to 0.8% of total loans and was positioned below the 13.8% and 16.1% medians for the Comparative Group and All Public Thrifts, respectively. Among the Comparative Group companies, Polonia Bancorp and Poage Bankshares also continued to display high concentrations of residential loans at 88.5% and 75.6% of total loans, respectively.

On a pro forma basis, HV Bancorp exhibits a more diverse portfolio than the current HV Bank because of the varied loan mix present at Victory Bank, which reflected loan portfolio concentrations of 27.9% in residential mortgages, 45.8% in other real estate mortgages, and 26.3% of non-mortgage loans as of December 31, 2013. Comparing HV Bank to HV Bancorp on a pro forma basis, the residential mortgage concentration would decrease to 50.0% of total loans at HV Bancorp, while other real estate loans and non-mortgage loans would increase to 33.4% and 16.6%, respectively.

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HV Bank’s borrowings level at 6.6% of total assets primarily reflected its usage of FHLB advances and repurchase agreements as supplemental funding sources, and was similar to the Comparative Group median of 6.5% but lower than the All Public Thrift median of 11.6%. Largely due to its lower capital level, HV Bank’s ratio of deposits to assets was 86.1% and surpassed the Comparative Group and All Public Thrift medians of 75.7% and 75.1%, respectively.

HV Bank’s restrained loan growth in recent periods is reflected in the comparative growth rates. HV Bank’s loan growth rate measured -0.8% over the LTM period, measuring below the Comparative Group median of 3.9% and All Public Thrift median of 5.3%. HV Bank positive growth rates of assets and deposits that exceeded the corresponding medians for the Comparative Group and All Public Thrifts. The sluggish economic recovery and recent turnaround from mounting credit-related losses forced many financial institutions to emphasize capital preservation and credit remediation over growth objectives. On a pro forma basis, HV Bancorp’s more robust growth rates reflect the steady expansion experienced by Victory Bank since it opened in 2008.

HV Bank’s 1.58% ratio of NPAs to total assets was almost the same as the Comparative Group median of 1.57% and slightly lower than the All Public Thrift median of 1.81%. Four of the Comparative Group companies exhibited higher ratios of NPAs to assets: Wolverine Bancorp at 2.84%, Athens Bancshares at 2.71%, Hamilton Bancorp at 2.49%, and Alliance Bancorp with 2.38%. Polonia Bancorp displayed a ratio of NPAs to assets equal to 1.50%, which closely approximated HV Bank’s NPAs ratio of 1.58% of assets. HV Bank’s ratio of reserve coverage compared unfavorably to the aggregate medians. HV Bank’s 0.61% ratio of reserves to total loans trailed the Comparative Group and All Public Thrift medians of 1.54% and 1.20%, respectively. Additionally, HV Bank’s 24.1% ratio of reserves to NPLs was lower than the Comparative Group and All Public Thrift medians of 71.5% and 57.7%, respectively.

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In summary, HV Bank’s recent earnings results underperformed the results exhibited by the Comparative Group and All Public Thrift segments. HV Bank’s lower profitability was characterized by a lower net interest margin and relatively high operating expenses, despite reflecting higher levels of non-interest income. Relative to the Comparative Group, HV Bank’s net interest margin is restrained by its high concentration of investment securities and lower level of equity capital. HV Bank’s earnings growth outlook will depend largely on its ability to improve the net interest margin, enhance operating efficiency, and maintain satisfactory asset quality as it attempts to manage and grow the loan portfolio.

For the LTM ended December 31, 2013, Victory Bancorp generated an ROA of 0.52% and an ROE of 5.55%. Victory Bancorp’s strong net interest margin of 4.40% reflected its large concentration of loans to assets and its diversified mix of loans. Victory Bancorp exhibited sound asset quality as represented by its 0.35% ratio of NPAs to total assets. On a pro forma basis giving effect to the merger and the conversion offering at the midpoint, HV Bancorp’s LTM ROA of 0.05% was inferior to the Comparative Group median of 0.42% and its LTM core ROA of 0.08% was below the Comparative Group median of 0.52%. While HV Bancorp’s pro forma asset quality ratios appear more favorable than the Comparative Group’s ratios, its capital levels would continue to fall below the Comparative Group’s medians.

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Table 21

General Operating Characteristics

As of December 31, 2013

	City / State	Ticker	Exchange	No. of Offices	Conversion Offering Date	Total Assets ($000s)		Net Loans ($000s)		Total Deposits ($000s)		Total Equity ($000s)
Huntingdon Valley Bank	Huntingdon Valley, PA	NA	NA	5	NA		163,423		79,534		140,631		10,261
Victory Bancorp, Inc.	Limerick, PA	NA	NA	1	NA		141,319		129,337		120,126		12,958
Pro Forma - HV Bancorp(1)	Huntingdon Valley, PA	NA	NA	6	NA		312,251		210,157		261,020		29,990
Comparative Group Average							317,642		200,988		229,802		47,413
Comparative Group Median							303,027		214,815		223,282		41,124
All Public Thrift Average							2,508,082		1,768,604		1,680,024		315,521
All Public Thrift Median							820,319		546,142		630,864		102,153
Comparative Group
Alliance Bancorp, Inc.	Broomall, PA	ALLB	NASDAQ	8	01/18/11		425,502		298,877		345,378		70,169
Athens Bancshares Corporation	Athens, TN	AFCB	NASDAQ	7	01/07/10		294,812		226,206		248,172		41,108
Georgetown Bancorp, Inc.	Georgetown, MA	GTWN	NASDAQ	3	07/12/12		263,033		224,913		175,961		28,942
Hamilton Bancorp, Inc.	Towson, MD	HBK	NASDAQ	5	10/10/12		300,470		149,330		237,123		61,474
Jacksonville Bancorp, Inc.	Jacksonville, IL	JXSB	NASDAQ	6	07/15/10		318,419		180,902		251,738		41,139
LSB Financial Corp.	Lafayette, IN	LSBI	NASDAQ	5	02/03/95		367,581		255,360		314,620		40,727
Poage Bankshares, Inc.	Ashland, KY	PBSK	NASDAQ	6	09/13/11		289,230		177,395		209,440		57,658
Polonia Bancorp, Inc.	Huntingdon Valley, PA	PBCP	NASDAQ	6	11/13/12		305,583		204,716		201,322		40,300
Wolverine Bancorp, Inc.	Midland, MI	WBKC	NASDAQ	4	01/20/11		297,761		260,706		172,983		60,325
WVS Financial Corp.	Pittsburgh, PA	WVFC	NASDAQ	6	11/29/93		314,033		31,470		141,286		32,290

(1) Assumes completion of the merger and the conversion offering at the midpoint.

Source: Huntingdon Valley Bank; Victory Bancorp; SNL Financial; Feldman Financial.

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Table 22

Summary Financial Performance Ratios

As of or For the Last Twelve Months Ended December 31, 2013

	Total Assets ($000s)		Total Equity/ Assets (%)		Tang. Equity/ Assets (%)		Total NPAs/ Assets (%)		Net Interest Margin (%)		Effcy. Ratio (%)		LTM ROA (%)			LTM ROE (%)			Core ROA (%)			Core ROE (%)
Huntingdon Valley Bank		163,423		6.28		6.28		1.58		2.74		103.16		0.01			0.08			(0.05	)		(0.74	)
Victory Bancorp, Inc.		141,319		9.17		9.17		0.35		4.40		74.99		0.52			5.55			0.60			6.34
Pro Forma - HV Bancorp(1)		312,251		9.60		9.36		0.99		3.39		93.70		0.05			0.51			0.08			0.83
Comparative Group Average		317,642		14.96		14.80		1.68		3.26		80.47		0.40			2.86			0.44			3.04
Comparative Group Median		303,027		13.57		13.54		1.57		3.35		78.54		0.42			2.52			0.52			2.57
All Public Thrift Average		2,508,082		13.11		12.45		2.43		3.24		75.09		0.55			4.27			0.55			4.27
All Public Thrift Median		820,319		12.25		11.20		1.81		3.27		74.79		0.58			4.68			0.58			4.46
Comparative Group
Alliance Bancorp, Inc.		425,502		16.49		16.49		2.38		3.36		79.44		0.32			1.80			0.32			1.80
Athens Bancshares Corporation		294,812		13.94		13.89		2.71		4.19		77.63		0.78			5.23			0.80			5.34
Georgetown Bancorp, Inc.		263,033		11.00		11.00		1.20		3.86		81.45		0.32			2.46			0.32			2.46
Hamilton Bancorp, Inc.		300,470		20.46		19.70		2.49		2.79		94.44		(0.38	)		(1.86	)		(0.44	)		(2.14	)
Jacksonville Bancorp, Inc.		318,419		12.92		12.17		1.40		3.51		72.91		1.02			7.51			0.85			6.26
LSB Financial Corp.		367,581		11.08		11.08		1.64		3.30		69.40		0.70			6.37			0.70			6.37
Poage Bankshares, Inc.		289,230		19.93		19.93		0.45		3.35		82.97		0.52			2.67			0.51			2.65
Polonia Bancorp, Inc.		305,583		13.19		13.19		1.50		3.13		98.48		(0.09	)		(0.60	)		0.56			2.65
Wolverine Bancorp, Inc.		297,761		20.26		20.26		2.84		3.60		73.15		0.54			2.48			0.54			2.48
WVS Financial Corp.		314,033		10.28		10.28		0.20		1.52		74.79		0.29			2.55			0.28			2.50

(1) Assumes completion of the merger and the conversion offering at the midpoint.

Source: Huntingdon Valley Bank; Victory Bancorp; SNL Financial; Feldman Financial.

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Table 23

Income and Expense Analysis

For the Last Twelve Months Ended December 31, 2013

	As a Percent of Average Assets
	Total Interest Income		Total Interest Expense		Net Interest Income		Other Oper. Income		Sec. Gains & Non-rec. Income		Loan Loss Prov.			Gen. & Admin. Expense		Amort. & Imp. Intang,		Non-rec. Expense		Pretax Core Earnings
Huntingdon Valley Bank		3.17		0.57		2.60		1.37		0.16		0.01			4.10		0.00		0.08		(0.13	)
Victory Bancorp, Inc.		5.03		0.76		4.27		0.68		0.03		0.26			3.71		0.00		0.15		0.98
Pro Forma - HV Bancorp(1)		3.82		0.61		3.21		0.93		0.10		0.12			3.97		0.04		0.11		0.05
Comparative Group Average		3.78		0.69		3.09		0.84		0.04		0.22			3.19		0.00		0.00		0.52
Comparative Group Median		3.84		0.65		3.17		0.71		0.00		0.19			3.09		0.00		0.00		0.51
All Public Thrift Average		3.70		0.71		3.00		1.03		0.05		0.15			3.12		0.01		0.04		0.76
All Public Thrift Median		3.68		0.65		3.03		0.68		0.01		0.11			2.90		0.00		0.00		0.88
Comparative Group
Alliance Bancorp, Inc.		3.73		0.55		3.18		0.17		0.00		0.20			2.66		0.00		0.00		0.49
Athens Bancshares Corporation		4.63		0.72		3.90		1.75		0.00		0.11			4.39		0.03		0.00		1.16
Georgetown Bancorp, Inc.		4.22		0.51		3.70		0.74		0.00		0.31			3.63		0.00		0.00		0.50
Hamilton Bancorp, Inc.		3.24		0.65		2.59		0.22		0.08		0.88			2.72		0.01		0.00		(0.79	)
Jacksonville Bancorp, Inc.		3.83		0.57		3.27		1.13		0.29		0.05			3.20		0.00		0.02		1.14
LSB Financial Corp.		3.82		0.65		3.16		1.09		0.00		0.18			2.97		0.00		0.00		1.11
Poage Bankshares, Inc.		3.85		0.69		3.16		0.47		0.01		0.04			3.08		0.00		0.00		0.51
Polonia Bancorp, Inc.		3.90		0.94		2.96		2.02		0.01		0.21			4.90		0.00		0.00		(0.13	)
Wolverine Bancorp, Inc.		4.61		1.10		3.52		0.68		0.00		0.29			3.09		0.00		0.00		0.81
WVS Financial Corp.		1.98		0.48		1.49		0.17		0.01		(0.04	)		1.25		0.00		0.00		0.45

(1) Assumes completion of the merger and the conversion offering at the midpoint.

Source: Huntingdon Valley Bank; Victory Bancorp; SNL Financial; Feldman Financial.

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Table 24

Yield-Cost Structure and Growth Rates

For the Last Twelve Months Ended December 31, 2013

	Avg. Earning Assets/ Assets		Avg. Funding Liabs./ Assets		Avg. Net Earning Assets/ Assets		Avg. Equity/ Assets		Yield on Earning Assets		Cost of Funding Liabs.		Net Interest Spread		Asset Growth Rate			Loan Growth Rate			Deposit Growth Rate
Huntingdon Valley Bank		95.00		93.48		1.51		6.99		3.34		0.61		2.73		3.48			(0.77	)		2.04
Victory Bancorp, Inc.		94.24		89.02		5.22		9.40		5.34		0.85		4.49		11.02			18.49			6.93
Pro Forma - HV Bancorp(1)		94.80		89.37		5.43		10.16		4.03		0.69		3.35		9.48			11.01			4.34
Comparative Group Average		95.07		83.26		11.81		15.79		3.98		0.83		3.15		1.70			8.16			(2.99	)
Comparative Group Median		94.61		84.22		10.36		14.93		4.09		0.78		3.25		0.95			3.90			1.40
All Public Thrift Average		93.26		85.62		7.64		13.30		4.00		0.83		3.17		3.17			5.48			1.89
All Public Thrift Median		93.79		86.17		7.42		12.73		3.98		0.77		3.23		2.36			5.34			1.09
Comparative Group
Alliance Bancorp, Inc.		94.74		80.95		13.79		17.58		3.94		0.68		3.26		(7.68	)		7.17			(6.92	)
Athens Bancshares Corporation		93.14		83.57		9.57		14.92		4.97		0.86		4.10		1.09			4.11			5.94
Georgetown Bancorp, Inc.		96.09		85.20		10.89		13.05		4.39		0.60		3.79		24.31			22.77			13.94
Hamilton Bancorp, Inc.		92.97		78.67		14.31		20.55		3.49		0.83		2.66		(10.25	)		22.77			(10.42	)
Jacksonville Bancorp, Inc.		93.13		85.47		7.66		13.58		4.12		0.66		3.46		(0.94	)		3.69			(2.62	)
LSB Financial Corp.		95.81		88.37		7.44		11.05		3.98		0.74		3.24		0.81			(9.32	)		1.94
Poage Bankshares, Inc.		94.47		79.63		14.84		19.43		4.07		0.87		3.20		(32.17	)		(2.37	)		(44.09	)
Polonia Bancorp, Inc.		94.35		84.87		9.47		14.94		4.13		1.11		3.02		14.25			37.07			2.34
Wolverine Bancorp, Inc.		97.68		77.35		20.33		21.60		4.72		1.42		3.30		4.37			1.65			9.09
WVS Financial Corp.		98.32		88.50		9.83		11.23		2.01		0.54		1.47		23.24			(5.96	)		0.87

(1) Assumes completion of the merger and the conversion offering at the midpoint.

Source: Huntingdon Valley Bank; Victory Bancorp; SNL Financial; Feldman Financial.

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Table 25

Balance Sheet Composition

As of December 31, 2013

	As a Percent of Total Assets
	Cash & Securities		Net Loans		Real Est. Owned		Intang. Assets		Other Assets			Total Deposits		Borrowed Funds		Other Liabs.		Total Liabs.		Total Equity
Huntingdon Valley Bank		45.93		48.67		0.35		0.00		5.05			86.05		6.58		1.08		93.72		6.28
Victory Bancorp, Inc.		3.48		91.52		0.00		0.00		5.00			85.00		5.42		0.40		90.83		9.17
Pro Forma - HV Bancorp(1)		27.63		67.30		0.18		0.27		4.62			83.59		6.05		0.75		90.40		9.60
Comparative Group Average		33.33		63.44		0.24		0.19		2.81			71.72		12.25		1.08		85.04		14.96
Comparative Group Median		28.52		68.23		0.13		0.00		5.35			75.67		6.53		1.02		86.43		13.57
All Public Thrift Average		26.40		67.41		0.40		0.68		5.11			73.39		12.27		1.23		86.89		13.11
All Public Thrift Median		23.11		69.84		0.21		0.01		4.80			75.13		11.62		0.98		87.75		12.25
Comparative Group
Alliance Bancorp, Inc.		23.56		70.24		0.75		0.00		5.45			81.17		0.81		1.53		83.51		16.49
Athens Bancshares Corporation		17.08		76.73		0.14		0.07		5.98			84.18		0.44		1.43		86.06		13.94
Georgetown Bancorp, Inc.		10.85		85.51		0.00		0.00		3.64			66.90		20.88		1.22		89.00		11.00
Hamilton Bancorp, Inc.		42.61		49.70		0.56		0.95		6.18			78.92		0.00		0.62		79.54		20.46
Jacksonville Bancorp, Inc.		36.52		56.81		0.56		0.86		5.25			79.06		6.16		1.86		87.08		12.92
LSB Financial Corp.		24.98		69.47		0.00		0.00		5.54			85.59		2.72		0.61		88.92		11.08
Poage Bankshares, Inc.		32.74		61.33		0.13		0.00		5.80			72.41		6.90		0.75		80.07		19.93
Polonia Bancorp, Inc.		28.15		66.99		0.12		0.00		4.73			65.88		19.31		1.62		86.81		13.19
Wolverine Bancorp, Inc.		28.89		87.56		0.09		0.00		(16.54	)		58.09		20.82		0.83		79.74		20.26
WVS Financial Corp.		87.95		10.02		0.00		0.00		2.03			44.99		44.44		0.29		89.72		10.28

(1) Assumes completion of the merger and the conversion offering at the midpoint.

Source: Huntingdon Valley Bank; Victory Bancorp; SNL Financial; Feldman Financial.

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Table 26

Regulatory Capital, Credit Risk, and Loan Composition

As of or For the Last Twelve Months Ended December 31, 2013

	Tier 1 Leverage Capital Ratio		Tier 1 Risk- based Capital		Total Risk- based Capital		NPLs/ Loans		Total NPAs/ Assets		Resrvs./ NPLs		Resrvs./ Loans		Resid. 1-4 Mtgs./ Loans		Other Real Est. Mtgs./ Loans		Non-mtg. Loans/ Loans
Huntingdon Valley Bank		6.85		12.30		12.84		2.52		1.58		24.07		0.61		86.21		13.03		0.76
Victory Bancorp, Inc.		8.20		8.95		10.20		0.38		0.35		334.00		1.27		27.91		45.76		26.33
Pro Forma - HV Bancorp(1)		8.45		11.70		11.97		1.19		0.99		19.31		0.23		49.99		33.37		16.64
Comparative Group Average		12.92		21.13		22.24		2.18		1.68		83.14		1.56		45.69		40.25		14.06
Comparative Group Median		11.32		21.23		22.29		2.18		1.57		71.53		1.54		39.59		42.47		13.80
All Public Thrift Average		12.44		19.35		20.52		2.98		2.43		75.38		1.38		40.09		41.73		18.70
All Public Thrift Median		11.98		18.05		19.43		2.27		1.81		57.66		1.20		38.33		40.35		16.13
Comparative Group
Alliance Bancorp, Inc.		13.25		20.87		22.12		2.08		2.38		67.15		1.40		36.86		54.36		8.78
Athens Bancshares Corporation		10.84		15.74		17.01		3.26		2.71		59.01		1.92		38.33		45.62		16.04
Georgetown Bancorp, Inc.		9.70		13.10		14.30		1.39		1.20		75.92		1.05		40.85		44.60		14.55
Hamilton Bancorp, Inc.		15.30		26.80		28.05		3.58		2.49		46.81		1.68		48.35		31.26		20.40
Jacksonville Bancorp, Inc.		11.51		16.89		18.15		2.27		1.40		81.52		1.85		23.88		40.35		35.77
LSB Financial Corp.		11.00		16.10		17.40		2.30		1.64		105.47		2.43		37.56		52.56		9.87
Poage Bankshares, Inc.		16.16		30.87		32.12		0.52		0.45		206.05		1.06		75.56		11.39		13.05
Polonia Bancorp, Inc.		11.12		21.59		22.46		2.09		1.50		31.93		0.67		88.54		8.56		2.89
Wolverine Bancorp, Inc.		19.60		24.60		25.90		2.31		2.84		122.39		2.83		18.63		77.66		3.71
WVS Financial Corp.		10.70		24.70		24.90		1.98		0.20		35.14		0.69		48.35		36.14		15.52

(1) Assumes completion of the merger and the conversion offering at the midpoint.

Source: Huntingdon Valley Bank; Victory Bancorp; SNL Financial; Feldman Financial.

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III. MARKET VALUE ADJUSTMENTS

General Overview

This concluding chapter of the Appraisal identifies certain additional adjustments to the HV Bancorp’s estimated pro forma market value relative to the Comparative Group selected in Chapter II. The adjustments discussed in this chapter are made from the viewpoints of potential investors, which would include depositors holding subscription rights and unrelated parties who may purchase stock in a community offering. It is assumed that these potential investors are aware of all relevant and necessary facts as they would pertain to the value of HV Bank relative to other publicly traded thrift institutions and relative to alternative investments.

Our appraised value is predicated on a continuation of the current operating environment for HV Bank and thrift institutions in general. Changes in HV Bank’s operating performance along with changes in the local and national economy, the stock market, interest rates, the regulatory environment, and other external factors may occur from time to time, often with great unpredictability, which could impact materially the pro forma market value of HV Bancorp or thrift stocks in general. Therefore, the Valuation Range provided herein is subject to a more current re-evaluation prior to the actual completion of the conversion.

In addition to the comparative operating fundamentals discussed in Chapter II, it is important to address additional market value adjustments based on certain financial and other criteria, which include, among other factors:

(1) Earnings Prospects

(2) Financial Condition

(3) Market Area

(4) Management

(5) Dividend Policy

(6) Liquidity of the Issue

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(7) Subscription Interest

(8) Recent Acquisition Activity

(9) Effect of Government Regulations and Regulatory Reform

(10) Stock Market Conditions

Earnings Prospects

Earnings prospects are dependent upon the sensitivity of asset yields and liability costs to changes in market rates, the credit quality of assets, the stability of non-interest components of income and expense, and the ability to leverage the balance sheet. Each of the foregoing is an important factor for investors in assessing earnings prospects. HV Bank has reported low profitability for much of the past ten years due to a combination of earnings fundamentals reflecting a relatively narrow net interest margin and above-average operating expense. Non-interest income, mainly comprising gains on sales of loans and investments, has become an important factor in more recent years toward delivering positive earnings results.

HV Bank recorded net income of $123,000 or ROA of 0.08% for the fiscal year ended June 30, 2013 and net income of $55,000 or annualized ROA of 0.07% for the six months ended December 31, 2013. For the LTM ended December 31, 2013, HV Bank’s net income amounted to $9,000 or an ROA of 0.01%, which trailed the Comparative Group median of 0.42% and All Public Thrift median of 0.58%. On a core earnings basis, HV Bank’s core ROA of -0.05% was positioned farther below the Comparative Group median of 0.52% and All Public Thrift median of 0.58%. HV Bank’s earnings components underperformed the Comparative Group in the areas of net interest income and non-interest expense, and surpassed the Comparative Group in the production of non-interest revenue. HV Bank’s net interest margin of 2.74% fell below the Comparative Group median of 3.35%, while its operating expense ratio of 4.10% relative to average assets exceeded the Comparative Group median of 3.09%.

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The merger is expected to improve HV Bank’s earnings outlook. The lending functions of each institution are very complementary, combining HV Bank’s residential lending and mortgage banking operations with Victory Bancorp’s small business commercial banking operations. HV Bank is expected to incorporate Victory Bancorp’s existing banking platform, which includes enhanced electronic delivery systems and technology that provides additional opportunities for operating efficiency, greater productivity, and expanded revenue. HV Bank will be able to introduce new business banking deposit products that can be marketed across its customer base and over the expanded market area coverage of the combined branch network.

On a pro forma basis giving effect to the merger and conversion at the midpoint of the offering range, HV Bancorp’s LTM ROA is estimated at 0.05% versus the historical LTM ROA of 0.01% for HV Bank. Similarly, HV Bancorp’s pro forma LTM core ROA is estimated at 0.08% versus the historical LTM core ROA of -0.05% for HV Bank. The improvement in earnings results is restrained by the impact of increased operating expense associated with the stock benefit compensation plans and the effect of fair value accounting adjustments. In addition, the pro forma earnings results are calculated based on historical data and do not take into account any potential operating cost savings or increased revenue opportunities. While the overall benefits of the merger should enhance HV Bancorp’s earnings prospects over time, these benefits are partially offset in the near term by the aforementioned factors as well as the added expense and integration risk to consolidate the operations of HV Bank and Victory Bancorp. Furthermore, the transformation of the earnings fundamentals presently in place at HV Bank will require a phase-in period to attain the improvements that translate into increased profitability for HV Bancorp. Therefore, we believe that the earnings outlook for HV Bancorp would continue to warrant a downward adjustment relative to the Comparative Group.

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Financial Condition

As discussed and summarized in Chapter I, HV Bank’s overall balance sheet reflects a sizeable concentration of investment securities and a loan portfolio overwhelmingly composed of residential single-family mortgages. HV Bank’s high level of liquidity is evidenced by a 45.9% ratio of cash and securities to total assets, compared to the corresponding Comparative Group median of 28.5%. On a pro forma basis following the merger with Victory Bancorp, whose balance sheet is concentrated largely in loans, HV Bancorp’s liquidity would decline to a level approaching that of the Comparative Group median and its loan concentration would expand commensurately. In addition, HV Bancorp’s pro forma loan portfolio would encompass a more diverse mix of loans, including increased holdings of commercial real estate and commercial business loans.

Concurrently, HV Bank’s asset quality would remain at satisfactory levels based on historical data as of December 31, 2013. HV Bank’s 1.58% ratio of NPAs to total assets was similar to the Comparative Group median of 1.57%, and is calculated at 0.99% on a pro forma basis including Victory Bancorp. In addition, the interest rate risk exposure stemming from HV Bank’s fixed-rate residential loan and investment portfolio can be mitigated through the addition of new capital from the conversion and from Victory Bancorp’s commercial loan portfolio that features shorter-term repricing characteristics. Before the infusion of net capital proceeds, HV Bank’s ratio of tangible equity to assets was 6.28% and below the Comparative Group median of 13.54%. On a pro forma basis, the ratio of tangible equity to assets is expected to improve for HV Bancorp but still trail the Comparative Group median due to the immediate capital leverage related to the addition of Victory Bancorp’s asset base. In addition, the post-merger capital level of HV Bancorp may restrain implementation of any future growth plans in the near term.

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The selection criteria for the Comparative Group resulted in a collection of companies with solid capital positions and generally satisfactory asset quality. We believe that the balance sheet, asset quality, and capitalization fundamentals of HV Bancorp on a pro forma basis are largely similar to that of the Comparative Group. Therefore, on the whole, we believe that no additional adjustment is warranted for financial condition relative to the Comparative Group.

Market Area

The members of the Comparative Group were drawn primarily from the Mid-Atlantic and Midwest regions of the country. The selection criteria parameters produced three public companies operating in HV Bank’s home state of Pennsylvania (Alliance Bancorp, Polonia Bancorp, and WVS Financial Corp.). Polonia Bancorp is based in Huntingdon Valley, Pennsylvania, similar to HV Bank and the headquarters locations of both financial institutions are located approximately two miles apart. In addition, two companies were selected from the Southeast and one from New England.

The Comparative Group companies are characterized by a cross-section of market areas that encompass suburban and urban locations in smaller to larger metropolitan areas with relatively stable economies and moderate population growth prospects, very similar to that experienced by HV Bank’s market area. Demographic data for HV Bank’s primary market area in Montgomery and Bucks counties reflect a trend of above-average household income and below-average unemployment rates. We do not believe that HV Bank’s market area conditions overall are notably different from those facing most of the companies in the Comparative Group, whose metropolitan areas include Baltimore, Boston, Philadelphia, and Pittsburgh. Based on these factors, we believe that no additional adjustment is warranted for market area.

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Management

Management’s principal challenges are to generate profitable results, monitor credit risks, and control operating costs while HV Bank competes in an increasingly challenging financial services environment. The normal challenges facing HV Bank in attempting to deliver earnings growth and enhance its competitiveness remain paramount as it attempts to leverage the stock offering proceeds and accomplish the integration of Victory Bancorp’s operations following the closing of the merger.

HV Bancorp plans to assemble a senior management team comprising individuals from HV Bank and Victory Bancorp. Travis J. Thompson, current President and Chief Executive Officer (“CEO”) of HV Bank, will become Chairman of HV Bancorp and Executive Chairman of HV Bank. Joseph W. Major, current President and CEO of Victory Bancorp, will become President and CEO of HV Bancorp and President and CEO of HV Bank upon consummation of the merger. Joseph C. O’Neill, Jr., current Chief Financial Officer (“CFO”) of HV Bank, will become the CFO of HV Bancorp and HV Bank following the merger. Also after the merger, the executive positions at HV Bank of Chief Operating Officer, Chief Lending Officer, and Chief Credit Officer will be assumed by individuals who are current partly of the management team at Victory Bank.

As reflected by the historical performance of both HV Bank and Victory Bancorp, we believe that investors will take into account that HV Bancorp can be professionally and capably managed by this experienced management team. Investors will likely rely upon actual earnings results as the means of evaluating the future performance of HV Bancorp’s management as the combined organization pursues its earnings and growth objectives following the completion of the conversion and merger. Therefore, based on these considerations, we believe no adjustment is warranted relative to the Comparative Group for this factor.

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Dividend Policy

Following the conversion, the Board of Directors of HV Bancorp will consider adopting a policy of paying regular cash dividends on the outstanding common stock. However, there is no guarantee that HV Bancorp will pay cash dividends or that, if paid, dividends will not be reduced or eliminated in the future. The Board may declare and pay periodic special cash dividends in addition to, or in lieu of, regular cash dividends. In determining whether to declare or pay any dividends, whether regular or special, the Board will take into account HV Bancorp’s and HV Bank’s financial condition and operating results, tax considerations, capital requirements, industry standards, applicable regulatory guidelines, and economic conditions.

Any HV Bancorp preferred stock, including the SBLF preferred stock assumed from Victory Bancorp, will have priority over common stock with respect to dividends and distribution of assets, but will rank junior to all outstanding indebtedness for borrowed money. Interest payments on HV Bancorp subordinated debt securities will rank senior to dividend payments on all capital stock.

Payment of cash dividends has become commonplace among publicly traded thrifts with relatively high capital levels. Of the ten members of the Comparative Group, seven currently pay regular cash dividends. The average dividend yield of the Comparative Group was 0.89% and the median was 1.17% as of April 15, 2014. The average dividend yield of the All Public Thrift aggregate was 1.46% and the median was 1.35% as of April 15, 2014. Although HV Bancorp has yet to establish a policy of paying regular cash dividends, we believe that investors will take note of HV Bancorp’s capital structure and determine that the dividend preference

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assigned to the preferred stock issue, along with the resulting capital leverage position and growth objectives of HV Bancorp, may forestall the payment of regular cash dividends on the common stock. While thrift stocks are not generally bought and sold based on the underlying dividend yield, we do believe that this restraining factor on potential dividend capacity warrants a slight downward adjustment.

Liquidity of the Issue

With the increased number of market makers and institutional investors following thrift stocks, the majority of thrift stock conversions are able to develop a public market for their new stock issues. Most publicly traded thrift stocks continue to be traded on the NASDAQ market. All of the ten members of the Comparative Group are listed on the NASDAQ market. In conjunction with the conversion, HV Bancorp will apply to have its common stock listed on the NASDAQ market.

The number of active buyers and sellers of shares of common stock at any particular time may be limited, which may have an adverse effect on the price at which shares of common stock can be sold. The development of a public market having the desirable characteristics of depth, liquidity, and orderliness is facilitated by trading on an active exchange such as the NASDAQ market. Therefore, we have concluded the no adjustment to HV Bancorp’s pro forma market value is warranted for anticipated liquidity of its common stock issue.

Subscription Interest

HV Bank has retained the services of Griffin Financial Group to assist in the marketing and sale of the stock offering. HV Bank’s ESOP intends to purchase in the subscription offering an amount of common shares equal to 6.0% of the total shares to be outstanding, including shares issued Victory Bancorp’s shareholders in the merger. HV Bank expects its trustees,

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executive officers, and their associates, to purchase 120,000 shares of common stock in the offering for an aggregate amount of $1.2 million based on a $10.00 offering price per share. Except for the ESOP, no person may purchase in the aggregate more than 5% of the shares sold in the conversion offering. Similarly, no person or entity, together with associates or persons acting in concert with such person or entity, may purchase more than 5% of the total shares sold in the conversion offering. The minimum purchase in the conversion offering will be 25 shares or an aggregate amount of $250.

If any shares remain available for purchase after satisfaction of all orders from eligible subscribers in the subscription offering, HV Bancorp may offer shares to the general public in a community offering. In the community offering, preference will be granted first to natural persons residing in Montgomery, Bucks, and Philadelphia counties in Pennsylvania, and then to the general public. If necessary, any shares of common stock not purchased in the subscription offering and community offering may be offered for sale to the general public in a syndicated offering to be managed by Griffin Financial Group in conjunction with other registered broker-dealers.

Recent subscription interest in thrift stock conversion offerings has been solid and broad-based. Three standard full conversion offerings were completed in calendar 2013 and two have been completed thus far in 2014. In addition, a growing number of companies have filed regulatory applications in 2014 to undertake mutual to stock conversion offerings. Subscription interest in thrift conversion stocks is cyclical and influenced by general stock market conditions and the overall economic outlook. Of the five standard conversion offerings completed in the past twelve months, three were closed at the adjusted maximum of the range and reflected oversubscriptions in the subscription and/or community offerings. We are not currently aware of

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any meaningful market evidence or specific characteristics that might help predict the likely level of interest in the subscription offering of HV Bancorp. Accordingly, absent actual results of the subscription offering, we believe that subscription interest is currently a neutral factor and at present requires no further adjustment.

Recent Acquisition Activity

Table 27 summarizes recent acquisition activity involving banks and thrifts based in Pennsylvania. S&T Bancorp, Susquehanna Bancshares, and ESSA Bancorp have been among the most active acquirers of banks and thrifts in Pennsylvania. The largest recent acquisition of a Pennsylvania bank or thrift involved the completed purchase in February 2012 of Tower Bancorp (total assets of $2.6 billion) by Susquehanna Bancshares. A number of mid-sized banks and thrifts, ranging in asset size from $300 million to $1 billion, have also been acquired recently.

Many bank and thrift acquisition transactions nationwide during the 2009 to 2012 period were characterized by sellers experiencing financial difficulties and subsequently being acquired or recapitalized in change of control transactions at prices near or below book value. However, acquisition valuations can vary widely according to the financial profile of the seller and trends in underlying trading market valuations. Certain provisions in the articles of incorporation and bylaws of HV Bancorp and specific banking regulations or approval conditions may prevent or make more difficult an involuntary acquisition of HV Bancorp. Accordingly, at the present time, we do not believe that potential acquisition premiums are a significant factor to consider in determining the estimated pro forma market value of HV Bancorp.

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Table 27

Summary of Recent Pennsylvania Bank and Thrift Acquisition Activity

Transactions Announced Since January 1, 2011 to April 15, 2014

				Seller’s Prior Financial Data																Offer Value to
Buyer	State	Seller	B/T (1)	Total Assets ($Mil.)		TanEq./ Assets (%)		NPAs/ Assets (%)		LTM ROA (%)			LTM ROE (%)			Date Anncd.	Status (2)	Offer Value ($Mil.)		Book Value (%)		Tang. Book (%)		LTM EPS (x)		Total Assets (%)
Average					635.2		10.05		2.07		0.05			(1.91	)	NA	NA		84.2		118.2		128.0		31.7		12.68
Median					312.9		8.86		1.57		0.24			1.89		NA	NA		46.1		117.0		124.1		29.6		10.95
CB Financial Services	PA	FedFirst Financial Corp.	T		319.0		15.96		1.54		0.73			4.28		04/14/14	P		55.0		104.5		106.8		25.2		17.24
Provident Fin’l Services	NJ	Team Capital Bank	T		949.2		9.24		0.86		0.71			7.09		12/20/13	P		124.4		190.6		190.6		19.2		13.11
HV Bancorp, Inc.	PA	Victory Bank	B		141.2		8.41		0.38		1.29			14.89		12/12/13	P		NA		NA		NA		NA		NA
ESSA Bancorp, Inc.	PA	Franklin Security Bancorp	B		225.6		10.60		1.08		0.22			1.92		11/18/13	C		15.7		83.5		86.5		30.5		6.96
GNB Fin’l Services, Inc.	PA	Liberty Centre Bancorp	B		27.9		9.01		3.98		(2.37	)		(24.46	)	08/28/13	C		NA		NA		NA		NA		NA
Peoples Fin’l Services Corp.	PA	Penseco Fin’l Services(3)	B		929.8		11.75		0.43		1.13			7.86		06/28/13	C		155.9		117.0		147.0		15.1		16.77
Riverview Financial Corp.	PA	Union Bancorp, Inc.	B		123.8		8.66		4.93		(0.02	)		(0.23	)	03/07/13	C		10.1		94.3		94.3		NM		8.16
Penns Woods Bancorp	PA	Luzerne Nat’l Bank Corp.	B		306.3		9.11		1.28		0.76			8.40		10/18/12	C		46.1		165.0		165.0		20.3		15.04
WesBanco, Inc.	WV	Fidelity Bancorp, Inc.	T		665.8		7.46		2.96		0.25			3.31		07/19/12	C		72.9		156.8		166.7		56.4		10.95
First Priority Fin’l Corp.	PA	Affinity Bancorp, Inc.(3)	B		176.3		6.86		1.54		(0.02	)		(0.34	)	05/23/12	C		12.7		103.9		104.7		NM		7.21
S&T Bancorp, Inc.	PA	Gateway Bank	B		120.3		12.62		0.00		0.51			4.23		03/30/12	C		21.3		140.1		140.1		34.2		17.68
Tompkins Fin’l Corp.	NY	VIST Financial Corp.	B		1,485.7		6.63		2.79		0.32			3.39		01/26/12	C		84.1		71.2		116.3		28.8		5.66
ESSA Bancorp, Inc.	PA	First Star Bancorp, Inc.	T		423.3		6.48		1.63		(0.41	)		(6.89	)	12/22/11	C		24.7		50.0		50.0		NM		7.77
Beneficial Mutual Bancorp	PA	SE Financial Corp.	T		306.9		8.26		3.67		0.09			1.11		12/05/11	C		31.8		110.5		110.5		NM		10.60
S&T Bancorp, Inc.	PA	Mainline Bancorp, Inc.	B		241.8		8.85		0.78		(0.09	)		(1.11	)	09/14/11	C		21.4		125.1		125.9		NM		8.84
Susquehanna Bancshares	PA	Tower Bancorp, Inc.	B		2,616.0		8.87		1.60		(0.01	)		(0.13	)	06/20/11	C		342.1		134.5		149.3		NM		13.08
F.N.B. Corporation	PA	Parkvale Financial Corp.	T		1,801.3		5.42		2.04		(0.83	)		(12.20	)	06/15/11	C		131.2		137.8		197.6		NM		7.29
GNB Fin’l Services, Inc.	PA	Herndon National Bank	B		30.5		27.00		0.95		0.50			1.86		02/04/11	C		8.3		100.7		100.7		54.2		27.20
Snyder Group	PA	NexTier Inc.	B		566.4		2.92		5.76		(2.36	)		(54.72	)	02/02/11	C		NA		NA		NA		NA		NA
Susquehanna Bancshares	PA	Abington Bancorp, Inc.	T		1,247.1		16.99		3.18		0.61			3.60		01/26/11	C		273.8		124.1		124.1		33.4		21.96

(1) B=bank; T=thrift.

(2) P=pending; C=completed.

(3) Merger of equals transaction

Source: SNL Financial.

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Effect of Government Regulations and Regulatory Reform

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) has changed the banking regulatory framework. It has created an independent Consumer Financial Protection Bureau that has assumed the consumer protection responsibilities of the various federal banking agencies and established more stringent capital standards for financial institutions and their holding companies. The legislation has also resulted in new regulations affecting the lending, funding, trading, and investment activities of financial institutions.

The full impact of the Dodd-Frank Act on banking operations will not be known until all of the regulations implementing the statute are adopted and implemented. However, compliance with these new laws and regulations may require financial institutions to make changes to business operations and will likely result in additional costs and divert management’s time from other business activities.

Following the conversion, HV Bank will become a Pennsylvania-chartered commercial bank and the wholly owned subsidiary of HV Bancorp, a registered bank holding company subject to regulation by the FRB. As a fully converted stock bank insured by the FDIC and supervised by its primary regulators, HV Bank will continue to operate in the same regulatory environment that is substantially similar to that faced by the Comparative Group companies. HV Bank was considered well capitalized as of December 31, 2013 and not subject to a formal regulatory enforcement agreement, similar to all the members of the Comparative Group. Therefore, given these factors, we believe that no specific adjustment is necessary for the effect of government regulations and regulatory reform.

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Stock Market Conditions

Table 28 displays the performance of the SNL All Public Thrift, SNL All Mid-Atlantic Thrift, and SNL < $500 Million-Asset Thrift indexes, as compared to the Dow Jones Industrials Average (“DJIA”) and Standard & Poor’s 500-Stock Index (“S&P 500”) over various periods. Table 28 also includes comparison to the SNL NASDAQ Thrift Index. The various public thrift indexes generally tracked directionally the cyclical trends of the broader stock index from 2012 through the period measured in 2014. The All Public Thrift Index increased by 17.5% in 2012, slightly above the 13.4% improvement in the S&P 500 and the 7.3% increase in the DJIA, while the SNL Mid-Atlantic Thrift Index advanced 15.2% during this period. The All Public Thrift Index advanced further by 24.9% in 2013, while the DJIA and S&P 500 advanced 29.6% and 26.5%, respectively, in 2013.

Table 28

Comparative Stock Index Performance

Stock Performance Index	12/31/11- 12/31/12			12/31/12- 12/31/13			12/31/13- 04/15/14			12/31/11- 04/15/14
SNL All Public Thrifts		17.5	%		24.9	%		0.2	%		47.0	%
SNL Mid-Atlantic Thrifts		15.2	%		25.8	%		-0.4	%		44.3	%
SNL Thrifts < $500 Mil. Assets		21.1	%		21.0	%		3.1	%		51.0	%
SNL NASDAQ Thrifts		15.9	%		24.0	%		1.7	%		46.2	%
Dow Jones Industrials Average		7.3	%		26.5	%		-1.9	%		33.1	%
S&P 500 Stock Index		13.4	%		29.6	%		-0.3	%		46.5	%

Source: SNL Financial.

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The market values for bank and thrift stocks increased have exhibited much volatility thus far in 2014, as have the DJIA and S&P 500 Index. The SNL All Public Thrift index increased nominally by 0.2% since December 31, 2013 and the DJIA and S&P 500 index were down marginally by 1.9% and 0.3%, respectively during this same period. Concerns over the sustainability of earnings in the banking system related to interest rate pressures, increased expenses related to Dodd-Frank, and capital concerns related to Basel III continue to place pressure on financial stock issues; however there appears to be increased market speculation on merger activity and industry consolidation heats up again. More recently, the sluggish stock market performance reflected the fact that slower than expected economic growth was reported for the first quarter of calendar 2014.

A “new issue” discount that reflects investor concerns and investment risks inherent in all initial public offerings (“IPOs”) is a factor to be considered for purposes of valuing converting thrifts. The magnitude of the new issue discount has begun to expand in the current market environment as most seasoned thrift stocks have rebounded to trade at levels approaching or exceeding book value, while thrift conversion IPOs represent a more unproven investment opportunity. The thrift conversion market continues to respond to the after-market performance of recent offerings.

Table 29 presents a summary of standard full conversion offerings completed since January 1, 2012. There were 12 standard conversion offerings completed in 2011, only seven in calendar 2012 and a scarce three transactions in 2013. Two standard thrift conversions have been completed thus far in 2014. The after-market price performance of standard thrift conversion IPOs has generally characterized by stock price increases. Of the 12 standard conversion offerings completed since January 1, 2012, the average and median one-week price

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changes were 16.4% and 14.8%, respectively. The after-market performance for the five recent thrift conversions listed on the Over-the-Counter Bulletin Board (“OTCBB”) exhibited average and median one-week price changes of 9.8% and 4.5%, respectively. As shown in Table 29, the cumulative price changes for OTCBB listed conversions were an average of 19.7% and median of 4.0% as compared to the NASDAQ listed conversions posting cumulative average and median price gains of 54.5% and 59.3%, respectively.

Historically, newly converted thrifts had been trading upward to a range approaching existing thrift stock valuation levels, but found resistance approaching book value until a discernible trend in earnings improvement was evident. Pricing a new offering at a high ratio in relation to pro forma book value, because of the mathematics of the calculation, would require very large increases in valuations resulting in non-sustainable price-to-earnings ratios and very marginal returns on equity. Accordingly, thrift conversions continue to be priced at discounts to publicly traded companies. This is due to the relatively high pro forma equity ratios, expected low returns on equity, and the uncertainty regarding the prospects of an institution to leverage the balance sheet prudently and effectively in the current low interest rate environment and against the backdrop of recovering real estate market conditions.

The FDIC recently reported that for the year ended December 31, 2013, the thrift industry recorded profits of $11.2 billion or 1.08% of average assets as compared to $11.0 billion or 1.06% for 2012. Asset quality continued to improve, as troubled assets (non-current loans and repossessed assets) declined to 1.74% of assets at the end of 2013, down from 2.38% one year earlier.

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Table 29

Summary of Recent Standard Conversion Stock Offerings

Transactions Completed Since January 1, 2012

								Pro Forma Ratios										After-Market Trading
						Gross		Price/		Price/		Price/				4/15/14		Price Change
Company	State	Stock Exchange	IPO Conv. Date	Total Assets ($Mil.)		Offering Proceeds ($Mil.)		Book Value (%)		Tang. Book (%)		LTM EPS (x)		IPO Price ($)		Closing Price ($)		One Day (%)		One Week (%)		One Month (%)		As of 4/15/14 (%)
Average - All Standard Offerings	NA	NA	NA		345.2		39.5		58.7		59.4		18.2		NA		NA		15.6		16.4		15.4		40.0
Median - All Standard Offerings	NA	NA	NA		253.9		27.2		58.7		59.0		17.4		NA		NA		12.6		14.8		16.3		41.5
Average - NASDAQ	NA	NA	NA		513.3		62.1		60.2		60.7		15.0		NA		NA		21.3		21.2		20.3		54.5
Median - NASDAQ	NA	NA	NA		315.8		37.0		59.7		59.7		12.6		NA		NA		19.0		20.0		22.9		59.3
Average - OTCBB	NA	NA	NA		109.9		7.8		56.7		57.6		21.4		NA		NA		7.5		9.8		8.6		19.7
Median - OTCBB	NA	NA	NA		90.6		6.7		54.2		56.4		20.9		NA		NA		7.5		4.5		2.5		4.0
Edgewater Bancorp, Inc.	MI	OTCBB	01/17/14		119.5		6.7		52.7		55.0		NM		10.00		10.40		0.0		2.5		2.5		4.0
Coastway Bancorp, Inc.	RI	NASDAQ	01/15/14		380.5		48.3		72.2		72.2		NM		10.00		10.20		9.2		8.5		1.9		2.0
Quarry City Savings & Loan Assn.	MO	OTCBB	07/26/13		40.3		4.1		54.2		56.4		13.9		10.00		10.35		7.5		2.0		0.5		3.5
Sunnyside Bancorp, Inc.	NY	OTCBB	07/16/13		90.6		7.9		63.0		63.0		NM		10.00		9.60		5.0		4.5		0.1		(4.0	)
Westbury Bancorp, Inc.	WI	NASDAQ	04/10/13		523.8		50.9		57.7		57.7		NM		10.00		14.30		35.2		35.1		33.3		43.0
Meetinghouse Bancorp, Inc.	MA	OTCBB	11/20/12		74.1		6.6		64.7		64.7		29.4		10.00		12.00		12.5		27.5		20.0		20.0
Hamilton Bancorp, Inc.	MD	NASDAQ	10/10/12		315.8		37.0		55.7		58.3		NM		10.00		14.00		19.0		17.0		12.5		40.0
Madison County Financial, Inc.	NE	NASDAQ	10/04/12		233.4		31.9		55.2		56.6		6.9		10.00		18.10		48.9		46.1		45.1		81.0
HomeTrust Bancshares, Inc.	NC	NASDAQ	07/11/12		1,564.4		211.6		59.7		59.7		NM		10.00		15.93		17.0		20.0		24.5		59.3
FS Bancorp, Inc.	WA	NASDAQ	07/10/12		300.8		32.4		61.1		61.1		25.6		10.00		16.37		0.1		0.7		2.1		63.7
Wellesley Bancorp, Inc.	MA	NASDAQ	01/26/12		274.4		22.5		59.7		59.7		12.6		10.00		19.25		20.0		20.9		22.9		92.5
West End Indiana Bancshares, Inc.	IN	OTCBB	01/11/12		225.2		13.6		49.1		49.1		20.9		10.00		17.50		12.6		12.5		20.0		75.0

Source: SNL Financial.

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FDIC regulated thrifts continued to be strongly capitalized with an average leverage ratio of 10.88% and an average total risk-based capital ratio of 18.75%, and there was only one failed thrift for the year ending December 31, 2013 as compared to ten for 2012. Thrift industry total assets have continued their decline, but at a much slower pace, decreasing approximately 0.7% during 2013, as compared to a 14.8% decrease in 2012. The industry reported a net interest margin of 3.39% for the year ended December 31, 2013 and 3.46% for the quarter ended December 31, 2013, as compared to 3.45% for the year ended December 31, 2012 and 3.24% for the quarter ended December 31, 2012. Structural changes during the year ended December 31, 2013, other than the one aforementioned thrift failure, comprised 28 thrifts that were acquired in mergers and one newly reporting thrift institution.

As the banking industry continues its recovery, the FRB has maintained a program of keeping rates at or near historic lows. Through calendar 2013 and early 2014, the effective federal funds rate was approximately 5-20 basis points and the prime rate has remained constant at 3.25%. In Mid-March of 2014, the FRB sent signals that while it intends to keep short-term rates near zero into 2015, rate increases may come sooner and more aggressively than expected depending on certain factors impacting the speed of economic recovery. While remaining low by historical standards, mortgage interest rates have risen recently as the FRB has continued with its decision to extend its purchases of mortgage-backed securities and long-term U.S. Treasury securities (although tapering purchases from $85 billion per month to $55 billion per month over the first three months of 2014) to attempt to keep longer-term borrowings at low interest levels to spur growth.

Thrift industry earnings results have recently been sustained by stabilizing net interest margins and have been bolstered by significant reductions in loan loss provisions. Industry

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operating expenses generally continue to rise in the face of a stabilizing net interest margin and little growth in non-interest income. Generally, over the past year, financial institutions have relied on reductions in loan loss provisions to a more normalized level as asset quality has improved to increase net income. While thrift industry capital levels remain strong and asset quality has improved, there continue to be volatile swings in the market for bank and thrift stocks. However, we note that some of the economic uncertainty has dissipated and believe no adjustment is necessary for stock market conditions.

Adjustments Conclusion

It is our opinion that HV Bancorp’s pro forma market value should be discounted relative to the Comparative Group because of factors associated with earnings prospects and dividend policy. Currently, converting thrifts are often valued at meaningful discounts to peer institutions relative to price-to-book and price-to-earnings ratios. It is the judgment of the appraiser to balance the relative dynamics of price-to-book and price-to-earnings discounts or premiums.

Valuation Approach

In determining the estimated pro forma market value of HV Bancorp, we have employed the comparative company approach and considered the following pricing ratios: price-to-earnings per share (“P/E”), price-to-book value per share (“P/B”), price-to-tangible book value per share (“P/TB”), and price-to-assets (“P/A”). Table 30 presents the trading market valuation ratios of the Comparative Group and All Public Thrift averages and medians as of April 15, 2014. As shown in Table 30, the average and median P/B ratios for the Comparative Group were 89.2% and 87.8%, respectively. The average and median P/TB ratios for the Comparative Group were 90.3% and 90.2%, respectively. The average and median P/E ratios for the

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Comparative Group were 27.6x and 25.8x respectively. On a core earnings basis, average and median core P/E ratios of the Comparative Group were 28.5x and 29.2x, respectively. Several of the Comparative Group companies reported P/E ratios that were negative or distortedly high due to very low levels of profitability. Such ratios are represented as not meaningful (“NM”) and were not utilized for comparative valuation analysis.

Investors continue to make decisions to purchase thrift conversion stocks and more seasoned thrift issues based upon consideration of core earnings profitability and P/B comparisons. The P/E ratio remains an important valuation ratio in the current thrift stock market environment. HV Bank’s earnings for the LTM ended December 31, 2013 amounted to $9,000 for an ROA of 0.01%. On a core earnings basis, which excludes non-recurring income and expense items, its LTM core earnings reflected a deficit of -$81,000 for a core ROA of -0.05%. On a pro forma basis assuming completion of the merger but before the impact of the conversion offering, HV Bancorp’s LTM earnings available for common shareholders would amount to $292,000 and LTM core earnings available for common shareholders would approximate $389,000. The increase reflects the addition of earnings production from Victory Bancorp, offset partially by the net purchase accounting effects of the merger.

Based on our comparative financial and valuation analyses, we concluded that HV Bancorp should be discounted relative to the trading valuation ratios of the overall Comparative Group. In consideration of the foregoing factors along with the additional adjustments discussed in this chapter, we have determined a pro forma midpoint P/B ratio of 73.1% and P/TB ratio of 75.5% for HV Bancorp. These valuation ratios results in an aggregate midpoint value of approximately $19.4 million that consists of $10.0 million in common stock to be sold in the conversion offering and $9.4 million to be issued to shareholders of Victory Bancorp in the

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merger. Employing an offering range of 15% above and below the midpoint offering amount of $10.0 million, the resulting minimum offering amount is $8.5 million and the resulting maximum offering amount is $11.5 million. The adjusted maximum offering amount, computed as an additional 15.0% above the maximum offering amount, is positioned at approximately $13.2 million. Including the common shares estimated to be issued to shareholders of Victory Bancorp at various points in the offering range produces aggregate pro forma market values for HV Bancorp of approximately $16.5 million at the minimum, $19.4 million at the midpoint, $22.0 million at the maximum, and $23.7 million at the adjusted maximum.

HV Bancorp’s pro forma midpoint P/B ratio of 73.1% reflects a discount of 18.0% to the Comparative Group average P/B ratio of 89.2% and a discount of 16.7% to the Comparative Group median P/B ratio of 87.8%. At the adjusted maximum, HV Bancorp’s pro forma P/B ratio of 78.2% evidences a 12.3% discount to the Comparative Group average and 10.9% discount to the Comparative Group median. In addition, at the adjusted maximum, the HV Bancorp’s pro forma P/TB ratio of 80.8% is positioned at a 10.5% discount to the corresponding Comparative Group average of 90.3% and 10.4% discount to the Comparative Group median of 90.2%.

As compared to recent conversion offerings in Table 29, HV Bancorp’s range pro forma P/B and P/TB valuation ratios would surpass the corresponding ratios for all the transactions listed. Only one recent standard full conversion offering, Coastway Bancorp, has been completed with P/B and P/TB ratios above 70%. Based in Cranston, Rhode Island, Coastway Bancorp concluded its offering in January 2014 with a sale of $48.3 million of common stock, representing the adjusted maximum of its offering range at P/B and P/TB ratios of 72.2%. Three months after its IPO at $10.00 per share, Coastway Bancorp closed at $10.20 on April 15, 2015 and reflected price appreciation of 2.0% since the IPO.

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The pro forma P/B and P/TB ratios for HV Bancorp are affected by the concurrent issuance of common stock to Victory Bancorp shareholders pursuant to the merger. The additional stock issue results in an increase to the aggregate market value of HV Bancorp along with the incremental capital. The additional capital issuance and leverage at the initial offering price has the effect of diluting ownership interest and raising the pro forma P/B and P/TB ratios of HV Bancorp, in comparison to other standard conversion offerings that did not involve a simultaneous merger and issuance of additional shares.

Based on the aggregate pro forma valuation range as indicated above, HV Bancorp’s pro forma P/E ratios based on LTM earnings reflected values ranging from 125.0x at the minimum to 166.7x at the adjusted maximum. As shown in Exhibit IV-2, the additional expense associated with the stock benefit plans, including the ESOP, RSP, and stock options, and the merger-related purchase accounting adjustments restrain the benefits of incremental earnings from Victory Bancorp and re-investing the offering proceeds. The low level of earnings results in very high P/E ratios that are not useful for comparative valuation analysis. Similarly, HV Bancorp’s core P/E ratios are distortedly high, ranging from 66.7x at the minimum to 100.0x at the adjusted maximum. Therefore, the very high P/E ratios for HV Bancorp are reported as NM (not meaningful) on Table 30 and the P/B and P/TB valuation analysis takes on more importance.

Based on the price-to-assets valuation metric, the aggregate pro forma midpoint of $19.4 million reflects a corresponding P/A ratio of 6.22%, ranging from 5.33% at the pro forma valuation minimum to 7.00% and 7.51% at the maximum and adjusted maximum, respectively. HV Bancorp’s relatively lower capital level on a pro forma basis generally resulted in P/A ratio discounts in contrast to the Comparative Group average P/A ratio of 13.27% and median P/A ratio of 12.63%.

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On a pro forma basis, HV Bancorp’s ratio of total equity to assets ranges from 8.85% at the valuation minimum and 9.60% at the midpoint to 10.27% and 10.69% at the maximum and adjusted maximum, respectively. Excluding the intangible assets resulting from the merger, HV Bancorp’s ratio of tangible equity to assets ranges from 8.61% at the valuation minimum and 9.36% at the midpoint to 9.98% and 10.41% at the maximum and adjusted maximum, respectively. Further excluding intangible assets and preferred stock, HV Bancorp’s ratio of tangible common equity to assets ranges from 7.50% at the valuation minimum and 8.26% at the midpoint to 8.88% and 9.32% at the maximum and adjusted maximum, respectively.

Valuation Conclusion

It is our opinion that, as of April 15, 2014, the estimated aggregate pro forma market value of the shares to be issued by HV Bancorp, inclusive of common stock to be issued to Victory Bancorp’s shareholders in connection with the pending merger, was $19,417,480 at the midpoint of the Valuation Range, equal to 1,941,748 shares of common stock at a per share value of $10.00. At the midpoint, it is assumed that 1,000,000 shares of common stock will be sold in the offering by HV Bancorp and 941,748 shares of HV Bancorp common stock will be part of the merger consideration issued to shareholders of Victory Bancorp.

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The range of shares sold in the conversion offering reflects a 15% decrease from the midpoint to determine the minimum and a 15% increase from the midpoint to determine the maximum. Assuming an additional 15% increase above the maximum results in the adjusted maximum. Based on the foregoing valuation, the corresponding Valuation Range of pro forma outstanding shares and pro forma market values assuming an offering price of $10.00 per share is shown on the following page:

	Sold in Conversion Offering			Issued in Merger(1)			Pro Forma Combined Total
HV Bancorp, Inc.
Shares of Common Stock
Minimum		850,000			800,485			1,650,485
Midpoint		1,000,000			941,748			1,941,748
Maximum		1,150,000			1,046,804			2,196,804
Adjusted Maximum		1,322,500			1,046,804			2,369,304
Pro Forma Market Value
Minimum	$	8,500,000		$	8,004,850		$	16,504,850
Midpoint	$	10,000,000		$	9,417,480		$	19,417,480
Maximum	$	11,500,000		$	10,468,040		$	21,968,040
Adjusted Maximum	$	13,225,000		$	10,468,040		$	23,693,040
Outstanding % of Shares
Minimum		51.50	%		48.50	%		100.00	%
Midpoint		51.50	%		48.50	%		100.00	%
Maximum		52.35	%		47.65	%		100.00	%
Adjusted Maximum		55.82	%		44.18	%		100.00	%

⁽¹⁾  As discussed in the preliminary prospectus of HV Bancorp, assumes that at levels equal to or below the midpoint of the offering range, 81% of Victory Bancorp Series E stockholders convert their preferred shares into Victory Bancorp common stock prior to the merger and 19% convert their preferred shares into subordinated debt. At levels above the midpoint of the offering range, it is assumed that 100% of the Series E preferred shares are exchanged for Victory Bancorp common stock. In the event that the aggregate HV Bancorp common stock shares to be issued in the merger, when added to the aggregate HV Bancorp common stock shares purchased by holders of Victory Bancorp common stock in the conversion offering, would result in Victory Bancorp shareholders owning in excess of 48.5% of the outstanding HV Bancorp common stock, then HV Bancorp will substitute cash in an amount sufficient to reduce the ownership level to comply with this limitation. In order to ensure that Victory Bancorp shareholders, in the aggregate, do not own HV Bancorp common stock in excess of the 48.5% limit, Series E preferred shareholders who are Victory Bancorp directors and senior management have entered into commitments pursuant to which they have agreed to exchange a certain percentage of shares of Victory Bancorp Series E preferred stock held by each of them for subordinated debt.

Exhibit IV-1 displays the assumptions utilized in calculating the pro forma financial consequences of the stock offering. Exhibit IV-2 displays the pro forma financial data at each level of the Valuation Range. Exhibit IV-3 provides more detailed data at the midpoint of the Valuation Range. Exhibit IV-4 compares the pro forma valuation ratios with the averages and medians reported by the Comparative Group and All Public Thrifts.

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Table 30

Comparative Pro Forma Market Valuation Analysis

HV Bancorp, Inc. and the Comparative Group

Computed from Market Price Data as of April 15, 2014

Company	Closing Price 4/15/14 ($)		Total Market Value ($Mil.)		Price/ LTM EPS (x)		Price/ Core EPS (x)		Price/ Book Value (%)		Price/ Tang. Book (%)		Price/ Total Assets (%)		Total Equity/ Assets (%)		Tang. Equity/ Assets (%)		Current Dividend Yield (%)
HV Bancorp, Inc.(1)
Pro Forma Minimum		10.00		16.5		NM		NM		68.8		71.3		5.33		8.85		8.61		0.00
Pro Forma Midpoint		10.00		19.4		NM		NM		73.1		75.5		6.22		9.60		9.36		0.00
Pro Forma Maximum		10.00		22.0		NM		NM		76.3		79.0		7.00		10.27		9.98		0.00
Pro Forma Adjusted Maximum		10.00		23.7		NM		NM		78.2		80.8		7.51		10.69		10.41		0.00
Comparative Group Average		NA		42.8		27.6		28.5		89.2		90.3		13.27		14.96		14.80		0.89
Comparative Group Median		NA		41.2		25.8		29.2		87.8		90.2		12.63		13.57		13.54		1.17
All Public Thrift Average(2)		NA		355.4		23.2		27.6		105.9		114.2		13.50		13.11		12.45		1.46
All Public Thrift Median(2)		NA		101.8		18.8		20.5		97.4		101.9		12.33		12.25		11.20		1.35
Comparative Group
Alliance Bancorp, Inc.		15.46		67.1		53.3		53.3		98.4		98.4		16.23		16.49		16.49		1.29
Athens Bancshares Corporation		20.25		37.5		17.9		17.5		93.2		93.6		12.99		13.94		13.89		0.99
Georgetown Bancorp, Inc.		14.75		27.1		36.0		36.0		93.3		93.3		10.27		11.00		11.00		1.08
Hamilton Bancorp, Inc.		14.00		49.2		NM		NM		80.1		84.0		16.39		20.46		19.70		0.00
Jacksonville Bancorp, Inc.		20.65		37.5		12.4		13.4		88.6		94.6		11.92		12.92		12.17		1.55
LSB Financial Corp.		28.83		44.9		17.8		17.8		110.8		110.8		12.27		11.08		11.08		1.25
Poage Bankshares, Inc.		14.50		56.6		21.0		27.4		84.2		84.2		16.78		19.93		19.93		1.38
Polonia Bancorp, Inc.		9.99		34.6		NM		NM		87.0		87.0		11.48		13.19		13.19		0.00
Wolverine Bancorp, Inc.		21.75		49.9		31.5		31.5		82.8		82.8		16.78		20.26		20.26		0.00
WVS Financial Corp.		11.59		23.9		30.5		31.1		73.9		73.9		7.60		10.28		10.28		1.38

⁽¹⁾  Pro forma ratios assume sale of common stock in the conversion offering and issuance of common stock to Victory Bancorp shareholders in the merger.

⁽²⁾  Excludes companies subject to pending acquisition or mutual holding company ownership.

Source: HV Bancorp, preliminary prospectus; SNL Financial; Feldman Financial.

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Exhibit I

Background of Feldman Financial Advisors, Inc.

Overview of Firm

Feldman Financial Advisors provides consulting and advisory services to financial institutions and mortgage companies in the areas of corporate valuations, mergers and acquisitions, strategic planning, branch sales and purchases, developing and implementing regulatory business and capital plans, and expert witness testimony and analysis. Our senior staff members have been involved in the stock conversion process since 1982 and have valued more than 350 converting institutions.

Feldman Financial Advisors was incorporated in February 1996 by a group of consultants who were previously associated with Credit Suisse First Boston and Kaplan Associates. Each of the principals at Feldman Financial Advisors has more than 10 years experience in consulting and all were officers of their prior firm. Our senior staff collectively has worked with more than 1,000 banks, thrifts and mortgage companies nationwide. The firm’s office is located in Washington, D.C.

Background of Senior Professional Staff

Trent Feldman – President. Trent is a nationally recognized expert in providing strategic advice to and valuing service companies, and advising on mergers and acquisitions. Trent was with Kaplan Associates for 14 years and was one of three founding principals at that firm. Trent also has worked at the Federal Home Loan Bank Board and with the California State Legislature. Trent holds Bachelors and Masters Degrees from the University of California at Los Angeles.

Peter Williams – Principal. Peter specializes in merger and acquisition analysis, stock and other corporate valuations, strategic business plans and retail delivery analysis. Peter was with Kaplan Associates for 13 years. Peter also served as a Corporate Planning Analyst with the Wilmington Trust Company in Delaware. Peter holds a BA in Economics from Yale University and an MBA in Finance and Investments from George Washington University.

Michael Green – Principal. Mike is an expert in mergers and acquisition analysis, financial institution and corporate valuations, and strategic and business plans. During Mike’s 10 years at Kaplan Associates, his experience also included business restructurings, litigation support, mark-to-market analysis, and goodwill valuations. Mike holds a BA in Finance and Economics from Rutgers College.

I-1

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-1

Consolidated Balance Sheets

Huntingdon Valley Bank

As of June 30, 2012 and 2013 and December 31, 2013

(Dollars in Thousands)

	Dec. 31,			June 30,
	2013			2013			2012
Assets
Cash and due from banks	$	21,679		$	3,668		$	7,069
Interest-bearing deposits with banks		1,219			3,405			3,942
Securities available-for-sale, at fair value		46,239			47,375			48,504
Securities held-to-maturity		5,020			4,432			606
Loans held for sale		3,745			9,293			16,392
Loans receivable, net		75,789			74,572			69,614
Bank-owned life insurance		3,617			3,559			3,443
Restricted investment in bank stock		910			779			761
Premises and equipment, net		1,793			1,886			2,094
Accrued interest receivable		587			557			563
Prepaid federal income taxes		83			83			40
Deferred income taxes		1,421			1,206			352
Prepaid expenses		253			239			617
Real estate owned		566			2,199			1,824
Other assets		502			120			92
Total Assets	$	163,423		$	153,373		$	155,914
Liabilities and Equity
Total deposits	$	140,631		$	133,540		$	133,717
FHLB advances		7,000			3,000			3,000
Securities sold under agreements to repurchase		3,759			4,031			5,204
Advances from borrowers for taxes and insurance		709			1,078			1,130
Deferred gain on sale - leaseback of building		367			375			391
Other liabilities		696			783			845
Total Liabilities		153,162			142,807			144,287
Retained earnings		11,502			11,447			11,324
Accumulated other comprehensive income (loss)		(1,241	)		(881	)		303
Total Equity		10,261			10,566			11,627
Total Liabilities and Equity	$	163,423		$	153,373		$	155,914

Source: HV Bank, financial statements.

II-1

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-2

Consolidated Income Statements

Huntingdon Valley Bank

For the Years Ended June 30, 2012 and 2013

And the Six Months Ended December 31, 2012 and 2013

(Dollars in Thousands)

	Six Months Ended December 31,					Year Ended June 30,
	2013			2012		2013			2012
Total interest income	$	2,545		$	2,569	$	4,994		$	5,545
Total interest expense		435			521		982			1,211
Net interest income		2,110			2,048		4,012			4,334
Provision (credit) for loan losses		(31	)		80		120			178
Net interest income after provision		2,141			1,968		3,892			4,156
Customer service fees		108			119		235			216
Increase in cash surrender value of BOLI		58			60		116			118
Gains on sale of loans, net		1,002			930		1,686			1,774
Gains on sale of available-for-sale securities		(2	)		334		592			528
Other non-interest income		36			50		71			113
Total non-interest income		1,202			1,493		2,700			2,749
Salaries and employee benefits		1,514			1,562		3,210			2,754
Occupancy expense		475			522		1,023			1,131
FDIC premiums		70			68		159			137
Data processing related operations		236			248		633			573
Real estate owned expense		186			167		373			658
Professional fees		286			173		404			292
Other expenses		486			480		696			528
Total non-interest expense		3,253			3,220		6,498			6,073
Income before income taxes		91			241		81			802
Income tax expense (benefit)		36			72		(42	)		(110	)
Net income	$	55		$	169	$	123		$	912

Source: HV Bank, financial statements.

II-2

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-3

Loan Portfolio Composition

Huntingdon Valley Bank

As of June 30, 2012 and 2013 and December 31, 2013

(Dollars in Thousands)

	December 31, 2013						June 30,
							2013						2012
	Amount			Percent			Amount			Percent			Amount			Percent
Residential mortgage loans	$	54,906			71.95	%	$	53,375			70.95	%	$	45,412			64.34	%
Home equity and HELOCs(1)		8,143			10.67			9,053			12.03			10,535			14.92
Other consumer loans		42			0.06			72			0.10			126			0.18
Commercial real estate loans		12,433			16.29			11,954			15.89			12,824			18.17
Commercial business loans		787			1.03			775			1.03			188			0.27
Construction residential loans		—			0.00			—			0.00			1,500			2.13
Total loans(2)		76,311			100.00	%		75,229			100.00	%		70,585			100.00	%
Less:
Unearned discounts and fees		(37	)					(76	)					(161	)
Undisbursed portion of loans		—						—						(336	)
Allowance for loan losses		(485	)					(581	)					(474	)
Net total loans	$	75,789					$	74,572					$	69,614

⁽¹⁾  Includes home equity loans secured by second mortgages and home equity lines of credit secured by second mortgages.

⁽²⁾ Does not include loans classified as held for sale.

Source: HV Bancorp, preliminary prospectus.

II-3

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-4

Net Lending Activity

Huntingdon Valley Bank

For the Years Ended June 30, 2012 and 2013

And the Six Months Ended December 31, 2012 and 2013

(Dollars in Thousands)

	Six Months Ended December 31,						Year Ended June 30,
	2013			2012			2013			2012
Total loans at beginning of period(1)	$	84,446		$	86,481		$	86,481		$	84,036
Loans originated or purchased
Consumer:
Residential mortgage loans(2)		40,458			54,551			103,523			149,118
Home equity loans and HELOCs		281			384			656			630
Other consumer loans		70			38			66			51
Commercial:
Commercial real estate loans		1,059			516			1,494			109
Commercial business loans		—			—			172			—
Construction residential loans		131			—			265			828
Total loans originated		41,999			55,489			106,176			150,736
Loans and participations purchased		—			—			676			—
Total loans originated/purchased	$	41,499		$	55,489		$	106,852		$	150,736
Loans sold/principal repayments
Loans sold	$	41,450		$	55,673		$	97,134		$	131,763
Principal repayments		4,845			5,602			9,443			14,549
Transferred to real estate owned or charged off		131			13			958			1,979
Total deductions	$	46,426		$	61,288		$	108,211		$	148,291
Net loan activity		(4,427	)		(5,799	)		(2,035	)		2,445
Total loans at end of period(1)	$	80,019		$	80,682		$	84,446		$	86,481

⁽¹⁾ Includes loans classified as held for sale; excludes unearned discounts and fees, and excludes undisbursed portion of construction loans.

Source: HV Bancorp, preliminary prospectus.

II-4

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-5

Investment Portfolio Composition

Huntingdon Valley Bank

As of June 30, 2012 and 2013 and December 31, 2013

(Dollars in Thousands)

	December 31, 2013				June 30,
					2013				2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities available-for-sale
U.S. Government securities	$	7,102	$	6,962	$	6,221	$	6,122	$	7,334	$	7,469
Corporate notes		9,591		9,058		9,597		9,118		6,281		6,235
CMOs - agency residential		17,575		16,829		19,627		18,842		22,561		22,741
MBS - agency residential		9,251		8,744		8,966		8,651		10,184		10,409
Municipal securities		4,075		3,896		4,069		3,887		1,379		1,400
Bank certificates of deposit		749		750		749		755		250		250
Total securities available-for-sale	$	48,343	$	46,239	$	48,869	$	47,375	$	47,989	$	48,504
Securities held-to-maturity
Municipal securities	$	5,020	$	4,905	$	4,432	$	4,310	$	606	$	606
Total securities held-to-maturity	$	5,020	$	4,905	$	4,432	$	4,310	$	606	$	606

Source: HV Bancorp, preliminary prospectus.

II-5

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-6

Deposit Account Distribution

Huntingdon Valley Bank

As of June 30, 2012 and 2013 and December 31, 2013

(Dollars in Thousands)

	December 31, 2013					June 30,
						2013					2012
	Amount		Percent			Amount		Percent			Amount		Percent
Transaction accounts
NOW accounts - interest bearing	$	28,975		20.60	%	$	26,390		19.76	%	$	24,512		18.33	%
NOW accounts - non-int. bearing		3,587		2.55			3,482		2.61			3,336		2.49
Money market deposit accounts		25,366		18.04			32,747		24.52			34,363		25.70
Passbook and statement savings		30,077		21.39			18,959		14.20			16,640		12.44
Checking accounts		5,072		3.61			5,536		4.15			5,451		4.08
Total transaction accounts		93,077		66.19			87,114		65.23			84,302		63.05
Certificate accounts
0.15% - 0.99%		16,626		11.82			13,457		10.08			9,699		7.25
1.00% - 1.99%		22,217		15.80			23,429		17.54			26,296		19.67
2.00% - 2.99%		8,233		5.85			8,288		6.21			10,078		7.54
3.00% - 3.99%		478		0.34			1,252		0.94			3,322		2.48
4.00% - 4.34%		—		—			—		—			20		0.01
Total certificate accounts		47,554		33.81			46,426		34.77			49,415		36.95
Total deposits	$	140,631		100.00	%	$	133,540		100.00	%	$	133,717		100.00	%

Source: HV Bancorp, preliminary prospectus.

II-6

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-7

Borrowed Funds Distribution

Huntingdon Valley Bank

As of June 30, 2012 and 2013 and December 31, 2013

(Dollars in Thousands)

	December 31, 2013			June 30,
				2013			2012
Federal Home Loan Bank advances
Balance outstanding at end of the period	$	7,000		$	3,000		$	3,000
Weighted average rate at end of the period		0.72	%		1.33	%		1.90	%
Securities sold under agreement to repurchase	$	3,759		$	4,031		$	5,204
Balance outstanding at end of the period		0.14	%		0.10	%		0.11	%
Weighted average rate at end of the period

Source: HV Bancorp, preliminary prospectus.

II-7

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-8

Consolidated Balance Sheets

The Victory Bancorp, Inc.

As of December 31, 2011 to 2013

(Dollars in Thousands)

	December 31,
	2013			2012			2011
Assets
Cash and due from banks	$	809		$	3,171		$	4,626
Federal funds sold		1,580			,406			7,745
Securities available-for-sale, at fair value		1,901			4,885			3,764
Loans receivable, net		129,337			109,158			84,459
Bank-owned life insurance		1,306			1,259			1,207
Restricted investment in bank stocks		627			508			387
Premises and equipment, net		3,960			3,868			3,854
Accrued interest receivable		425			394			287
Other assets		1,374			1,647			682
Total Assets	$	141,319		$	127,296		$	107,011
Liabilities and Equity
Total deposits	$	120,126		$	112,338		$	95,653
Borrowings		7,665			2,000			—
Other liabilities		570			406			283
Total Liabilities		128,361			114,744			95,936
Preferred stock, Series E non-cum., convertible		2,616			2,616			2,616
Preferred stock, Series F cumulative, non-conv.		3,431			3,431			3,431
Common stock		1,025			1,025			1,025
Surplus		9,221			9,221			9,221
Accumulated deficit		(3,356	)		(3,848	)		(5,164	)
Accumulated other comprehensive income (loss)		21			107			(54	)
Total Equity		12,958			12,552			11,075
Total Liabilities and Equity	$	141,319		$	127,296		$	107,011

Source: Victory Bancorp, financial statements.

II-8

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit II-9

Consolidated Income Statements

The Victory Bancorp, Inc.

For the Years Ended December 31, 2011 to 2013

(Dollars in Thousands)

	Year Ended December 31,
	2013		2012			2011
Total interest income	$	6,839	$	5,707		$	4,722
Total interest expense		1,030		1,074			1,091
Net interest income		5,809		4,633			3,631
Provision for loan losses		348		472			279
Net interest income after provision		5,461		4,161			3,352
Service charges and activity fees		145		140			97
Gains on sales of loans, net		680		123			579
Gains on sales of securities, net		45		—			—
Other non-interest income		99		106			53
Total non-interest income		969		369			729
Salaries and employee benefits		2,842		2,307			1,896
Occupancy and equipment		409		368			438
Legal and professional fees		545		260			239
Advertising and promotion		122		98			70
Loan expenses		80		33			36
Data processing costs		579		461			434
FDIC premiums		83		102			99
Shares tax		91		82			74
Other expenses		496		346			265
Total non-interest expense		5,247		4,057			3,551
Income before income taxes		1,183		473			530
Income tax expense (benefit)		473		(1,060	)		(200	)
Net income	$	710	$	1,533		$	730
Preferred stock dividends		218		217			233
Net income available to common shareholders	$	492	$	1,316		$	507

Source: Victory Bancorp, financial statements.

II-9

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit III

Financial and Market Data for All Public Thrifts

Company	State	Ticker	Total Assets ($Mil.)		Total Equity/ Assets (%)		Tang. Equity/ Assets (%)		LTM ROA (%)			LTM ROE (%)			Closing Price 4/15/14 ($)		Total Market Value ($Mil.)		Price/ LTM EPS (x)		Price/ Core EPS (x)		Price/ Book Value (%)		Price/ Tang. Book (%)		Price/ Total Assets (%)		Div. Yield (%)
All Public Thrifts(1)
Alliance Bancorp, Inc.	PA	ALLB		426		16.49		16.49		0.32			1.80			15.46		67.1		53.3		53.3		98.4		98.4		16.23		1.29
Anchor Bancorp	WA	ANCB		391		13.33		13.33		(0.23	)		(1.93	)		18.80		47.9		NM		NM		91.9		91.9		12.25		0.00
ASB Bancorp, Inc.	NC	ASBB		733		13.79		13.79		0.19			1.37			17.76		89.3		57.3		68.7		88.5		88.5		12.21		0.00
Astoria Financial Corp.	NY	AF		15,794		9.62		8.55		0.41			4.69			12.98		1,288.5		21.6		22.1		92.3		106.5		8.19		1.23
Athens Bancshares Corp.	TN	AFCB		295		13.94		13.89		0.78			5.23			20.25		37.5		17.9		17.5		93.2		93.6		12.99		0.99
Atlantic Coast Financial Corp.	FL	ACFC		734		8.93		8.93		(1.55	)		(30.40	)		4.12		63.9		NM		NM		97.5		97.5		8.71		0.00
Bank Mutual Corp.	WI	BKMU		2,347		12.10		12.09		0.46			3.91			6.06		282.1		26.3		26.0		100.1		100.2		12.00		1.98
BankFinancial Corp.	IL	BFIN		1,454		12.08		11.93		0.23			1.89			9.93		209.5		62.1		55.5		119.3		121.0		14.42		0.40
Berkshire Hills Bancorp, Inc.	MA	BHLB		5,673		11.95		7.54		0.78			6.09			24.74		621.1		15.0		12.2		91.3		152.0		10.92		2.91
BofI Holding, Inc.	CA	BOFI		3,568		8.73		8.73		1.54			17.05			80.16		1,131.6		24.4		23.5		367.4		367.4		31.61		0.00
Broadway Financial Corp.	CA	BYFC		332		7.70		7.70		(0.09	)		(1.47	)		1.22		24.7		NM		NM		96.4		96.4		7.42		0.00
BSB Bancorp, Inc.	MA	BLMT		1,055		12.37		12.37		0.21			1.51			17.15		155.3		NM		78.9		119.1		119.1		14.73		0.00
Cape Bancorp, Inc.	NJ	CBNJ		1,093		12.85		10.99		0.53			3.80			10.72		127.4		23.3		21.1		92.1		109.9		11.83		2.24
Capitol Federal Financial, Inc.	KS	CFFN		9,111		17.23		17.23		0.76			4.25			12.39		1,798.6		25.8		25.8		116.3		116.3		20.03		2.42
Carver Bancorp, Inc.	NY	CARV		639		7.90		7.90		0.26			2.82			12.45		46.0		34.6		64.2		NM		NM		7.75		0.00
Central Federal Corp.	OH	CFBK		256		8.94		8.94		(0.39	)		(4.04	)		1.55		24.5		NM		NM		107.3		107.3		9.59		0.00
Charter Financial Corp.	GA	CHFN		1,080		25.30		24.95		0.51			2.29			10.64		242.8		42.6		45.9		89.6		91.3		22.66		1.88
Cheviot Financial Corp.	OH	CHEV		587		15.49		13.90		0.24			1.43			10.53		71.8		50.1		42.0		79.2		89.9		12.26		3.42
Chicopee Bancorp, Inc.	MA	CBNK		588		15.69		15.69		0.44			2.79			17.40		94.6		34.8		33.8		102.6		102.6		16.09		1.61
Citizens Community Bancorp, Inc.	WI	CZWI		552		9.80		9.77		0.20			2.00			7.88		40.7		37.5		26.9		75.0		75.3		7.35		0.51
Clifton Bancorp Inc.	NJ	CSBK		1,099		17.42		17.42		0.61			3.42			11.72		311.7		45.9		48.8		158.6		158.6		27.64		2.09
CMS Bancorp, Inc.	NY	CMSB		NA		8.66		8.66		0.37			4.29			9.28		17.3		17.8		22.7		81.3		81.3		6.62		0.00
Coastway Bancorp, Inc.	RI	CWAY		433		6.43		6.43		0.06			0.81			10.20		50.5		NA		NA		NA		NA		NA		0.00
Colonial Financial Services, Inc.	NJ	COBK		583		10.15		10.15		(0.30	)		(2.87	)		11.16		43.1		NM		NM		72.7		72.7		7.37		0.00
Dime Community Bancshares, Inc.	NY	DCOM		4,028		10.81		9.56		1.09			10.58			16.53		607.0		13.4		13.5		139.3		159.8		15.07		3.39
Eagle Bancorp Montana, Inc.	MT	EBMT		516		9.25		7.84		0.53			5.38			10.95		42.9		15.9		19.1		89.8		107.6		8.31		2.65
ESB Financial Corp.	PA	ESBF		1,907		9.75		7.73		0.83			8.36			12.55		222.6		13.9		NA		NA		NA		NA		3.19
ESSA Bancorp, Inc.	PA	ESSA		1,355		12.29		11.57		0.58			4.68			10.75		127.8		15.4		14.7		77.0		82.5		9.46		2.60
EverBank Financial Corp	FL	EVER		17,641		9.19		8.92		0.75			8.88			19.06		2,338.5		18.7		16.3		158.9		164.8		13.36		0.63
First Capital, Inc.	IN	FCAP		444		12.00		10.92		1.12			9.59			20.75		57.8		11.4		11.5		108.5		120.8		13.00		4.05
First Clover Leaf Financial Corp.	IL	FCLF		622		11.75		10.07		0.55			4.40			9.30		65.2		20.2		20.6		89.2		106.1		10.48		2.58
First Connecticut Bancorp, Inc.	CT	FBNK		2,110		11.01		11.01		0.19			1.57			15.76		263.4		65.7		70.3		111.7		111.7		12.29		0.76
First Defiance Financial Corp.	OH	FDEF		2,137		12.73		10.00		1.08			8.39			26.97		260.3		12.3		11.8		96.3		126.6		12.27		2.22
First Federal Bancshares of Arkansas	AR	FFBH		549		12.97		12.97		0.14			1.02			9.09		182.2		NM		NM		255.9		255.9		33.19		0.00
First Federal of Nthn. Mich. Bancorp	MI	FFNM		210		11.22		11.20		0.03			0.23			4.87		14.0		NM		101.5		59.7		59.8		6.70		1.64
First Financial Northwest, Inc.	WA	FFNW		921		20.02		20.02		2.73			13.12			10.02		164.4		6.9		6.8		89.1		89.1		17.83		2.00

III-1

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit III (continued)

Financial and Market Data for All Public Thrifts

Company	State	Ticker	Total Assets ($Mil.)		Total Equity/ Assets (%)		Tang. Equity/ Assets (%)		LTM ROA (%)			LTM ROE (%)			Closing Price 4/15/14 ($)		Total Market Value ($Mil.)		Price/ LTM EPS (x)		Price/ Core EPS (x)		Price/ Book Value (%)		Price/ Tang. Book (%)		Price/ Total Assets (%)		Div. Yield (%)
First Savings Financial Group, Inc.	IN	FSFG		687		12.00		10.71		0.71			5.64			22.60		51.1		11.3		10.8		78.3		92.3		7.63		1.95
Flagstar Bancorp, Inc.	MI	FBC		9,407		15.16		15.16		2.13			21.56			20.07		1,128.4		4.6		3.7		97.2		97.2		12.33		0.00
Fox Chase Bancorp, Inc.	PA	FXCB		1,117		15.53		15.53		0.51			3.13			16.88		205.1		35.2		37.5		118.2		118.2		18.36		2.37
Franklin Financial Corp.	VA	FRNK		1,075		22.51		22.51		0.91			3.98			19.61		236.8		23.6		28.4		98.2		98.2		22.10		0.00
FS Bancorp, Inc.	WA	FSBW		419		14.87		14.87		1.01			6.43			16.37		53.0		12.7		13.7		85.1		85.1		12.65		1.22
Georgetown Bancorp, Inc.	MA	GTWN		263		11.00		11.00		0.32			2.46			14.75		27.1		36.0		36.0		93.3		93.3		10.27		1.08
Hamilton Bancorp, Inc.	MD	HBK		300		20.46		19.70		(0.38	)		(1.86	)		14.00		49.2		NM		NM		80.1		84.0		16.39		0.00
Hampden Bancorp, Inc.	MA	HBNK		694		12.19		12.19		0.55			4.31			16.00		90.4		23.9		24.4		106.8		106.8		13.02		1.50
Heritage Financial Group, Inc.	GA	HBOS		1,381		9.06		8.78		0.87			9.37			19.22		151.5		12.8		14.3		120.4		124.6		10.90		1.46
HF Financial Corp.	SD	HFFC		1,254		7.79		7.43		0.48			6.06			13.89		98.0		16.5		17.8		100.3		105.6		7.81		3.24
Hingham Institution for Savings	MA	HIFS		1,356		7.61		7.61		1.07			13.52			74.70		159.0		8.1		10.3		141.8		141.8		11.05		1.45
HMN Financial, Inc.	MN	HMNF		649		13.21		13.21		4.55			42.22			9.65		42.9		1.7		1.7		71.5		71.5		6.86		0.00
Home Bancorp, Inc.	LA	HBCP		984		14.42		14.25		0.76			5.14			20.10		142.7		19.0		18.6		100.6		101.9		14.50		0.00
Home Federal Bancorp, Inc.	LA	HFBL		286		14.46		14.46		0.94			6.18			18.10		40.7		14.8		15.0		98.6		98.6		14.25		1.33
HomeStreet, Inc.	WA	HMST		3,066		8.67		NA		0.88			9.56			18.51		274.7		11.5		10.7		103.0		NA		8.93		0.00
HomeTrust Bancshares, Inc.	NC	HTBI		1,629		21.98		NA		0.73			3.21			15.93		315.2		26.6		25.0		88.0		NA		19.34		0.00
IF Bancorp, Inc.	IL	IROQ		568		13.89		13.89		0.64			4.22			16.10		71.3		19.2		19.3		90.9		90.9		12.63		0.62
Jacksonville Bancorp, Inc.	IL	JXSB		318		12.92		12.17		1.02			7.51			20.65		37.5		12.4		13.4		88.6		94.6		11.92		1.55
LaPorte Bancorp, Inc.	IN	LPSB		527		15.23		13.81		0.83			4.81			10.97		64.2		15.9		17.7		81.0		90.8		12.33		1.46
Louisiana Bancorp, Inc.	LA	LABC		317		18.29		18.29		0.86			4.81			19.76		56.6		19.2		20.7		98.4		98.4		18.01		1.01
LSB Financial Corp.	IN	LSBI		368		11.08		11.08		0.70			6.37			28.83		44.9		17.8		17.8		110.8		110.8		12.27		1.25
Madison County Financial, Inc.	NE	MCBK		290		21.16		20.85		1.08			4.82			18.10		55.9		17.6		17.0		89.5		91.2		18.94		1.55
Malvern Bancorp, Inc.	PA	MLVF		594		12.56		12.56		(2.99	)		(21.51	)		10.45		68.5		NM		NM		91.9		91.9		11.54		0.00
Meta Financial Group, Inc.	SD	CASH		1,807		7.89		7.77		0.81			9.96			40.55		247.7		16.5		16.7		173.1		176.1		13.67		1.28
NASB Financial, Inc.	MO	NASB		1,181		16.25		16.09		1.83			11.13			24.29		191.1		9.0		8.9		99.5		100.7		16.18		0.00
Naugatuck Valley Financial Corp.	CT	NVSL		487		11.97		11.97		(1.74	)		(13.89	)		7.61		53.3		NM		NM		91.5		91.5		10.95		0.00
New Hampshire Thrift Bancshares	NH	NHTB		1,424		10.48		6.84		0.66			5.86			14.70		120.8		13.5		13.3		94.6		166.7		8.55		3.54
New York Community Bancorp	NY	NYCB		46,688		12.29		7.42		1.07			8.46			15.95		7,052.5		14.8		14.9		122.6		214.1		15.06		6.27
Northfield Bancorp, Inc.	NJ	NFBK		2,703		26.50		26.03		0.70			2.70			12.58		699.9		37.0		39.4		101.8		104.2		26.96		1.91
Northwest Bancshares, Inc.	PA	NWBI		7,881		14.68		12.72		0.84			5.88			14.82		1,398.9		20.3		21.2		120.7		142.5		17.72		3.51
Ocean Shore Holding Co.	NJ	OSHC		1,020		10.41		9.95		0.51			5.02			14.90		101.1		18.4		18.0		96.8		101.9		10.08		1.61
OceanFirst Financial Corp.	NJ	OCFC		2,250		9.53		9.53		0.71			7.51			17.24		300.1		18.1		15.1		139.8		139.8		13.32		2.78
OmniAmerican Bancorp, Inc.	TX	OABC		1,391		14.89		14.89		0.48			3.12			22.63		259.4		37.1		46.8		125.1		125.1		18.63		0.88
Oneida Financial Corp.	NY	ONFC		742		12.22		8.96		0.86			6.59			12.44		87.4		14.3		13.5		96.4		136.4		11.77		3.86
Oritani Financial Corp.	NJ	ORIT		2,942		17.67		17.67		1.49			8.07			15.28		698.4		15.8		16.1		134.4		134.4		23.74		4.58
Peoples Federal Bancshares, Inc.	MA	PEOP		588		17.88		17.88		0.37			2.01			17.98		115.2		51.4		51.4		109.9		109.9		19.65		0.89
People’s United Financial, Inc.	CT	PBCT		33,214		13.75		7.85		0.75			4.89			14.83		4,600.7		20.0		18.6		99.6		186.5		13.70		4.38

III-2

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit III (continued)

Financial and Market Data for All Public Thrifts

Company	State	Ticker	Total Assets ($Mil.)		Total Equity/ Assets (%)		Tang. Equity/ Assets (%)		LTM ROA (%)			LTM ROE (%)			Closing Price 4/15/14 ($)		Total Market Value ($Mil.)		Price/ LTM EPS (x)		Price/ Core EPS (x)		Price/ Book Value (%)		Price/ Tang. Book (%)		Price/ Total Assets (%)		Div. Yield (%)
Poage Bankshares, Inc.	KY	PBSK		289		19.93		19.93		NA			NA			14.50		56.6		NA		NA		84.2		84.2		16.78		1.38
Polonia Bancorp, Inc.	PA	PBCP		306		13.19		13.19		(0.09	)		(0.60	)		9.99		34.6		NM		NM		87.0		87.0		11.48		0.00
Provident Financial Holdings, Inc.	CA	PROV		1,134		13.44		13.44		1.11			8.44			14.42		142.1		11.6		11.6		93.2		93.2		12.53		2.77
Provident Financial Services, Inc.	NJ	PFS		7,487		13.50		9.19		0.97			7.08			17.40		1,047.3		14.1		14.2		103.1		159.1		13.92		3.45
Prudential Bancorp, Inc.	PA	PBIP		525		24.84		24.84		0.36			2.40			10.74		102.5		54.0		76.5		78.6		78.6		19.52		0.00
Pulaski Financial Corp.	MO	PULB		1,294		9.04		8.76		0.72			7.58			10.45		118.8		14.9		14.9		115.6		120.4		9.01		3.64
Riverview Bancorp, Inc.	WA	RVSB		805		10.15		7.20		0.56			5.42			3.43		77.1		17.2		17.3		94.8		138.5		9.58		0.00
Rockville Financial, Inc.	CT	RCKB		2,302		13.01		12.97		0.67			4.67			13.44		349.2		24.9		22.0		116.6		117.0		15.16		2.98
Severn Bancorp, Inc.	MD	SVBI		800		10.35		10.31		(3.00	)		(24.45	)		4.52		45.5		NM		NM		81.1		81.6		5.89		0.00
SI Financial Group, Inc.	CT	SIFI		1,346		11.35		10.04		(0.08	)		(0.63	)		11.67		149.4		NM		57.5		97.7		112.1		11.09		1.03
Simplicity Bancorp, Inc.	CA	SMPL		855		16.50		16.12		0.72			4.28			17.02		128.6		21.3		21.3		95.1		97.8		15.69		1.88
SP Bancorp, Inc.	TX	SPBC		304		10.79		10.79		0.41			3.73			20.50		32.9		25.3		24.5		100.8		100.8		10.88		0.00
State Investors Bancorp, Inc.	LA	SIBC		259		16.07		16.07		0.20			1.19			15.40		36.1		NM		77.0		88.6		88.6		14.23		0.00
Territorial Bancorp Inc.	HI	TBNK		1,617		13.12		NA		0.93			6.73			20.55		206.6		13.8		16.3		97.4		NA		12.77		2.73
TF Financial Corp.	PA	THRD		836		11.35		10.84		0.85			7.40			30.89		97.3		13.6		14.0		102.5		108.0		11.64		1.55
Timberland Bancorp, Inc.	WA	TSBK		728		10.86		10.16		0.63			5.19			11.00		77.5		19.3		21.6		98.0		105.7		10.65		1.45
TrustCo Bank Corp NY	NY	TRST		4,521		8.00		7.99		0.90			11.15			6.76		639.3		16.0		16.5		176.5		176.8		14.12		3.88
United Community Bancorp	IN	UCBA		512		14.49		13.96		0.52			3.77			11.06		57.0		19.8		21.4		76.7		80.1		11.12		2.17
United Community Financial Corp.	OH	UCFC		1,738		10.07		10.07		0.56			5.32			3.62		182.5		51.7		103.4		104.1		104.2		10.49		0.00
Waterstone Financial, Inc.	WI	WSBF		1,947		11.02		10.99		0.90			7.01			10.18		350.1		23.7		23.7		163.3		163.7		17.99		1.96
Wayne Savings Bancshares, Inc.	OH	WAYN		410		9.40		9.01		0.51			5.24			11.30		32.1		15.7		15.3		83.3		87.3		7.83		2.83
Wellesley Bancorp, Inc.	MA	WEBK		459		10.20		10.20		0.55			5.09			19.25		47.2		19.8		20.5		101.0		101.0		10.30		0.00
Westbury Bancorp, Inc.	WI	WBB		536		16.94		16.94		0.03			0.21			14.30		73.5		NA		NA		81.1		81.1		13.73		0.00
Westfield Financial, Inc.	MA	WFD		1,277		12.07		12.07		0.53			4.04			7.20		143.0		21.2		32.8		94.1		94.1		11.36		3.33
Wolverine Bancorp, Inc.	MI	WBKC		298		20.26		20.26		0.54			2.48			21.75		49.9		31.5		31.5		82.8		82.8		16.78		0.00
WSFS Financial Corp.	DE	WSFS		4,516		8.48		7.69		1.07			11.60			69.00		614.9		13.6		14.9		160.2		178.4		13.59		0.70
WVS Financial Corp.	PA	WVFC		314		10.28		10.28		0.29			2.55			11.59		23.9		30.5		31.1		73.9		73.9		7.60		1.38
Average	NA	NA		2,531		13.11		12.45		0.55			4.27			NA		355.4		23.2		27.6		105.9		114.2		13.50		1.46
Median	NA	NA		836		12.25		11.20		0.58			4.68			NA		101.8		18.8		20.5		97.4		101.9		12.33		1.35

⁽¹⁾ Public thrifts traded on NYSE, NYSE MKT, or NASDAQ; excludes companies subject to pending acquisitions or mutual holding company ownership.

Source: SNL Financial; Feldman Financial.

III-3

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit IV-1

Pro Forma Assumptions for Conversion Stock Offering

1. The total amount of the net offering proceeds was fully invested at the beginning of the applicable period.

2. The net offering proceeds are invested to yield a return of 1.75%, which represented the yield on five-year U.S. Treasury securities at December 31, 2013. The effective corporate income tax rate was assumed to be 34.0%, resulting in a net after-tax yield of 1.16%.

3. It is assumed that 6% of the total shares of common stock to be outstanding after completion of the conversion, including shares issued to Victory Bancorp shareholders in the merger, will be acquired by the employee stock ownership plan (“ESOP”). Pro forma adjustments have been made to earnings and equity to reflect the impact of the ESOP. The annual expense is estimated based on a 25-year loan to the ESOP from HV Bancorp. No re-investment is assumed on proceeds used to fund the ESOP.

4. It is assumed that that the restricted stock plan (“RSP”) will purchase in the open market a number of shares equal to 4% of the total shares to be outstanding after completion of the conversion, including shares issued to Victory Bancorp shareholders in the merger. Also, it is assumed that these shares are acquired at the initial public offering price of $10.00 per share. Pro forma adjustments have been made to earnings and equity to reflect the impact of the RSP. The annual expense is estimated based on a five-year vesting period. No re-investment is assumed on proceeds used to fund the RSP.

5. It is assumed that an additional 10% of the total shares to be outstanding after completion of the conversion, including shares issued to Victory Bancorp shareholders in the merger, will be reserved for issuance by HV Bancorp’s stock option plan. Pro forma net income has been adjusted to reflect the expense associated with the granting of options at an assumed options value of $3.33 per share. It is further assumed that options for all shares reserved under the plan were granted to plan participants at the beginning of the period, 25% of the options granted were non-qualified options for income tax purposes, the options would vest at a rate of 20% per year, and compensation expense will be recognized on a straight-line basis over the five-year vesting period

6. The fair value of stock options has been estimated at $3.33 per option using the Black-Scholes option pricing model with the following assumptions: a grant-date share price and option exercise price of $10.00; dividend yield of 0.00%; an expected option life of 10 years; a risk-free interest rate of 3.04%; and a volatility rate of 15.82% based on an index of publicly traded thrift institutions.

7. Total offering expenses, including marketing agent fees and expenses, are estimated at $1.0 million at the midpoint, and range from $973,000 at the minimum to $1.1 million at the adjusted maximum.

8. No effect has been given in the pro forma equity calculation for the assumed earnings on the net proceeds.

9. No effect has been given to withdrawals from deposit accounts for the purpose of purchasing common stock in the offering.

IV-1

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit IV-2

HV Bancorp, Inc.

Pro Forma Conversion Valuation Range

Historical Financial Data as of December 31, 2013

(Dollars in Thousands, Except Per Share Data)

	Minimum			Midpoint			Maximum			Adj. Max.
Shares outstanding		1,650,485			1,941,748			2,196,804			2,369,304
Shares sold in conversion offering		850,000			1,000,000			1,150,000			1,322,500
Shares issued in Victory Bancorp merger		800,485			941,748			1,046,804			1,046,804
Shares sold in offering (%)		51.50	%		51.50	%		52.35	%		55.82	%
Shares issued in merger (%)		48.50	%		48.50	%		47.65	%		44.18	%
Offering price	$	10.00		$	10.00		$	10.00		$	10.00
Pro forma market value	$	16,505		$	19,417		$	21,968		$	23,693
Gross offering proceeds	$	8,500		$	10,000		$	11,500		$	13,225
Less: estimated offering expenses		(973	)		(1,016	)		(1,060	)		(1,115	)
Net offering proceeds		7,527			8,984			10,440			12,110
Less: ESOP purchase		(990	)		(1,165	)		(1,318	)		(1,422	)
Less: RSP purchase		(660	)		(777	)		(879	)		(948	)
Net investable proceeds from offering	$	5,877		$	7,042		$	8,243		$	9,740
Net Income (available to common):
LTM ended 12/31/13 - HV Bank		9			9			9			9
LTM ended 12/31/13 - Victory Bancorp		492			492			492			492
Pro forma income on net proceeds		68			82			96			113
Pro forma impact of funding the merger		(25	)		(9	)		(4	)		(4	)
Pro forma subordinated debt cost		(28	)		(28	)		0			0
Pro forma merger adjustments		(172	)		(172	)		(172	)		(172	)
Pro forma ESOP adjustment		(26	)		(31	)		(35	)		(38	)
Pro forma RSP adjustment		(87	)		(103	)		(116	)		(125	)
Pro forma option adjustment		(101	)		(118	)		(134	)		(144	)
Pro forma net income for common		130			122			135			131
Pro forma earnings per share	$	0.08		$	0.07		$	0.07		$	0.06
Core Earnings (available to common):
LTM ended 12/31/13 - HV Bank		(81	)		(81	)		(81	)		(81	)
LTM ended 12/31/13 - Victory Bancorp		593			593			593			593
Pro forma income on net proceeds		68			82			96			113
Pro forma impact of funding the merger		(25	)		(9	)		(4	)		(4	)
Pro forma subordinated debt cost		(28	)		(28	)		0			0
Pro forma merger adjustments		(87	)		(87	)		(87	)		(87	)
Pro forma ESOP adjustment		(26	)		(31	)		(35	)		(38	)
Pro forma RSP adjustment		(87	)		(103	)		(116	)		(125	)
Pro forma option adjustment		(101	)		(118	)		(134	)		(144	)
Pro forma core earnings		227			218			232			227
Pro forma core earnings per share	$	0.15		$	0.12		$	0.11		$	0.10
Total Equity
Historical 12/31/13 - HV Bank	$	10,261		$	10,261		$	10,261		$	10,261
Net offering proceeds		7,527			8,984			10,440			12,110
Common equity issued in merger		8,005			9,417			10,468			10,468
Preferred equity assumed in merger		3,431			3,431			3,431			3,431
Less: merger expenses		(161	)		(161	)		(161	)		(161	)
Less: ESOP purchase		(990	)		(1,165	)		(1,318	)		(1,422	)
Less: RSP purchase		(660	)		(777	)		(879	)		(948	)
Pro forma total equity	$	27,413		$	29,990		$	32,242		$	33,739
Pro forma common equity	$	23,982		$	26,559		$	28,811		$	30,308
Pro forma common book value	$	14.53		$	13.68		$	13.11		$	12.79

IV-2

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit IV-2 (continued)

HV Bancorp, Inc.

Pro Forma Conversion Valuation Range

Historical Financial Data as of December 31, 2013

(Dollars in Thousands, Except Per Share Data)

	Minimum			Midpoint			Maximum			Adj. Max.
Shares outstanding		1,650,485			1,941,748			2,196,804			2,369,304
Shares sold in conversion offering		850,000			1,000,000			1,150,000			1,322,500
Shares issued in Victory Bancorp merger		800,485			941,748			1,046,804			1,046,804
Shares sold in offering (%)		51.50	%		51.50	%		52.35	%		55.82	%
Shares issued in merger (%)		48.50	%		48.50	%		47.65	%		44.18	%
Offering price	$	10.00		$	10.00		$	10.00		$	10.00
Pro forma market value	$	16,505		$	19,417		$	21,968		$	23,693
Gross offering proceeds	$	8,500		$	10,000		$	11,500		$	13,225
Less: estimated offering expenses		(973	)		(1,016	)		(1,060	)		(1,115	)
Net offering proceeds		7,527			8,984			10,440			12,110
Less: ESOP purchase		(990	)		(1,165	)		(1,318	)		(1,422	)
Less: RSP purchase		(660	)		(777	)		(879	)		(948	)
Net investable proceeds from offering	$	5,877		$	7,042		$	8,243		$	9,740
Tangible Equity
Historical 12/31/13 - HV Bank	$	10,261		$	10,261		$	10,261		$	10,261
Net offering proceeds		7,527			8,984			10,440			12,110
Common stock issued in merger		8,005			9,417			10,468			10,468
Preferred stock assumed in merger		3,431			3,431			3,431			3,431
Less: merger expenses		(161	)		(161	)		(161	)		(161	)
Less: intangible assets		(834	)		(834	)		(1,002	)		(1,002	)
Less: ESOP purchase		(990	)		(1,165	)		(1,318	)		(1,422	)
Less: RSP purchase		(660	)		(777	)		(879	)		(948	)
Pro forma tangible equity	$	26,579		$	29,156		$	31,240		$	32,737
Pro forma tangible common equity	$	23,148		$	25,725		$	27,809		$	29,306
Pro forma tangible common book value	$	14.02		$	13.25		$	12.66		$	12.37
Total Assets
Historical 12/31/13 - HV Bank	$	163,423		$	163,423		$	163,423		$	163,423
Historical 12/31/13 - Victory Bancorp		141,319			141,319			141,319			141,319
Net offering proceeds		7,527			8,984			10,440			12,110
Plus: merger adjustments		(945	)		467			1,021			1,021
Less: ESOP purchase		(990	)		(1,165	)		(1,318	)		(1,422	)
Less: RSP purchase		(660	)		(777	)		(879	)		(948	)
Pro forma total assets	$	309,674		$	312,251		$	314,006		$	315,503
Pro Forma Ratios:
Price / LTM EPS		125.0			142.9			142.9			166.7
Price / Core EPS		66.7			83.3			90.9			100.0
Price / Book Value		68.8	%		73.1	%		76.3	%		78.2	%
Price / Tangible Book Value		71.3	%		75.5	%		79.0	%		80.8	%
Price / Total Assets		5.33	%		6.22	%		7.00	%		7.51	%
Total Equity / Assets		8.85	%		9.60	%		10.27	%		10.69	%
Tangible Equity / Assets		8.61	%		9.36	%		9.98	%		10.41	%
Tangible Common Equity / Assets		7.50	%		8.26	%		8.88	%		9.32	%
Memo Items:
Total value of acquiring Victory Bancorp	$	9,803		$	9,802		$	10,468		$	10,468
Common portion of merger consideration		8,005			9,417			10,468			10,468
Cash portion of merger consideration		1,798			385			0			0
Merger-related expenses		361			361			361			361
Preferred stock assumed - SBLF		3,431			3,431			3,431			3,431
Subordinated debt issued		497			497			0			0

IV-3

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit IV-3

Pro Forma Conversion Analysis at the Midpoint Valuation

HV Bancorp, Inc.

Pro Forma Financial Data as of December 31, 2013

	Symbol	Data
Pre-Conversion Variables
Net income - LTM com. avail.	Y	$	292,000
Core earnings - LTM com. avail.	Y		389,000
Common equity	B		10,100,000
Tangible common equity	TB		9,266,000
Total assets	A		305,209,000
Expenses in conversion	X		1,016,000
Other proceeds not reinvested	O		1,942,000
ESOP purchase	E		1,165,000
ESOP expense (pre-tax)	F		47,000
RSP purchase	M		777,000
RSP expense (pre-tax)	N		156,000
Stock option expense (pre-tax)	Q		129,000
Option expense tax-deductible	D		25.00	%
Re-investment rate (after-tax)	R		1.16	%
Tax rate	T		34.00	%
Shares for EPS	S		94.24	%
Pro Forma Valuation Ratios at Maximum Value
Price / LTM EPS	P/E		142.86
Price / Core EPS	P/E		83.33
Price / Book Value	P/B		73.10	%
Price / Tangible Book	P/TB		75.47	%
Price / Assets	P/A		6.22	%

Pro Forma Calculation at Maximum Value						Based on
V	=	(P/E / S)*((Y-R*(O+X)-(F+N)*(1-T)-(Q-Q*D*T)))	=	$	19,417,480	[LTM earnings]
		1 - (P/E * R)
V	=	(P/E / S)*((Y-R*(O+X)-(F+N)*(1-T)-(Q-Q*D*T))	=	$	19,417,480	[Core earnings]
		1 - (P/E * R)
V	=	P/B * (B - X - E - M)	=	$	19,417,480	[Book value]
		1 - P/B
V	=	P/TB * (TB - X - E - M)	=	$	19,417,480	[Tangible book]
		1 - P/TB
V	=	P/A * (A - X - E - M)	=	$	19,417,480	[Total assets]
		1 - P/A

Pro Forma Offering Range							Merger Shares		Aggregate Pro Forma Value
Minimum =	$	10,000,000	x	0.85	=	$8,500,000	$	8,004,850	$	16,504,850
Midpoint =	$	10,000,000	x	1.00	=	$10,000,000	$	9,417,480	$	19,417,480
Maximum =	$	10,000,000	x	1.15	=	$11,500,000	$	10,468,040	$	21,968,040
Adj. Max. =	$	11,500,000	x	1.15	=	$13,225,000	$	10,468,040	$	23,693,040

IV-4

FELDMAN FINANCIAL ADVISORS, INC.

Exhibit IV-4

Comparative Valuation Ratio Differential

Pro Forma Conversion Valuation Range

Computed from Market Price Data as of April 15, 2014

		Pro Forma HV Bancorp		Comparative Group
Valuation Ratio	Symbol			Average			Median
Price / Book Value	P/B				89.2			87.8
Minimum	(%)		68.8		-22.9	%		-21.6	%
Midpoint			73.1		-18.0	%		-16.7	%
Maximum			76.3		-14.5	%		-13.1	%
Adj. Maximum			78.2		-12.3	%		-10.9	%
Price / Tangible Book	P/TB				90.3			90.2
Minimum	(%)		71.3		-21.0	%		-21.0	%
Midpoint			75.5		-16.4	%		-16.3	%
Maximum			79.0		-12.5	%		-12.4	%
Adj. Maximum			80.8		-10.5	%		-10.4	%
Price / LTM EPS	P/E				27.6			25.8
Minimum	(x)		NM		NA			NA
Midpoint			NM		NA			NA
Maximum			NM		NA			NA
Adj. Maximum			NM		NA			NA
Price / Core EPS	P/E				28.5			29.2
Minimum	(x)		NM		NA			NA
Midpoint			NM		NA			NA
Maximum			NM		NA			NA
Adj. Maximum			NM		NA			NA
Price / Total Assets	P/A				13.27			12.63
Minimum	(%)		5.33		-59.8	%		-57.8	%
Midpoint			6.22		-53.1	%		-50.8	%
Maximum			7.00		-47.3	%		-44.6	%
Adj. Maximum			7.51		-43.4	%		-40.5	%

IV-5

EX-99.6

Exhibit 99.6

RP^® FINANCIAL, LC.

Advisory | Planning | Valuation

May 28, 2013

Mr. Travis J. Thompson

President and Chief Executive Officer

Huntingdon Valley Bank

3501 Masons Mill Road, Suite 401

Huntingdon Valley, Pennsylvania 19006

Dear Mr. Thompson:

This letter sets forth the agreement between Huntingdon Valley Bank (the “Bank”), Huntingdon Valley, Pennsylvania, and RP^® Financial, LC. (“RP Financial”), whereby the Bank has engaged RP Financial to prepare a written business plan document and three year financial projections reflecting the pro forma impact of the standard conversion and simultaneous acquisition of Victory Bancorp, Inc, Limerick, Pennsylvania (“Victory”) and the post-conversion/acquisition activities, organization and financial targets of the Bank. These services are described in greater detail below, and will be co-directed by the undersigned and James J. Oren, Director of RP Financial.

Description of Proposed Services

In this regard, RP Financial’s planning services will be comprised of: (1) evaluating the Bank’s current financial and operating condition, current business strategies and anticipated future strategies on a pro forma basis; (2) quantifying the impact of the Bank’s anticipated business strategies, incorporating the use of offering proceeds; (3) preparing detailed financial projections on a quarterly basis for a period of at least three fiscal years after the anticipated completion of the standard conversion and simultaneous acquisition, to reflect the impact of anticipated business strategies and the use of offering proceeds; (4) preparing the written business plan document which conforms with applicable regulatory guidelines, including a description of the use of offering proceeds and how the convenience and needs of the community will be addressed; and (5) preparing the detailed financial schedules of the capitalization and inter-company cash flows over the projection period. The financial projections will reflect Bank and consolidated levels.

The principal sections of the business plan, consistent with the regulatory requirements, will include: Executive Summary; Description of Business; Market Area; Management Plan; Records, Systems and Controls; Monitoring and Revising the Plan; Alternative Business Strategy and pro forma financial projections. The financial projections will be prepared on a quarterly basis as described in the preceding paragraph.

RP Financial will prepare the business plan for Board approval in advance of filing the plan with the regulators.

Washington Headquarters
Three Ballston Plaza	Direct: (703) 647-6553
1100 North Glebe Road, Suite 600	Telephone: (703) 528-1700
Arlington, VA 22201	Fax No.: (703) 528-1788
E-Mail: mfaust@rpfinancial.com	Toll-Free No.: (866) 723-0594

Mr. Travis J. Thompson

May 28, 2013

Page 2

Fee Structure and Payment Schedule

The Bank agrees to compensate RP Financial for preparation of the business plan on a fixed fee basis of $45,000. The payment schedule includes a $10,000 retainer fee and the balance due upon delivery of the completed plan. In the event that an update to the plan is required by the regulatory authorities as a condition to gaining regulatory approval of the business plan, the Bank will pay RP Financial a $7,500 fee per update to the plan. Payment of the business plan update fee shall be made upon delivery of the completed business plan update.

The Bank also agrees to reimburse RP Financial for those direct out-of-pocket expenses necessary and incidental to providing the business planning services. Reimbursable expenses will likely include printing, binding, telephone, facsimile, computer/data base, data and shipping/messenger services. In the event out-of-town travel is required in conjunction with RP Financial’s engagement, the Bank will authorize such travel and will separately reimburse RP Financial for such travel expenses.

In the event the Bank shall, for any reason, discontinue this planning engagement prior to delivery of the completed business plan, the Bank agrees to compensate RP Financial according to RP Financial’s standard billing rates for consulting services based on accumulated and verifiable time expenses, not to exceed the fixed fee described above, plus reimbursable expenses incurred. RP Financial’s standard hourly billing rates range from $450 for managing directors to $125 for research associates.

If during the course of the planning engagement, unforeseen events occur so as to materially change the nature or the work content of the business planning services described in this contract, the terms of said contract shall be subject to renegotiation by the Bank and RP Financial. Such unforeseen events may include changes in regulatory requirements as it specifically relates to the Bank or potential transactions that will dramatically impact the Bank, such as a pending acquisition (other than the pending acquisition of Victory) or branch transaction.

Covenants, Representations and Warranties

The Bank and RP Financial agree to the following:

1. The Bank agrees to make available or to supply to RP Financial such information with respect to its business and financial condition as RP Financial may reasonably request in order to provide the aforesaid valuation. Such information heretofore or hereafter supplied or made available to RP Financial shall include: annual financial statements, periodic regulatory filings and material agreements, debt instruments, off balance sheet assets or liabilities, commitments and contingencies, unrealized gains or losses and corporate books and records. All information provided by the Bank to RP Financial shall remain strictly confidential (unless such information is otherwise made available to the public), and if the conversion is not consummated or the services of RP Financial are terminated hereunder, RP Financial shall promptly return to the Bank the original and any copies of such information.

2. The Bank represents and warrants to RP Financial that any information provided to RP Financial does not and will not, to the best of the Bank’s knowledge, at the times it is provided to RP Financial, contain any untrue statement of a material fact or in response to informational requests by RP Financial fail to state a material fact necessary to make the statements therein not false or misleading in light of the circumstances under which they were made.

Mr. Travis J. Thompson

May 28, 2013

Page 3

3. (a) The Bank agrees that it will indemnify and hold harmless RP Financial, any affiliates of RP Financial, the respective members, officers, agents and employees of RP Financial or their successors and assigns who act for or on behalf of RP Financial in connection with the services called for under this agreement (hereinafter referred to as “RP Financial”), from and against any and all losses, claims, damages and liabilities (including, but not limited to, reasonable attorneys fees, and all losses and expenses in connection with claims under the federal securities laws) attributable to (i) any untrue statement or alleged untrue statement of a material fact contained in the financial statements or other information furnished or otherwise provided by the Bank to RP Financial, either orally or in writing; (ii) the omission or alleged omission of a material fact from the financial statements or other information furnished or otherwise made available by the Bank to RP Financial; or (iii) any action or omission to act by the Bank, or the Bank’s respective officers, directors, employees or agents, which action or omission is undertaken in bad faith or is negligent. The Bank will be under no obligation to indemnify RP Financial hereunder if a court determines that RP Financial was negligent or acted in bad faith with respect to any actions or omissions of RP Financial related to a matter for which indemnification is sought hereunder. Reasonable time devoted by RP Financial to situations for which RP Financial is deemed entitled to indemnification hereunder, shall be an indemnifiable cost payable by the Bank at the normal hourly professional rate chargeable by such employee.

(b) RP Financial shall give written notice to the Bank of such claim or facts within thirty days of the assertion of any claim or discovery of material facts upon which RP Financial intends to base a claim for indemnification hereunder, including the name of counsel that RP Financial intends to engage in connection with any indemnification related matter. In the event the Bank elects, within seven days of the receipt of the original notice thereof, to contest such claim by written notice to RP Financial, the Bank shall not be obligated to make payments under Section 3(c), but RP Financial will be entitled to be paid any amounts payable by the Bank hereunder within five days after the final non-appealable determination of such contest either by written acknowledgement of the Bank or a decision of a court of competent jurisdiction or alternative adjudication forum, unless it is determined in accordance with Section 3(c) hereof that RP Financial is not entitled to indemnity hereunder. If the Bank does not so elect to contest a claim for indemnification by RP Financial hereunder, RP Financial shall (subject to the Bank’s receipt of the written statement and undertaking under Section 3(c) hereof) be paid promptly and in any event within thirty days after receipt by the Bank of detailed billing statements or invoices for which RP Financial is entitled to reimbursement under Section 3(c) hereof.

(c) Subject to the Bank’s right to contest under Section 3(b) hereof, the Bank shall pay for or reimburse the reasonable expenses, including reasonable attorneys’ fees, incurred by RP Financial in advance of the final disposition of any proceeding within thirty days of the receipt of such request if RP Financial furnishes the Bank: (1) a written statement of RP Financial’s good faith belief that it is entitled to indemnification hereunder; (2) a written undertaking to repay the advance if it ultimately is determined in a final, non-appealable adjudication of such proceeding that it or he is not entitled to such indemnification; and (3) a detailed invoice of the expenses for which reimbursement is sought.

(d) In the event the Bank does not pay any indemnified loss or make advance reimbursements of expenses in accordance with the terms of this agreement, RP Financial shall have all remedies available at law or in equity to enforce such obligation.

Mr. Travis J. Thompson

May 28, 2013

Page 4

This agreement constitutes the entire understanding of the Bank and RP Financial concerning the subject matter addressed herein, and such contract shall be governed and construed in accordance with the Commonwealth of Virginia. This agreement may not be modified, supplemented or amended except by written agreement executed by both parties.

The Bank and RP Financial are not affiliated, and neither the Bank nor RP Financial has an economic interest in, or is held in common with, the other and has not derived a significant portion of its gross revenues, receipts or net income for any period from transactions with the other. RP Financial represents and warrants that it is not aware of any fact or circumstance that would cause it not to be “independent” within the meaning of the conversion regulations of the federal banking agencies or otherwise prohibit or restrict in anyway RP Financial from serving in the role of independent appraiser for the Bank.

Please acknowledge your agreement to the foregoing by signing as indicated below and returning to RP Financial a signed copy of this letter.

Sincerely,

Marcus Faust

Director

Agreed To and Accepted By:	Travis J. Thompson
	President and Chief Executive Officer

Upon Authorization by the Board of Directors For:	Huntingdon Valley Bank,
	Huntingdon Valley, Pennsylvania

Date Executed:

EX-99.7

Exhibit 99.7

RP^® FINANCIAL, LC.

Advisory | Planning | Valuation

July 15, 2013

Travis J. Thompson

President and Chief Executive Officer

Huntingdon Valley Bank

3501 Masons Mill Road, Suite 401

Huntingdon Valley, Pennsylvania 19006

Dear Mr. Thompson:

This letter sets forth the agreement between Huntingdon Valley Bank, Huntingdon Valley, Pennsylvania (“Huntingdon Valley” or the “Bank”)), and RP^® Financial, LC. (“RP Financial”), whereby Huntingdon Valley has engaged RP Financial to prepare certain purchase accounting valuation adjustments and other pro forma financial tables in conjunction with its contemplated mutual-to-stock conversion transaction and simultaneous acquisition of Victory Bancorp, Inc. (“Victory Bancorp”) and its wholly owned subsidiary Victory Bank, Limerick, Pennsylvania (“Victory Bank”), collectively “Victory”. The nature, timing, and fee structure of RP Financial’s services in this regard are described more fully below.

Description of Proposed Services

RP Financial is prepared to provide valuation and advisory services in three service areas: (1) preparation of purchase accounting valuation adjustments related to financial assets and liabilities acquired in conjunction with the contemplated Victory acquisition; (2) preparation of certain pro forma conversion/acquisition tables for the FDIC and Federal Reserve applications in connection with the mutual-to-stock conversion transaction and simultaneous acquisition of Victory (the; and (3) preparation of certain pro forma conversion/acquisition transaction merger tables for inclusion in the mutual-to-stock conversion offering prospectus. Each of these service areas are described below:

1. Purchase Accounting Adjustments.

The acquisition of Victory will be accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 805 (“ASC 805”, formerly SFAS 141R) and other related accounting standards, including FASB ASC 820 (formerly SFAS 157), which requires the transaction to be accounted for at fair value. The fair valuation analyses that we will provide will consist in a report form of the fair valuation of Victory’s portfolios of investment securities, loans receivable, deposits and borrowings (if applicable), along with a determination of the core deposit intangible (“CDI”) valuation and, if appropriate, other identifiable intangible assets. Victory will need to provide an indication of fair value of the office land/building asset.

The reports will set forth certain detailed information pertaining to the portfolios being valued, the valuation methodology and models, and the resulting valuation and purchase accounting adjustments as of the quarter end prior to the filing of the regulatory merger application and as of the effective date of the merger. In this regard, RP Financial will utilize the following Victory information, at a minimum, to determine the valuation and mark-to-market adjustments: internal financial reports, regulatory call reports, maturity and yield information; a loan portfolio trial balance; and certificate of deposit monthly maturity schedules. In addition, RP Financial will use Huntingdon Valley market

Washington Headquarters Three Ballston Plaza 1100 North Glebe Road, Suite 600 Arlington, VA 22201 E-Mail: mfaust@rpfinancial.com   Direct: (703) 647-6553 Telephone: (703) 528-1700 Fax No.: (703) 528-1788 Toll-Free No.: (866) 723-0594

Travis J. Thompson

July 15, 2013

Page 2

information in determining the mark-to-market adjustments, such as market interest rates (regionally based, if appropriate), market pricing of similar interest-earning assets and interest-bearing liabilities, loan and mortgage-backed securities prepayment speeds, delinquency ratios, among others.

RP Financial will prepare its report as of the quarter end immediately prior to the filing of the merger application and updated as of the effective date of the acquisition, utilizing market rates on or about the valuation date and the most recent financial information available for Victory Bank prior to the valuation date.

2. Pro Forma Tables for Regulatory Applications.

RP Financial will prepare the pro forma financial tables required for the FDIC and Federal Reserve conversion and merger applications based on direction from Huntingdon Valley’s counsel. Such tables will likely include a parent company pro forma balance sheet as of the most recent quarter and for the first year of operation after the transaction. The most recent quarter end balance sheet will separately reflect Huntingdon Valley’s and Victory’s principal group of assets, liabilities, and capital accounts; debit and credit adjustments reflecting the proposed acquisition of Victory and the resulting pro forma combined balance sheet, with detailed support for the assumptions and purchase accounting adjustments in footnotes. Goodwill and other intangible assets will be listed separately on the balance sheet and the amortization period and method used for any intangible assets will be indicated. A bank level pro forma combined income statement for the first year after completion of the transaction, and a bank level pro forma regulatory capital compliance analysis will also be prepared with detailed support in footnotes. Additionally, we will prepare a combined parent only pro-forma balance sheet, also as of the most recent quarter end.

If requested, we will also prepare tables to reflect the conversion offering proceeds at several points in the offering range, as directed by counsel for Huntingdon Valley based on guidance from the regulatory authorities. The pro forma tables will be prepared as of the most recent quarter end prior to the application and can be updated as required. If RP Financial is not retained to prepare purchase accounting adjustments (see above), it is assumed that such adjustments and amortization schedules will be provided by a third party. Such adjustments are a prerequisite for completing the pro forma tables.

3. Pro Forma Financial Tables for Offering Prospectus.

RP Financial will prepare the pro forma conversion/acquisition tables required for inclusion in the offering prospectus of HV Bancorp Inc., the newly formed holding company of the Bank. Such tables will include pro forma balance sheets and income statements as of reporting periods reflected in the prospectus (most recent audit year-end and stub period, if required). Tables will be prepared to reflect the impact of the acquisition of Victory Bank and the conversion offering proceeds at several points in the offering range, as directed by counsel for Huntingdon Valley and tables will tie to and be consistent with other pro forma valuation data included in the offering prospectus. If RP Financial is not retained to prepare purchase accounting adjustments (see above), it is assumed that such adjustments and amortization schedules will be provided by a third party. Such adjustments are a prerequisite for completing the pro forma tables.

Travis J. Thompson

July 15, 2013

Page 3

Fee Structure

Huntingdon Valley agrees to pay RP Financial on a fixed fee basis for each of the services listed below.

Victory

Purchase Accounting Adjustments:	$10,000 for the preliminary analysis utilized for the application filings
	$ 2,500 for the final analysis as of the closing date
Pro Forma Tables (FDIC & Fed)	$5,000 for preparation of the original tables, including the first update and $2,500 for each subsequent update required as a result of inclusion of new financial results in the regulatory applications (most likely in the event of a delay in the offering and/or merger)
Pro Forma Tables (Prospectus)	$10,000 for preparation of the original tables, including the first update and $2,500 for each subsequent update required as a result of inclusion of new financial results in the offering prospectus (most likely in the event of a delay in the offering and/or merger)

A retainer of $10,000 will be payable upon execution of this agreement; said retainer will be credited against the fee payable for the Purchase Accounting Adjustments – preliminary analysis. The fixed fees plus reimbursable expenses will be payable upon delivery of the preliminary and final reports and tables and the updates (if necessary). Reimbursable expenses will be capped at $2,500. Should RP Financial provide other services as may be requested by Huntingdon Valley, Huntingdon Valley will agree to reimburse RP Financial per its hourly rates for the consultants involved. RP Financial will receive Huntingdon Valley’s prior written approval for any such activities. RP Financial’s hourly rates range from $450 per hour for managing directors to $75 per hour for research associates. Out-of-pocket expenses will likely include printing, binding, telephone, facsimile, computer, data and shipping/messenger services.

In the event Huntingdon Valley shall, for any reason, discontinue the engagement prior to delivery of the completion of the above work effort, Huntingdon Valley agrees to compensate RP Financial according to RP Financial’s hourly rates for consulting services based on accumulated and verifiable time expenses, plus out-of-pocket expenses as set forth below

Indemnifications

Covenants, Representations and Warranties

Huntingdon Valley and RP Financial agree to the following:

1. Huntingdon Valley agrees to make available or to supply to RP Financial such information with respect to its business and financial condition as RP Financial may reasonably request in order to provide the aforesaid valuations and financial tables. Such information heretofore or hereafter supplied or made available to RP Financial shall include: annual financial

Travis J. Thompson

July 15, 2013

Page 4

statements, periodic regulatory filings and material agreements, debt instruments, off balance sheet assets or liabilities, commitments and contingencies, unrealized gains or losses and corporate books and records. All information provided by Huntingdon Valley to RP Financial shall remain strictly confidential (unless such information is otherwise made available to the public), and if the conversion and/or merger is not consummated or the services of RP Financial are terminated hereunder, RP Financial shall promptly return to Huntingdon Valley the original and any copies of such information.

2. Huntingdon Valley represents and warrants to RP Financial that any information provided to RP Financial does not and will not, to the best of Huntingdon Valley’s knowledge, at the times it is provided to RP Financial, contain any untrue statement of a material fact or in response to informational requests by RP Financial fail to state a material fact necessary to make the statements therein not false or misleading in light of the circumstances under which they were made.

3. (a) Huntingdon Valley agrees that it will indemnify and hold harmless RP Financial, any affiliates of RP Financial, the respective members, officers, agents and employees of RP Financial or their successors and assigns who act for or on behalf of RP Financial in connection with the services called for under this agreement (hereinafter referred to as “RP Financial”), from and against any and all losses, claims, damages and liabilities (including, but not limited to, reasonable attorneys fees, and all losses and expenses in connection with claims under the federal securities laws) attributable to (i) any untrue statement or alleged untrue statement of a material fact contained in the financial statements or other information furnished or otherwise provided by Huntingdon Valley to RP Financial, either orally or in writing; (ii) the omission or alleged omission of a material fact from the financial statements or other information furnished or otherwise made available by Huntingdon Valley to RP Financial; or (iii) any action or omission to act by Huntingdon Valley, or Huntingdon Valley’s respective officers, directors, employees or agents, which action or omission is undertaken in bad faith or is negligent. Huntingdon Valley will be under no obligation to indemnify RP Financial hereunder if a court determines that RP Financial was negligent or acted in bad faith with respect to any actions or omissions of RP Financial related to a matter for which indemnification is sought hereunder. Reasonable time devoted by RP Financial to situations for which RP Financial is deemed entitled to indemnification hereunder, shall be an indemnifiable cost payable by Huntingdon Valley at the normal hourly professional rate chargeable by such employee.

(b) RP Financial shall give written notice to Huntingdon Valley of such claim or facts within thirty days of the assertion of any claim or discovery of material facts upon which RP Financial intends to base a claim for indemnification hereunder, including the name of counsel that RP Financial intends to engage in connection with any indemnification related matter. In the event Huntingdon Valley elects, within seven days of the receipt of the original notice thereof, to contest such claim by written notice to RP Financial, Huntingdon Valley shall not be obligated to make payments under Section 3(c), but RP Financial will be entitled to be paid any amounts payable by Huntingdon Valley hereunder within five days after the final non-appealable determination of such contest either by written acknowledgement of Huntingdon Valley or a decision of a court of competent jurisdiction or alternative adjudication forum, unless it is determined in accordance with Section 3(c) hereof that RP Financial is not entitled to indemnity hereunder. If Huntingdon Valley does not so elect to contest a claim for indemnification by RP Financial hereunder, RP Financial shall (subject to Huntingdon Valley’s receipt of the written statement and undertaking under Section 3(c) hereof) be paid promptly and in any event within thirty days after receipt by Huntingdon Valley of detailed billing statements or invoices for which RP Financial is entitled to reimbursement under Section 3(c) hereof.

Travis J. Thompson

July 15, 2013

Page 5

(c) Subject to Huntingdon Valley’s right to contest under Section 3(b) hereof, Huntingdon Valley shall pay for or reimburse the reasonable expenses, including reasonable attorneys’ fees, incurred by RP Financial in advance of the final disposition of any proceeding within thirty days of the receipt of such request if RP Financial furnishes Huntingdon Valley: (1) a written statement of RP Financial’s good faith belief that it is entitled to indemnification hereunder; (2) a written undertaking to repay the advance if it ultimately is determined in a final, non-appealable adjudication of such proceeding that it or he is not entitled to such indemnification; and (3) a detailed invoice of the expenses for which reimbursement is sought.

(d) In the event Huntingdon Valley does not pay any indemnified loss or make advance reimbursements of expenses in accordance with the terms of this agreement, RP Financial shall have all remedies available at law or in equity to enforce such obligation.

This agreement constitutes the entire understanding of Huntingdon Valley and RP Financial concerning the subject matter addressed herein, and such contract shall be governed and construed in accordance with the Commonwealth of Virginia. This agreement may not be modified, supplemented or amended except by written agreement executed by both parties.

Huntingdon Valley and RP Financial are not affiliated, and neither Huntingdon Valley nor RP Financial has an economic interest in, or is held in common with, the other and has not derived a significant portion of its gross revenues, receipts or net income for any period from transactions with the other. RP Financial is not aware of any fact or circumstance that would prohibit or restrict in anyway RP Financial from providing the services as indicated under this Agreement.

Please acknowledge your agreement to the foregoing by signing as indicated below and returning to RP Financial a signed copy of this agreement along with the $10,000 retainer.

Sincerely,

Marcus Faust

Director

Agreed To and Accepted By:	Travis J. Thompson
	President and Chief Executive Officer

Upon Authorization by the Board of Directors For:	Huntingdon Valley Bank
	Huntingdon Valley, Pennsylvania

Date Executed: