|  x                              | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------------------------------------|-----------------------------------------------------------------------------------------|
|                                 |                                                                                    |
| FOR THE QUARTER ENDED MARCH 31, 2010 |
|                                 |                                                                                    |
|  o                              | TRANSITION REPORT PURSUANT TO SECTION 13 OF THE EXCHANGE ACT FOR THE TRANSITION PERIOD  |

| VSB Bancorp, Inc.                                              |
|----------------------------------------------------------------|
| (Exact name of registrant as specified in its charter)         |
|                                                           |
| New York                                                       |
| (State or other jurisdiction of incorporation or organization) |
|                                                           |
| 11-3680128                                                     |
| (I. R. S. Employer Identification No.)                         |
|                                                           |
| 4142 Hylan Boulevard, Staten Island, New York 10308            |
| (Address of principal executive offices)                       |
|                                                           |
| (718) 979-1100                                                 |
| Registrant’s telephone number                            |
|                                                           |
| Common Stock                                                   |
| (Title of Class)                                               |

| Large Accelerated Filer o | Accelerated Filer o | Non-Accelerated Filer o | Smaller Reporting Company x |
|---------------------------|--------------------------|-------------------------|-----------------------------|

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|           |                                                                                                                                                        |   | Page     |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
|           | PART I                                                                                                                                                      |   |     |   |
|           |                                                                                                                                                        |   |     |   |
| Item 1         | Consolidated Statements of Financial Condition as of March 31, 2010 and December 31, 2009 (unaudited)                                                       |   | 4        |   |
|           |                                                                                                                                                        |   |     |   |
|           | Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and 2009 (unaudited)                                                        |   | 5        |   |
|           |                                                                                                                                                        |   |     |   |
|           | Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2010 and the Year Ended December 31, 2009 (unaudited) |   | 6        |   |
|           |                                                                                                                                                        |   |     |   |
|           | Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009 (unaudited)                                                        |   | 7        |   |
|           |                                                                                                                                                        |   |     |   |
|           | Notes to Consolidated Financial Statements for the Three Months Ended March 31, 2010 and 2009 (unaudited)                                                   |   | 8 to 17  |   |
|           |                                                                                                                                                        |   |     |   |
| Item 2         | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                                 |   | 18 to 26 |   |
|           |                                                                                                                                                        |   |     |   |
| Item 3         | Control and Procedures                                                                                                                                      |   | 26       |   |
|           |                                                                                                                                                        |   |     |   |
|           | PART II                                                                                                                                                     |   |     |   |
|           |                                                                                                                                                        |   |     |   |
| Item 1         | Legal Proceedings                                                                                                                                           |   | 26       |   |
|           |                                                                                                                                                        |   |     |   |
| Signature Page |                                                                                                                                                        | 27     |     |
|           |                                                                                                                                                        |   |     |   |
|           | Exhibit 31.1, 31.2, 32.1, 32.2                                                                                                                              |   |     |   |

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|   | ● | deterioration in local, regional, national or global economic conditions which could result in, among other things, an increase in loan delinquencies, a decrease in property values, or a change in the real estate turnover rate; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | changes in market interest rates or changes in the speed at which market interest rates change;                                                                                                                                     |
|   | ● | changes in laws and regulations affecting the financial service industry;                                                                                                                                                           |
|   | ● | changes in the public’s perception of financial institutions in general and banks in particular;                                                                                                                              |
|   | ● | changes in competition; and                                                                                                                                                                                                         |
|   | ● | changes in consumer preferences by our customers or the customers of our business borrowers.                                                                                                                                        |

----

Consolidated Statements of Financial Condition

|                                                                                                                                          |
|-----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                          |   | March 31, 2010 |   |   | December 31, 2009 |   |
|                                                                                                                                          |   |   |   |   |   |   |
| Assets:                                                                                                                                       |   |   |   |   |   |   |
| Cash and due from banks                                                                                                                       |   | $ | 44,640,167 |   |   | $ | 39,716,919 |   |
| Investment securities, available for sale                                                                                                     |   |   | 112,989,150 |   |   |   | 113,912,404 |   |
| Loans receivable                                                                                                                              |   |   | 77,997,578 |   |   |   | 78,834,156 |   |
| Allowance for loan loss                                                                                                                       |   |   | (1,161,562 | ) |   |   | (1,063,454 | ) |
| Loans receivable, net                                                                                                                         |   |   | 76,836,016 |   |   |   | 77,770,702 |   |
| Bank premises and equipment, net                                                                                                              |   |   | 3,073,451 |   |   |   | 3,204,063 |   |
| Accrued interest receivable                                                                                                                   |   |   | 658,764 |   |   |   | 722,228 |   |
| Other assets                                                                                                                                  |   |   | 1,568,403 |   |   |   | 1,673,556 |   |
| Total assets                                                                                                                                  |   | $ | 239,765,951 |   |   | $ | 236,999,872 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| Liabilities and stockholders’ equity:                                                                                                   |   |   |   |   |   |   |   |   |
| Liabilities:                                                                                                                                  |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                                                     |   |   |   |   |   |   |   |   |
| Demand and checking                                                                                                                           |   | $ | 69,822,290 |   |   | $ | 70,372,448 |   |
| NOW                                                                                                                                           |   |   | 33,384,458 |   |   |   | 32,501,930 |   |
| Money market                                                                                                                                  |   |   | 29,156,607 |   |   |   | 28,124,315 |   |
| Savings                                                                                                                                       |   |   | 15,041,529 |   |   |   | 15,001,936 |   |
| Time                                                                                                                                          |   |   | 64,862,522 |   |   |   | 64,669,128 |   |
| Total deposits                                                                                                                                |   |   | 212,267,406 |   |   |   | 210,669,757 |   |
| Escrow deposits                                                                                                                               |   |   | 383,412 |   |   |   | 316,329 |   |
| Accounts payable and accrued expenses                                                                                                         |   |   | 2,052,126 |   |   |   | 1,529,837 |   |
| Total liabilities                                                                                                                             |   |   | 214,702,944 |   |   |   | 212,515,923 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| Stockholders’ equity:                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| Common stock, ($.0001 par value, 3,000,000 shares authorized, 1,945,134 issued, 1,762,191outstanding at March 31, 2010 and December 31, 2009) |   |   | 195 |   |   |   | 195 |   |
| Additional paid in capital                                                                                                                    |   |   | 9,303,081 |   |   |   | 9,317,719 |   |
| Retained earnings                                                                                                                             |   |   | 16,441,421 |   |   |   | 16,112,741 |   |
| Treasury stock, at cost (182,943 shares at March 31, 2010 and December 31, 2009)                                                              |   |   | (1,840,249 | ) |   |   | (1,840,249 | ) |
| Unearned Employee Stock Ownership Plan shares                                                                                                 |   |   | (690,402 | ) |   |   | (732,672 | ) |
| Accumulated other comprehensive gain, net of taxes of $1,559,262 and $1,371,416, respectively                                                 |   |   | 1,848,961 |   |   |   | 1,626,215 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| Total stockholders’ equity                                                                                                              |   |   | 25,063,007 |   |   |   | 24,483,949 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders’ equity                                                                                              |   | $ | 239,765,951 |   |   | $ | 236,999,872 |   |

----

Consolidated Statements of Operations

|                                              |   | Three months   |      |   | Three months   |   |
|---------------------------------------------------|--------|----------------|-----------|--------|----------------|--------|
|                                              |   | ended          |      |   | ended          |   |
|                                              |   | March 31, 2010 |      |   | March 31, 2009 |   |
| Interest and dividend income:                     |   |           |      |   |           |   |
| Loans receivable                                  |   | $              | 1,390,296 |   |           | $      | 1,330,706 |   |
| Investment securities                             |   |           | 1,162,222 |   |           |   | 1,382,619 |   |
| Other interest earning assets                     |   |           | 9,207     |   |           |   | 4,741 |   |
| Total interest income                             |   |           | 2,561,725 |   |           |   | 2,718,066 |   |
| Interest expense:                                 |   |           |      |   |           |   |   |   |
| NOW                                               |   |           | 39,252    |   |           |   | 26,783 |   |
| Money market                                      |   |           | 62,486    |   |           |   | 60,511 |   |
| Savings                                           |   |           | 11,460    |   |           |   | 13,102 |   |
| Time                                              |   |           | 160,117   |   |           |   | 310,552 |   |
| Total interest expense                            |   |           | 273,315   |   |           |   | 410,948 |   |
| Net interest income                               |   |           | 2,288,410 |   |           |   | 2,307,118 |   |
| Provision for loan loss                           |   |           | 90,000    |   |           |   | 275,000 |   |
| Net interest income after provision for loan loss |   |           | 2,198,410 |   |           |   | 2,032,118 |   |
|                                              |   |           |      |   |           |   |   |   |
| Non-interest income:                              |   |           |      |   |           |   |   |   |
| Loan fees                                         |   |           | 2,304     |   |           |   | 25,751 |   |
| Service charges on deposits                       |   |           | 540,701   |   |           |   | 545,862 |   |
| Net rental income                                 |   |           | 11,983    |   |           |   | 11,517 |   |
| Other income                                      |   |           | 46,686    |   |           |   | 30,039 |   |
| Total non-interest income                         |   |           | 601,674   |   |           |   | 613,169 |   |
| Non-interest expenses:                            |   |           |      |   |           |   |   |   |
| Salaries and benefits                             |   |           | 963,616   |   |           |   | 911,983 |   |
| Occupancy expenses                                |   |           | 363,790   |   |           |   | 379,081 |   |
| Legal expense                                     |   |           | 89,521    |   |           |   | 74,649 |   |
| Professional fees                                 |   |           | 66,200    |   |           |   | 77,000 |   |
| Computer expense                                  |   |           | 66,955    |   |           |   | 66,800 |   |
| Directors’ fees                             |   |           | 58,950    |   |           |   | 51,100 |   |
| FDIC and NYSBD assessments                        |   |           | 94,000    |   |           |   | 75,500 |   |
| Other expenses                                    |   |           | 300,344   |   |           |   | 316,350 |   |
| Total non-interest expenses                       |   |           | 2,003,376 |   |           |   | 1,952,463 |   |
| Income before income taxes                        |   |           | 796,708   |   |           |   | 692,824 |   |
| Provision/(benefit) for income taxes:             |   |           |      |   |           |   |   |   |
| Current                                           |   |           | 442,310   |   |           |   | 425,850 |   |
| Deferred                                          |   |           | (77,824   | )      |           |   | (106,077 | ) |
| Total provision for income taxes                  |   |           | 364,486   |   |           |   | 319,773 |   |
| Net income                                        |   | $              | 432,222   |   |           | $      | 373,051 |   |
| Earnings per share:                               |   |           |      |   |           |   |   |   |
| Basic                                             |   | $              | 0.25      |   |           | $      | 0.21 |   |
|                                              |   |           |      |   |           |   |   |   |
| Diluted                                           |   | $              | 0.25      |   |           | $      | 0.20 |   |
|                                              |   |           |      |   |           |   |   |   |
| Comprehensive income                              |   | $              | 654,968   |   |           | $      | 1,274,942 |   |
|                                              |   |           |      |   |           |   |   |   |
| Book value per common share                       |   | $              | 14.22     |   |           | $      | 13.08 |   |

----

Consolidated Statements of Changes in Stockholders’ Equity

|                                                                           |   |      |      |   |   |       |   |     |      |     |   |       |   |   | Accumulated   |   |   |                |   |
|--------------------------------------------------------------------------------|--------|-----------|-----------|--------|--------|------------|--------|----------|-----------|----------|--------|------------|--------|--------|---------------|--------|--------|---------------------|--------|
|                                                                           |   | Number of |      |   |   | Additional |   |     |      | Treasury |   | Unearned   |   |   | Other         |   |   | Total               |   |
|                                                                           |   | Common    |      | Common |   | Paid-In    |   | Retained |      | Stock,   |   | ESOP       |   |   | Comprehensive |   |   | Stockholders’ |   |
|                                                                           |   | Shares    |      | Stock  |   | Capital    |   | Earnings |      | at cost  |   | Shares     |   |   | Gain          |   |   | Equity              |   |
|                                                                           |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |
| Balance at January 1, 2009                                                     |   |      | 1,882,461 |   | $      | 192        |   | $        | 9,200,010 |     | $      | 14,714,143 |   | $      | (395,891      | )      | $      | (901,750            | )      |   | $ | 587,063 |   |   | $ | 23,203,767 |   |
|                                                                           |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |
| Exercise of stock option, including tax benefit                                |   |      | 21,250    |   |   | 3          |   |     | 118,624   |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   | 118,627 |   |
| Stock-based compensation                                                       |   |      |      |   |   |       |   |     | 1,278     |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   | 1,278 |   |
| Amortization of earned portion of ESOP common stock                            |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   | 169,078             |   |   |   |   |   |   |   | 169,078 |   |
| Amortization of cost over fair value - ESOP                                    |   |      |      |   |   |       |   |     | (2,193    | )        |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   | (2,193 | ) |
| Cash dividends declared ($0.24 per share)                                      |   |      |      |   |   |       |   |     |      |     |   | (423,679   | )      |   |          |   |   |                |   |   |   |   |   |   |   | (423,679 | ) |
| Purchase of treasury stock, at cost                                            |   |      | (141,520  | )      |   |       |   |     |      |     |   |       |   |   | (1,444,358    | )      |   |                |   |   |   |   |   |   |   | (1,444,358 | ) |
| Comprehensive income:                                                          |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |
| Net income                                                                     |   |      |      |   |   |       |   |     |      |     |   | 1,822,277  |   |   |          |   |   |                |   |   |   |   |   |   |   | 1,822,277 |   |
| Other comprehensive income, net:                                               |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |
| Change in unrealized gain on securities available for sale, net of tax effects |   |      | —   |   |   | —    |   |     | —   |     |   | —    |   |   | —       |   |   | —             |   |   |   | 1,039,152 |   |   |   | 1,039,152 |   |
| Total comprehensive income                                                     |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   | 2,861,429 |   |
|                                                                           |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2009                                                   |   |      | 1,762,191 |   | $      | 195        |   | $        | 9,317,719 |     | $      | 16,112,741 |   | $      | (1,840,249    | )      | $      | (732,672            | )      |   | $ | 1,626,215 |   |   | $ | 24,483,949 |   |
|                                                                           |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |
| Stock-based compensation                                                       |   |      |      |   |   |       |   |     | 1,944     |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   | 1,944 |   |
| Amortization of earned portion of ESOP common stock                            |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   | 42,270              |   |   |   |   |   |   |   | 42,270 |   |
| Amortization of cost over fair value - ESOP                                    |   |      |      |   |   |       |   |     | (16,582   | )        |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   | (16,582 | ) |
| Cash dividends declared ($0.06 per share)                                      |   |      |      |   |   |       |   |     |      |     |   | (103,542   | )      |   |          |   |   |                |   |   |   |   |   |   |   | (103,542 | ) |
| Comprehensive income:                                                          |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |
| Net income                                                                     |   |      |      |   |   |       |   |     |      |     |   | 432,222    |   |   |          |   |   |                |   |   |   |   |   |   |   | 432,222 |   |
| Other comprehensive income, net:                                               |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |
| Change in unrealized gain on securities available for sale, net of tax effects |   |      | —   |   |   | —    |   |     | —   |     |   | —    |   |   | —       |   |   | —             |   |   |   | 222,746 |   |   |   | 222,746 |   |
| Total comprehensive income                                                     |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   | 654,968 |   |
|                                                                           |   |      |      |   |   |       |   |     |      |     |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |
| Balance at March 31, 2010                                                      |   |      | 1,762,191 |   | $      | 195        |   | $        | 9,303,081 |     | $      | 16,441,421 |   | $      | (1,840,249    | )      | $      | (690,402            | )      |   | $ | 1,848,961 |   |   | $ | 25,063,007 |   |

----

Consolidated Statements of Cash Flows

|                                                                             |   | Three months   |       |   | Three months   |   |
|----------------------------------------------------------------------------------|--------|----------------|------------|--------|----------------|--------|
|                                                                             |   | ended          |       |   | ended          |   |
|                                                                             |   | March 31, 2010 |       |   | March 31, 2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                            |   |           |       |   |           |   |
| Net income                                                                       |   | $              | 432,222    |   |           | $      | 373,051 |   |
| Adjustments to reconcile net income to net cash provided by operating activities |   |           |       |   |           |   |   |   |
| Depreciation and amortization                                                    |   |           | 152,206    |   |           |   | 170,554 |   |
| Accretion of income, net of amortization of premium                              |   |           | 8,770      |   |           |   | (15,347 | ) |
| ESOP compensation expense                                                        |   |           | 25,688     |   |           |   | 19,704 |   |
| Stock-based compensation expense                                                 |   |           | 1,944      |   |           |   | 320 |   |
| Provision for loan losses                                                        |   |           | 90,000     |   |           |   | 275,000 |   |
| Decrease in prepaid and other assets                                             |   |           | 105,153    |   |           |   | 240,150 |   |
| Decrease in accrued interest receivable                                          |   |           | 63,464     |   |           |   | 3,283 |   |
| Increase in deferred income taxes                                                |   |           | (77,824    | )      |           |   | (241,086 | ) |
| Increase in accrued expenses and other liabilities                               |   |           | 412,267    |   |           |   | 366,439 |   |
| Net cash provided by operating activities                                        |   |           | 1,213,890  |   |           |   | 1,192,068 |   |
|                                                                             |   |           |       |   |           |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                            |   |           |       |   |           |   |   |   |
| Net decrease/(increase) in loan receivable                                       |   |           | 868,869    |   |           |   | (2,780,229 | ) |
| Proceeds from repayment and calls of investment securities, available for sale   |   |           | 10,242,054 |   |           |   | 7,343,401 |   |
| Purchases of investment securities, available for sale                           |   |           | (8,941,161 | )      |           |   | (5,799,823 | ) |
| Purchases of premises and equipment, net                                         |   |           | (21,594    | )      |           |   | (58,961 | ) |
| Net cash provided by/(used in) investing activities                              |   |           | 2,148,168  |   |           |   | (1,295,612 | ) |
|                                                                             |   |           |       |   |           |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                            |   |           |       |   |           |   |   |   |
| Net increase in deposits                                                         |   |           | 1,664,732  |   |           |   | 8,923,103 |   |
| Purchase of treasury stock, at cost                                              |   |           | —    |   |           |   | (462,972 | ) |
| Cash dividends paid                                                              |   |           | (103,542   | )      |           |   | (106,867 | ) |
| Net cash provided by financing activities                                        |   |           | 1,561,190  |   |           |   | 8,353,264 |   |
|                                                                             |   |           |       |   |           |   |   |   |
| NET INCREASE IN CASH AND CASH EQUIVALENTS                                        |   |           | 4,923,248  |   |           |   | 8,249,720 |   |
|                                                                             |   |           |       |   |           |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                   |   |           | 39,716,919 |   |           |   | 21,240,223 |   |
|                                                                             |   |           |       |   |           |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                         |   | $              | 44,640,167 |   |           | $      | 29,489,943 |   |
|                                                                             |   |           |       |   |           |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                |   |           |       |   |           |   |   |   |
| Cash paid during the period for:                                                 |   |           |       |   |           |   |   |   |
| Interest                                                                         |   | $              | 302,984    |   |           | $      | 555,899 |   |
| Taxes                                                                            |   | $              | 86,725     |   |           | $      | 68,850 |   |

----

NOTES TO  CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009 (UNAUDITED) 

----

----

----

----

| Reconciliation of EPS                       |   | Three months endedMarch 31, 2010 |    |   | Three months endedMarch 31, 2009 |   |
|---------------------------------------------|--------|----------------------------------|---------|--------|----------------------------------|--------|
|                                        |   |  NetIncome                  |    |   | WeightedAverageShares            |   |   | Per ShareAmount |   |   | NetIncome |   |   | WeightedAverageShares |   |   | Per ShareAmount |   |
|                                        |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings per common share             |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income available to common stockholders |   | $                                | 432,222 |   |                             |   | 1,725,522 |   |   | $ | 0.25 |   |   | $ | 373,051 |   |   |   | 1,807,984 |   |   | $ | 0.21 |   |
|                                        |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect of dilutive shares              |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares, if converted       |   |                             |    |   |                             |   | 19,098 |   |   |   |   |   |   |   |   |   |   |   | 22,667 |   |   |   |   |   |
|                                        |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings per common share           |   |                             |    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income available to common stockholders |   | $                                | 432,222 |   |                             |   | 1,744,620 |   |   | $ | 0.25 |   |   | $ | 373,051 |   |   |   | 1,830,651 |   |   | $ | 0.20 |   |

----

----

|                                |   | March 31, 2010 |        |
|-------------------------------------|--------|----------------|-------------|
|                                |   | Amortized      |        |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                |   | Cost           |        |   | Gains |   |   | Losses |   |   | Value |   |
|                                |   |           |        |   |   |   |   |   |   |   |   |   |
| FNMA MBS - Residential              |   | $              | 4,693,683   |   |   | $ | 192,628 |   |   | $ | — |   |   | $ | 4,886,311 |   |
| GNMA MBS - Residential              |   |           | 1,227,408   |   |   |   | 66,356 |   |   |   | — |   |   |   | 1,293,764 |   |
| Whole Loan MBS - Residential        |   |           | 1,703,238   |   |   |   | 32,036 |   |   |   | — |   |   |   | 1,735,274 |   |
| Collateralized mortgage obligations |   |           | 101,956,598 |   |   |   | 3,244,389 |   |   |   | (127,186 | ) |   |   | 105,073,801 |   |
|                                |   | $              | 109,580,927 |   |   | $ | 3,535,409 |   |   | $ | (127,186 | ) |   | $ | 112,989,150 |   |

|                                |   | December 31, 2009 |        |
|-------------------------------------|--------|-------------------|-------------|
|                                |   | Amortized         |        |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                |   | Cost              |        |   | Gains |   |   | Losses |   |   | Value |   |
|                                |   |              |        |   |   |   |   |   |   |   |   |   |
| FNMA MBS - Residential              |   | $                 | 4,855,213   |   |   | $ | 185,607 |   |   | $ | — |   |   | $ | 5,040,820 |   |
| GNMA MBS - Residential              |   |              | 1,265,428   |   |   |   | 55,812 |   |   |   | — |   |   |   | 1,321,240 |   |
| Whole Loan MBS - Residential        |   |              | 1,860,603   |   |   |   | 15,135 |   |   |   | (18,845 | ) |   |   | 1,856,893 |   |
| Collateralized mortgage obligations |   |              | 102,933,529 |   |   |   | 3,085,224 |   |   |   | (325,302 | ) |   |   | 105,693,451 |   |
|                                |   | $                 | 110,914,773 |   |   | $ | 3,341,778 |   |   | $ | (344,147 | ) |   | $ | 113,912,404 |   |

----

|                                   |   | March 31, 2010 |        |
|----------------------------------------|--------|----------------|-------------|
| Securities, Available for Sale         |   | Amortized      |        |   | Fair |   |
| Expected Maturity                      |   | Cost           |        |   | Value |   |
|                                   |   |           |        |   |   |   |   |   |
| Less than one year                     |   | $              | —     |   |   | $ | — |   |
| Due after one year through five years  |   |           | 4,044,070   |   |   |   | 4,204,744 |   |
| Due after five years through ten years |   |           | 37,797,063  |   |   |   | 39,457,122 |   |
| Due after ten years                    |   |           | 67,739,794  |   |   |   | 69,327,284 |   |
|                                   |   | $              | 109,580,927 |   |   | $ | 112,989,150 |   |

| March 31, 2010                      |   | Less than 12 months |       |   | More than 12 months |   |     | Total  |   |
|-------------------------------------|--------|---------------------|------------|--------|---------------------|--------|----------|--------|--------|
|                                |   | Fair                |       |   | Unrealized          |   |     | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                |   | Value               |       |   | Loss                |   |     | Value  |   |   | Loss |   |   | Value |   |   | Loss |   |
|                                |   |                |       |   |                |   |     |   |   |   |   |   |   |   |   |   |   |   |
| FNMA MBS                            |   | $                   | —    |   |                | $      | —  |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |
| GNMA MBS                            |   |                | —    |   |                |   | —  |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Whole Loan MBS                      |   |                | —    |   |                |   | —  |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Collateralized mortgage obligations |   |                | 10,401,975 |   |                |   | (109,296 | )      |   |   | 1,276,720 |   |   |   | (17,890 | ) |   |   | 11,678,695 |   |   |   | (127,186 | ) |
|                                |   | $                   | 10,401,975 |   |                | $      | (109,296 | )      |   | $ | 1,276,720 |   |   | $ | (17,890 | ) |   | $ | 11,678,695 |   |   | $ | (127,186 | ) |

| December 31, 2009                   |   | Less than 12 months |       |   | More than 12 months |   |     | Total  |   |
|-------------------------------------|--------|---------------------|------------|--------|---------------------|--------|----------|--------|--------|
|                                |   | Fair                |       |   | Unrealized          |   |     | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                |   | Value               |       |   | Loss                |   |     | Value  |   |   | Loss |   |   | Value |   |   | Loss |   |
|                                |   |                |       |   |                |   |     |   |   |   |   |   |   |   |   |   |   |   |
| FNMA MBS                            |   | $                   | —    |   |                | $      | —  |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |
| GNMA MBS                            |   |                | —    |   |                |   | —  |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Whole Loan MBS                      |   |                | —    |   |                |   | —  |   |   |   | 433,666 |   |   |   | (18,845 | ) |   |   | 433,666 |   |   |   | (18,845 | ) |
| Collateralized mortgage obligations |   |                | 10,036,242 |   |                |   | (280,961 | )      |   |   | 1,750,950 |   |   |   | (44,341 | ) |   |   | 11,787,192 |   |   |   | (325,302 | ) |
|                                |   | $                   | 10,036,242 |   |                | $      | (280,961 | )      |   | $ | 2,184,616 |   |   | $ | (63,186 | ) |   | $ | 12,220,858 |   |   | $ | (344,147 | ) |

----

|   | Interest-bearing Bank Balances – Interest-bearing bank balances mature within one year and are carried at cost which are estimated to be reasonably close to fair value.                                                                                                                                                                                                                                                                                                     |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Money Market Investments – The fair value of these securities approximates their carrying value due to the relatively short time to maturity                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Investment Securities, Available For Sale – The estimated fair value of these securities is determined by using available market information and appropriate valuation methodologies. The estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Loans Receivable - The fair value of commercial and construction loans are approximated by the carrying value as the loans are tied directly to the Prime Rate and are subject to change on a daily basis. The fair value of the remainder of the portfolio is determined by discounting the future cash flows of the loans using the appropriate discount rate.                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Other Financial Assets - The fair value of these assets, principally accrued interest receivable, approximates their carrying value due to their short maturity.                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Non-Interest Bearing and Interest Bearing Deposits - The fair value disclosed for non-interest bearing deposits is equal to the amount payable on demand at the reporting date. The fair value of interest bearing deposits is based upon the current rates for instruments of the same remaining maturity. Interest bearing deposits with a maturity of greater than one year are estimated using a discounted cash flow approach that applies interest rates currently being offered. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Other Liabilities - The estimated fair value of other liabilities, which primarily include accrued interest payable, approximates their carrying amount.                                                                                                                                                                                                                                                                                                                                |

----

|   | The carrying amounts and estimated fair values of financial instruments, at March 31, 2010 and December 31, 2009 are as follows: |
|--------|----------------------------------------------------------------------------------------------------------------------------------|

|                                      |   | March 31, 2010 |        |   | December 31, 2009 |   |
|-------------------------------------------|--------|----------------|-------------|--------|-------------------|--------|
|                                      |   | Carrying       |        |   | Fair              |   |   | Carrying |   |   | Fair |   |
|                                      |   | Amount         |        |   | Value             |   |   | Amount |   |   | Value |   |
| Financial Assets:                         |   |           |        |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents                 |   | $              | 44,640,167  |   |              | $      | 44,640,167 |   |   | $ | 39,716,919 |   |   | $ | 39,716,919 |   |
| Investment securities, available for sale |   |           | 112,989,150 |   |              |   | 112,989,150 |   |   |   | 113,912,404 |   |   |   | 113,912,404 |   |
| Loans receivable                          |   |           | 76,836,016  |   |              |   | 77,822,706 |   |   |   | 77,770,702 |   |   |   | 78,515,058 |   |
| Other financial assets                    |   |           | 658,764     |   |              |   | 658,764 |   |   |   | 722,228 |   |   |   | 722,228 |   |
|                                      |   |           |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total Financial Assets                    |   | $              | 235,124,097 |   |              | $      | 236,110,787 |   |   | $ | 232,122,253 |   |   | $ | 232,866,609 |   |
|                                      |   |           |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial Liabilities:                    |   |           |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing deposits             |   | $              | 70,205,702  |   |              | $      | 70,205,702 |   |   | $ | 70,688,777 |   |   | $ | 70,688,777 |   |
| Interest bearing deposits                 |   |           | 142,445,116 |   |              |   | 142,333,430 |   |   |   | 140,297,309 |   |   |   | 140,258,492 |   |
| Other liabilities                         |   |           | 16,874      |   |              |   | 16,874 |   |   |   | 45,695 |   |   |   | 45,695 |   |
|                                      |   |           |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total Financial Liabilities               |   | $              | 212,667,692 |   |              | $      | 212,556,006 |   |   | $ | 211,031,781 |   |   | $ | 210,992,964 |   |

|   | Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.                                                                                                     |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                |
|   | Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
|   |                                                                                                                                                                                                                                                                |
|   | Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing and asset or liability.                                                                        |

----

|                                |   | Fair Value Measurements at March 31, 2010 Using |        |
|-------------------------------------|--------|-------------------------------------------------|-------------|
|                                |   |                                            |        |   |   |   |   | Significant |   |   |   |   |
|                                |   |                                            |        |   | Quoted Prices in |   |   | Other |   |   | Significant |   |
|                                |   |                                            |        |   | Active Markets for |   |   | Observable |   |   | Unobservable |   |
|                                |   | March 31,                                       |        |   | Identical Assets |   |   | Inputs |   |   | Inputs |   |
|                                |   | 2010                                            |        |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
| Assets:                             |   |                                            |        |   |   |   |   |   |   |   |   |   |
| FNMA MBS - Residential              |   | $                                               | 4,886,311   |   |   | $ | — |   |   | $ | 4,886,311 |   |   | $ | — |   |
| GNMA MBS - Residential              |   |                                            | 1,293,764   |   |   |   | — |   |   |   | 1,293,764 |   |   |   | — |   |
| Whole Loan MBS - Residential        |   |                                            | 1,735,274   |   |   |   | — |   |   |   | 1,735,274 |   |   |   | — |   |
| Collateralized mortgage obligations |   |                                            | 105,073,801 |   |   |   | — |   |   |   | 105,073,801 |   |   |   | — |   |
| Total Available for sale Securities |   | $                                               | 112,989,150 |   |   | $ | — |   |   | $ | 112,989,150 |   |   | $ | — |   |

|                                |   | Fair Value Measurements at December 31, 2009 Using |        |
|-------------------------------------|--------|----------------------------------------------------|-------------|
|                                |   |                                               |        |   |   |   |   | Significant |   |   |   |   |
|                                |   |                                               |        |   | Quoted Prices in |   |   | Other |   |   | Significant |   |
|                                |   |                                               |        |   | Active Markets for |   |   | Observable |   |   | Unobservable |   |
|                                |   | December 31,                                       |        |   | Identical Assets |   |   | Inputs |   |   | Inputs |   |
|                                |   | 2009                                               |        |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
| Assets:                             |   |                                               |        |   |   |   |   |   |   |   |   |   |
| FNMA MBS - Residential              |   | $                                                  | 5,040,820   |   |   | $ | — |   |   | $ | 5,040,820 |   |   | $ | — |   |
| GNMA MBS - Residential              |   |                                               | 1,321,240   |   |   |   | — |   |   |   | 1,321,240 |   |   |   | — |   |
| Whole Loan MBS - Residential        |   |                                               | 1,856,893   |   |   |   | — |   |   |   | 1,856,893 |   |   |   | — |   |
| Collateralized mortgage obligations |   |                                               | 105,693,451 |   |   |   | — |   |   |   | 105,693,451 |   |   |   | — |   |
| Total Available for sale Securities |   | $                                                  | 113,912,404 |   |   | $ | — |   |   | $ | 113,912,404 |   |   | $ | — |   |

----

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

| ● | A $4,923,248 net increase in cash and cash equivalents, partially offset by |
|---------|-----------------------------------------------------------------------------|
| ● | A $923,254 net decrease in investment securities available for sale and     |
| ● | A $934,686 net decrease in net loans receivable.                            |

----

----

|   | ● | Interest income of $2,561,725                     |
|--------|---------|---------------------------------------------------|
|   | ● | Reduced by interest expense of $273,315           |
|   | ● | Reduced by a provision for loan losses of $90,000 |
|   | ● | Increased by non-interest income of $601,674      |
|   | ● | Reduced by non-interest expense of $2,003,376     |
|   | ● | Reduced by income tax expense of $364,486         |

----

----

|   | ● | $51,633 increase in salaries and benefits due to higher related benefit costs and increased salary and benefits due to normal raises;      |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | $18,500 increase in FDIC and NYSBD assessments due to an increase in the FDIC assessment rate and assessment base over the prior year; and |
|   | ● | $14,872 increase in legal expense primarily due to increased collection costs.                                                             |

----

|                                                             |   | ThreeMonths EndedMarch 31, 2010 |        |   | ThreeMonths EndedMarch 31, 2009 |   |
|------------------------------------------------------------------|--------|---------------------------------|-------------|--------|---------------------------------|--------|
|                                                             |   | Average                         |        |   |                            |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                                                             |   | Balance                         |        |   | Interest                        |   |   | Cost(1) |   |   | Balance |   |   | Interest |   |   | Cost(1) |   |
|                                                             |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets:                                                          |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                         |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivable                                                 |   | $                               | 79,657,521  |   |                            | $      | 1,390,296 |   |   |   | 7.08 | % |   | $ | 67,850,861 |   |   | $ | 1,330,706 |   |   |   | 7.55 | % |
| Investment securities, afs                                       |   |                            | 115,269,647 |   |                            |   | 1,162,222 |   |   |   | 4.09 |   |   |   | 121,701,423 |   |   |   | 1,382,619 |   |   |   | 4.61 |   |
| Other interest-earning assets                                    |   |                            | 31,983,896  |   |                            |   | 9,207 |   |   |   | 0.12 |   |   |   | 18,523,892 |   |   |   | 4,741 |   |   |   | 0.10 |   |
| Total interest-earning assets                                    |   |                            | 226,911,064 |   |                            |   | 2,561,725 |   |   |   | 4.58 |   |   |   | 208,076,176 |   |   |   | 2,718,066 |   |   |   | 5.17 |   |
|                                                             |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest earning assets                                      |   |                            | 9,146,946   |   |                            |   |   |   |   |   |   |   |   |   | 5,518,760 |   |   |   |   |   |   |   |   |   |
| Total assets                                                     |   | $                               | 236,058,010 |   |                            |   |   |   |   |   |   |   |   | $ | 213,594,936 |   |   |   |   |   |   |   |   |   |
|                                                             |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and equity:                                          |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                    |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                                                 |   | $                               | 14,964,564  |   |                            |   | 11,460 |   |   |   | 0.31 |   |   | $ | 12,717,607 |   |   |   | 13,102 |   |   |   | 0.42 |   |
| Time accounts                                                    |   |                            | 64,468,177  |   |                            |   | 160,117 |   |   |   | 1.01 |   |   |   | 75,067,561 |   |   |   | 310,552 |   |   |   | 1.68 |   |
| Money market accounts                                            |   |                            | 29,005,089  |   |                            |   | 62,486 |   |   |   | 0.87 |   |   |   | 23,432,674 |   |   |   | 60,511 |   |   |   | 1.05 |   |
| Now accounts                                                     |   |                            | 32,725,644  |   |                            |   | 39,252 |   |   |   | 0.49 |   |   |   | 18,498,973 |   |   |   | 26,783 |   |   |   | 0.59 |   |
| Total interest-bearing liabilities                               |   |                            | 141,163,474 |   |                            |   | 273,315 |   |   |   | 0.79 |   |   |   | 129,716,815 |   |   |   | 410,948 |   |   |   | 1.28 |   |
| Checking accounts                                                |   |                            | 67,545,187  |   |                            |   |   |   |   |   |   |   |   |   | 58,806,306 |   |   |   |   |   |   |   |   |   |
| Escrow deposits                                                  |   |                            | 419,279     |   |                            |   |   |   |   |   |   |   |   |   | 428,070 |   |   |   |   |   |   |   |   |   |
| Total deposits                                                   |   |                            | 209,127,940 |   |                            |   |   |   |   |   |   |   |   |   | 188,951,191 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                |   |                            | 1,929,055   |   |                            |   |   |   |   |   |   |   |   |   | 1,281,238 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                |   |                            | 211,056,995 |   |                            |   |   |   |   |   |   |   |   |   | 190,232,429 |   |   |   |   |   |   |   |   |   |
| Equity                                                           |   |                            | 25,001,015  |   |                            |   |   |   |   |   |   |   |   |   | 23,362,507 |   |   |   |   |   |   |   |   |   |
| Total liabilities and equity                                     |   | $                               | 236,058,010 |   |                            |   |   |   |   |   |   |   |   | $ | 213,594,936 |   |   |   |   |   |   |   |   |   |
|                                                             |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income/net interest rate spread                     |   |                            |        |   |                            | $      | 2,288,410 |   |   |   | 3.79 | % |   |   |   |   |   | $ | 2,307,118 |   |   |   | 3.89 | % |
|                                                             |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest earning assets/net interest margin                  |   | $                               | 85,747,590  |   |                            |   |   |   |   |   | 4.09 | % |   | $ | 78,359,361 |   |   |   |   |   |   |   | 4.37 | % |
|                                                             |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of interest-earning assets to interest-bearing liabilities |   |                            | 1.61        | x      |                            |   |   |   |   |   |   |   |   |   | 1.60 | x |   |   |   |   |   |   |   |   |
|                                                             |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on Average Assets (1)                                     |   |                            | 0.74        | %      |                            |   |   |   |   |   |   |   |   |   | 0.64 | % |   |   |   |   |   |   |   |   |
| Return on Average Equity (1)                                     |   |                            | 7.01        | %      |                            |   |   |   |   |   |   |   |   |   | 5.85 | % |   |   |   |   |   |   |   |   |
| Tangible Equity to Total Assets                                  |   |                            | 10.45       | %      |                            |   |   |   |   |   |   |   |   |   | 10.75 | % |   |   |   |   |   |   |   |   |
|                                                             |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Annualized.                                                  |   |                            |        |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| Contractual Obligations                                              |   | Payment due by Period                     |       |
|----------------------------------------------------------------------|--------|-------------------------------------------|------------|
|                                                                 |   | Less than                                 |       |   | One to three |   |   | Four to five |   |   | After |   |   | Total Amounts |   |
|                                                                 |   | One Year                                  |       |   | years |   |   | years |   |   | five years |   |   | committed |   |
|                                                                 |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Minimum annual rental payments under non-cancelable operating leases |   | $                                         | 406,866    |   |   | $ | 838,256 |   |   | $ | 794,095 |   |   | $ | 1,315,761 |   |   | $ | 3,354,978 |   |
| Remaining contractual maturities of time deposits                    |   |                                      | 60,645,728 |   |   |   | 1,460,835 |   |   |   | 2,755,959 |   |   |   | — |   |   |   | 64,862,522 |   |
| Total contractual cash obligations                                   |   | $                                         | 61,052,594 |   |   | $ | 2,299,091 |   |   | $ | 3,550,054 |   |   | $ | 1,315,761 |   |   | $ | 68,217,500 |   |
|                                                                 |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other commitments                                                    |   | Amount of commitment Expiration by Period |       |
|                                                                 |   | Less than                                 |       |   | One to three |   |   | Four to five |   |   | After |   |   | Total Amounts |   |
|                                                                 |   | One Year                                  |       |   | years |   |   | years |   |   | five years |   |   | committed |   |
|                                                                 |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loan commitments                                                     |   | $                                         | 22,421,261 |   |   | $ | 4,488,504 |   |   | $ | — |   |   | $ | — |   |   | $ | 26,909,765 |   |

| ● | $2,450,326 in two loans to a retail business, which are fully secured by commercial real estate collateral. We have entered into a modified repayment arrangement with the borrower and we have obtained confessions of judgment. We have collected a large portion of their arrears and the borrowers have agreed to pay all remaining arrears over the upcoming year. We maintain the personal guaranties of the principals on these loans.                                                                                                                                                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ● | $2,200,000 in two residential mortgage loans that are fully collateralized. We have entered into modified repayment arrangements with the borrowers and we have obtained confessions of judgment. We have collected a large portion of their arrears and the borrowers have agreed to pay all remaining arrears over the upcoming year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ● | $859,968 in three construction loans to a builder secured and cross-collateralized by first mortgage liens on three lots in Staten Island on which single-family houses are near completion. The loans are past maturity and we commenced foreclosure actions in 2008. The foreclosure sale was held in January 2010 and the Bank was the successful bidder. We have an agreement with a builder to assign our bid to the builder upon the payment to us of an amount sufficient to exceed the value of the loans on our books, and thus we will not record any loss upon the foreclosure sale and the subsequent assignment of our bid to the builder. The loans remain classified as non-performing loans at March 31, 2010 because the delivery of the deed in the foreclosure sale had not yet occurred by that date. |
| ● | $396,996 in a loan to a local business in which we are a participant in the loan with another bank. We are not the lead lender. The loan is in arrears and the lead lender has commenced a foreclosure action. The loan is secured by a first mortgage on a commercial building, a security interest in the business, and the personal guaranties of the principals.                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

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Item 4 –Controls and Procedures

Part II

Item 1 – Legal Proceedings

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Signature Page

|               | VSB Bancorp, Inc.                        |
|--------------------|------------------------------------------|
|               |                                     |
| Date: May 11, 2010 | /s/ Raffaele M. Branca                   |
|               | Raffaele M. Branca, President & CEO  |
|               | and Principal Executive Officer and      |
|               |                                     |
| Date: May 11, 2010 | /s/ Jonathan B. Lipschitz                |
|               | Jonathan B. Lipschitz,                   |
|               | Vice President, Controller and Principal |
|               | Accounting Officer                       |

| Exhibit |   |                                                                      |
|---------|--------|---------------------------------------------------------------------------|
| Number  |   | Description of Exhibit                                                    |
| 31.1    |   | Rule 13A-14(a)/15D-14(a) Certification of Chief Executive Officer         |
| 31.2    |   | Rule 13A-14(a)/15D-14(a) Certification of Principal Accounting Officer    |
| 32.1    |   | Certification by CEO pursuant to 18 U.S.C. 1350.                          |
| 32.2    |   | Certification by Principal Accounting Officer pursuant to 18 U.S.C. 1350. |

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| Exhibit |   |                                                                      |
|---------|--------|---------------------------------------------------------------------------|
| Number  |   | Description of Exhibit                                                    |
| 31.1    |   | Rule 13A-14(a)/15D-14(a) Certification of Chief Executive Officer         |
| 31.2    |   | Rule 13A-14(a)/15D-14(a) Certification of Principal Accounting Officer    |
| 32.1    |   | Certification by CEO pursuant to 18 U.S.C. 1350.                          |
| 32.2    |   | Certification by Principal Accounting Officer pursuant to 18 U.S.C. 1350. |

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