**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-QSB**

| [X] | QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE                ACT OF                1934 |
|-----|-------------------------------------------------------------------------------------------------------------------------------|

| [               ] | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGEACT  |
|------------------------|-------------------------------------------------------------------------------------|

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**APPLICABLE      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY**

**PROCEEDINGS      DURING THE PRECEDING FIVE YEARS**

**APPLICABLE      ONLY TO CORPORATE ISSUERS**

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| PART                  I. | FINANCIAL                  INFORMATION                                                                                                                   |   PAGE                |
|--------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|
|                     |                                                                                                                                                     |                            |
| Item 1.                  | Financial Statements                                                                                                                                     |                            |
|                     |                                                                                                                                                     |                            |
|                     | Consolidated Statements of Financial Condition                  as                  ofDecember 31, 2005 (unaudited) and June 30,                  2005   |  1                  and 2  |
|                     |                                                                                                                                                     |                            |
|                     | Consolidated                  Statements of Income for the three andsix                  months ended December 31, 2005 and 2004 (unaudited)             |  3                  and 4  |
|                     |                                                                                                                                                     |                            |
|                     | Consolidated Statements of Changes in Stockholders’                  Equityfor                  the six months ended December 31, 2005 (unaudited) |  5                         |
|                     |                                                                                                                                                     |                            |
|                     | Consolidated                  Statements of Cash Flows for the sixmonths                  ended December 31, 2005 and 2004 (unaudited)                   |  6                  and 7  |
|                     |                                                                                                                                                     |                            |
|                     | Notes to Consolidated Financial                Statements                                                                                                |  8                  to 12  |
|                     |                                                                                                                                                     |                            |
| Item 2.                  | Management’s Discussion and Analysis of                  FinancialCondition and Results of Operations                                              |  13                  to 21 |
|                     |                                                                                                                                                     |                            |
| Item 3.                  | Controls and Procedures                                                                                                                                  |  22                        |
|                     |                                                                                                                                                     |                            |
| PART II.                 | OTHER                  INFORMATION                                                                                                                       |                            |
|                     |                                                                                                                                                     |                            |
| Item 1.                  | Legal Proceedings                                                                                                                                        | 23                              |
| Item 2.                  | Unregistered Sales of Equity Securities                and                Use of Proceeds                                                                | 23                              |
| Item 3.                  | Defaults Upon Senior Securities                                                                                                                          |  23                        |
| Item 4.                  | Submission of Matters to a Vote of                Security-Holders                                                                                       | 24                              |
| Item 5.                  | Other Information                                                                                                                                        | 24                              |
| Item 6.                  | Exhibits                                                                                                                                                 | 24                              |
|                     |                                                                                                                                                     |                            |
| Signatures               |                                                                                                                                                     | 25                              |
|                     |                                                                                                                                                     |                            |
| Exhibit 31.1             |                                                                                                                                                     | 26                  and 27      |
|                     |                                                                                                                                                     |                            |
| Exhibit 31.2             |                                                                                                                                                     | 28                  and 29      |
|                          |                                                                                                                                                     |                            |
| Exhibit 32.1             |                                                                                                                                                          | 30                              |

----

|                                                                                                         |   |   | December                  31,2005 |   |   | June                  30,2005 |   |
|--------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------|--------|--------|-------------------------------|--------|
|                                                                                                         |   |   | (Unaudited)                       |   |   | (Audited)                     |   |
| ASSETS                                                                                                       |   |   |                              |   |   |                          |   |
| Cash                  and due from banks                                                                     |   | $      | 4,697                             |   | $      | 3,122                         |   |
| Interest-bearing                  deposits with banks                                                        |   |   | 214                               |   |   | 1,844                         |   |
| Total                  cash and cash equivalents                                                             |   |   | 4,911                             |   |   | 4,966                         |   |
|                                                                                                         |   |   |                              |   |   |                          |   |
| Investment                  securities available-for-sale,at                  market value                   |   |   | 67,967                            |   |   | 75,227                        |   |
| Investment                    securities held-to-maturity,at                  amortized cost                 |   |   | 1,110                             |   |   | 1,201                         |   |
| Investment                  in nonconsolidated subsidiary                                                    |   |   | 155                               |   |   | —                  |   |
| Federal                  Home Loan Bank stock, at cost                                                       |   |   | 1,315                             |   |   | 1,315                         |   |
| Mortgage                  loans held-for-sale                                                                |   |   | 813                               |   |   | 2,148                         |   |
| Loans                    receivable, net of deferred loan feesand                  allowance for loan losses |   |   | 122,077                           |   |   | 106,839                       |   |
| Accrued                  interest and dividends receivable                                                   |   |   | 1,142                             |   |   | 1,102                         |   |
| Mortgage                  servicing rights, net                                                              |   |   | 1,814                             |   |   | 1,857                         |   |
| Property                  and equipment, net                                                                 |   |   | 6,123                             |   |   | 6,242                         |   |
| Cash                  surrender value of life insurance                                                      |   |   | 5,141                             |   |   | 5,049                         |   |
|                                                                                                         |   |   |                                   |   |   |                               |   |
| Real                    estate acquired in settlement of loans,net                  of allowance for losses  |   |   | —                      |   |   | —                  |   |
| Other                  assets                                                                                |   |   | 452                               |   |   | 468                           |   |
| Total                  assets                                                                                |   | $      | 213,020                           |   | $      | 206,414                       |   |

----

|                                                                                                                                                                                                                                                                                     |   |   | December                    31,2005 |   |   | June                    30,2005 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------|--------|--------|---------------------------------|--------|
|                                                                                                                                                                                                                                                                                     |   |   | (Unaudited)                         |   |   | (Audited)                       |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                    |   |   |                                |   |   |                            |   |
| Liabilities:                                                                                                                                                                                                                                                                             |   |   |                                |   |   |                            |   |
| Deposit                  accounts:                                                                                                                                                                                                                                                       |   |   |                                |   |   |                            |   |
| Noninterest                  bearing                                                                                                                                                                                                                                                     |   | $      | 12,278                              |   | $      | 11,660                          |   |
| Interest                  bearing                                                                                                                                                                                                                                                        |   |   | 159,824                             |   |   | 160,837                         |   |
| Advances                  from Federal Home Loan Bank                                                                                                                                                                                                                                    |   |   | 11,702                              |   |   | 9,885                           |   |
| Long-term                  subordinated debentures                                                                                                                                                                                                                                       |   |   | 5,155                               |   |   | —                         |   |
| Accrued                  expenses and other liabilities                                                                                                                                                                                                                                  |   |   | 1,649                               |   |   | 1,767                           |   |
| Total                  liabilities                                                                                                                                                                                                                                                       |   |   | 190,608                             |   |   | 184,149                         |   |
| Stockholders'                  Equity:                                                                                                                                                                                                                                                   |   |   |                                |   |   |                            |   |
| Preferred                  stock (no par value, 1,000,000 sharesauthorized,                  none issued or outstanding)                                                                                                                                                                 |   |   | —                             |   |   | —                         |   |
| Common stock (par value $0.01                  per                  share;9,000,000                      shares authorized; 1,223,572 sharesissued;                        1,095,372 and 1,103,972 outstanding atDecember                      31, 2005 and June 30, 2005, respectively) |   |   | 12                                  |   |   | 12                              |   |
| Additional                  paid-in capital                                                                                                                                                                                                                                              |   |   | 4,246                               |   |   | 4,188                           |   |
| Unallocated                  common stock held by employeestock                  ownership plan ("ESOP")                                                                                                                                                                                 |   |   | (147                                | )      |   | (165                            | )      |
| Treasury                    stock, at cost (128,200 and 119,600 shares atDecember                  31, 2005 and June 30, 2005, respectively)                                                                                                                                             |   |   | (4,332                              | )      |   | (4,048                          | )      |
| Retained                  earnings                                                                                                                                                                                                                                                       |   |   | 23,394                              |   |   | 22,630                          |   |
| Accumulated                  other comprehensive income (loss)                                                                                                                                                                                                                           |   |   | (761                                | )      |   | (352                            | )      |
| Total                  stockholders' equity                                                                                                                                                                                                                                              |   |   | 22,412                              |   |   | 22,265                          |   |
|                                                                                                                                                                                                                                                                                     |   |   |                                |   |   |                            |   |
| Total                  liabilities and stockholders' equity                                                                                                                                                                                                                              |   | $      | 213,020                             |   | $      | 206,414                         |   |

----

|                                                               |   | Three                    Months EndedDecember                  31, |   | Six                    Months EndedDecember                  31, |   |
|--------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|------------------------------------------------------------------|--------|
|                                                               |   | 2005                                                               |   | 2004                                                             |   | 2005 |   | 2004 |   |
|                                                               |   | (Unaudited)                                                        |   | (Unaudited)                                                      |   |
| Interest                  and Dividend Income:                     |   |                                                               |   |                                                             |   |   |   |   |   |   |   |   |   |
| Interest                  and fees on loans                        |   | $                                                                  | 1,897  |                                                             | $      | 1,507 |   | $ | 3,687 |   | $ | 2,972 |   |
| Interest                  on deposits with banks                   |   |                                                               | 36     |                                                             |   | 9 |   |   | 47 |   |   | 25 |   |
| FHLB                  stock dividends                              |   |                                                               | -      |                                                             |   | 7 |   |   | - |   |   | 21 |   |
| Securities                  available-for-sale                     |   |                                                               | 640    |                                                             |   | 733 |   |   | 1,263 |   |   | 1,429 |   |
| Securities                  held-to-maturity                       |   |                                                               | 13     |                                                             |   | 17 |   |   | 27 |   |   | 34 |   |
| Total                  interest and dividend income                |   |                                                               | 2,586  |                                                             |   | 2,273 |   |   | 5,024 |   |   | 4,481 |   |
|                                                               |   |                                                               |   |                                                             |   |   |   |   |   |   |   |   |   |
| Interest                  Expense:                                 |   |                                                               |   |                                                             |   |   |   |   |   |   |   |   |   |
| Deposits                                                           |   |                                                               | 717    |                                                             |   | 588 |   |   | 1,383 |   |   | 1,166 |   |
| FHLB                  advances and subordinated debentures         |   |                                                               | 179    |                                                             |   | 33 |   |   | 281 |   |   | 93 |   |
| Total                  interest expense                            |   |                                                               | 896    |                                                             |   | 621 |   |   | 1,664 |   |   | 1,259 |   |
|                                                               |   |                                                               |   |                                                             |   |   |   |   |   |   |   |   |   |
| Net                  interest income                               |   |                                                               | 1,690  |                                                             |   | 1,652 |   |   | 3,360 |   |   | 3,221 |   |
| Loan                  loss provision                               |   |                                                               | -      |                                                             |   | - |   |   | - |   |   | - |   |
| Net                  interest income after loan loss provision     |   |                                                               | 1,690  |                                                             |   | 1,652 |   |   | 3,360 |   |   | 3,221 |   |
|                                                               |   |                                                               |   |                                                             |   |   |   |   |   |   |   |   |   |
| Noninterest                  income:                               |   |                                                               |   |                                                             |   |   |   |   |   |   |   |   |   |
| Net                  gain on sale of loans                         |   |                                                               | 128    |                                                             |   | 111 |   |   | 301 |   |   | 225 |   |
| Demand                  deposit service charges                    |   |                                                               | 136    |                                                             |   | 145 |   |   | 279 |   |   | 284 |   |
| Mortgage                  loan servicing fees                      |   |                                                               | 130    |                                                             |   | 251 |   |   | 321 |   |   | 336 |   |
| Net                  gain on sale of available-for-sale securities |   |                                                               | -      |                                                             |   | 10 |   |   | 1 |   |   | 10 |   |
| Other                                                              |   |                                                               | 123    |                                                             |   | 106 |   |   | 258 |   |   | 200 |   |
| Total                  noninterest income                          |   |                                                               | 517    |                                                             |   | 623 |   |   | 1,160 |   |   | 1,055 |   |

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|                                                               |   |                                                               |      |                                                               |   |      |   |   |      |
|--------------------------------------------------------------------|--------|--------------------------------------------------------------------|-----------|--------------------------------------------------------------------|--------|-----------|--------|--------|-----------|
|                                                               |   | Three                    Months EndedDecember                  31, |      | Six                    Months EndedDecember                    31, |   |
|                                                               |   | 2005                                                               |      | 2004                                                               |   | 2005      |   | 2004   |      |
|                                                               |   | (Unaudited)                                                        |      | (Unaudited)                                                        |   |
| Noninterest                  expense:                              |   |                                                               |      |                                                               |   |      |   |   |      |   |   |   |   |
| Salaries                  and employee benefits                    |   |                                                               | 906       |                                                               |   | 807       |   |   | 1,738     |   |   | 1,616 |   |
| Occupancy                  expenses                                |   |                                                               | 133       |                                                               |   | 122       |   |   | 258       |   |   | 248 |   |
| Furniture                  and equipment depreciation              |   |                                                               | 78        |                                                               |   | 80        |   |   | 157       |   |   | 158 |   |
| In-house                  computer expense                         |   |                                                               | 68        |                                                               |   | 66        |   |   | 135       |   |   | 128 |   |
| Advertising                  expense                               |   |                                                               | 46        |                                                               |   | 47        |   |   | 116       |   |   | 87 |   |
| Amortization                  of mtg servicing fees                |   |                                                               | 92        |                                                               |   | 93        |   |   | 198       |   |   | 189 |   |
| Federal                  insurance premiums                        |   |                                                               | 6         |                                                               |   | 6         |   |   | 12        |   |   | 12 |   |
| Postage                                                            |   |                                                               | 19        |                                                               |   | 23        |   |   | 42        |   |   | 48 |   |
| Legal,                  accounting, and examination fees           |   |                                                               | 61        |                                                               |   | 49        |   |   | 95        |   |   | 84 |   |
| Consulting                  fees                                   |   |                                                               | 12        |                                                               |   | 12        |   |   | 30        |   |   | 23 |   |
| ATM                  processing                                    |   |                                                               | 12        |                                                               |   | 12        |   |   | 24        |   |   | 24 |   |
| Other                                                              |   |                                                               | 204       |                                                               |   | 241       |   |   | 424       |   |   | 441 |   |
| Total                  noninterest expense                         |   |                                                               | 1,637     |                                                               |   | 1,558     |   |   | 3,229     |   |   | 3,058 |   |
|                                                               |   |                                                               |      |                                                               |   |      |   |   |      |   |   |   |   |
| Income                  before provision for income taxes          |   |                                                               | 570       |                                                               |   | 717       |   |   | 1,291     |   |   | 1,218 |   |
|                                                               |   |                                                               |      |                                                               |   |      |   |   |      |   |   |   |   |
| Provision                  for income taxes                        |   |                                                               | 125       |                                                               |   | 146       |   |   | 347       |   |   | 290 |   |
|                                                               |   |                                                               |      |                                                               |   |      |   |   |      |   |   |   |   |
| Net                  income                                        |   | $                                                                  | 445       |                                                               | $      | 571       |   | $      | 944       |   | $ | 928 |   |
|                                                               |   |                                                               |      |                                                               |   |      |   |   |      |   |   |   |   |
| Basic                  earnings per share                          |   | $                                                                  | 0.41      |                                                               | $      | 0.50      |   | $      | 0.87      |   | $ | 0.80 |   |
|                                                               |   |                                                               |      |                                                               |   |      |   |   |      |   |   |   |   |
| Diluted                  earnings per share                        |   | $                                                                  | 0.37      |                                                               | $      | 0.48      |   | $      | 0.78      |   | $ | 0.77 |   |
|                                                               |   |                                                               |      |                                                               |   |      |   |   |      |   |   |   |   |
| Weighted                  average shares outstanding (basic eps)   |   |                                                               | 1,077,640 |                                                               |   | 1,145,492 |   |   | 1,079,122 |   |   | 1,158,823 |   |
|                                                               |   |                                                               |      |                                                               |   |      |   |   |      |   |   |   |   |
| Weighted                  average shares outstanding (diluted eps) |   |                                                               | 1,204,412 |                                                               |   | 1,199,812 |   |   | 1,203,835 |   |   | 1,199,235 |   |

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|                                                                                                                                                                                                                |   | PREFERREDSTOCK |    | COMMONSTOCK |   | ADDITIONALPAID-INCAPITAL |   | UNALLOCATEDESOPSHARES |    | TREASURYSTOCK |   | RETAINEDEARNINGS |   | ACCUMULATEDOTHERCOMPREHENSIVEINCOME |    | TOTAL  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|-------------|--------|--------------------------|--------|-----------------------|---------|---------------|--------|------------------|--------|-------------------------------------|---------|--------|--------|
|                                                                                                                                                                                                                |   |           |    |        |   |                     |   |                  |    |          |   |             |   |                                |    |   |   |
| Balance,                June 30, 2005                                                                                                                                                                               |   | $              | — |        | $      | 12                       |   | $                     | 4,188   |          | $      | (165             | )      | $                                   | (4,048  | )      | $      | 22,630 |   | $ | (352 | ) | $ | 22,265 |   |
|                                                                                                                                                                                                                |   |           |    |        |   |                     |   |                  |    |          |   |             |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| Net                income (unaudited)                                                                                                                                                                               |   |           | — |        |   | —                  |   |                  | — |          |   | —          |   |                                | — |   |   | 944 |   |   | — |   |   | 944 |   |
| Other                comprehensive income (unaudited)                                                                                                                                                               |   |           | — |        |   | —                  |   |                  | — |          |   | —          |   |                                | — |   |   | — |   |   | (409 | ) |   | (409 | ) |
|                                                                                                                                                                                                                |   |           |    |        |   |                     |   |                  |    |          |   |             |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| Total                comprehensive income (unaudited)                                                                                                                                                               |   |           |    |        |   |                     |   |                  |    |          |   |             |   |                                |    |   |   |   |   |   |   |   |   | 535 |   |
|                                                                                                                                                                                                                |   |           |    |        |   |                     |   |                  |    |          |   |             |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| Dividends                paid ($.40 per share) (unaudited)                                                                                                                                                          |   |           | — |        |   | —                  |   |                  | — |          |   | —          |   |                                | — |   |   | (180 | ) |   | — |   |   | (180 | ) |
|                                                                                                                                                                                                                |   |           |    |        |   |                     |   |                  |    |          |   |             |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| Treasury                stock purchased (2,500 shares @$31.75;                1,200 shares @ $32.20; 1,000 shares                @ $32.50; 1,400 shares @ $34.45; 2,500                shares @ $34.25) (unaudited) |   |           | — |        |   | —                  |   |                  | — |          |   | —          |   |                                | (284    | )      |   | — |   |   | — |   |   | (284 | ) |
|                                                                                                                                                                                                                |   |           |    |        |   |                     |   |                  |    |          |   |             |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| ESOP                  shares allocated orcommitted                  to be released                  for allocation (2,300 shares)(unaudited)                                                                        |   |           | — |        |   | —                  |   |                  | 58      |          |   | 18               |   |                                | — |   |   | — |   |   | — |   |   | 76 |   |
|                                                                                                                                                                                                                |   |           |    |        |   |                     |   |                  |    |          |   |             |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| Balance,                December 31, 2005 (unaudited)                                                                                                                                                               |   | $              | — |        | $      | 12                       |   | $                     | 4,246   |          | $      | (147             | )      | $                                   | (4,332  | )      | $      | 23,394 |   | $ | (761 | ) | $ | 22,412 |   |

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|                                                                                                                                                                |   | Six                    Months EndedDecember                  31, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|---------|
|                                                                                                                                                                |   | 2005                                                             |    | 2004 |   |
|                                                                                                                                                                |   |  (Unaudited)                                                |    |
| CASH                  FLOWS FROM OPERATING ACTIVITIES:                                                                                                              |   |                                                             |    |   |   |   |   |
| Net                  income                                                                                                                                         |   | $                                                                | 944     |   | $ | 928 |   |
| Adjustments                    to reconcile net income to net cashfrom                  operating activities:                                                       |   |                                                             |    |   |   |   |   |
| Provision                  for mortgage servicing rights valuation losses                                                                                           |   |                                                             | (46     | ) |   | (49 | ) |
| Depreciation                                                                                                                                                        |   |                                                             | 256     |   |   | 256 |   |
| Net                    amortization of marketable securities premiumand                  discounts                                                                  |   |                                                             | 546     |   |   | 723 |   |
| Amortization                  of capitalized mortgage servicing rights                                                                                              |   |                                                             | 198     |   |   | 189 |   |
| Gain                  on sale of loans                                                                                                                              |   |                                                             | (301    | ) |   | (225 | ) |
| Net                  realized (gain) loss on sale of available-for-sale                  securities                                                                 |   |                                                             | (1      | ) |   | (10 | ) |
| FHLB                  & other dividends reinvested                                                                                                              |   |                                                             | — |   |   | (14 | ) |
| Increase                  in cash surrender value of life insurance                                                                                                 |   |                                                             | (92     | ) |   | (84 | ) |
| Loss                  on sale of real estate owned                                                                                                                  |   |                                                             | 6       |   |   | — |   |
| Change                  in assets and liabilities:                                                                                                                  |   |                                                             |    |   |   |   |   |
| (Increase)                  decrease in assets:                                                                                                                     |   |                                                             |    |   |   |   |   |
| Accrued                  interest and dividends receivable                                                                                                          |   |                                                             | (41     | ) |   | 29 |   |
| Loans                  held-for-sale                                                                                                                                |   |                                                             | 1,622   |   |   | 437 |   |
| Other                  assets                                                                                                                                       |   |                                                             | 31      |   |   | 146 |   |
| Increase                  (decrease) in liabilities:                                                                                                                |   |                                                             |    |   |   |   |   |
| Accrued                  expenses and other liabilities                                                                                                             |   |                                                             | 199     |   |   | 182 |   |
| Net                  cash provided by operating activities                                                                                                          |   |                                                             | 3,321   |   |   | 2,508 |   |
|                                                                                                                                                                |   |                                                             |    |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES:                                                                                                              |   |                                                             |    |   |   |   |   |
| Purchase                  of securities:                                                                                                                            |   |                                                             |    |   |   |   |   |
| Investment                  securities held-to-maturity                                                                                                             |   |                                                             | — |   |   | — |   |
| Investment                  securities available-for-sale                                                                                                           |   |                                                             | (4,269  | ) |   | (6,098 | ) |
| Proceeds                  from maturities, calls and principal payments:                                                                                            |   |                                                             |    |   |   |   |   |
| Investment                  securities held-to-maturity                                                                                                             |   |                                                             | 90      |   |   | 236 |   |
| Investment                  securities available-for-sale                                                                                                           |   |                                                             | 9,836   |   |   | 10,585 |   |
| FHLB                  stock redeemed                                                                                                                                |   |                                                             | — |   |   | 267 |   |
| Proceeds                  from sales of investment securities available-for-sale                                                                                    |   |                                                             | 505     |   |   | 2,179 |   |
| Net                    (increase) decrease in loan receivable, excludes                    transfersto                  real estate acquired in settlement of loans |   |                                                             | (15,426 | ) |   | (2,111 | ) |
| Purchase                  of stock in non-consolidated subsidiaries                                                                                                 |   |                                                             | (155    | ) |   | — |   |

----

|                                                                                                            |   |  Six                  Months EndedDecember                  31, |    |
|-----------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|---------|
|                                                                                                            |   | 2005                                                                 |    | 2004 |   |
|                                                                                                            |   |  (Unaudited)                                                    |    |
| CASH                  FLOWS FROM INVESTING ACTIVITIES (CONTINUED):                                              |   |                                                                 |    |   |   |   |   |
| Purchase                  of property and equipment                                                             |   |                                                                 | (138    | ) |   | (142 | ) |
| Purchase                  of bank owned life insurance                                                          |   |                                                                 | — |   |   | (2,400 | ) |
| Proceeds                    from the sale of real estate acquired in the settlement of                    loans |   |                                                                 | 69      |   |   | — |   |
| Net                  cash provided by (used in) investing activities                                            |   |                                                                 | (9,488  | ) |   | 2,516 |   |
|                                                                                                            |   |                                                                 |    |   |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                          |   |                                                                 |    |   |   |   |   |
| Net                  increase (decrease) in checking and savings accounts                                       |   |                                                                 | (394    | ) |   | 268 |   |
| Net                  increase (decrease) in overnight FHLB advances                                             |   |                                                                 | 1,400   |   |   | (1,000 | ) |
| Payments                  on FHLB advances                                                                      |   |                                                                 | (584    | ) |   | (2,531 | ) |
| FHLB                  advances                                                                                  |   |                                                                 | 1,000   |   |   | — |   |
| Issue                  of subordinated debentures                                                               |   |                                                                 | 5,155   |   |   | — |   |
| Sale                  (Purchase) of Treasury Stock                                                              |   |                                                                 | (285    | ) |   | (1,874 | ) |
| Dividends                  paid                                                                                 |   |                                                                 | (180    | ) |   | (189 | ) |
| Net                  cash provided by (used in) financing activities                                            |   |                                                                 | 6,112   |   |   | (5,326 | ) |
|                                                                                                            |   |                                                                 |    |   |   |   |   |
| Net                  increase (decrease) in cash and cash equivalents                                           |   |                                                                 | (55     | ) |   | (302 | ) |
|                                                                                                            |   |                                                                 |    |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS, beginning of period                                                 |   |                                                                 | 4,966   |   |   | 4,347 |   |
|                                                                                                            |   |                                                                 |    |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS, end of period                                                       |   | $                                                                    | 4,911   |   | $ | 4,045 |   |
|                                                                                                            |   |                                                                 |    |   |   |   |   |
|                                                                                                            |   |                                                                 |    |   |   |   |   |
| SUPPLEMENTAL                  CASH FLOW INFORMATION:                                                            |   |                                                                 |    |   |   |   |   |
| Cash                  paid during the period for interest                                                       |   | $                                                                    | 1,724   |   | $ | 1,286 |   |
|                                                                                                            |   |                                                                 |    |   |   |   |   |
| Cash                  paid during the period for income taxes                                                   |   | $                                                                    | 387     |   | $ | 183 |   |
|                                                                                                            |   |                                                                 |    |   |   |   |   |
| NON-CASH                  INVESTING ACTIVITIES:                                                                 |   |                                                                 |    |   |   |   |   |
| (Increase)                  decrease in market value of securities available-for-sale                           |   | $                                                                    | 642     |   | $ | (998 | ) |
|                                                                                                            |   |                                                                 |    |   |   |   |   |
| Mortgage                  servicing rights capitalized                                                          |   | $                                                                    | 109     |   | $ | 118 |   |

----

**NOTE      1.**

**BASIS      OF PRESENTATION**

----

**NOTE        2.  INVESTMENT        SECURITIES**

|                                   |   |   | December                  31, 2005 (Unaudited) |   |   | June                  30, 2005 (Audited) |   |
|----------------------------------------|--------|--------|------------------------------------------------|--------|--------|------------------------------------------|--------|
|                                   |   |   | AMORTIZEDCOST                                  |   |   | GROSSUNREALIZEDGAINS/(LOSSES)            |   |   | FAIRVALUE |   |   | AMORTIZEDCOST |   |   | GROSSUNREALIZEDGAINS/(LOSSES) |   |   | FAIRVALUE |   |
| **Available-for-sale:**                |   |   |                                           |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.                  government and   |   |   |                                           |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| agency                  obligations    |   | $      | 7,176                                          |   | $      | (118                                     | )      | $ | 7,058 |   | $ | 8,012 |   | $ | (41 | ) | $ | 7,971 |   |
| Municipal                  obligations |   |   | 16,275                                         |   |   | 35                                       |   |   | 16,310 |   |   | 13,239 |   |   | 188 |   |   | 13,427 |   |
| Corporate                  obligations |   |   | 16,790                                         |   |   | (406                                     | )      |   | 16,384 |   |   | 17,020 |   |   | (231 | ) |   | 16,789 |   |
| Mortgage-backed                        |   |   |                                           |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                             |   |   | 8,377                                          |   |   | (140                                     | )      |   | 8,237 |   |   | 11,164 |   |   | (110 | ) |   | 11,054 |   |
| Collateralized                         |   |   |                                           |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| mortgage                  obligations  |   |   | 18,783                                         |   |   | (364                                     | )      |   | 18,419 |   |   | 24,583 |   |   | (213 | ) |   | 24,370 |   |
| Corporate                  preferred   |   |   |                                           |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stock                                  |   |   | 1,800                                          |   |   | (241                                     | )      |   | 1,559 |   |   | 1,800 |   |   | (184 | ) |   | 1,616 |   |
| Total                                  |   | $      | 69,201                                         |   | $      | (1,234                                   | )      | $ | 67,967 |   | $ | 75,818 |   | $ | (591 | ) | $ | 75,227 |   |
| **Held-to-maturity:**                  |   |   |                                           |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Municipal                  obligations |   | $      | 828                                            |   | $      | 23                                       |   | $ | 851 |   | $ | 829 |   | $ | 37 |   | $ | 866 |   |
| Mortgage-backed                        |   |   |                                           |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                             |   |   | 282                                            |   |   | 4                                        |   |   | 286 |   |   | 372 |   |   | 11 |   |   | 383 |   |
| Total                                  |   | $      | 1,110                                          |   | $      | 27                                       |   | $ | 1,137 |   | $ | 1,201 |   | $ | 48 |   | $ | 1,249 |   |

----

**NOTE      3.**

**LOANS      RECEIVABLE**

|                                                                         |   |   | December                    31,2005 |   |   | June                    30,2005 |   |
|------------------------------------------------------------------------------|--------|--------|-------------------------------------|--------|--------|---------------------------------|--------|
|                                                                         |   |   | (Unaudited)                         |   |   | (Audited)                       |   |
| *(Dollars                  in Thousands)*                                    |   |   |                                |   |   |                            |   |
| First                  mortgage loans:                                       |   |   |                                |   |   |                            |   |
| Residential                  mortgage (1-4 family)                           |   | $      | 66,928                              |   | $      | 56,533                          |   |
| Commercial                  real estate                                      |   |   | 16,085                              |   |   | 14,779                          |   |
| Real                  estate construction                                    |   |   | 4,672                               |   |   | 2,723                           |   |
|                                                                         |   |   |                                |   |   |                            |   |
| Other                  loans:                                                |   |   |                                |   |   |                            |   |
| Home                  equity                                                 |   |   | 18,216                              |   |   | 15,698,367                      |   |
| Consumer                                                                     |   |   | 11,027                              |   |   | 10,909                          |   |
| Commercial                                                                   |   |   | 5,638                               |   |   | 5,568                           |        |
|                                                                         |   |   |                                |   |   |                            |   |
| Total                                                                        |   |   | 122,566                             |   |   | 107,313                         |   |
|                                                                         |   |   |                                |   |   |                            |   |
| Less:                    Allowance for loan losses                 |   |   | (539                                | )      |   | (573                            | )      |
|     Deferred                  loan                  fees |   |   | 50                                  |   |   | 99                              |   |
|                                                                         |   |   |                                |   |   |                            |   |
| Total                                                                        |   | $      | 122,077                             |   | $      | 106,539                         |   |

|                                                                              |   | Six Months                    EndedDecember                  31,2,005 |    | Year EndedJune                  30,2005 |   |
|-----------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|---------|----------------------------------------------|--------|
|                                                                              |   | (Unaudited)                                                                |    | (Audited)                                    |   |
| *(Dollars                    in Thousands)*                                       |   |                                                                       |    |                                         |   |
| Balance,                  beginning of period                                     |   |  $                                                                    | 573     |                                         | $      | 628 |   |
| Reclassification                  to repossessedproperty                  reserve |   |                                                                       | (15     | )                                       |   | (15 | ) |
| Provision                  charged to operations                                  |   |                                                                       | — |                                         |   | — |   |
| Charge-offs                                                                       |   |                                                                       | (26     | )                                            |   | (50 | ) |
| Recoveries                                                                        |   |                                                                       | 7       |                                         |   | 10 |   |
| Balance,                  end of period                                           |   | $                                                                          | 539     |                                         | $      | 573 |   |

----

**NOTE      4.**

**DEPOSITS**

|                                          |   |   | December                    31,2005 |   |   | June                    30, 2005 |   |
|-----------------------------------------------|--------|--------|-------------------------------------|--------|--------|---------------------------------------|--------|
|                                          |   |   | (Unaudited)                    |   |   | (Audited)                             |   |
| *(Dollars                  in Thousands)*     |   |   |                                |   |   |                                  |   |
| Noninterest                  checking         |   | $      | 12,278                              |   | $      | 11,660                                |   |
| Interest-bearing                  checking    |   |   | 29,966                              |   |   | 30,865                                |   |
| Passbook                                      |   |   | 25,133                              |   |   | 25,239                                |   |
| Money                  market                 |   |   | 31,081                              |   |   | 26,749                                |   |
| Time                  certificates of deposit |   |   | 73,644                              |   |   | 77,984                                |   |
| Total                                         |   | $      | 172,102                             |   | $      | 172,497                               |   |

**NOTE      5.**

**EARNINGS      PER SHARE**

**NOTE      6.**

**DIVIDENDS      AND STOCK REPURCHASE PROGRAM**

----

**NOTE      7.**

**MORTGAGE      SERVICING RIGHTS**

|                                                |   |   | Six                    monthsendedDecember                      31,2005 |   |   | Twelve                      monthsendedJune                    30,2005 |   |
|------------------------------------------------|--------|--------|-------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------|--------|
|                                                |   |   | (Unaudited)                                                             |   |   | (Audited)                                                              |   |
| *(Dollars                  in Thousands)*      |   |   |                                                                    |   |   |                                                                   |   |
| Mortgage                  Servicing Rights     |   |   |                                                                    |   |   |                                                                   |   |
| Beginning                  balance             |   | $      | 1,903                                                                   |   | $      | 2,064                                                                  |   |
| Servicing                  rights capitalized  |   |   | 109                                                                     |   |   | 219                                                                    |   |
| Servicing                  rights amortized    |   |   | (198                                                                    | )      |   | (380                                                                   | )      |
| Ending                  balance                |   |   | 1,814                                                                   |   |   | 1,903                                                                  |   |
|                                           |   |   |                                                                    |   |   |                                                                   |   |
| Valuation                  Allowance           |   |   |                                                                    |   |   |                                                                   |   |
| Beginning                  balance             |   |   | 46                                                                      |   |   | 60                                                                     |   |
| Provision                                      |   |   | (46                                                                     | )      |   | (14                                                                    | )      |
| Adjustments                                    |   |   | —                                                                 |   |   | —                                                                |   |
| Ending                  balance                |   |   | —                                                                 |   |   | 46                                                                     |   |
|                                           |   |   |                                                                    |   |   |                                                                   |   |
| Net                  Mortgage Servicing Rights |   | $      | 1,814                                                                   |   | $      | 1,857                                                                  |   |

----

**Note      Regarding Forward-Looking Statements**

**Overview**

----

**Overview      (Continued)**

**Financial      Condition**

----

**Financial      Condition (continued)**

**Results      of Operations for the Three Months Ended December 31, 2005 and      2004**

*Net      Income.*

*Net      Interest Income.*

----

**Results      of Operations for the Three Months Ended December 31, 2005 and 2004      (Continued)**

*Interest      and Dividend Income.*

*Interest      Expense.*

*Provision      for Loan Losses.*

----

**Results      of Operations for the Three Months Ended December 31, 2005 and 2004      (continued)**

*Provision      for Loan Losses (Continued). *

*Noninterest      Income. *

*Noninterest      Expense.*

*Income      Tax Expense.*

**Results      of Operations for the Six Months Ended December 31, 2005 and      2004**

*Net      Income.*

*Net      Interest Income.*

*Interest      and Dividend Income.*

----

**Results      of Operations for the Six Months Ended December 31, 2005 and      2004**

*Interest      and Dividend Income (Continued).*

*Interest      Expense.*

*Provision      for Loan Losses.*

*Noninterest      Income.*

----

**Results      of Operations for the Six Months Ended December 31, 2005 and 2004      (continued)**

*Noninterest      Expense.*

*Income      Tax Expense.*

**Liquidity,      Interest Rate Sensitivity and Capital Resources**

----

**Liquidity,      Interest Rate Sensitivity and Capital Resources      (Continued)**

|                                 |   |   | (Unaudited)At                  December 31, 2005 |   |
|--------------------------------------|--------|--------|--------------------------------------------------|--------|
|                                 |   |   | DollarAmount                                     |   |   | For                        CapitalAdequacyPurposes%                  of Assets |   |
| Tangible                  capital:   |   |   |                                             |   |   |   |   |
| Capital                  level       |   | $      | 25,011                                           |   |   | 11.83 | % |
| Requirement                          |   |   | 3,172                                            |   |   | 1.50 |   |
| Excess                               |   | $      | 21,839                                           |   |   | 10.33 | % |
| Core                  capital:       |   |   |                                             |   |   |   |   |
| Capital                  level       |   | $      | 25,011                                           |   |   | 11.83 | % |
| Requirement                          |   |   | 6,344                                            |   |   | 3.00 |   |
| Excess                               |   | $      | 18,667                                           |   |   | 8.83 | % |
| Risk-based                  capital: |   |   |                                             |   |   |   |   |
| Capital                  level       |   | $      | 25,500                                           |   |   | 16.99 | % |
| Requirement                          |   |   | 12,004                                           |   |   | 8.00 |   |
| Excess                               |   | $      | 13,496                                           |   |   | 8.99 | % |

**Impact      of Inflation and Changing Prices**

----

**Application      of Critical Accounting Policies**

*Allowance      for Loan and Lease Losses (ALLL)*

*Deferred      Loan Fees*

*Deferred      Tax Assets*

*Fair      Value of Other Financial Instruments*

*Economic      Life of Fixed Assets*

----

**ITEM      3.**

**CONTROLS      AND PROCEDURES**

----

**Part      II - OTHER INFORMATION**

|       c.)  | Small                  Business Issuer Purchases of Equity                  Securities. |
|-----------------------------------------------|-----------------------------------------------------------------------------------------|

| Period                                                                | TotalNumber                    ofSharesPurchased* | AveragePrice                    PaidPer                  Share | Total                      Numberof                    SharesPurchasedas                    Part ofPubliclyAnnounced                    Plansor                  Programs | MaximumNumber                    ofShares                    thatMay                    Yet BePurchasedUnder                    the Plansor                  Programs |
|-----------------------------------------------------------------------|---------------------------------------------------|----------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| October                  2005 10-1-05                    10-31-05     | 1,400                                             | $34.45                                                         | 1,400                                                                                                                                                                     | 22,650                                                                                                                                                                |
| November                  2005 11-1-05                    to 11-30-05 | 2,500                                             | $34.25                                                         | 2,500                                                                                                                                                                     | 20,150                                                                                                                                                                |
| December                  200512-1-05                    to 12-31-5   | None                                              | N/A                                                            | N/A                                                                                                                                                                       | N/A                                                                                                                                                                   |
| Total                                                                 | 3,900                                             | $34.32                                                         | 3,900                                                                                                                                                                     | N/A                                                                                                                                                                   |

----

**Part      II - OTHER INFORMATION (CONTINUED)**

| a.)   | Election                of directors for three-year terms expiring in                2007: |
|-----------------|--------------------------------------------------------------------------------------------|

|                                 |  For:      |  Against: |
|--------------------------------------|-----------------|----------------|
|  Larry                A. Dreyer |  1,018,854 |  2,235    |
|  Lynn                E. Dickey  |  1,018,354 | 2,735          |

| b.)   | Ratification                of appointment of Anderson ZurMuehlen & Co., P.C. as                auditors |
|-----------------|--------------------------------------------------------------------------------------------------------------|

|   |  For:      | Against:  | Abstain: |
|--------|-----------------|-----------|----------|
|   |  1,020,121 |  560 | 408      |
|   |            |      |     |

----

|                                     |                              |                                               |
|------------------------------------------|-----------------------------------|----------------------------------------------------|
|                                     | **EAGLE              BANCORP**    |
|                                |                         |                                          |
| Date: February              9, 2006 | By:                     | /s/ Larry              A.              Dreyer |
|                                     | Larry              A. Dreyer      |
|                                     | Title:              President/CEO |

|                                     |                                             |                                                |
|------------------------------------------|--------------------------------------------------|-----------------------------------------------------|
|                                     |                                             |
|                                |                                        |                                           |
| Date: February              9, 2006 | By:                                    | /s/ Peter              J.              Johnson |
|                                     | Peter              J. Johnson                    |
|                                     | Title:              Executive Vice President/CFO |

----