Edgar Filing: MALVERN FEDERAL BANCORP INC

t72186_def14a.htm

SCHEDULE 14A

United States

Securities and Exchange Commission

Washington, D.C. 20549

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. _____)

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Malvern Federal Bancorp, Inc.

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MALVERN FEDERAL BANCORP, INC.

January 11, 2012

Dear Shareholder:

You are cordially invited to attend the annual meeting of shareholders of Malvern Federal Bancorp, Inc. The meeting will be held at the Sheraton Great Valley Hotel, 707 East Lancaster Avenue, Frazer, Pennsylvania, on Thursday, February 9, 2012 at 10:00 a.m., Eastern Time. The matters to be considered by shareholders at the annual meeting are described in the accompanying materials.

It is very important that you be represented at the annual meeting regardless of the number of shares you own or whether you are able to attend the meeting in person. We urge you to mark, sign, and date your proxy card today and return it in the envelope provided, even if you plan to attend the annual meeting. This will not prevent you from voting in person, but will ensure that your vote is counted if you are unable to attend.

Your continued support of and interest in Malvern Federal Bancorp, Inc. is sincerely appreciated.

	Very truly yours,


	/s/Ronald Anderson
	Ronald Anderson
	President and Chief Executive Officer

MALVERN FEDERAL BANCORP, INC. 42 East Lancaster Avenue Paoli, Pennsylvania 19301 (610) 644-9400


	NOTICE OF ANNUAL MEETING OF SHAREHOLDERS


	TIME	10:00 a.m., Eastern Time, Thursday, February 9, 2012

	PLACE	Sheraton Great Valley Hotel 707 East Lancaster Avenue Frazer, Pennsylvania

	ITEMS OF BUSINESS	(1) To elect three directors for a three-year term expiring in 2015, and until their successors are elected and qualified; (2) To raitfy the appointment of ParenteBeard LLC as our independent registered public accounting firm for the fiscal year ending September 30, 2012; and (3) To transact such other business, as may properly come before the meeting or at any adjournment thereof. We are not aware of any other such business.

	RECORD DATE	Holders of Malvern Federal Bancorp common stock of record at the close of business on December 27, 2011 are entitled to vote at the meeting.

	ANNUAL REPORT	Our 2011 Annual Report is enclosed but is not a part of the proxy solicitation materials.

	PROXY VOTING	It is important that your shares be represented and voted at the meeting. You can vote your shares by completing and returning the proxy card sent to you. Most shareholders whose shares are held in "street" name can also vote their shares over the Internet or by telephone. If Internet or telephone voting is available to you, voting instructions are printed on your voting instruction form. You can revoke a proxy at any time prior to its exercise at the meeting by following the instructions in the accompanying proxy statement.
		BY ORDER OF THE BOARD OF DIRECTORS /s/Shirley Stanke Shirley Stanke Corporate Secretary
	Paoli, Pennsylvania January 11, 2012

TABLE OF CONTENTS

		Page

About the Annual Meeting of Shareholders		1

Information with Respect to Nominees for Director, Continuing Directors and Executive Officers		3

Election of Directors (Proposal One)		3

Members of the Board of Directors Continuing in Office		4

Executive Officers Who are Not Also Directors		5

Director Nominations		5

Committees and Meetings of the Board of Directors		6

Board Leadership Structure and the Board’s Role in Risk Oversight		7

Directors’ Attendance at Annual Meetings		7

Directors’ Compensation		7

Report of the Audit Committee		8

Management Compensation		9

Summary Compensation Table		9

Employment Agreements		10

Supplemental Executive Retirement Agreements		10

Employee's Savings & Profit Sharing Plan		10

Employee Stock Ownership Plan		11

Endorsement Split Dollar Insurance Agreements		11

Related Party Transactions		11

Beneficial Ownership of Common Stock by Certain Beneficial Owners and Management		13

Section 16(a) Beneficial Ownership Reporting Compliance		14

Ratification of the Appointment of Our Independent Registered Public Accounting Firm (Proposal Two)		14

Audit Fees		15

Shareholder Proposals, Nominations and Communications with the Board of Directors		16

Annual Reports		16

Other Matters		16

PROXY STATEMENT

MALVERN FEDERAL BANCORP, INC.

ABOUT THE ANNUAL MEETING OF SHAREHOLDERS

This proxy statement is furnished to holders of common stock of Malvern Federal Bancorp, Inc. the (“Company”), the “mid-tier” holding company of Malvern Federal Savings Bank (the “Bank”. Our Board of Directors is soliciting proxies to be used at the annual meeting of shareholders to be held at the Sheraton Great Valley Hotel, located at 707 East Lancaster Avenue, Frazer, Pennsylvania, on Thursday, February 9, 2012 at 10:00 a.m., Eastern Time, and any adjournment thereof, for the purposes set forth in the Notice of Annual Meeting of Shareholders. This proxy statement is first being mailed to shareholders on or about January 11, 2012.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on February 9, 2012. This proxy statement and our Annual Report on Form 10-K for the year ended September 30, 2011 as well as driving directions to the annual meeting are available on our website at www.malvernfederal.com under the “Investor Relations” tab.

What is the purpose of the annual meeting?

At our annual meeting, shareholders will act upon the matters outlined in the Notice of Annual Meeting, consisting of the election of directors and the ratification of our independent registered public accounting firm.

Who is entitled to vote?

Only Malvern Federal Bancorp shareholders of record as of the close of business on the record date for the meeting, December 27, 2011, are entitled to vote at the meeting. On the record date, we had 6,102,500 shares of common stock issued and outstanding and no other class of equity securities outstanding. For each issued and outstanding share of common stock you own on the record date, you will be entitled to one vote on each matter to be voted on at the meeting, in person or by proxy.

How do I submit my proxy?

After you have carefully read this proxy statement, indicate on your proxy card how you want your shares to be voted. Then sign, date and mail your proxy card in the enclosed prepaid return envelope as soon as possible. This will enable your shares to be represented and voted at the annual meeting even if you do not attend the meeting.

If my shares are held in "street name" by my broker, could my broker automatically vote my shares for me?

Your broker may not vote on the election of directors. You should use the voting instruction card provided by the institution that holds your shares to instruct your broker to vote your shares or else your shares will be considered "broker non-votes."

Broker non-votes are shares held by brokers or nominees as to which voting instructions have not been received from the beneficial owners or the persons entitled to vote those shares and the broker or nominee does not have discretionary voting power under rules applicable to broker-dealers. Under these rules, the proposal to elect directors, is not an item on which brokerage firms may vote in their discretion on behalf of their clients if such clients have not furnished voting instructions within ten days of the annual meeting.

Your broker may vote in his or her discretion on the ratification of the appointment of our independent registered public accounting firm if you do not furnish instructions.

Can I attend the meeting and vote my shares in person?

All shareholders are invited to attend the annual meeting. Shareholders of record can vote in person at the annual meeting. If your shares are held in street name, then you are not the shareholder of record and you must ask your broker or other nominee how you can vote at the annual meeting.

Can I change my vote after I return my proxy card?

Yes. If you are a shareholder of record, there are three ways you can change your vote or revoke your proxy after you have sent in your proxy form.

•

First, you may send a written notice to our Corporate Secretary, Ms. Shirley Stanke, Malvern Federal Bancorp, Inc., 42 East Lancaster Avenue, Paoli, Pennsylvania 19301, in advance of the meeting stating that you would like to revoke your proxy.

•

Second, you may complete and submit a new proxy card before the annual meeting. Any earlier proxies will be revoked automatically.

•

Third, you may attend the annual meeting and vote in person. Any earlier proxy will be revoked. However, attending the annual meeting without voting in person will not revoke your proxy.

If your shares are held in "street name" and you have instructed a broker or other nominee to vote your shares, you must follow directions from your broker or other nominee to change your vote.

What constitutes a quorum?

The presence at the meeting, in person or by proxy, of the holders of a majority of outstanding shares that all shareholders are entitled to vote on a particular matter will constitute a quorum. Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of votes considered to be present at the meeting.

What are the Board of Directors' recommendations?

The recommendations of the Board of Directors are set forth under the description of each proposal in this proxy statement. In summary, the Board of Directors recommends that you vote FOR the nominees for director described herein, and FOR the ratification of the appointment of ParenteBeard LLC for fiscal 2012.

The proxy solicited hereby, if properly signed and returned to us and not revoked prior to its use, will be voted in accordance with your instructions. If no contrary instructions are given, each proxy signed and received will be voted in the manner recommended by the Board of Directors and, upon the transaction of such other business as may properly come before the meeting, in accordance with the best judgment of the persons appointed as proxies. Proxies solicited hereby may be exercised only at the annual meeting and any adjournment of the annual meeting and will not be used for any other meeting.

What vote is required to approve each item?

The election of directors will be determined by a plurality of the votes cast at the annual meeting. The three nominees for director receiving the most "for" votes will be elected directors. The affirmative vote of a majority of the shares represented in person or by proxy at the annual meeting is required to ratify the appointment of ParenteBeard LLC for fiscal 2012. Abstentions are considered in determining the presence of a quorum and will count as a vote against the proposal to ratify the appointment of the independent registered public accounting firm.

As indicated below under "Beneficial Ownership of Common Stock by Certain Beneficial Owners and Management," Malvern Federal Mutual Holding Company owns a majority of our outstanding common stock. The Mutual Holding Company intends to vote all of the shares it owns for the nominees for director and for the ratification of the appointment of ParenteBeard LLC, thereby ensuring a quorum at the annual meeting, and that each of such proposals will be adopted.

INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR, CONTINUING DIRECTORS AND EXECUTIVE OFFICERS

Election of Directors (Proposal One)

Our Bylaws provide that the Board of Directors shall be divided into three classes as nearly equal in number as possible. The directors are elected by our shareholders for staggered terms and until their successors are elected and qualified. One class shall be elected annually. At this meeting, you will be asked to elect one class of directors, consisting of three directors, for a three-year term expiring in 2015, and until their successors are elected and qualified.

Our Board of Directors has recommended the re-election of Ms. Woodman and Messrs. Palmer and Yerkes as directors. No director or nominee for director is related to any other director or executive officer by blood, marriage or adoption. Shareholders are not permitted to use cumulative voting for the election of directors. Our Board of Directors has determined that Messrs. Hughes, Scartozzi, Steinmetz, Palmer and Yerkes and Ms. Camp and Ms. Woodman are independent directors, as defined in the Nasdaq listing standards.

Unless otherwise directed, each proxy signed and returned by a shareholder will be voted for the election of the nominees for director listed below. If any person named as a nominee should be unable or unwilling to stand for election at the time of the annual meeting, the proxies will nominate and vote for any replacement nominee or nominees recommended by our Board of Directors. At this time, the Board of Directors knows of no reason why any of the nominees listed below may not be able to serve as a director if elected.

The following tables present information concerning the nominees for director and our continuing directors. All of our current directors also serve as directors of Malvern Federal Savings Bank. With the exception of Ms. Woodman and Mr. Scartozzi, the indicated period of service as a director includes service as a director of Malvern Federal Savings Bank prior to the organization of Malvern Federal Bancorp in 2008. Ages are reflected as of September 30, 2011.

Nominees for Director for Three-Year Terms Expiring in 2015

Name	Age	Position with Malvern Federal Bancorp and Principal Occupation During the Past Five Years	Director Since
Joseph E. Palmer, Jr.	71	Director. Co-owner and manager of Palmer Group Properties, a real estate investment and management company located in Paoli, Pennsylvania since 1994. Mr. Palmer’s extensive experience as an owner and operator of a real estate company in the Bank’s market area position him as well qualified to serve as a Director.	1986
Therese Woodman	59	Director. Township Manager of East Whiteland Township since February 2001. Ms. Woodman brings a wealth of experience to the Board with respect to local community matters, particularly in the areas of planning and development, which makes her well qualified to serve as a Director.	2009
John B. Yerkes, Jr.	73	Vice Chairman of the Board. Principal and Chief Executive Officer of Yerkes Associates, Inc., consulting civil engineers, West Chester, Pennsylvania, since 1961. Mr. Yerkes’ background as a business owner and civil engineer, position him as well qualified to serve as a Director.	1975

The Board of Directors recommends that you vote FOR the election of the nominees for director.

Members of the Board of Directors Continuing in Office

Directors Whose Terms Expire in 2013

Name	Age	Position with Malvern Federal Bancorp and Principal Occupation During the Past Five Years	Director Since
Ronald Anderson	55	President and Chief Executive Officer of Malvern Federal Bancorp, Inc. since its organization in 2008 and President and Chief Executive Officer of Malvern Federal Savings Bank since September 2002. Previously, Executive Vice President and Chief Executive Officer of Malvern Federal Savings Bank from September 2001 to September 2002. Mr. Anderson’s long service as an executive officer of Malvern Federal Bancorp and the Bank provide the Board with a wealth of knowledge and experience and make him well qualified to serve as a Director.	2006
F. Claire Hughes, Jr.	67	Chairman of the Board. Retired since January 2007. Previously Vice President, General Manager and Treasurer of Matthews Ford and President of Matthews Leasing Company, Paoli, Pennsylvania. Mr. Hughes business and financial experience as manager of a small business and president of a leasing company, make him well qualified to serve as a director.	2001

Directors Whose Terms Expire in 2014

Name	Age	Position with Malvern Federal Bancorp and Principal Occupation During the Past Five Years	Director Since
Kristin S. Camp	42	Director. Partner at the law firm Buckley, Brion, McGuire & Morris LLP, West Chester, Pennsylvania since 1996. As an attorney practicing in the Bank’s market area, Ms. Camp brings valuable legal experience to the Board.	2007
George E. Steinmetz	50	Director. Owner, Matthews Paoli Ford, an automobile dealership, Paoli, Pennsylvania since 2002. Mr. Steinmetz’s background as a small business owner in the Bank’s market area position him as well qualified to serve as a Director.	2007
Stephen P. Scartozzi	60	Director. President of The Hardware Center, Inc., Paoli, Pennsylvania since 2008. Mr. Scartozzi’s background as a small business owner in the Bank’s market area make him well qualified to serve as a Director.	2010

Executive Officers Who are Not Also Directors

Dennis Boyle, who is 59 years old, currently is Senior Vice President and Chief Financial Officer of Malvern Federal Bancorp and Senior Vice President, Treasurer and Chief Financial Officer of Malvern Federal Savings Bank. Previously, Mr. Boyle served as Vice President and Treasurer of Malvern Federal Savings Bank and in various other capacities since joining the bank in 1974.

Richard J. Fuchs, who is 62 years old, joined Malvern Federal Savings Bank as Senior Vice President – Operations on September 1, 2009. Previously, Mr. Fuchs served as the Executive Vice President – Retail Banking and Chief Deposit Office of Fox Chase Bank, Hatboro, Pennsylvania, from April 2006 until September 2009, and prior thereto, he was Senior Vice President – Community Banking Division at The Bryn Mawr Trust Company, Bryn Mawr, Pennsylvania, and he also served as President and Chief Executive Officer of its subsidiary, the Bryn Mawr Brokerage Company from 2000 to 2005.

William E. Hughes, Jr., who is 54 years old, has served as Senior Vice President and Chief Lending Officer of Malvern Federal Savings Bank since 1997 and in various other capacities since joining the Bank in 1977.

Director Nominations

Nominations for director of Malvern Federal Bancorp are made by the full Board of Directors. The Board of Directors considers the recommendations of the Nominating and Corporate Governance Committee in selecting nominees for director. All of our directors participate in the consideration of director nominees and will consider candidates for director suggested by other directors, as well as our management and shareholders. A shareholder who desires to recommend a prospective nominee for the Board should notify our Secretary in writing with whatever supporting material the shareholder considers appropriate. Any shareholder wishing to make a nomination must follow our procedures for shareholder nominations, which are described under "Shareholder Proposals, Nominations and Communications with the Board of Directors."

The charter of the Nominating and Corporate Governance Committee sets forth certain criteria the committee may consider when recommending individuals for nomination as a director including: (a) ensuring that the board of directors, as a whole, is diverse and consists of individuals with various and relevant career experience, relevant technical skills, industry knowledge and experience, financial expertise (including expertise that could qualify a director as a “financial expert,” as that term is defined by the rules of the SEC), local or community ties and (b) minimum individual qualifications, including strength of character, mature judgment, familiarity with our business and industry, independence of thought and an ability to work collegially. The committee also may consider the extent to which the candidate would fill a present need on the Board of Directors.

Committees and Meetings of the Board of Directors

During the fiscal year ended September 30, 2011, the Board of Directors of Malvern Federal Bancorp met 24 times. No director of Malvern Federal Bancorp attended fewer than 75% of the aggregate of the total number of Board meetings held during the period for which he has been a director and the total number of meetings held by all committees of the Board on which he served during the periods that he served.

Membership on Certain Board Committees. The Board of Directors of Malvern Bancorp has established an Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. The following table sets forth the membership of such committees as of the date of this proxy statement.


			Nominating
			and Corporate
Directors	Audit	Compensation	Governance
Camp			*
Hughes	*	**
Palmer	*	*
Scartozzi	*
Steinmetz	**	*
Woodman			*
Yerkes		*	**

	*	Member
	**	Chair

Audit Committee. The Board of Directors has established an Audit Committee consisting of Messrs. Steimmetz, Hughes, Scartozzi and Palmer. The Audit Committee reviews with management and the independent registered public accounting firm the systems of internal control, reviews the annual financial statements, including the Form 10-K, and monitors Malvern Federal Bancorp's adherence in accounting and financial reporting to generally accepted accounting principles. The Audit Committee is comprised of four directors who are independent directors as defined in the Nasdaq listing standards and the rules and regulations of the Securities and Exchange Commission. The Board of Directors has determined that Mr. Steinmetz meets the qualifications established for an audit committee financial expert in the regulations of the Securities and Exchange Commission. The Audit Committee met eight times in fiscal 2011. The Audit Committee charter as presently in effect is available on the Company’s website, www.malvernfederal.com.

Nominating and Corporate Governance Committee. It is the responsibility of the Nominating and Corporate Governance Committee to, among other functions, recommend nominees for the consideration of the Board of Directors in selecting nominees for election at the Annual Meeting. The Nominating and Corporate Governance Committee met once in fiscal 2011. The Nominating and Corporate Governance Committee members are independent directors, as defined in the Nasdaq listing standards. The committee's charter is available on our website at www.malvernfederal.com under the Investor Relations heading.

Compensation Committee. It is the responsibility of the Compensation Committee to set the compensation of our Chief Executive Officer as well as the other named executive officers. The Compensation Committee met once in fiscal 2011. Each of the members of the Compensation Committee is an independent director as defined in the Nasdaq listing standards. The committee's charter is available on our website at www.malvernfederal.com under the Investor Relations heading.

Board Leadership Structure and the Board’s Role in Risk Oversight

Ronald Anderson serves as our President and Chief Executive Officer and F. Claire Hughes, Jr. serves as Chairman of the Board. The Board of Directors has determined that that separation of the offices of Chairman of the Board and President enhances Board independence and oversight. Further, the separation of the Chairman of the Board permits the President and Chief Executive Officer to better focus on his responsibilities on managing the daily operations of Malvern Federal Bancorp, enhancing shareholder value and expanding and strengthening our franchise while allowing the Chairman to lead the Board of Directors in its fundamental role of providing independent oversight and advice to management. Mr. Hughes is an independent director under the rules of the Nasdaq Stock Market.

Risk is inherent with every business, particularly financial institutions. We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputational risk. Management is responsible for the day-to-day management of the risks Malvern Federal Bancorp faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board of Directors has the responsibility to ensure that the risk management processes designed and implemented by management are adequate and functioning as designed. In this regard, the Chairman of the Board meets regularly with management to discuss strategy and risks facing the company. Members of senior management regularly attend the Board meetings and are available to address any questions or concerns raised by the Board on risk management or other matters. The Chairman of the Board and independent directors work together to provide strong, independent oversight of Malvern Federal Bancorp’s management and affairs though its committees and meetings of independent directors.

Directors' Attendance at Annual Meetings

Directors are expected to attend the annual meeting of shareholders absent a valid reason for not doing so.

Directors' Compensation

We do not pay separate compensation to directors for their service on the Board of Directors of Malvern Federal Bancorp. Fees are paid to directors by the Bank only. Our directors, except for our President and Chief Executive Officer and Chairman of the Board, currently receive a fee of $400 for attending regularly scheduled monthly Board meetings of the Bank for a maximum of $800 per month. Directors, with the exception our President and Chief Executive Officer, also receive fees for attending property/loan committee meetings and reviewing loans. The Bank’s Chairman of the Board currently receives an annual retainer of $60,000 and the Vice Chairman receives $30,000. The remaining directors, other than Mr. Anderson, receive annual retainers of $25,000.

The table below summarizes the total compensation paid by Malvern Federal Savings Bank to our non-employee directors for the fiscal year ended September 30, 2011.

Name	Fees Earned or Paid in Cash	All Other Compensation(1)	Total
F. Claire Hughes, Jr.	$61,560	$ 2,501	$64,061
Kristin S. Camp	34,720	--	34,720
Joseph E. Palmer, Jr.	34,600	3,360	37,960
Stephen P. Scartozzi	35,360	--	35,360
Edward P. Shanaughy(2)	6,367	12,662	19,029
George E. Steinmetz	36,380	--	36,380
Therese Woodman	36,000	--	36,000
John B. Yerkes, Jr.	38,980	3,848	42,828

(1)

Consists of accruals and payments under the Directors’ Retirement Plan.

(2)

Mr. Shanaughy retired from the Board on November 10, 2010.

Malvern Federal Savings Bank has entered into Director Retirement Plan (“DRP”) Agreements with directors Hughes, Palmer and Yerkes and former director Shanaughy. The DRP Agreements provide the subject directors with retirement benefits for a five-year period at normal retirement age, defined as 80 years. The normal annual retirement benefit amounts are $17,400, $15,500, and $14,300 in the case of Messrs. Hughes, Palmer and Yerkes, respectively, and $10,500 in the case of Mr. Shanaughy. Mr. Shanaughy retired and received his first annual retirement benefit payment during fiscal 2011. The DRP Agreements also provide for reduced benefits upon early retirement and for benefits upon the director’s death or disability or separation of service following a change-in-control, as defined, of the Bank. The DRP Agreements provide that in the event any of the payments to be made thereunder are deemed to constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code (the “Code”), then such payments and benefits received thereunder shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits being non-deductible by Malvern Federal Savings Bank for federal income tax purposes. The DRP Agreements also include non-compete provisions.

REPORT OF THE AUDIT COMMITTEE

The functions of the Audit Committee include the following: performing all duties assigned by the Board of Directors, reviewing with management and independent public accountants the basis for the reports issued by Malvern Federal Saving Bank and Malvern Federal Bancorp, Inc. pursuant to federal regulatory requirements, meeting with the independent registered public accounting firm to review the scope of audit services, significant accounting changes and audit conclusions regarding significant accounting estimates, assessments as to the adequacy of internal controls and the resolution of any significant deficiencies or material control weaknesses, and assessing compliance with laws and regulations and overseeing the internal audit function. The Audit Committee also reviews and assesses the adequacy of its Charter on an annual basis.

The Audit Committee has reviewed and discussed Malvern Federal Bancorp's audited financial statements with management. The Audit Committee has discussed with Malvern Federal Bancorp's independent registered public accounting firm, ParenteBeard LLC, the matters required to be discussed by the Statement on Auditing Standards ("SAS") No. 61, as amended (AICPA, Professional Standards, Vol. I, AU Section 380), as adopted by the Public Accounting Oversight Board in Rule 3800T. The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding ParenteBeard LLC's communications with the audit committee concerning independence, and has discussed with ParenteBeard LLC, the independent auditor's independence. Based on the review and discussions referred to above in this report, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in Malvern Federal Bancorp's Annual Report on Form 10-K for the fiscal year ended September 30, 2011 for filing with the Securities and Exchange Commission.

	Members of the Audit Committee

	George Steimmetz, Chairman
	F. Claire Hughes, Jr.
	Joseph E. Palmer
	Stephen P. Scartozzi

MANAGEMENT COMPENSATION

Summary Compensation Table

The following table sets forth a summary of certain information concerning the compensation paid by Malvern Federal Savings Bank for services rendered in all capacities during the fiscal years ended September 30, 2011 and 2010 to our principal executive officer, the other two most highly compensated executive officers who were employees as of the end of fiscal 2011 and another individual for whom information would have been required to be included in the table but for the fact that he was not an employee as of September 30, 2011. Malvern Federal Bancorp, the holding company of Malvern Federal Savings, has not paid separate cash compensation to our executive officers.

	Fiscal					All Other
Name and Principal Position	Year	Salary		Bonus		Compensation(1)		Total
Ronald Anderson	2011	$	208,731	$	--	$	43,772	$	252,503
President and Chief Executive Officer	2010		201,000		--		50,057		251,057

Dennis Boyle	2011		171,777		--		48,520		220,297
Senior Vice President and Chief Financial Officer	2010		163,000		--		50,534		213,534

Gerard M. McTear, Jr.	2011(2)		89,862		--		146,175		236,037
Executive Vice President and Chief Administrative Officer	2010		132,000		--		22,508		154,508

William E. Hughes, Jr.	2011		134,892		--		20,907		155,799
Senior Vice President and Chief Lending Officer	2010		128,000		--		27,066		155,066


(1)	Includes amounts accrued under the Supplemental Executive Retirement Agreements, life insurance premiums, employer matching contributions and supplemental contributions under the Bank’s 401(k) plan, amounts allocated pursuant to the Company’s employee stock ownership plan and, in the case of Mr. Anderson, an automobile allowance. Also includes, in the case of Mr. McTear, a severance payment of $132,000 paid after the receipt of all requisite regulatory approvals/non-objections.
(2)	Mr. McTear’s employment terminated as of April 22, 2011.

Malvern Federal Bancorp has not implemented any equity awards or stock option plans to date. Malvern Federal Bancorp does not maintain any non-equity incentive plans.

Employment Agreements

On August 11, 2008, the Company and the Bank entered into Employment Agreements with Mr. Anderson. The agreements have a three-year term. On the annual anniversary date of the agreements in August 2009, the Agreements were extended for an additional year and are scheduled to expire on August 2012 unless they are further extended (any such further extension would require the approval or non-objection of the FDIC and the OCC or FRB, as the case may be). The employment agreements previously entered into with Messrs. Boyle and Hughes expired by their terms in August 2011.

The agreements are terminable by the Company and/or the Bank with or without cause. In the event employment was terminated for cause, as defined, Mr. Anderson would not be entitled to any additional compensation or benefits under the terms of the agreements. If the Agreements were terminated by the Company and/or the Bank without cause or if Mr. Anderson terminates the agreement because the Company and/or the Bank have materially breached the agreement or he otherwise has "good reason," as defined, to terminate, then he will be entitled to a cash severance payment equal to two times his then current base salary plus continued participation in all group insurance, life insurance, health and accident insurance and disability insurance for 24 months, unless Mr. Anderson receives substantially similar benefits with another employer prior thereto. In the event of termination in connection with a "change in control," as defined, Mr. Anderson will be entitled to a severance payment in an amount equal to three times his then current base salary plus his cash bonus received in the immediately preceding year, plus continuation of health insurance and certain other benefits for up to 36 months. As a result of the supervisory factors which led to the execution of the supervisory agreements by the Company and the Bank in October 2010, the payment of any severance benefits to Mr. Anderson currently requires the approval or non-objection of the FDIC and the OCC or FRB.

Supplemental Executive Retirement Agreements

In September and October 2004, Malvern Federal Savings Bank entered into Supplemental Executive Retirement Agreements (“SERPs”) with Messrs. Boyle, Anderson and Hughes, respectively. The Bank also has entered into SERPs with another executive officer and three non-executive officers. Under the terms of the SERPs, the officer will be entitled to an annual retirement benefit payable over 15 years. The annual benefit at normal retirement age, defined as 65 years, is $61,000, $50,000 and $45,000 in the case of Messrs. Anderson, Boyle and Hughes, respectively. Such normal retirement benefits under the SERPs can be increased by 3.5% for each year that the executive’s separation of service from the Bank is delayed beyond age 65, up to age 70. The SERPs also provide for reduced benefits upon early retirement and for benefits upon the executive’s death or disability or upon the executive’s separation of service following a change-in-control, as defined, of the Bank. The SERPs also provide that in the event any of the payments to be made thereunder are deemed to constitute “parachute payments” within the meaning of Section 280G of the Code, then such payments and benefits received thereunder shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits being non-deductible by Malvern Federal Savings Bank for federal income tax purposes. In order not to forfeit the payment of benefits under the SERPs, the officers must honor the non-compete provisions of such agreements.

Employees’ Savings & Profit Sharing Plan

Malvern Federal Savings Bank maintains an Employees’ Savings & Profit Sharing Plan (the “401(k) Plan”), for its employees including executive officers. Eligible employees may defer up to 6% of their salaries, with a matching contribution made by the Bank up to a specified limit determined annually by the Board of Directors. The Bank also may make additional discretionary contributions. We made 401(k) Plan matching contributions of $54,000 and $116,000, respectively, in fiscal 2011 and 2010.

Employee Stock Ownership Plan

In 2008, the Company established an employee stock ownership plan (the “ESOP”) for all eligible employees. As part of the Bank’s mutual holding company reorganization, the ESOP purchased 241,178 shares of common stock of Malvern Federal Bancorp utilizing a $2.6 million loan from the Company. The loan to the ESOP is being repaid over its term of 18 years and shares are released for allocation to employees’ accounts as debt service payments are made. Shares released from the suspense account are allocated to each eligible participant’s plan account pro rata based on compensation. Forfeitures may be used for the payment of expenses or be reallocated among the remaining participants. Participants become 100% vested after three years of service. Participants also become fully vested in their account balances upon a change in control (as defined), death, disability or retirement. Benefits are payable upon retirement or separation from service. The current ESOP trustees are Messrs. Anderson, Steinmetz and Boyle.

Endorsement Split Dollar Insurance Agreements

Malvern Federal Savings Bank has purchased insurance policies on the lives of its executive officers, and has entered into Split Dollar Insurance Agreements with each of those officers. The policies are owned by Malvern Federal Savings Bank which pays each premium due on the policies. Under the agreements with the named executive officers, upon an officer’s death while he remains employed by Malvern Federal Savings Bank the executive’s beneficiary shall receive proceeds in the amount of three times the executive’s base salary at the time of death. In the case of the officer’s death after termination of employment with Malvern Federal Savings Bank, provided he reached age 65 before such termination, the officer’s beneficiary shall receive proceeds in the amount of two times the executive's base salary. Malvern Federal Savings Bank is entitled to receive the amount of the death benefits less those paid to the officer’s beneficiary, which is expected to reimburse Malvern Federal Savings Bank in full for its life insurance investment.

The Split Dollar Insurance Agreements may be terminated at any time by Malvern Federal Savings Bank or the officer, by written notice to the other. The Split Dollar Insurance Agreements will also terminate upon cancellation of the insurance policy by Malvern Federal Savings Bank, cessation of Malvern Federal Savings Bank’s business or upon bankruptcy, receivership or dissolution or by Malvern Federal Savings Bank upon the officer’s termination of service to Malvern Federal Savings Bank. Upon termination, the officer forfeits any right in the death benefit and Malvern Federal Savings Bank may retain or terminate the insurance policy in its sole discretion.

Related Party Transactions

Loans and Extensions of Credit. Malvern Federal Savings Bank offers mortgage loans to its directors, officers and employees as well as members of their immediate families for the financing of their primary residences and certain other loans. These loans are generally made on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons except Malvern Federal Savings Bank waives the origination fees on real estate loans made to all employees. It is the belief of management that these loans neither involve more than the normal risk of collectibility nor present other unfavorable features to Malvern Federal Savings Bank.

The table below list all outstanding loans made by Malvern Federal Savings Bank to related persons, where the amount involved exceeds $120,000 and loan origination fees were waived. In each case, the loans listed are loans to executive officers secured by real estate where, consistent with our policy for all employees, the typical 3.0% loan origination fee was waived.

					Amounts Paid During Fiscal 2011
Name	Loan Origination Date	Amount of Fees Waived at Time of Origination	Largest Principal Amount Outstanding during Year Ended September 30, 2011	Amount Outstanding at September 30, 2011	Principal	Interest	Interest Rate
William E. Hughes, Jr.	2006	$7,700	$226,079	$216,240	$9,840	$12,419	5.610%

Section 22(h) of the Federal Reserve Act generally provides that any credit extended by a savings institution, such as Malvern Federal Savings Bank, to its executive officers, directors and, to the extent otherwise permitted, principal stockholder(s), or any related interest of the foregoing, must be on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions by the savings institution with non-affiliated parties; unless the loans are made pursuant to a benefit or compensation program that (i) is widely available to employees of the institution and (ii) does not give preference to any director, executive officer or principal stockholder, or certain affiliated interests of either, over other employees of the savings institution, and must not involve more than the normal risk of repayment or present other unfavorable features.

BENEFICIAL OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of December 27, 2011, the voting record date for the annual meeting, certain information as to the common stock beneficially owned by (i) each person or entity, including any "group" as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, who or which was known to us to be the beneficial owner of more than 5% of the issued and outstanding common stock, (ii) the directors and director nominees of Malvern Federal Bancorp, (iii) certain executive officers of Malvern Federal Bancorp; and (iv) all directors, director nominees and executive officers of Malvern Federal Bancorp as a group.

Name of Beneficial Owner or Number of Persons in Group		Amount and Nature of Beneficial Ownership as of December 27, 2011(1)				Percent of Common Stock
Malvern Federal Mutual Holding Company 42 E. Lancaster Avenue Paoli, Pennsylvania 19301			3,383,875				55.5	%

Joseph Stilwell and John Stilwell(2)

26 Broadway, 23rd Floor

New York, New York 10004

605,600

(2)

9.9

Directors and Nominees:
Ronald Anderson	10,709	(3)(4)	*
Kristin S. Camp	1,100		*
F. Claire Hughes, Jr.	5,000		*
Joseph E. Palmer, Jr.	4,000		*
Stephan P. Scartozzi	1,622	(5)	*
George E. Steinmetz	10,000	(4)	*
Therese Woodman	1,717		*
John B. Yerkes, Jr.	5,000		*

Other Named Executive Officers:			*
Dennis Boyle	14,227	(4)(6)	*
William E. Hughes, Jr.	8,086	(7)

All Directors, Director Nominees and Executive Officers as a

Group (11 persons)

67,399

(8)

1.1


* Represents less than 1% of our outstanding common stock.

(1)

Based upon filings made pursuant to the Securities Exchange Act of 1934 and information furnished by the respective individuals. Under regulations promulgated pursuant to the Securities Exchange Act of 1934, shares of common stock are deemed to be beneficially owned by a person if he or she directly or indirectly has or shares (i) voting power, which includes the power to vote or to direct the voting of the shares, or (ii) investment power, which includes the power to dispose or to direct the disposition of the shares. Unless otherwise indicated, the named beneficial owner has sole voting and dispositive power with respect to the shares.

(2)

Based on information contained in the Schedule 13D, as amended, filed by Joseph Stilwell and certain affiliated entities and John Stilwell. Joseph Stilwell beneficially owns 600,600 shares of Malvern Federal Bancorp common stock, including shares which Joseph Stilwell has shared voting and dispositive over and which are held in the names of Stilwell Value Partners VI, Stilwell Partners, Stilwell Associates and Stillwell Offshore, in Joseph Stilwell’s capacities as the general partner of Stilwell Partners and the managing and sole member of Stilwell Value LLC, which is the general partner of Stilwell Value Partners VI and Stilwell Associates, and of Stillwell Management, which is the general partner of Stillwell Offshore. Also includes 5,000 shares beneficially owned by John Stilwell, brother of Joseph Stilwell.

(Footnotes continued on following page)

__________________

(Footnotes continued from prior page)

(3)

Includes 9,000 shares held in the Malvern Federal Saving Bank Employees’ Savings and Profit Sharing plan (the “401(k) Plan”), and 1,718 shares allocated to Mr. Anderson’s account in the employee stock ownership plan (“ESOP”).

(4)

Does not include 196,500 unallocated shares held in the ESOP which are voted by the ESOP trustees.

(5)

The indicated shares are held jointly by Mr. Scartozzi and his spouse.

(6)

Includes 12,500 shares held in the 401(k) Plan, 300 shares held by Mr. Boyle’s children and 1,427 shares allocated to Mr. Boyle’s account in the ESOP.

(7)

Includes 7,000 shares held in the 401(k) Plan and 1,091 shares allocated to Mr. Hughes’ account in the ESOP.

(8)

Includes an aggregate 4,236 shares allocated to the ESOP accounts and an aggregate 28,500 shares allocated to the 401(k) Plan accounts of executive officers.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the officers and directors, and persons who own more than 10% of Malvern Federal Bancorp's common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by regulation to furnish Malvern Federal Bancorp with copies of all Section 16(a) forms they file. We know of no person who owns 10% or more of our common stock other than Malvern Federal Mutual Holding Company.

Based solely on our review of the copies of such forms furnished to us, or written representations from our officers and directors, we believe that during, and with respect to, the fiscal year ended September 30, 2011, our officers and directors complied in all respects with the reporting requirements promulgated under Section 16(a) of the Securities Exchange Act of 1934.

RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM (PROPOSAL TWO)

The Audit Committee of the Board of Directors of Malvern Federal Bancorp has appointed ParenteBeard LLC, independent registered public accounting firm, to perform the audit of our financial statements for the year ending September 30, 2012, and further directed that the selection of auditors be submitted for ratification by the shareholders at the annual meeting.

We have been advised by ParenteBeard LLC that neither that firm nor any of its associates has any relationship with Malvern Federal Bancorp or its subsidiaries other than the usual relationship that exists between an independent registered public accounting firm and its clients. ParenteBeard LLC will have one or more representatives at the annual meeting who will have an opportunity to make a statement, if they so desire, and will be available to respond to appropriate questions.

Audit Fees

The following table sets forth the aggregate fees paid by us to ParenteBeard LLC for professional services rendered by ParenteBeard LLC in connection with the audit of Malvern Federal Bancorp's consolidated financial statements for fiscal 2011 and 2010, as well as the fees paid by us to ParenteBeard LLC for audit-related services, tax services and all other services rendered by ParenteBeard LLC to us during fiscal 2011 and 2010.

	Year Ended September 30,
	2011		2010
Audit fees (1)	$	162,588	$	139,735
Audit-related fees (2)		--		--
Tax fees		37,333		38,404
All other fees		--		--
Total	$	199,692	$	178,139

___________________

(1)

Audit fees consist of fees incurred in connection with the audit of our annual consolidated financial statements and the review of the interim consolidated financial statements included in our quarterly reports filed with the Securities and Exchange Commission, as well as work generally only the independent auditor can reasonably be expected to provide, such as statutory audits, consents and assistance with and review of documents filed with the Securities and Exchange Commission.

(2)	Audit related fees consist of fees incurred in connection with the provision of due diligence services and consultations regarding financial and accounting standards.

The Audit Committee selects our independent registered public accounting firm and pre-approves all audit services to be provided by it to Malvern Federal Bancorp. The Audit Committee also reviews and pre-approves all audit-related and non-audit related services rendered by our independent registered public accounting firm in accordance with the Audit Committee's charter. In its review of these services and related fees and terms, the Audit Committee considers, among other things, the possible effect of the performance of such services on the independence of our independent registered public accounting firm. The Audit Committee pre-approves certain audit-related services and certain non-audit related tax services which are specifically described by the Audit Committee on an annual basis and separately approves other individual engagements as necessary.

Each new engagement of the Company's independent registered public accounting firm was approved in advance by the Audit Committee or its Chair, and none of those engagements made use of the de minimis exception to pre-approval contained in the Securities and Exchange Commission's rules.

The Board of Directors recommends that you vote FOR the ratification of the appointment of ParenteBeard LLC as our independent registered public accounting firm for the fiscal year ending September 30, 2012.

SHAREHOLDER PROPOSALS, NOMINATIONS AND COMMUNICATIONS

WITH THE BOARD OF DIRECTORS

Shareholder Proposals. Any proposal which a shareholder wishes to have included in the proxy materials of Malvern Federal Bancorp relating to the next annual meeting of shareholders of Malvern Federal Bancorp, which is anticipated to be held in February 2013, must be made in writing and filed with the Corporate Secretary, Shirley Stanke, Malvern Federal Bancorp, Inc., 42 E. Lancaster Avenue, Paoli, Pennsylvania 19301, no later than September 13, 2012. If such proposal is in compliance with all of the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended, it will be included in the proxy statement and set forth on the form of proxy issued for such annual meeting of shareholders. It is urged that any such proposals be sent certified mail, return receipt requested.

Shareholder proposals which are not submitted for inclusion in Malvern Federal Bancorp's proxy materials pursuant to Rule 14a-8 may be brought before an annual meeting pursuant to Article II, Section 15 of Malvern Federal Bancorp's Bylaws. Notice of the proposal must be given in writing and delivered to, or mailed and received at, our principal executive offices five days before the date of the annual meeting. The notice must include the information required by Article II, Section 15 of our Bylaws.

Shareholder Nominations. Our Bylaws provide that all nominations for election to the Board of Directors, other than those made by the Board or a committee thereof, shall be made by a shareholder who has complied with the requirements contained in Article II, Section 14 of our Bylaws. Written notice of a shareholder nomination generally must be communicated to the attention of the Secretary and either delivered to, or mailed and received at, our principal executive offices not later than, with respect to an annual meeting of shareholders five days before the date of the annual meeting.

Other Shareholder Communications. Shareholders who wish to communicate with the Board may do so by sending written communications addressed to the Board of Directors of Malvern Federal Bancorp, Inc., c/o Shirley Stanke, Malvern Federal Bancorp, Inc., 42 E. Lancaster Avenue, Paoli, Pennsylvania 19301. Ms. Stanke will forward such communications to the director or directors to whom they are addressed.

ANNUAL REPORTS

A copy of Malvern Federal Bancorp's Annual Report on Form 10-K for the year ended September 30, 2011 accompanies this proxy statement. Such annual report is not part of the proxy solicitation materials.

Upon receipt of a written request, we will furnish to any shareholder a copy of the exhibits to the Annual Report on Form 10-K. Such written requests should be directed to Shirley Stanke, Malvern Federal Bancorp, Inc., 42 E. Lancaster Avenue, Paoli, Pennsylvania 19301.

OTHER MATTERS

Management is not aware of any business to come before the annual meeting other than the matters described above in this proxy statement. However, if any other matters should properly come before the meeting, it is intended that the proxies solicited hereby will be voted with respect to those other matters in accordance with the judgment of the persons voting the proxies.

The cost of the solicitation of proxies will be borne by Malvern Federal Bancorp. Malvern Federal Bancorp will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending the proxy materials to the beneficial owners of Malvern Federal Bancorp's common stock. In addition to solicitations by mail, directors, officers and employees of Malvern Federal Bancorp may solicit proxies personally or by telephone without additional compensation.

January 11, 2012

Dear Fellow Shareholders:

The recession continued to have a significant impact on the financial services sector during our fiscal year ended September 30, 2011. Unemployment and the local real estate market showed little improvement, if any, in fiscal 2011. Unemployment remains close to 9% and commercial and residential property values in our local markets show few signs of increasing from the lows of 2010 and 2011. As we noted last year in our letter to shareholders, Malvern Federal has not been immune to the downturn in the economy. The declining real estate values and increased credit costs continue to have an adverse impact on our business. For year ended September 30, 2011, we reported a loss of $6.1 million, or $1.04 per share. Much of the loss in the past fiscal year reflects our continuing efforts to resolve our problem assets.

These are difficult times for banks such as Malvern Federal that have significant exposure to the real estate market through commercial, construction and residential loans. We are committed to working our way through these challenges and believe we have the strategies and management team to do so. While much remains to be done, we believe we have made progress in a number of areas. Improving asset quality and increasing core deposits continued to be two of our primary business strategies during the past year, as evidenced by:

• Non-accruing loans were reduced to $12.9 million at the 2011 fiscal year-end compared to $19.9 million at the end of fiscal 2010 — an improvement of 35%.

• Total non-performing loans as a percentage of gross loans improved to 2.52% at the fiscal 2011 year-end compared to 3.60% at the end of fiscal 2010.

• The ratio of our allowance for loan losses to total non-accruing loans increased to 78.2% at September 30, 2011 compared to 41.1% at September 30, 2010.

• Our total delinquent loans improved to $15.6 million at September 30, 2011 compared to $24.2 million at September 30, 2010.

• Changing — and improving — the composition of our deposit portfolio to less costly sources of funds. Core deposits increased by $14.7 million during fiscal 2011.

• Our percentage of core deposits at September 30, 2011 was 43.3% of total deposits compared to 37.3% at the end of fiscal 2010.

Your Board of Directors, management team and employees remain committed to serving the needs of our customers, improving our asset quality and increasing long-term shareholder value. Let me assure you that our primary focus continues to be resolving and reducing our problem assets and returning to profitability. We will continue to explore all reasonably available paths in our efforts to better position your company for the future.

We are proud of our heritage and look forward to our future. We believe the core principles that served us well over the last 124 years will continue to serve us well for many years to come.

Very truly yours,

/s/ F. Claire Hughes, Jr.	/s/ Ronald Anderson
F. Claire Hughes, Jr.	Ronald Anderson
Chairman	President and Chief Executive Officer

DIRECTORS —

Malvern Federal Bancorp, Inc. & Malvern Federal Savings Bank

F. Claire Hughes, Jr. 

Chairman

John B. Yerkes, Jr. 

Vice Chairman

Ronald Anderson

Kristin S. Camp, Esq.

Joseph E. Palmer, Jr.

Stephen P. Scartozzi

George E. Steinmetz

Therese H. Woodman

OFFICERS —

Malvern Federal Bancorp, Inc.

Ronald Anderson

President and Chief Executive Officer

Dennis Boyle

Chief Financial Officer

Shirley Stanke

Corporate Secretary

OFFICERS —

Malvern Federal Savings Bank

Ronald Anderson

President and Chief Executive Officer

Dennis Boyle

Senior Vice President,

Chief Financial Officer and Treasurer

William E. Hughes, Jr.

Senior Vice President and

Chief Lending Officer

Richard J. Fuchs

Senior Vice President of Operations

Charles Neiner

Chief Credit Officer

Linda M. Laurent

Vice President of Consumer Lending

Kyle Stewart

Vice President of Business Banking

Katherine Sullivan

Vice President, Controller and Assistant Treasurer

Stephanie J. Tayge

Vice President of Deposit Services

Kenneth J. Camarda

Director of Information Technology

Karen Esterly

Director of Deposit Services

Thomas Ostrishko

Director of Security

Scott J. Sterling

Director of Marketing

Gretchen Byrne

Manager, Coventry Financial Center

Lori Lebel

Manager, Lionville Financial Center

Meghan Link

Manager, Paoli Financial Center

Roberta A. Marovich

Manager, Berwyn Financial Center

Carol Jones

Manager, Malvern Financial Center

Heddi Mitchell

Manager, Concordville and Westtown Financial Centers

Meghan Todd

Manager, Exton Financial Center

Market Maker

Stifel Nicolaus & Company, Inc.

18 Columbia Turnpike

Florham Park, NJ 07832

Transfer Agent

Registrar and Transfer Company

10 Commerce Drive

Cranford, NJ 07016

Independent Auditors

ParenteBeard, LLC

1200 Atwater Drive, Suite 225

Malvern, PA 19355

General Counsel

Lentz Cantor & Massey, LTD

460 East King Road

Malvern, PA 19355

Special Counsel

Elias, Matz, Tiernan and Herrick, LLP

734 15th Street NW, 11th Floor

Washington, DC 20005

Shareholder inquiries please

contact Ronald Anderson at 610.644.9400 or visit our website

at www.malvernfederal.com

• Berwyn: 610.251.9585

• Concordville: 610.558.1555

• Coventry: 610.469.6201

• Exton: 610.363.1700

• Lionville: 610.594.6400

• Malvern: 610.647.7944

• Paoli: 610.993.6200

• Westtown: 610.399.8000

		REVOCABLE PROXY
x	Please Mark Votes As in This Example
x	Please Mark Votes As in This Example	MALVERN FEDERAL BANCORP, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MALVERN FEDERAL BANCORP, INC. FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FEBRUARY 9, 2012 AND AT ANY ADJOURNMENT THEREOF.

The undersigned hereby appoints the Board of Directors of Malvern Federal Bancorp, Inc. or any successors thereto, as proxies with full powers of substitution, to represent and vote, as designated below, all the shares of common stock of Malvern Federal Bancorp, Inc. held of record by the undersigned on December 27, 2011 at the Annual Meeting of Shareholders to be held at the Sheraton Great Valley Hotel, located at 707 East Lancaster Avenue, Frazer, Pennsylvania, on Thursday, February 9, 2012, at 10:00 a.m., Eastern Time, or at any adjournment thereof.


1.	ELECTION of directors for three-year term.

FOR

WITHHOLD

FOR ALL EXCEPT

NOMINEES for three-year term expiring in 2015: Joseph E. Palmer, Jr., Therese Woodman and John B. Yerkes, Jr.

INSTRUCTION: To withhold authority to vote for any individual nominee, mark “For All Except” and write that nominee’s name in the space provided below.

2. PROPOSAL to ratify the appointment of ParenteBeard LLC as Malvern Federal Bancorp’s independent registered public accounting firm for the fiscal year ending September 30, 2012.

FOR

AGAINST

ABSTAIN

3. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting.

The Board of Directors recommends that you vote (i) FOR the nominees to the Board of Directors; and (ii) FOR the ratification of ParenteBeard LLC as Malvern Federal Bancorp’s independent registered public accounting firm for the year ending September 30, 2012.

The shares of Malvern Federal Bancorp’s common stock will be voted as specified. If not otherwise specified, this proxy will be voted FOR the nominees to the Board of Directors, FOR the ratification of the independent registered public accounting firm and otherwise at the discretion of the proxies. This proxy may be revoked at any time prior to the time it is voted at the Annual Meeting.

Please be sure to date and sign this Proxy Card in the box below.		Date


	Sign above


o	Detach above card, sign, date and mail in postage paid envelope provided.	o

	Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on February 9, 2012. The proxy statement and our Annual Report on Form 10-K for the year ended September 30, 2011 as well as driving directions to the annual meeting are available on our website at www.malvernfederal.com under the “Investor Relations” tab.


	MALVERN FEDERAL BANCORP, INC.

The above signed hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders of Malvern Federal Bancorp, Inc. and the accompanying Proxy Statement and Annual Report for the year ended September 30, 2011, prior to the signing of this proxy.

Please sign this proxy exactly as your name(s) appear(s) on this proxy. When signing in a representative capacity, please give title. When shares are held jointly, only one holder needs to sign.

PLEASE ACT PROMPTLY

PLEASE COMPLETE, DATE, SIGN AND MAIL YOUR PROXY CARD PROMPTLY

IN THE ENCLOSED POSTAGE PAID ENVELOPE.

IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE CARD IN THE ENVELOPE PROVIDED.

MALVERN FEDERAL BANCORP, INC.

January 11, 2012

To:	Participants in the Malvern Federal Savings Bank Employees’ Savings and Profit Sharing Plan (the “401(k) Plan”) and/or Employee Stock Ownership Plan (“ESOP”)

Re:	Instructions for voting shares of Malvern Federal Bancorp, Inc.

As described in the enclosed materials, proxies are being solicited in connection with the proposals to be considered at the upcoming Annual Meeting of Shareholders of Malvern Federal Bancorp, Inc. We hope you will take advantage of the opportunity to direct the manner in which shares of common stock of Malvern Federal Bancorp allocated to your account in the 401(k) Plan and/or ESOP will be voted.

Enclosed with this letter is the Proxy Statement, which describes the matters to be voted upon, the Annual Report on Form 10-K for the year ended September 30, 2011 and Voting Instruction Ballot(s). After you have reviewed the Proxy Statement, we urge you to vote your allocated shares held in the 401(k) Plan and/or ESOP by marking, dating, signing and returning the enclosed Voting Instruction Ballot(s).

We urge each of you to vote, as a means of participating in the governance of the affairs of Malvern Federal Bancorp. If your voting instructions are not received, the shares allocated to your 401(k) Plan account and/or ESOP account will generally not be voted. While I hope that you will vote in the manner recommended by the Board of Directors, the most important thing is that you vote in whatever manner you deem appropriate. Please take a moment to do so.

Please note that the enclosed material relates only to those shares which have been allocated to you in your account under the 401(k) Plan and/or ESOP. If you also own shares of Malvern Federal Bancorp common stock outside of the 401(k) Plan and/or ESOP, you should receive other voting material for those shares owned by you individually. Please return all your voting material so that all your shares may be voted.

	Sincerely,

	/s/ Ronald Anderson
	President and Chief Executive Officer

MALVERN FEDERAL SAVINGS BANK
EMPLOYEES’ SAVINGS AND PROFIT SHARING PLAN
VOTING INSTRUCTION BALLOT

x	Please Mark Votes	MALVERN FEDERAL BANCORP, INC.
	As in This Example	ANNUAL MEETING OF SHAREHOLDERS

The undersigned hereby instructs the Trustees of the Employees’ Savings and Profit Sharing Plan (the “401(k) Plan”) of Malvern Federal Savings Bank to vote, as designated below, all the shares of common stock of Malvern Federal Bancorp, Inc. allocated to my 401(k) Plan account as of December 27, 2011 at the Annual Meeting of Shareholders to be held at the Sheraton Great Valley Hotel located at 707 East Lancaster Avenue, Frazer, Pennsylvania, on Thursday, February 9, 2012, at 10:00 a.m., Eastern Time, or at any adjournment thereof.


1.	ELECTION of directors for three-year term.

FOR

WITHHOLD

FOR ALL EXCEPT

NOMINEES for three-year term expiring in 2015: Joseph E. Palmer, Jr., Therese Woodman and John B. Yerkes, Jr.

INSTRUCTION: To withhold authority to vote for any individual nominee, mark “For All Except” and write that nominee’s name in the space provided below.

2. PROPOSAL to ratify the appointment of ParenteBeard LLC as Malvern Federal Bancorp’s independent registered public accounting firm for the fiscal year ending September 30, 2012.

FOR

AGAINST

ABSTAIN

3. In their discretion, the Trustees are authorized to vote upon such other business as may properly come before the meeting.

The shares of Malvern Federal Bancorp’s common stock will be voted as specified. If not otherwise specified, the shares will be voted FOR the nominees to the Board of Directors, FOR the ratification of the independent registered public accounting firm and otherwise at the discretion of the Trustees.

The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders of Malvern Federal Bancorp, Inc. and the accompanying Proxy Statement and Annual Report for the year ended September 30, 2011 prior to the signing of this card.

Please be sure to date and sign this Card in the box below.		Date


	Sign above

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on February 9, 2012. The proxy statement and our Annual Report on Form 10-K for the year ended September 30, 2011 as well as driving directions to the annual meeting are available on our website at www.malvernfederal.com under the “Investor Relations” tab.

MALVERN FEDERAL BANCORP, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
VOTING INSTRUCTION BALLOT

x	Please Mark Votes	MALVERN FEDERAL BANCORP, INC.
	As in This Example	ANNUAL MEETING OF SHAREHOLDERS

The undersigned hereby instructs the Trustees of the Employee Stock Ownership Plan (the “ESOP”) of Malvern Federal Bancorp, Inc. to vote, as designated below, all the shares of common stock of Malvern Federal Bancorp, Inc. allocated to my ESOP account as of December 27, 2011 at the Annual Meeting of Shareholders to be held at the Sheraton Great Valley Hotel located at 707 East Lancaster Avenue, Frazer, Pennsylvania, on Thursday, February 9, 2012, at 10:00 a.m., Eastern Time, or at any adjournment thereof.


1.	ELECTION of directors for three-year term.

FOR

WITHHOLD

FOR ALL EXCEPT

NOMINEES for three-year term expiring in 2015: Joseph E. Palmer, Jr., Therese Woodman and John B. Yerkes, Jr.

INSTRUCTION: To withhold authority to vote for any individual nominee, mark “For All Except” and write that nominee’s name in the space provided below.

2. PROPOSAL to ratify the appointment of ParenteBeard LLC as Malvern Federal Bancorp’s independent registered public accounting firm for the fiscal year ending September 30, 2012.

FOR

AGAINST

ABSTAIN

3. In their discretion, the Trustees are authorized to vote upon such other business as may properly come before the meeting.

Please be sure to date and sign this Card in the box below.		Date


	Sign above