EXHIBIT
13
 
 FINANCIAL
STATEMENTS








AJS
BANCORP, INC.


Midlothian,
Illinois





CONSOLIDATED
FINANCIAL STATEMENTS


December
31, 2007 and 2006








CONTENTS








REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            F-2CONSOLIDATED
      FINANCIAL STATEMENTSCONSOLIDATED
      STATEMENTS OF FINANCIAL CONDITION
            F-3CONSOLIDATED
      STATEMENTS OF INCOME
            F-4CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY
            F-5CONSOLIDATED
      STATEMENTS OF CASH FLOWS
            F-6NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS
            F-8





All
schedules are omitted as the required information either is not applicable or is
included in the consolidated financial statements or related
notes.





REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








Board of
Directors and shareholders


AJS
Bancorp, Inc.


Midlothian,
Illinois








We have
audited the accompanying consolidated statements of financial condition of AJS
Bancorp, Inc. as of December 31, 2007 and 2006, and the related consolidated
statements of income, stockholders’ equity, and cash flows for the years then
ended.  These financial statements are the responsibility of the
Company’s management.  Our responsibility is to express an opinion on
these financial statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of AJS Bancorp, Inc. as of
December 31, 2007 and 2006, and the results of its operations and its cash flows
for the years then ended, in conformity with U.S. generally accepted accounting
principles.










Oak
Brook, Illinois


March 10,
2008


F-2


AJS
BANCORP, INC.


CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION


December
31, 2007 and 2006


(Dollars
in thousands)








2007
            
            
            2006ASSETSCash
      and cash equivalentsCash
      and due from banks (interest-earning:  2007 - $3,625;2006 -
      $32,571)
            
            $
            18,296
            
            
            $
            36,617Federal
      funds sold
            
            
            77
            
            
            
            7,231Total
      cash and cash equivalents
            
            
            18,373
            
            
            
            43,848Certificates
      of deposit
            
            
            2,997
            
            
            
            5,490Securities
      available for sale
            
            
            81,322
            
            
            
            68,774Securities
      held to maturity (fair value:  2007 - $125;2006 -
      $204)
            
            
            125
            
            
            
            204Loans,
      net of allowance of $1,539 - 2007 and $1,619 - 2006
            
            
            132,966
            
            
            
            138,377Federal
      Home Loan Bank stock
            
            
            2,450
            
            
            
            2,450Premises
      and equipment
            
            
            4,282
            
            
            
            4,342Bank
      owned life insurance
            
            
            3,054
            
            
            
            -Accrued
      interest receivable
            
            
            1,061
            
            
            
            1,021Other
      assets
            
            
            1,719
            
            
            
            2,007Total
      assets
            
            $
            248,349
            
            
            $
            266,513LIABILITIES
      AND STOCKHOLDERS’ EQUITYLiabilitiesDeposits
            
            $
            190,534
            
            
            $
            202,176Federal
      Home Loan Bank advances
            
            
            23,350
            
            
            
            28,750Advance
      payments by borrowers for taxes and insurance
            
            
            1,551
            
            
            
            1,655Other
      liabilities and accrued interest payable
            
            
            4,986
            
            
            
            5,183Total
      liabilities
            
            
            220,421
            
            
            
            237,764Commitments
      and contingent liabilities (note 14)Stockholders’
      equityPreferred
      stock, $.01 par value, 20,000,000 shares authorized; none
      issued
            
            
            -
            
            
            
            -Common
      stock, $.01 par value, 50,000,000 shares authorized; 2,444,521 shares
      issued
            
            
            24
            
            
            
            24Additional
      paid-in capital
            
            
            11,079
            
            
            
            10,428Treasury
      stock, at cost (2007 – 407,649 shares; 2006 – 310,217
    shares)
            
            
            (9,598
            )
            
            
            (7,256
            )Retained
      earnings
            
            
            26,543
            
            
            
            26,368Accumulated
      other comprehensive loss
            
            
            (120
            )
            
            
            (815
            )Total
      stockholders’ equity
            
            
            27,928
            
            
            
            28,749Total
      liabilities and stockholders’ equity
            
            $
            248,349
            
            
            $
            266,513


See
accompanying notes.
 F-3




AJS
BANCORP, INC.


CONSOLIDATED
STATEMENTS OF INCOME


Years
ended December 31, 2007 and 2006


(Dollars
in thousands, except per share data)








2007
            
            
            2006Interest
      and dividend incomeLoans
            
            $
            8,492
            
            
            $
            9,250Securities
            
            
            3,791
            
            
            
            2,874Interest-earning
      deposits and other
            
            
            1,458
            
            
            
            1,227Federal
      funds sold
            
            
            149
            
            
            
            238Total
      interest income
            
            
            13,890
            
            
            
            13,589Interest
      expenseDeposits
            
            
            6,561
            
            
            
            5,736Federal
      Home Loan Bank advances and other
            
            
            1,139
            
            
            
            1,281Total
      interest expense
            
            
            7,700
            
            
            
            7,017Net
      interest income
            
            
            6,190
            
            
            
            6,572Provision
      for loan losses
            
            
            179
            
            
            
            (28
            )Net
      interest income after provision for loan losses
            
            
            6,011
            
            
            
            6,600Noninterest
      incomeService
      fees
            
            
            497
            
            
            
            509Gain
      on sale of other real estate
            
            
            -
            
            
            
            2Insurance
      commissions
            
            
            143
            
            
            
            188Gain
      on sale of loans
            
            
            -
            
            
            
            54Rental
      income
            
            
            120
            
            
            
            139Other
            
            
            98
            
            
            
            47Total
      noninterest income
            
            
            858
            
            
            
            939Noninterest
      expenseCompensation
      and employee benefits
            
            
            3,255
            
            
            
            3,460Occupancy
      expense
            
            
            779
            
            
            
            850Data
      processing expense
            
            
            342
            
            
            
            368Advertising
      and promotion
            
            
            271
            
            
            
            322Professional
            
            
            217
            
            
            
            217Postage
      and supplies
            
            
            159
            
            
            
            203Bank
      security
            
            
            125
            
            
            
            130Loss
      on the sale of other real estate
            
            
            56
            
            
            
            -Loss
      on security impairment
            
            
            244
            
            
            
            -Other
            
            
            587
            
            
            
            538Total
      noninterest expense
            
            
            6,035
            
            
            
            6,088Income
      before income taxes
            
            
            834
            
            
            
            1,451Income
      taxes
            
            
            275
            
            
            
            540Net
      income
            
            $
            559
            
            
            $
            911Earnings
      per shareBasic
            
            $
            0.27
            
            
            $
            0.43Diluted
            
            
            0.26
            
            
            
            0.43





See
accompanying notes.
 F-4




AJS
BANCORP, INC.


CONSOLIDATEDSTATEMENTS OF
STOCKHOLDERS’ EQUITY


Years
ended December 31, 2007 and 2006


(Dollars
in thousands, except per share data)








AccumulatedAdditional
            
            
            
            
            
            Unearned
            
            
            
            
            
            OtherCommon
            
            
            Paid-In
            
            
            Treasury
            
            
            Stock
            
            
            Retained
            
            
            ComprehensiveStock
            
            
            Capital
            
            
            Stock
            
            
            Awards
            
            
            Earnings
            
            
            Income
      (Loss)
            
            
            TotalBalance
      at January 1, 2006
            
            $
            24
            
            
            $
            10,839
            
            
            $
            (6,931
            )
            
            $
            (486
            )
            
            $
            25,820
            
            
            $
            (1,014
            )
            
            
            28,252Transfer
      to additional paid-in capital
            
            
            -
            
            
            
            (486
            )
            
            
            -
            
            
            
            486
            
            
            
            -
            
            
            
            -
            
            
            
            -Purchase
      of 14,503 shares treasury stock
            
            
            -
            
            
            
            -
            
            
            
            (340
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (340
            )Allocation
      of stock awards
            
            
            -
            
            
            
            (11
            )
            
            
            11
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Reclassification
      due to changes in fair value of common stock in ESOP subject
      to  contingent repurchase obligation
            
            
            -
            
            
            
            (199
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (199
            )Stock
      awards earned
            
            
            -
            
            
            
            229
            
            
            
            (28
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            201Stock
      options exercised- 1,600 shares
            
            
            -
            
            
            
            (2
            )
            
            
            32
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            30Stock
      option compensation expense
            
            
            -
            
            
            
            58
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            58Cash
      dividend ($0.41 per share)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (363
            )
            
            
            -
            
            
            
            (363
            )Comprehensive
      incomeNet
      income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            911
            
            
            
            -
            
            
            
            911Change
      in unrealized gain on securities  available for sale, net of
      taxes
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            199
            
            
            
            199Total
      comprehensive income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,110Balance
      at December 31, 2006
            
            
            24
            
            
            
            10,428
            
            
            
            (7,256
            )
            
            
            -
            
            
            
            26,368
            
            
            
            (815
            )
            
            
            28,749Purchase
      of 99,832 shares treasury stock
            
            
            -
            
            
            
            -
            
            
            
            (2,390
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (2,390
            )Reclassification
      due to changes in fair value of common stock in ESOP subject to contingent
      repurchase obligation
            
            
            -
            
            
            
            365
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            365Stock
      awards earned
            
            
            -
            
            
            
            231
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            231Stock
      options exercised - 2,400 shares
            
            
            -
            
            
            
            (3
            )
            
            
            48
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            45Stock
      option compensation expense
            
            
            -
            
            
            
            58
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            58Cash
      dividend ($0.41 per share)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (384
            )
            
            
            -
            
            
            
            (384
            )Comprehensive
      incomeNet
      income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            559
            
            
            
            -
            
            
            
            559Change
      in unrealized gain on securities available for sale, net of
      taxes
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            695
            
            
            
            695Total
      comprehensive income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,254Balance
      at December 31, 2007
            
            $
            24
            
            
            $
            11,079
            
            
            $
            (9,598
            )
            
            $
            -
            
            
            $
            26,543
            
            
            $
            (120
            )
            
            $
            27,928




See
accompanying notes.
 F-5




AJS
BANCORP, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


Years
ended December 31, 2007 and 2006


(Dollars
in thousands)








2007
            
            
            2006Cash
      flows from operating activitiesNet
      income
            
            $
            559
            
            
            $
            911Adjustments
      to reconcile net income to net cash provided by operating
      activitiesDepreciation
            
            
            235
            
            
            
            267Provision
      for loan losses
            
            
            179
            
            
            
            (28
            )Deferred
      income taxes
            
            
            (90
            )
            
            
            (62
            )Premium
      amortization on securities, net
            
            
            (23
            )
            
            
            113Stock
      award compensation expense
            
            
            231
            
            
            
            201Stock
      option compensation expense
            
            
            58
            
            
            
            58Earnings
      on bank owned life insurance
            
            
            (54
            )
            
            
            -Dividend
      reinvestments on securities available for sale
            
            
            (579
            )
            
            
            (447
            )Gain
      on sale of loans
            
            
            -
            
            
            
            (54
            )Loss
      on the sale of other real estate owned
            
            
            56
            
            
            
            -Loss
      on security impairment
            
            
            244
            
            
            
            -Changes
      inAccrued
      interest receivable and other assets
            
            
            (103
            )
            
            
            53Accrued
      interest payable and other liabilities
            
            
            168
            
            
            
            (81
            )Net
      cash provided by operating activities
            
            
            881
            
            
            
            931Cash
      flows from investing activitiesSecurities
      available for salePurchases
            
            
            (32,329
            )
            
            
            (16,695
            )Maturities
      and principal payments
            
            
            21,275
            
            
            
            19,821Securities
      held to maturityMaturities
      and principal payments
            
            
            79
            
            
            
            91Maturities
      of certificates of deposit
            
            
            2,493
            
            
            
            3,094Loan
      originations, net
            
            
            5,050
            
            
            
            10,109Proceeds
      from loan sales
            
            
            -
            
            
            
            3,364Proceeds
      from sale of other real estate
            
            
            126
            
            
            
            -Purchase
      of equipment
            
            
            (175
            )
            
            
            (68
            )Purchase
      of bank owned life insurance
            
            
            (3,000
            )
            
            
            -Proceeds
      from the sale of FHLB stock
            
            
            -
            
            
            
            966Net
      cash provided by (used in) investing activities
            
            
            (6,481
            )
            
            
            20,682




(Continued)
 F-6




AJS
BANCORP, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


Years
ended December 31, 2007 and 2006


(Dollars
in thousands)








2007
            
            
            2006Cash
      flows from financing activitiesDividends
      paid
            
            $
            (384
            )
            
            $
            (363
            )Net
      change in deposits
            
            
            (11,642
            )
            
            
            11,769Purchases
      of FHLB advances
            
            
            -
            
            
            
            -Maturities
      of FHLB advances
            
            
            (5,400
            )
            
            
            (4,000
            )Purchase
      of common stock
            
            
            (2,390
            )
            
            
            (340
            )Proceeds
      from exercise of stock options
            
            
            45
            
            
            
            30Net
      change in advance payments by borrowers  for taxes and
      insurance
            
            
            (104
            )
            
            
            (91
            )Net
      cash provided by (used in) financing activities
            
            
            (19,875
            )
            
            
            7,005Net
      change in cash and cash equivalents
            
            
            (25,475
            )
            
            
            28,618Cash
      and cash equivalents at beginning of year
            
            
            43,848
            
            
            
            15,230Cash
      and cash equivalents at end of year
            
            $
            18,373
            
            
            $
            43,848Supplemental
      disclosures of cash flow informationCash
      paid during the year forInterest
            
            $
            7,670
            
            
            $
            6,764Income
      taxes
            
            
            427
            
            
            
            688Supplemental
      noncash disclosuresTransfers
      from loans to real estate owned
            
            $
            261
            
            
            $
            -




(Continued)
 F-7


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Principles of
Consolidation:  The consolidated financial statements include
the accounts of AJS Bancorp, Inc. (“the Company”) and its wholly owned
subsidiary, A. J. Smith Federal Savings Bank (“the Bank”).  All
significant intercompany balances and transactions have been
eliminated.  The Company is 60.3% owned by a mutual holding company,
AJS Bancorp, MHC.  These consolidated financial statements do not
include AJS Bancorp, MHC and its results or financial condition.





Nature of
Operations:  The only business of the Company is ownership of
the Bank.  The Bank is a federally chartered savings bank with
operations located in Midlothian and Orland Park, Illinois.  The Bank
provides single-family residential and home equity loans and commercial loans to
customers and accepts deposits from customers located in the southern suburbs of
Chicago, Illinois.  Substantially all of the loans are secured by
specific items of collateral including business assets, consumer assets, and
commercial and residential real estate.  Commercial loans are expected
to be repaid from cash flows from operations of businesses.  There are
no significant concentrations of loans to any one industry or
customer.  However, the ability of the customers to repay their loans
is dependent on the real estate and general economic conditions in the
area.





Use of
Estimates:  To prepare financial statements in conformity with
U.S. generally accepted accounting principles, management makes estimates and
assumptions based on available information.  These estimates and
assumptions affect the amounts reported in the financial statements, and the
disclosures provided and future results could differ.  The allowance
for loan losses and fair values of financial instruments are particularly
subject to change.





Cash
Flows:  Cash and cash equivalents include cash, deposits with
other financial institutions with original maturities of less than 90 days, and
federal funds sold.  Net cash flows are reported for loan and deposit
transactions.





Interest-Bearing Deposits in
Other Financial Institutions:  Interest-bearing deposits in
other financial institutions mature within one year and are carried at
cost.





Securities:  Debt
securities are classified as held to maturity and carried at amortized cost when
management has the positive intent and ability to hold them to
maturity.  Debt securities are classified as available for sale when
they might be sold before maturity.  Equity securities with readily
determinable fair values are classified as available for
sale.  Securities available for sale are carried at fair value, with
unrealized holding gains and losses reported in other comprehensive income, net
of tax.





Interest
income includes amortization of purchase premium or
discount.  Premiums and discounts on securities are amortized on the
level-yield method without anticipating prepayments, except for mortgage backed
securities where prepayments are anticipated.  Gains and
losses on sales are based on the amortized cost of the security
sold.  Securities are written down to fair value when a decline in
fair value is not temporary.


(Continued)
 F-8


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)




Declines
in the fair value of securities below their cost that are other than temporary
are reflected as realized losses.  In estimating other-than-temporary
losses, management considers: the length of time and extent that fair value has
been less than cost, the financial condition and


near term
prospects of the issuer, and the Company’s ability and intent to hold the
security for a period sufficient to allow for any anticipated recovery in fair
value





Federal Home Loan Bank
(FHLB) Stock:  The Bank is a member of the FHLB
system.  Members are required to own a certain amount of stock based
on the level of borrowings and other factors, and may invest in additional
amounts.  FHLB stock is carried at cost, classified as a restricted
security, and periodically evaluated for impairment based on ultimate recovery
of par value.  Both cash and stock dividends are reported as
income.





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





Mortgage
loans held for sale are generally sold with servicing rights
retained.  The carrying value of mortgage loans sold is reduced by the
cost allocated to the servicing right.  Gains and losses on sales of
mortgage loans are based on the difference between the selling price and the
carrying value of the related loan sold.  At December 31, 2007 and
December 31, 2006, there were no loans held for sale.





Loans:  Loans
that management has the intent and ability to hold for the foreseeable future or
until maturity or payoff are reported at the principal balance outstanding, net
of unearned interest, deferred loan fees and costs, and an allowance for loan
losses.





Interest
income is reported on the interest method and includes amortization of net
deferred loan fees and costs over the contractual loan term.  Interest
income is accrued on the unpaid principal balance.  Loan origination
fees, net of certain direct origination costs, are deferred and recognized in
interest income using the level-yield method without anticipating
prepayments.  Interest income on mortgage and commercial loans is
discontinued at the time the loan is 90 days delinquent unless the loan is
well-secured and in process of collection.  Consumer and credit card
loans are typically charged off no later than 120 days past due.  Past
due status is based on the contractual terms of the loan.  In all
cases, loans are placed on nonaccrual or charged-off at an earlier date if
collection of principal or interest is considered doubtful.


(Continued)
 F-9


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





Allowance for Loan
Losses:  The allowance for loan losses is a valuation allowance
for probable incurred credit losses, increased by the provision for loan losses
and decreased by charge-offs less recoveries.  Management estimates
the allowance balance required using past loan loss experience; known and
inherent losses in the nature and volume of the portfolio that are both probable
and estimable; information about specific borrower situations; and estimated
collateral values, economic conditions, and other
factors.  Allocations of the allowance may be made for
specific loans, but the entire allowance is available for any loan that, in
management’s judgment, should be charged off.  Loan losses are charged
against the allowance when management believes that the uncollectiblity of a
loan balance is confirmed.





The
allowance consists of specific and general components.  The specific
component relates to loans that are individually classified as impaired or loans
otherwise classified as substandard or doubtful.  The general
component covers non-classified loans and is based on historical loss experience
adjusted for current factors.





A loan is
impaired when full payment under the loan terms is not
expected.  Impairment is evaluated in total for smaller-balance loans
of similar nature such as residential mortgage and consumer loans and on an
individual loan basis for other loans.  If a loan is impaired, a
portion of the allowance is allocated so that the loan is reported, net, at the
present value of estimated future cash flows using the loan’s existing rate or
at the fair value of collateral if repayment is expected solely from the
collateral.





Premises and
Equipment:  Land is carried at cost.  Premises and
equipment are stated at cost less accumulated
depreciation.  Depreciation is calculated using primarily the
straight-line method and is provided over the estimated useful lives of 15 to 50
years for premises and 1 to 10 years for equipment.





Other Real Estate
Owned:  Real estate properties acquired through or in lieu of
loan foreclosure are recorded at the lower of cost or fair value less estimated
costs to sell.  Costs relating to improvement of property are
capitalized, whereas costs relating to holding property are
expensed.





Bank Owned Life
Insurance:  The Company purchased life insurance policies on
certain key executives during 2007.  Bank owned life insurance is
recorded at the amount that can be realized under the insurance contract at the
balance sheet date,which
is the cash surrender value adjusted for other charges or other amounts due that
are probable at settlement.  The FASB Emerging Issues Task Force
finalized Issue No. 06-5, Accounting for Purchases of Life
Insurance - Determining the Amount That Could Be Realized in Accordance with
FASB Technical Bulletin No. 85-4 (Accounting for Purchases of Life
Insurance).This issue requires that a policyholder consider
contractual terms of a life insurance policy in determining the amount that
could be realized under the insurance contract.  It also requires that
if the contract provides for a greater surrender value if all individual
policies in a group are surrendered at the same time, that the surrender value
be determined based on the assumption that policies will be surrendered on an
individual basis.  Lastly, the Issue requires disclosure when there
are contractual restrictions on the Company’s ability to surrender a
policy.  The adoption of EITF 06-5 on January 1, 2007 had no
impact on the Company’s financial condition or results of
operation.


(Continued)
 F-10


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)




Long-Term
Assets:Premises and equipment,
core deposit and other intangible assets, and other long-term assets are
reviewed for impairment when events indicate their carrying amount may not be
recoverable from future undiscounted cash flows.  If impaired, the
assets are recorded at fair value.





Income
Taxes:  Income tax expense is the total of the current year
income tax due or refundable and the change in deferred tax assets and
liabilities.  Deferred tax assets and liabilities are the expected
future tax amounts for the temporary differences between carrying amounts and
tax bases of assets and liabilities, computed using enacted tax
rates.  A valuation allowance, if needed, reduces deferred tax assets
to the amount expected to be realized.





The
Company adopted FASB Interpretation 48, Accounting for Uncertainty in Income
Taxes (“FIN 48”), as of January 1, 2007.  A tax position
is recognized as a benefit only if it is "more likely than not" that the tax
position would be sustained in a tax examination, with a tax examination being
presumed to occur.  The amount recognized is the largest amount of tax
benefit that is greater than 50% likely of being realized on
examination.  For tax positions not meeting the "more likely than not"
test, no tax benefit is recorded.  The adoption had no affect on the
Company’s financial statements.





The
Company recognizes interest and/or penalties related to income tax matters in
income tax expense.





Loss
Contingencies:  Loss contingencies, including claims and legal
actions arising in the ordinary course of business, are recorded as liabilities
when the likelihood of loss is probable and an amount or range of loss can be
reasonably estimated.  Management does not believe there now are such
matters that will have a material effect on the financial
statements.





Loan Commitments and Related
Financial Statements:  Financial instruments include
off-balance-sheet credit instruments, such as commitments to make loans and
commercial letters of credit, issued to meet customer financing
needs.  The face amount for these items represents the exposure to
loss, before considering customer collateral or ability to
repay.  Such financial instruments are recorded when they are
funded.





Fair Value of Financial
Instruments:  Fair values of financial instruments are
estimated using relevant market information and other assumptions, as more fully
disclosed in a separate note.


(Continued)
 F-11


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





Fair
value estimates involve uncertainties and matters of significant judgment
regarding interest rates, credit risk, prepayments, and other factors,
especially in the absence of broad markets for particular
items.  Changes in assumptions or in market conditions could
significantly affect the estimates.





Earnings Per Common
Share:  Basic earnings per common share is net income divided
by the weighted average number of common shares outstanding during the
period.  Employee stock ownership plan shares are considered
outstanding for this calculation unless unearned.  Diluted earnings
per common share include the dilutive effect of additional potential common
shares issuable under stock options and the vesting of stock
awards.  Earnings and dividends per share are restated for all stock
splits and dividends through the date of issue of the financial
statements.





Comprehensive
Income:  Comprehensive income consists of net income and other
comprehensive income.  Other comprehensive income includes unrealized
gains and losses on securities available for sale, which are also recognized as
separate components of stockholders’ equity.





Employee Stock Ownership
Plan (“ESOP”):  The cost of shares issued to the ESOP but not
yet allocated to participants is presented in the consolidated statement of
financial condition as a reduction of stockholders’
equity.  Compensation expense is recorded based on the market price of
the shares as they are committed to be released for allocation to participant
accounts.  The difference between the market price and the cost of the
shares committed to be released is recorded as an adjustment to paid-in
capital.  Dividends on ESOP shares reduce retained earnings; dividends
on unearned ESOP shares are used to reduce debt service.  Shares are
considered outstanding in the earnings per share calculations as they are
committed to be released; unallocated shares are not considered
outstanding.  Because participants may require the Company to purchase
their ESOP shares upon termination of their employment and certain predetermined
dates according to the ESOP plan document, the fair value of the put-able
allocated ESOP shares is reclassified from stockholders’ equity and included in
other liabilities.





Stock
Compensation:The Company records
stock-based employee compensation cost using the fair value method in accordance
with SFAS No. 123R Share Based
Payment.





Dividend
Restriction:  Banking regulations require the maintenance of
certain capital levels and may limit the dividends paid by the bank to the
holding company or by the holding company to the stockholders.  These
restrictions pose no practical limit on the ability of the bank or the holding
company to pay dividends at historical levels.





Operating Segment:
Internal financial information is primarily reported and aggregated in a single
line of business, banking.  Accordingly, all of the financial service
operations are considered by management to be aggregated in one reportable
operating segment.


(Continued)
 F-12


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





Reclassifications:  Certain
items on the prior year financial statements have been reclassified with no
effect on net income to conform to the current year presentation.





Adoption of New Accounting
Standards:  In February 2006, the FASB issued SFAS No. 155,
Accounting for Certain Hybrid
Financial Instruments, which permits fair value remeasurement for hybrid
financial instruments that contain an embedded derivative that otherwise would
require bifurcation.  Additionally, SFAS No. 155 clarifies the
accounting guidance for beneficial interests in
securitizations.  Under SFAS No. 155, all beneficial interests in a
securitization will require an assessment in accordance with SFAS No. 133 to
determine if an embedded derivative exists within the instrument.  In
January 2007, the FASB issued Derivatives Implementation Group Issue B40, Application of Paragraph 13(b) to
Securitized Interests in Prepayable Financial Assets (DIG Issue
B40).  DIG Issue B40 provides an exemption from the embedded
derivative test of paragraph 13(b) of SFAS No. 133 for instruments that would
otherwise require bifurcation if the test is met solely because of a prepayment
feature included within the securitized interest and prepayment is not
controlled by the security holder.  SFAS No. 155 and DIG Issue B40 are
effective for fiscal years beginning after September 15, 2006.  The
adoption of SFAS No. 155 and DIG Issue B40 on January 1, 2007 did not have a
material impact on the Company's consolidated financial position or results of
operations.





Effect of Newly Issued But
Not Yet Effective Accounting Standards:  In September 2006, the
FASB issued Statement No. 157, Fair Value
Measurements.  This Statement defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements.  This Statement establishes a fair value hierarchy about
the assumptions used to measure fair value and clarifies assumptions about risk
and the effect of a restriction on the sale or use of an asset.  The
standard is effective for fiscal years beginning after November 15,
2007.  The impact of adoption on January 1, 2008 was not
material.





In
February 2007, the FASB issued Statement No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities.  The
standard provides companies with an option to report selected financial assets
and liabilities at fair value and establishes presentation and disclosure
requirements designed to facilitate comparisons between companies that choose
different measurement attributes for similar types of assets and
liabilities.  The new standard is effective for the Company on January
1, 2008.  As of January 1, 2008 the Company elected the fair value
option for the Company’s marketable equity securities.  Upon adoption
of FAS 159 on January 1, 2008, a $75 fair value adjustment was recognized to
equity.  Changes in fair value of the Company’s marketable equity
securities will be recognized through earnings in the future.





In
September 2006, the FASB Emerging Issues Task Force finalized Issue No. 06-4,
Accounting for Deferred
Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life
Insurance Arrangements.  This issue requires that a liability
be recorded during the service period when a split-dollar life insurance
agreement continues after participants’ employment or
retirement.


(Continued)
 F-13


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





The
required accrued liability will be based on either the post-employment benefit
cost for the continuing life insurance or based on the future death benefit
depending on the contractual terms of the underlying agreement.  This
issue is effective for fiscal years beginning after December 15,
2007.  The impact of adoption on January 1, 2008 was not material
because the Company does not have split-dollar arrangements.








NOTE
2 - SECURITIES





The fair
value of securities available for sale and the related gross unrealized gains
and losses recognized in accumulated other comprehensive income (loss) were as
follows:





Gross
            
            
            GrossFair
            
            
            Unrealized
            
            
            UnrealizedValue
            
            
            Gains
            
            
            LossesDecember 31,
      2007U.S.
      governmental agencies
            
            $
            26,644
            
            
            $
            191
            
            
            $
            (30
            )Mortgage-backed
            
            
            43,165
            
            
            
            128
            
            
            
            (560
            )Mutual
      fund
            
            
            11,437
            
            
            
            -
            
            
            
            -Equity
      investment
            
            
            76
            
            
            
            75
            
            
            
            -Total
            
            $
            81,322
            
            
            $
            394
            
            
            $
            (590
            )December 31,
      2006U.S.
      governmental agencies
            
            $
            23,749
            
            
            $
            15
            
            
            $
            (215
            )Mortgage-backed
            
            
            34,059
            
            
            
            31
            
            
            
            (1,026
            )Mutual
      fund
            
            
            10,904
            
            
            
            2
            
            
            
            (201
            )Equity
      investment
            
            
            62
            
            
            
            61
            
            
            
            -Total
            
            $
            68,774
            
            
            $
            109
            
            
            $
            (1,442
            )


(Continued)
 F-14


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE 2 - SECURITIES(Continued)





The
amortized cost, unrecognized gains and losses, and fair values of securities
held to maturity follow:





Gross
            
            
            GrossAmortized
            
            
            Unrecognized
            
            
            Unrecognized
            
            
            FairCost
            
            
            Gains
            
            
            Losses
            
            
            ValueDecember 31,
      2007Mortgage-backed
            
            $
            60
            
            
            $
            -
            
            
            $
            -
            
            
            $
            60State
      and municipal
            
            
            65
            
            
            
            -
            
            
            
            -
            
            
            
            65$
            125
            
            
            $
            -
            
            
            $
            -
            
            
            $
            125December 31,
      2006Mortgage-backed
            
            $
            74
            
            
            $
            -
            
            
            $
            -
            
            
            $
            74State
      and municipal
            
            
            130
            
            
            
            -
            
            
            
            -
            
            
            
            130$
            204
            
            
            $
            -
            
            
            $
            -
            
            
            $
            204





Contractual
maturities of securities at December 31, 2007 were as
follows.  Securities not due at a single maturity date, including
mortgage-backed securities, mutual funds and equity investments, are shown
separately.





Available
            
            
            Held
      tofor Sale
            
            
            MaturityFair
            
            
            Amortized
            
            
            FairValue
            
            
            Cost
            
            
            ValueDue
      in one year or less
            
            $
            9,485
            
            
            $
            65
            
            
            $
            65Due
      after one year through five years
            
            
            17,159
            
            
            
            -
            
            
            
            -Due
      after five years
            
            
            -
            
            
            
            -
            
            
            
            -Mortgage-backed
      securities
            
            
            43,165
            
            
            
            60
            
            
            
            60Mutual
      fund
            
            
            11,448
            
            
            
            -
            
            
            
            -Equity
      investment
            
            
            76
            
            
            
            -
            
            
            
            -$
            81,333
            
            
            $
            125
            
            
            $
            125





Securities
with a carrying value of approximately $10,566 and $9,903 at December 31,
2007 and 2006 were pledged to secure public deposits and for other purposes as
required or permitted by law.  There were no security sales recorded
during 2007 or 2006.




(Continued)
 F-15


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE 2 - SECURITIES(Continued)





Securities
with unrealized losses at year end not recognized in income, by length of time
that individual securities have been in a continuous unrealized loss position,
are as follows:





Less Than 12 Months
            
            
            12 Months or More
            
            
            TotalFair
            
            
            Unrealized
            
            
            Fair
            
            
            Unrealized
            
            
            Fair
            
            
            UnrealizedValue
            
            
            Loss
            
            
            Value
            
            
            Loss
            
            
            Value
            
            
            Loss2007U.S.
      government agencies
            
            $
            -
            
            
            $
            -
            
            
            $
            5,970
            
            
            $
            (30
            )
            
            $
            5,970
            
            
            $
            (30
            )Mortgage-backed
            
            
            2,187
            
            
            
            (7
            )
            
            
            21,396
            
            
            
            (553
            )
            
            
            23,583
            
            
            
            (560
            )Total
      temporarily impaired
            
            $
            2,187
            
            
            $
            (7
            )
            
            $
            27,366
            
            
            $
            (583
            )
            
            $
            29,553
            
            
            $
            (590
            )2006U.S.
      government agencies
            
            $
            6,959
            
            
            $
            (13
            )
            
            $
            13,786
            
            
            $
            (202
            )
            
            $
            20,745
            
            
            $
            (215
            )Mortgage-backed
            
            
            1,990
            
            
            
            (1
            )
            
            
            28,749
            
            
            
            (1,025
            )
            
            
            30,739
            
            
            
            (1,026
            )Mutual
      fund
            
            
            292
            
            
            
            (1
            )
            
            
            8,400
            
            
            
            (200
            )
            
            
            8,692
            
            
            
            (201
            )Total
      temporarily impaired
            
            $
            9,241
            
            
            $
            (15
            )
            
            $
            50,935
            
            
            $
            (1,427
            )
            
            $
            60,176
            
            
            $
            (1,442
            )








At
December 31, 2007, the Company recognized a $244 other-than-temporary impairment
loss on its mutual fund investment.  The mutual fund has been in an
unrealized loss position since 2003 with a decline as much as 2.2
%.  The amortized cost basis was $11,681 and its fair value was 2.1%
less at December 31, 2007.  The mutual fund’s fair value traditionally
reacted inversely with short-term interest rates, although during 2007 it ceased
to react to short-term interest rate changes and management believed it could no
longer forecast a recovery within a reasonable holding period.  Even
though management does not perceive credit loss exposure and intends to hold the
mutual fund for the foreseeable future, the unrealized loss was deemed to be
other-than-temporary and the loss was recognized through earnings.





Unrealized
losses have not been recognized into income because the issuer’s bonds are of
high credit quality and/or they are backed by the government, such as Fannie Mae
or Freddie Mac bonds and mortgage-backed securities.  In addition,
management has the intent and ability to hold them for the foreseeable future
and the decline in fair value is largely due to increases in market interest
rates.  The fair value is expected to recover as the securities
approach their maturity date and/or market rates change.


(Continued)
 F-16


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
3 - LOANS





Loans
consist of:


2007
            
            
            2006Mortgage:Secured
      by one-to-four-family residences
            
            $
            85,803
            
            
            $
            86,024Multi-family
      and secured by other properties
            
            
            33,888
            
            
            
            41,194Home
      equity
            
            
            14,406
            
            
            
            12,198Consumer
      and other
            
            
            258
            
            
            
            482134,355
            
            
            
            139,898Allowance
      for loan losses
            
            
            (1,539
            )
            
            
            (1,619
            )Net
      deferred costs and other
            
            
            150
            
            
            
            98Loans,
      net
            
            $
            132,966
            
            
            $
            138,377Changes
      in the allowance for loan losses follow:2007
            
            
            2006Beginning
      balance
            
            $
            1,619
            
            
            $
            1,701Provision
      for loan losses
            
            
            179
            
            
            
            (28
            )Charge-offs
            
            
            (280
            )
            
            
            (82
            )Recoveries
            
            
            21
            
            
            
            28Ending
      balance
            
            $
            1,539
            
            
            $
            1,619Impaired
      loans were as follows:2007
            
            
            2006Impaired
      loans with no allocated allowance for loan losses
            
            $
            3,687
            
            
            $
            454Average
      of impaired loans during the year
            
            $
            2,364
            
            
            $
            893Interest
      income recognized during impairment
            
            
            38
            
            
            
            25Cash-basis
      interest income recognized
            
            
            19
            
            
            
            17Nonperforming
      loans were as follows:2007
            
            
            2006Nonaccrual
      loans
            
            $
            934
            
            
            $
            540Loans
      past due over 90 days still on accrual
            
            
            -
            
            
            
            -


(Continued)
 F-17


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE 3 - LOANS(Continued)





Nonperforming
loans and impaired loans are defined differently.  Some loans may be
included in both categories, whereas other loans may only be included in one
category.  There were no impaired loans with an allocated allowance
for loan losses.





Certain
directors and executive officers of the Bank and companies with which they are
affiliated have obtained loans from the Bank on various occasions.  A
summary of such loans made by the Bank is as follows:





2007
            
            
            2006Beginning
      balance
            
            $
            1,495
            
            
            $
            1,552New
      loans
            
            
            91
            
            
            
            -Repayments
            
            
            (69
            )
            
            
            (57
            )Ending
      balance
            
            $
            1,517
            
            
            $
            1,495





Mortgage
loans serviced for others are not included in the consolidated statements of
financial condition.  The unpaid principal balances of these loans
follows:





2007
            
            
            2006Mortgage
      loan portfolios serviced for:Fannie
      Mae
            
            $
            6,309
            
            
            $
            8,048Freddie
      Mac
            
            
            84
            
            
            
            90Balance,
      end of year
            
            $
            6,393
            
            
            $
            8,138





The
carrying value of mortgage servicing rights is $47 and $57 at December 31, 2007
and 2006.  Custodial escrow balances maintained in connection with the
foregoing loan servicing were approximately $209 and $221 at December 31, 2007
and 2006.


(Continued)
 F-18


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
4 - PREMISES AND EQUIPMENT





Premises
and equipment consist of:


2007
            
            
            2006Land
            
            $
            1,351
            
            
            $
            1,351Office
      buildings and improvements
            
            
            5,305
            
            
            
            5,252Furniture,
      fixtures, and equipment
            
            
            1,661
            
            
            
            1,7178,317
            
            
            
            8,320Less
      accumulated depreciation
            
            
            4,035
            
            
            
            3,978$
            4,282
            
            
            $
            4,342








NOTE
5 - DEPOSITS





Certificates
of deposit in denominations of $100,000 or more were $35,648 and $35,880 at
December 31, 2007 and 2006.  Depending on how ownership of the account
is listed, some deposit amounts in excess of $100,000 may not be federally
insured.





Deposit
accounts are summarized as follows:


2007
            
            
            2006Passbook
      accounts
            
            $
            38,103
            
            
            $
            40,463NOW
      and checking accounts
            
            
            22,383
            
            
            
            23,098Money
      market accounts
            
            
            7,291
            
            
            
            9,336Certificates
      of deposit
            
            
            122,757
            
            
            
            129,279Total
      deposits
            
            $
            190,534
            
            
            $
            202,176





Scheduled
maturities of time certificates at December 31, 2007 are as
follows:





2008
            
            $
            103,9362009
            
            
            7,8572010
            
            
            6,0082011
            
            
            1,9342012
            
            
            3,022$
            122,757





(Continued)
 F-19


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE 5 - DEPOSITS
(Continued)





Interest
expense on deposits is summarized as follows:





2007
            
            
            2006NOW
            
            $
            58
            
            
            $
            69Money
      market
            
            
            259
            
            
            
            246Passbook
            
            
            448
            
            
            
            468Certificates
      of deposit
            
            
            5,796
            
            
            
            4,953$
            6,561
            
            
            $
            5,736








Non-interest-bearing
deposits (NOW accounts) totaled $12,912 and $13,361 at December 31, 2007
and 2006.  Deposit accounts held by directors and executive officers
totaled $991 and $926 at December 31, 2007 and 2006.








NOTE
6 - FEDERAL HOME LOAN BANK ADVANCES





At year
end, advances from the FHLB were as follows:





FixedMaturity Date
            
            Rate
            
            
            2007
            
            
            2006January
      23, 2007
            
            
            2.69
            %
            
            $
            -
            
            
            $
            500January
      29, 2007
            
            
            3.26
            
            
            
            -
            
            
            
            400March
      23, 2007
            
            
            2.53
            
            
            
            -
            
            
            
            500April
      26, 2007
            
            
            3.35
            
            
            
            -
            
            
            
            1,000May
      7, 2007
            
            
            3.57
            
            
            
            -
            
            
            
            1,000July
      23, 2007
            
            
            4.06
            
            
            
            -
            
            
            
            500November
      13, 2007
            
            
            3.74
            
            
            
            -
            
            
            
            500November
      27, 2007
            
            
            5.28
            
            
            
            -
            
            
            
            1,000January
      23, 2008
            
            
            3.21
            
            
            
            500
            
            
            
            500January
      28, 2008
            
            
            3.68
            
            
            
            400
            
            
            
            400March
      24, 2008
            
            
            2.96
            
            
            
            625
            
            
            
            625April
      28, 2008
            
            
            3.84
            
            
            
            1,000
            
            
            
            1,000May
      7, 2008
            
            
            4.08
            
            
            
            1,000
            
            
            
            1,000June
      18, 2008
            
            
            4.33
            
            
            
            1,000
            
            
            
            1,000July
      22, 2008
            
            
            4.41
            
            
            
            500
            
            
            
            500November
      13, 2008
            
            
            4.16
            
            
            
            500
            
            
            
            500


(Continued)
 F-20


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE 6 - FEDERAL HOME LOAN BANK
ADVANCES(Continued)





FixedMaturity Date
            
            Rate
            
            
            2007
            
            
            2006November
      17, 2008
            
            
            3.64
            %
            
            $
            400
            
            
            $
            400November
      27, 2008
            
            
            5.48
            
            
            
            1,000
            
            
            
            1,000March
      20, 2009
            
            
            5.63
            
            
            
            3,000
            
            
            
            3,000March
      23, 2009
            
            
            3.35
            
            
            
            625
            
            
            
            625June
      17, 2009
            
            
            4.40
            
            
            
            1,000
            
            
            
            1,000June
      22, 2009
            
            
            4.67
            
            
            
            1,000
            
            
            
            1,000June
      25, 2009
            
            
            4.61
            
            
            
            1,000
            
            
            
            1,000July
      1, 2009
            
            
            4.54
            
            
            
            1,000
            
            
            
            1,000August
      10, 2009
            
            
            3.88
            
            
            
            650
            
            
            
            650September
      16, 2009
            
            
            3.68
            
            
            
            600
            
            
            
            600September
      28, 2009
            
            
            3.79
            
            
            
            2,000
            
            
            
            2,000March
      23, 2010
            
            
            3.71
            
            
            
            250
            
            
            
            250July
      2, 2010
            
            
            4.69
            
            
            
            1,000
            
            
            
            1,000October
      25, 2010
            
            
            4.16
            
            
            
            1,000
            
            
            
            1,000July
      7, 2011
            
            
            4.61
            
            
            
            800
            
            
            
            800October
      26, 2011
            
            
            4.02
            
            
            
            400
            
            
            
            400November
      17, 2011
            
            
            4.31
            
            
            
            1,100
            
            
            
            1,100January
      10, 2012
            
            
            4.36
            
            
            
            1,000
            
            
            
            1,000$
            23,350
            
            
            $
            28,750





The
advances are secured by a blanket lien on qualifying first mortgage loans in an
amount equal to at least 170% of the amount of outstanding
advances.  The advances are also subject to a prepayment penalty
equivalent to the unpaid interest cash flows at rates effective at the time of
the prepayment.





Maturities
over the next five years are as follows:





2008
            
            $
            6,9252009
            
            
            10,8752010
            
            
            2,2502011
            
            
            2,3002012
            
            
            1,000$
            23,350


(Continued)
 F-21


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
7 - INCOME TAXES





Income
tax expense was as follows:


2007
            
            
            2006CurrentFederal
            
            $
            422
            
            
            $
            607State
            
            
            10
            
            
            
            55Deferred
            
            
            (157
            )
            
            
            (122
            )Total
            
            $
            275
            
            
            $
            540





Effective
tax rates differ from federal statutory rates applied to financial statement
income due to the following.


2007
            
            
            2006Income
      tax at federal statutory rate
            
            $
            286
            
            
            $
            493Effect
      ofState
      taxes, net of federal benefit
            
            
            (11
            )
            
            
            24Other,
      net
            
            
            -
            
            
            
            23Total
            
            $
            275
            
            
            $
            540Effective
      tax rate
            
            
            32.7
            %
            
            
            37.2
            %





The net
deferred tax assets included in other assets in the consolidated statements of
financial condition are as follows:





2007
            
            
            2006Deferred
      tax assetsAllowance
      for loan losses
            
            $
            720
            
            
            $
            684Accrued
      expenses
            
            
            846
            
            
            
            781Unrealized
      loss on securities available for sale
            
            
            76
            
            
            
            518Security
      impairment
            
            
            95
            
            
            
            -Other
            
            
            -
            
            
            
            411,737
            
            
            
            2,024Deferred
      tax liabilitiesPremises
      and equipment
            
            
            (302
            )
            
            
            (312
            )Federal
      Home Loan Bank stock dividends
            
            
            (186
            )
            
            
            (186
            )Deferred
      loan fees
            
            
            (118
            )
            
            
            (129
            )Other
            
            
            (19
            )
            
            
            -(625
            )
            
            
            (627
            )Net
      deferred tax asset
            
            $
            1,112
            
            
            $
            1,397


(Continued)
 F-22


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE 7 - INCOME TAXES
(Continued)





Federal
income tax laws provided additional bad debt deductions through 1987 totaling
$2,372.  Accounting standards do not require a deferred tax liability
to be recorded on this amount, which liability otherwise would total $921 at
December 31, 2007.  If the Bank were liquidated or otherwise ceased to
be a bank or if tax laws were to change, this amount would be
expensed.








NOTE
8 - EMPLOYEE BENEFITS





The Bank
maintains a contributory profit sharing plan for its employees.  To be
eligible to participate, an employee must have completed one year of service, be
credited with 1,000 hours of service during that period, and have attained the
age of 18.  Bank contributions to the plan are discretionary and
determined by the Board of Directors.  Profit sharing expense was $100
and $150 for the years ended December 31, 2007 and 2006.





The Bank
offers a deferred compensation plan to its officers and
directors.  Participants can defer (i) twenty percent (20%) of such
Participant’s Base Salary;  (ii) fifty percent (50%) of such
Participant’s annual Bonus; (iii) and one hundred percent  (100%) of
such Participant’s Director’s Fees.  Deferred compensation balances
earn a rate equal to two percentage points above the prime rate, as published in
The Wall Street Journal.  The Bank’s liability for the deferred
compensation plan totaled $561 and $436 at December 31, 2007 and
2006.  Expenses related to the plan were $58 and $57 at December 31,
2007 and 2006, and are reflected as a part of compensation
expense.   The assets of the plan are subject to claim of the
general creditors of the Bank.





The Bank
sponsors nonqualified unfunded retirement plans for certain directors, which
provide annual benefit payments upon their retirement.  The Bank’s
liability for the plans totaled $1,499 and $1,466 at December 31, 2007 and
2006.  Expense related to the plans totaled $55 and $53 for the years
ended December 31, 2007 and 2006.








NOTE
9 - EMPLOYEE STOCK OWNERSHIP PLAN





As part
of the conversion transaction, the Company established an ESOP for the benefit
of substantially all employees.  The ESOP borrowed $944 from the
Company and used those funds to acquire 94,352 shares of the Company’s stock at
$10 per share.





Shares
issued to the ESOP are allocated to ESOP participants based on principal and
interest repayments made by the ESOP on the loan from the
Company.  The loan was secured by shares purchased with the loan
proceeds and was repaid by the ESOP with funds from the Company’s discretionary
contributions to the ESOP and earnings on the ESOP’s
assets.  Principal payments were scheduled to occur over a ten-year
period; however, the Company elected to prepay the loan and as of December 31,
2005, the loan was paid in full.  There are no plans to adopt another
Employee Stock Option Plan at this time.


(Continued)
 F-23


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
9 - EMPLOYEE STOCK OWNERSHIP PLAN (Continued)





Participants
receive the shares at the end of employment.  A participant may
require stock received to be repurchased unless the stock is traded on an
established market.





During
2005, approximately 18,870 shares of stock with an average fair value of $23.65
per share were committed to be released, resulting in ESOP compensation expense
of $447.  At December 31, 2007, all ESOP shares were
allocated.  Shares held by the ESOP at December 31 are as
follows:





2007
            
            
            2006Allocated
      shares
            
            
            78,626
            
            
            
            83,427Shares
      distributed from plan
            
            
            15,726
            
            
            
            10,925Total
      ESOP shares
            
            
            94,352
            
            
            
            94,352Fair
      value of allocated shares subject to repurchase obligation recorded in
      other liabilities
            
            $
            1,816
            
            
            $
            2,182








NOTE
10 - EMPLOYEE STOCK BENEFITS





The
Company has a stock option plan and a recognition and retention
plan.





Stock Option
Plan





Under the
stock option plan, certain key employees are granted options to purchase shares
of the Company’s Common Stock at fair value at the date of the
grant.  All stock options have an exercise price that is at least
equal to the fair market value of the Company’s stock on the date the options
were granted.  The Company adopted the stock plan in May 2003 under the
terms of which options for 114,685 shares of the Company’s common stock were
granted to directors, officers, and employees.  The options generally
become exercisable in equal installments over a five-year period from the date
of grant, and they expire ten years from the date of grant.  No option
may be exercised if such exercise would cause the mutual holding company to own
fewer than a majority of the total number of shares
outstanding.  There are a total of 7,456 options available for future
grant under the stock option plan.


(Continued)
 F-24


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
10 - EMPLOYEE STOCK BENEFITS (Continued)





The fair
value of each option award is estimated on the date of grant using a closed form
option valuation (Black-Scholes) model that uses the assumptions noted in the
table below.  Expected volatilities are based on historical
volatilities of the Company’s common stock.  The Company uses
historical data to estimate option exercise and post-vesting termination
behavior.  (Employee and management options are tracked
separately.)  The expected term of options granted is based on
historical data and represents the period of time that optionsgranted are expected to be outstanding, which
takes into account that the options are not transferable.  The
risk-free interest rate for the expected term of the option is based on the U.S.
Treasury yield curve in effect at the time of the grant.





There
were no stock options granted during 2007.  The fair value of options
granted during 2006 was determined using the following weighted-average
assumptions as of grant date.





2006Risk-free
      interest rate
            
            
            4.71
            %Expected
      option life
            
            2.2
      yearsExpected
      stock price volatility
            
            
            10.11
            %Dividend
      yield
            
            
            1.68
            %








A summary
of the activity in the stock option plan for 2007 follows:





Shares
            
            
            Weighted
                Average
                Exercise
              Price
            
            
            Weighted
                  Average
                  Remaining
                  Contractual
                Term
            
            
            Aggregate
              Intrinsic
              ValueOutstanding
      at beginning of year
            
            
            102,885
            
            
            $
            18.81Granted
            
            
            -
            
            
            
            -Exercised
            
            
            (2,400
            )
            
            
            18.75Forfeited
      or expired
            
            
            -
            
            
            
            -Outstanding
      at end of year
            
            
            100,485
            
            
            $
            18.81
            
            
            
            5.4
            
            
            $
            120Exercisable
      at end of year
            
            
            79,748
            
            
            $
            18.80
            
            
            
            5.4
            
            
            $
            96




(Continued)
 F-25


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
10 - EMPLOYEE STOCK BENEFITS (Continued)





Information
related to the stock option plan during each year follows:





2007
            
            
            2006Intrinsic
      value of options exercised
            
            $
            13
            
            
            $
            8Cash
      received from option exercises
            
            
            45
            
            
            
            30Tax
      benefit realized from option exercises
            
            
            4
            
            
            
            3Weighted
      average fair value of options granted
            
            
            -
            
            
            
            2.40








As of
December 31, 2007 there was $23 of total unrecognized compensation cost related
to nonvested stock options granted under the Plan.  The cost is
expected to be recognized during the first and second quarters in
2008.





Share Award
Plan





Pursuant
to its 2003 stock-based incentive plan, the Company awarded 58,971 shares of
restricted stock in May 2003.  These shares normally vest over a
five-year period, unless certain circumstances occur that trigger earlier
vesting according to the approved Recognition and Retention Plan
(“RRP”).  The unamortized cost of shares not yet earned (vested) is
reported as a reduction of stockholders’ equity.





A summary
of the activity in the RRP is as follows:





Weighted-AverageGrant-DateNonvested Shares
            
            Shares
            
            
            Fair ValueNonvested
      at January 1, 2007
            
            
            20,868
            
            
            $
            18.85Granted
            
            
            -
            
            
            
            -Vested
            
            
            10,434
            
            
            
            18.85Forfeited
            
            
            -
            
            
            
            -Nonvested
      at December 31, 2007
            
            
            10,434
            
            
            $
            18.85





As of
December 31, 2007, there was $78 of total unrecognized compensation cost related
to nonvested shares granted under the Plan.  The cost is expected to
be recognized during the first and second quarters in 2008.  The total
fair value of shares vested during the years ended December 31, 2007 and 2006
was $231 and $201.




(Continued)
 F-26


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
11 - FAIR VALUES OF FINANCIAL INSTRUMENTS





The
carrying amount and estimated fair value of financial instruments were as
follows.





December 31, 2007
            
            
            December 31, 2006Carrying
            
            
            Fair
            
            
            Carrying
            
            
            FairAmount
            
            
            Value
            
            
            Amount
            
            
            ValueFinancial
      assetsCash
      and cash equivalents
            
            $
            18,373
            
            
            $
            18,373
            
            
            $
            43,848
            
            
            $
            43,848Certificates
      of deposit
            
            
            2,997
            
            
            
            2,997
            
            
            
            5,490
            
            
            
            5,490Securities
      available for sale
            
            
            81,322
            
            
            
            81,322
            
            
            
            68,774
            
            
            
            68,774Securities
      held to maturity
            
            
            125
            
            
            
            125
            
            
            
            204
            
            
            
            204Loans,
      net
            
            
            132,966
            
            
            
            133,276
            
            
            
            138,377
            
            
            
            137,851Federal
      Home Loan Bank stock
            
            
            2,450
            
            
            
            2,450
            
            
            
            2,450
            
            
            
            2,450Accrued
      interest receivable
            
            
            1,061
            
            
            
            1,061
            
            
            
            1,021
            
            
            
            1,021Financial
      liabilitiesDeposits
            
            
            (190,534
            )
            
            
            (191,164
            )
            
            
            (202,176
            )
            
            
            (202,236
            )FHLB
      advances
            
            
            (23,350
            )
            
            
            (23,506
            )
            
            
            (28,750
            )
            
            
            (28,267
            )Advances
      from borrowers for taxes  and insurance
            
            
            (1,551
            )
            
            
            (1,551
            )
            
            
            (1,655
            )
            
            
            (1,655
            )Accrued
      interest payable
            
            
            (431
            )
            
            
            (431
            )
            
            
            (401
            )
            
            
            (401
            )








The
methods and assumptions used to estimate fair value are described as
follows.





Carrying
amount is the estimated fair value for cash and cash equivalents, short-term
borrowings, Federal Home Loan Bank stock, accrued interest receivable and
payable, demand deposits, short-term debt, and variable rate loans or deposits
that reprice frequently and fully.  Security fair value is based on
market prices or dealer quotes and, if no such information is available, on the
rate and term of the security and information about the issuer.  For
fixed rate loans or deposits and for variable rate loans or deposits with
infrequent repricing or repricing limits, fair value is based on discounted cash
flows using current market rates applied to the estimated life and credit
risk.  Fair values for impaired loans are estimated using discounted
cash flow analysis or underlying collateral values.  Fair value of
loans held for sale is based on market quotes.  Fair value of debt is
based on current rates for similar financing.  Fair value of
off-balance-sheet items is based on the current fees or cost that would be
charged to enter into or terminate such arrangements.





NOTE
12 - REGULATORY CAPITAL





The Bank
is subject to regulatory capital requirements administered by federal banking
agencies.  Capital adequacy guidelines and, additionally for banks,
prompt corrective action regulations involve quantitative measures of assets,
liabilities, and certain off-balance-sheet items calculated under regulatory
accounting practices.  Capital amounts and classifications are also
subject to qualitative judgments by regulators.  Failure to meet
capital requirements can initiate regulatory action.


(Continued)
 F-27


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
12 - REGULATORY CAPITAL (Continued)







Prompt
corrective action regulations provide five classifications:  well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized, although these terms are not
used to represent overall financial condition.  If adequately
capitalized, regulatory approval is required to accept brokered
deposits.  If undercapitalized, capital distributions are limited, as
is asset growth and expansion, and capital restoration plans are
required.  The Bank’s actual and required capital amounts and ratios
are presented below:





To
      Be WellCapitalized
      UnderFor
      Capital
            
            
            Prompt
      CorrectiveActual
            
            
            Adequacy Purposes
            
            
            Action ProvisionsAmount
            
            
            Ratio
            
            
            Amount
            
            
            Ratio
            
            
            Amount
            
            
            RatioAs of December 31,
      2007Total
      risk-based capital to risk-weighted assets
            
            $
            30,588
            
            
            
            24.96
            %
            
            $
            9,802
            
            
            
            8.0
            %
            
            $
            12,253
            
            
            
            10.0
            %Tier
      I (core) capital to risk- weighted assets
            
            
            29,225
            
            
            
            23.85
            
            
            
            4,901
            
            
            
            4.0
            
            
            
            7,352
            
            
            
            6.0Tier
      I (core) capital to adjusted total assets
            
            
            29,225
            
            
            
            11.75
            
            
            
            9,946
            
            
            
            4.0
            
            
            
            12,432
            
            
            
            5.0As of December 31,
      2006Total
      risk-based capital to risk-weighted assets
            
            $
            29,944
            
            
            
            23.7
            %
            
            $
            10,122
            
            
            
            8.0
            %
            
            $
            12,652
            
            
            
            10.0
            %Tier
      I (core) capital to risk- weighted assets
            
            
            28,362
            
            
            
            22.4
            
            
            
            5,061
            
            
            
            4.0
            
            
            
            7,591
            
            
            
            6.0Tier
      I (core) capital to adjusted total assets
            
            
            28,695
            
            
            
            11.1
            
            
            
            10,379
            
            
            
            4.0
            
            
            
            12,974
            
            
            
            5.0





The
Qualified Thrift Lender test requires that at least 65% of assets be maintained
in housing-related finance and other specified areas.  If this test is
not met, limits are placed on growth, branching, new investments, Federal Home
Loan Bank advances, and dividends or the Bank must convert to a commercial bank
charter.  Management believes that this test is met.





As of
December 31, 2007, the most recent notification from the Office of Thrift
Supervision (“the OTS”) categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action.  There are no
conditions or events since that notification that management believes have
changed the Bank’s category.





During
2007, the Company paid a cash dividend of $0.11 per share for each quarter of
the year.  During 2006, the Company paid a cash dividend of $0.10 per
share during the first three


(Continued)
 F-28


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
12 - REGULATORY CAPITAL (Continued)





quarters
of the year, and $0.11 per share for the last quarter of the
year.  The OTS approved a waiver of dividends on the shares held by
the mutual holding company.  The amount of dividends waived, totaling
$540 for 2007, and $503 for 2006, is a restriction on retained earnings of the
Company.








NOTE
13 - EARNINGS PER COMMON SHARE





A
reconciliation of the numerator and denominator of the earnings per common share
computation for the year ended December 31 follows:





2007
            
            
            2006BasicNet
      income
            
            $
            559
            
            
            $
            911Weighted
      average common shares outstanding
            
            
            2,101,898
            
            
            
            2,118,093Basic
      earnings per common share
            
            $
            0.27
            
            
            $
            0.43DilutedNet
      income
            
            $
            559
            
            
            $
            911Weighted
      average common shares outstanding for basic earnings per common
      share
            
            
            2,101,898
            
            
            
            2,118,093Add:  dilutive
      effects of assumed exercises of stock options and stock
    awards
            
            
            22,518
            
            
            
            20,779Average
      shares and dilutive potential common shares
            
            
            2,124,416
            
            
            
            2,138,872Diluted
      earnings per common share
            
            $
            0.26
            
            
            $
            .43





At
December 31, 2007 and 2006, there were no antidilutive shares.








NOTE
14 - OFF-BALANCE-SHEET ACTIVITIES





Some
financial instruments, such as loan commitments, credit lines, letters of
credit, and overdraft protection, are issued to meet customer financing
needs.  These are agreements to provide credit or to support the
credit of others, as long as conditions established in the contract are met, and
usually have expiration dates.  Commitments may expire without being
used.  Off-balance-sheet risk to credit loss exists up to the face
amount of these instruments, although material losses are not
anticipated.  The same credit policies are used to make such
commitments as are used for loans, including obtaining collateral at exercise of
the commitment.


(Continued)
 F-29


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
14 - OFF-BALANCE-SHEET ACTIVITIES (Continued)







The
contractual amount of financial instruments with off-balance-sheet risk was as
follows at year end:





2007
            
            
            2006Fixed
            
            
            Variable
            
            
            Fixed
            
            
            VariableRate
            
            
            Rate
            
            
            Rate
            
            
            RateCommitments
      to make loans
            
            $
            5,645
            
            
            $
            410
            
            
            $
            413
            
            
            $
            4,540Unused
      lines of credit and letters of credit
            
            
            -
            
            
            
            14,734
            
            
            
            -
            
            
            
            15,730





Commitments
to make loans are generally made for periods of 120 days or less.  The
fixed rate loan commitments have interest rates ranging from 5.13% to 7.75% and
the commitments are to extend credit ranging from 10 to 30 years.





The Bank
has previously sold fixed rate mortgages to Fannie Mae and Freddie Mac with and
without recourse.  Recourse obligations on sold loans are recorded at
fair value.





2007
            
            
            2006Contract
            
            
            Carrying
            
            
            Contract
            
            
            CarryingAmount
            
            
            Value
            
            
            Amount
            
            
            ValueLoans
      sold with recourse
            
            $
            108
            
            
            $
            108
            
            
            $
            123
            
            
            $
            123





In the
normal course of business, there are various outstanding contingent liabilities,
such as claims and legal actions that are not reflected in the financial
statements.  In the opinion of management, no material losses are
anticipated as a result of these actions or claims.


(Continued)
 F-30


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
15 - OTHER COMPREHENSIVE INCOME





Other
comprehensive income components and related taxes were as follows:





2007
            
            
            2006Unrealized
      holding gains and losses on securities available for sale
            
            $
            893
            
            
            $
            327Less
      reclassification adjustments for gains and losses later recognized in
      income
            
            
            (244
            )
            
            
            -Net
      unrealized gains and losses
            
            
            1,137
            
            
            
            327Tax
      effect
            
            
            (442
            )
            
            
            (128
            )Other
      comprehensive income
            
            $
            695
            
            
            $
            199








NOTE
16 - PARENT COMPANY CONSOLIDATED FINANCIAL STATEMENTS





The
following are the condensed balance sheets and statements of income and cash
flows for AJS Bancorp, Inc. without subsidiary.





CONDENSED
BALANCE SHEETS


December
31, 2007 and 2006





2007
            
            
            2006ASSETSCash
      and cash equivalents
            
            $
            619
            
            
            $
            3,363Investment
      in bank subsidiary
            
            
            29,106
            
            
            
            27,548$
            29,725
            
            
            $
            30,911LIABILITIES
      AND STOCKHOLDERS’ EQUITYLiabilities
            
            $
            1,797
            
            
            $
            2,162Stockholders’
      equity
            
            
            27,928
            
            
            
            28,749$
            29,725
            
            
            $
            30,911


(Continued)
 F-31


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
16 - PARENT COMPANY CONSOLIDATED FINANCIAL STATEMENTS


(Continued)





CONDENSED
STATEMENTS OF INCOME


For the
years ended December 31, 2007 and 2006




2007
              
              
              2006IncomeESOP
      loan
              
              $
              -
              
              
              $
              -Deposits
      in financial institutions
              
              
              128
              
              
              
              133Dividends
      from subsidiary
              
              
              -
              
              
              
              1,500128
              
              
              
              1,633Other
      expensesOther
      operating expenses
              
              
              150
              
              
              
              133Income
      (loss) before income taxes and equity inundistributed
      earnings
              
              
              (22
              )
              
              
              1,500Income
      taxes
              
              
              (8
              )
              
              
              -Income
      (loss) before equity in undistributedearnings
      of bank subsidiary
              
              
              (14
              )
              
              
              1,500Equity
      in undistributed earnings of bank subsidiary
              
              
              573
              
              
              
              (589
              )Net
      income
              
              $
              559
              
              
              $
              911




(Continued)
 F-32


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
16 - PARENT COMPANY CONSOLIDATED FINANCIAL STATEMENTS


(Continued)





CONDENSED
STATEMENTS OF CASH FLOWS


For the
years ended December 31, 2007 and 2006





2007
              
              
              2006Operating
      activitiesNet
      income
              
              $
              559
              
              
              $
              911Adjustments
      to reconcile net income to netcash
      provided by (used in) operating activities:Equity
      in undistributed earnings ofbank
      subsidiary
              
              
              (573
              )
              
              
              589Change
      in other assets and liabilities
              
              
              (1
              )
              
              
              14Net
      cash provided by (used in)operating
      activities
              
              
              (15
              )
              
              
              1,514Financing
      activitiesDividends
      paid
              
              
              (384
              )
              
              
              (363
              )Purchase
      of common stock
              
              
              (2,390
              )
              
              
              (340
              )Proceeds
      for exercising stock options
              
              
              45
              
              
              
              30Net
      cash used in financing activities
              
              
              (2,729
              )
              
              
              (673
              )Net
      change in cash and cash equivalents
              
              
              (2,744
              )
              
              
              841Cash
      and cash equivalents at beginning of year
              
              
              3,363
              
              
              
              2,522Cash
      and cash equivalents at end of year
              
              $
              619
              
              
              $
              3,363




(Continued)
 F-33


AJS
BANCORP, INC.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007 and 2006


(Dollars
in thousands, except per share data)








NOTE
16 - QUARTERLY FINANCIAL DATA (UNAUDITED)








Net
            
            
            Earnings
            
            
            EarningsInterest
            
            
            Net Interest
            
            
            Income
            
            
            Per Share
            
            
            Per Share2007
            
            Income
            
            
            Income
            
            
            (Loss)
            
            
            Basic
            
            
            DilutedFirst
      quarter
            
            $
            3,578
            
            
            $
            1,638
            
            
            $
            251
            
            
            $
            0.12
            
            
            $
            0.
      12Second
      quarter
            
            
            3,526
            
            
            
            1,566
            
            
            
            159
            
            
            
            0.08
            
            
            
            0.07Third
      quarter
            
            
            3,472
            
            
            
            1,530
            
            
            
            245
            
            
            
            0.12
            
            
            
            0.12Fourth
      quarter
            
            
            3,314
            
            
            
            1,456
            
            
            
            (96
            )
            
            
            (0.05
            )
            
            
            (0.05
            )2006First
      quarter
            
            $
            3,239
            
            
            $
            1,652
            
            
            $
            254
            
            
            $
            0.12
            
            
            
            0.12Second
      quarter
            
            
            3,325
            
            
            
            1,639
            
            
            
            240
            
            
            
            0.11
            
            
            
            0.11Third
      quarter
            
            
            3,460
            
            
            
            1,675
            
            
            
            248
            
            
            
            0.12
            
            
            
            0.12Fourth
      quarter
            
            
            3,565
            
            
            
            1,606
            
            
            
            16
            
            
            
            0.08
            
            
            
            0.08






F-34