----

----

| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|----------------------------------------------------------------------------------------------------|

|                                                          |                                   |
|---------------------------------------------------------------|----------------------------------------|
| Federal                                                       | 42-1597948                             |
| (State or Other Jurisdiction ofIncorporation or Organization) | (I.R.S. EmployerIdentification Number) |
| 40 Main Street, Putnam, Connecticut                           | 06260                                  |
| (Address of Principal Executive Office)                       | (Zip Code)                             |

| Large accelerated filer o     | Accelerated filer  o               |
|------------------------------------|----------------------------------------------|
| Non-accelerated filer  o | Smaller reporting company   x |

|   |
|--------|

----

|                |                                                                                                               |                                               |
|---------------------|--------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|
|                |                                                                                                               | Page                                               |
| PART I         |         1                                                                  |
|                |                                                                                                               |                                               |
| ITEM 1.        | Business                                                                                                           | 1                                                  |
|                |                                                                                                               |                                               |
| ITEM 1A.       | Risk Factors                                                                                                       |        33       |
|                |                                                                                                               |                                               |
| ITEM 1B.       | Unresolved Staff Comments                                                                                          |        38       |
|                |                                                                                                               |                                               |
| ITEM 2.        | Properties                                                                                                         |         38 |
|                |                                                                                                               |                                               |
| ITEM 3.        | Legal Proceedings                                                                                                  |         39 |
|                |                                                                                                               |                                               |
| ITEM 4.        | [Removed and Reserved]                                                                                             |         39 |
|                |                                                                                                               |
| PART II        |         40                                                                 |
|                |                                                                                                               |                                               |
| ITEM 5.        | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |         40 |
|                |                                                                                                               |                                               |
| ITEM 6.        | Selected Financial Data                                                                                            |       41             |
|                |                                                                                                               |                                               |
| ITEM 7.        | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        |         42 |
|                |                                                                                                               |                                               |
| ITEM 7A.       | Quantitative and Qualitative Disclosures About Market Risk                                                         |         50 |
|                |                                                                                                               |                                               |
| ITEM 8.        | Financial Statements and Supplementary Data                                                                        |         50 |
|                |                                                                                                               |                                               |
| ITEM 9.        | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure                               |         90 |
|                |                                                                                                               |                                               |
| ITEM 9A.       | Controls and Procedures                                                                                            |        90       |
|                |                                                                                                               |                                               |
| ITEM 9B.       | Other Information                                                                                                  |         91 |
|                |                                                                                                               |
| PART III  |         92                                                                 |
|                |                                                                                                               |                                               |
| ITEM 10.       | Directors, Executive Officers and Corporate Governance                                                             |         92 |
|                |                                                                                                               |                                               |
| ITEM 11.       | Executive Compensation                                                                                             |         92 |
|                |                                                                                                               |                                               |
| ITEM 12.       | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                     |         92 |
|                |                                                                                                               |                                               |
| ITEM 13.       | Certain Relationships and Related Transactions, and Director Independence                                          |         92 |
|                |                                                                                                               |                                               |
| ITEM 14.       | Principal Accountant Fees and Services                                                                             |         92 |
|                |                                                                                                               |
| PART IV   |         93                                                                 |
|                |                                                                                                               |
| ITEM 15.       | Exhibits and Financial Statement Schedules                                                                         |         93 |
|                |                                                                                                               |
| Signatures          |         94                                                                 |

----

| ITEM 1. | Business |
|--------------|----------|

----

----

|                                       |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |
|--------------------------------------------|--------|------------------------|---------|--------|---------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|---------|--------|
|                                       |   | At June 30,            |    |
|                                       |   | 2011                   |    |   | 2010    |   |   | 2009   |   |   | 2008    |   |   | 2007   |   |
|                                       |   | Amount                 |    |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |    | Amount |   |   | Percent |   |   | Amount |    |   | Percent |   |
|                                       |   | (Dollars in thousands) |    |
| Mortgage Loans:                            |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |
|    Residential (1)          |   | $                      | 193,084 |   |    |   | 74.96  | %      |   | $      | 194,960 |   |   |   | 75.37  | %      |    | $      | 200,680 |   |   |   | 74.57   | %      |   | $      | 181,978 |   |    |   | 72.59 | % |   | $ | 168,126 |   |   |   | 69.86 | % |
|    Commercial real estate   |   |                   | 53,248  |   |    |   | 20.67  |   |   |   | 54,398  |   |   |   | 21.03  |   |    |   | 56,500  |   |   |   | 20.99   |   |   |   | 55,406  |   |    |   | 22.10 |   |   |   | 59,274 |   |   |   | 24.63 |   |
|    Residential construction |   |                   | 2,824   |   |    |   | 1.10   |   |   |   | 1,338   |   |   |   | 0.52   |   |    |   | 1,887   |   |   |   | 0.70    |   |   |   | 3,223   |   |    |   | 1.29 |   |   |   | 5,376 |   |   |   | 2.23 |   |
| Commercial                                 |   |                   | 7,356   |   |    |   | 2.86   |   |   |   | 6,786   |   |   |   | 2.62   |   |    |   | 8,958   |   |   |   | 3.33    |   |   |   | 8,687   |   |    |   | 3.46 |   |   |   | 6,449 |   |   |   | 2.68 |   |
| Consumer and other                         |   |                   | 1,070   |   |    |   | 0.41   |   |   |   | 1,177   |   |   |   | 0.46   |   |    |   | 1,097   |   |   |   | 0.41    |   |   |   | 1,394   |   |    |   | 0.56 |   |   |   | 1,439 |   |   |   | 0.60 |   |
|                                       |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Total loans                                |   | $                      | 257,582 |   |    |   | 100.00 | %      |   | $      | 258,659 |   |   |   | 100.00 | %      |    | $      | 269,122 |   |   |   | 100.00  | %      |   | $      | 250,688 |   |    |   | 100.00 | % |   | $ | 240,664 |   |   |   | 100.00 | % |
|                                       |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Unadvanced construction loans              |   |                   | (1,476  | )      |    |   |   |   |   |   | (1,521  | )      |   |   |   |   |    |   | (2,929  | )      |   |   |    |   |   |   | (6,522  | )      |    |   |   |   |   |   | (8,264 | ) |   |   |   |   |
|                                       |   |                   | 256,106 |   |    |   |   |   |   |   | 257,138 |   |   |   |   |   |    |   | 266,193 |   |   |   |    |   |   |   | 244,166 |   |    |   |   |   |   |   | 232,400 |   |   |   |   |   |
| Net deferred loan costs                    |   |                   | 191     |   |    |   |   |   |   |   | 285     |   |   |   |   |   |    |   | 324     |   |   |   |    |   |   |   | 320     |   |    |   |   |   |   |   | 282 |   |   |   |   |   |
| Allowance for loan losses                  |   |                   | (3,072  | )      |    |   |   |   |   |   | (2,651  | )      |   |   |   |   |    |   | (2,200  | )      |   |   |    |   |   |   | (1,758  | )      |    |   |   |   |   |   | (1,780 | ) |   |   |   |   |
|                                       |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Loans, net                                 |   | $                      | 253,225 |   |    |   |   |   |   | $      | 254,772 |   |   |   |   |   |    | $      | 264,317 |   |   |   |    |   |   | $      | 242,728 |   |    |   |   |   |   | $ | 230,902 |   |   |   |   |   |
|                                       |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |

----

|                                      |   | Residential (1)        |    |   | Commercial Real Estate |   |   | Residential Construction |   |   | Commercial           |   |   | Consumer and OtherLoans |   |   | Total Loans          |   |
|-------------------------------------------|--------|------------------------|---------|--------|------------------------|--------|--------|--------------------------|--------|--------|----------------------|--------|--------|-------------------------|--------|--------|----------------------|--------|
|                                      |   | Amount                 |    |   | Weighted AverageRate   |   |   | Amount                   |   |   | Weighted AverageRate |   |   | Amount                  |   |   | Weighted AverageRate |   |   | Amount |   |   | Weighted AverageRate |   |   | Amount |   |   | WeightedAverageRate |   |   | Amount |   |   | WeightedAverageRate |   |
|                                      |   | (Dollars in thousands) |    |
| Due During the Years                      |   |                   |    |   |                   |   |   |                     |   |   |                 |   |   |                    |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending June 30,                           |   |                   |    |   |                   |   |   |                     |   |   |                 |   |   |                    |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2012                                      |   | $                      | 52,068  |   |                   |   | 4.19   | %                        |   | $      | 27,778               |   |   |                    | 6.45   | %      |                 | $      | 1,910 |   |   |   | 4.92 | % |   | $ | 3,758 |   |   |   | 4.53 | % |   | $ | 405 |   |   |   | 7.13 | % |   | $ | 85,919 |   |   |   | 4.97 | % |
| 2013                                      |   |                   | 15,361  |   |                   |   | 5.47   | %                        |   |   | 10,099               |   |   |                    | 6.36   | %      |                 |   | - |   |   |   | 0.00 | % |   |   | 1,526 |   |   |   | 6.15 | % |   |   | 309 |   |   |   | 6.33 | % |   |   | 27,295 |   |   |   | 5.85 | % |
| 2014                                      |   |                   | 14,517  |   |                   |   | 5.40   | %                        |   |   | 6,173                |   |   |                    | 6.69   | %      |                 |   | - |   |   |   | 0.00 | % |   |   | 1,116 |   |   |   | 6.15 | % |   |   | 121 |   |   |   | 7.50 | % |   |   | 21,927 |   |   |   | 5.81 | % |
| 2015 to 2016                              |   |                   | 22,013  |   |                   |   | 5.25   | %                        |   |   | 5,231                |   |   |                    | 6.55   | %      |                 |   | - |   |   |   | 0.00 | % |   |   | 778 |   |   |   | 5.85 | % |   |   | 170 |   |   |   | 6.20 | % |   |   | 28,192 |   |   |   | 5.51 | % |
| 2017 to 2021                              |   |                   | 37,760  |   |                   |   | 5.22   | %                        |   |   | 3,264                |   |   |                    | 7.09   | %      |                 |   | - |   |   |   | 0.00 | % |   |   | 178 |   |   |   | 5.23 | % |   |   | 20 |   |   |   | 6.95 | % |   |   | 41,222 |   |   |   | 5.37 | % |
| 2022 and beyond                           |   |                   | 51,365  |   |                   |   | 2.42   | %                        |   |   | 141                  |   |   |                    | 1.67   | %      |                 |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |   |   | 45 |   |   |   | 3.38 | % |   |   | 51,551 |   |   |   | 2.42 | % |
|                                      |   |                   |    |   |                   |   |   |                     |   |   |                 |   |   |                    |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Total |   | $                      | 193,084 |   |                   |   | 4.23   | %                        |   | $      | 52,686               |   |   |                    | 6.50   | %      |                 | $      | 1,910 |   |   |   | 4.92 | % |   | $ | 7,356 |   |   |   | 5.27 | % |   | $ | 1,070 |   |   |   | 6.63 | % |   | $ | 256,106 |   |   |   | 4.74 | % |

----

----

|                                                 |   |           |    |
|------------------------------------------------------|--------|----------------|---------|
|                                                 |   | Fixed          |    |   | Adjustable |   |   | Total |   |
|                                                 |   | (In thousands) |    |
| Mortgage loans:                                      |   |           |    |   |   |   |   |   |   |
|      Residential (1)        |   | $              | 112,194 |   |   | $ | 28,822 |   |   | $ | 141,016 |   |
|      Commercial real estate |   |           | 19,931  |   |   |   | 4,977 |   |   |   | 24,908 |   |
| Commercial loans                                     |   |           | 1,898   |   |   |   | 1,700 |   |   |   | 3,598 |   |
| Consumer and other loans                             |   |           | 632     |   |   |   | 33 |   |   |   | 665 |   |
|                                                 |   |           |    |   |   |   |   |   |   |   |   |   |
|       Total            |   | $              | 134,655 |   |   | $ | 35,532 |   |   | $ | 170,187 |   |

----

----

----

----

----

----

|                                                                                    |   | At June 30,            |   |
|-----------------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                                    |   | 2011                   |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                                    |   | (Dollars in thousands) |   |
|                                                                                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-accrual loans:                                                                      |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage loans (1)                                                          |   | $                      | 1,752  |   |   | $ | 1,425 |   |   | $ | 1,277 |   |   | $ | - |   |   | $ | 55 |   |
|     Commercial real estate                                          |   |                   | 4,635  |   |   |   | 4,164 |   |   |   | 5,073 |   |   |   | 982 |   |   |   | 1,480 |   |
| Residential construction                                                                |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                                                              |   |                   | -      |   |   |   | 213 |   |   |   | 99 |   |   |   | - |   |   |   | 3 |   |
| Consumer and other                                                                      |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                                                                   |   |                   | 6,387  | (2) |   |   | 5,802 | (2) |   |   | 6,449 |   |   |   | 982 |   |   |   | 1,538 |   |
| Accruing loans past due over 90 days:                                                   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage loans (1)                                                          |   |                   | 32     |   |   |   | 491 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial real estate                                                                  |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | 470 |   |   |   | - |   |
| Residential construction                                                                |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                                                              |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer and other                                                                      |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                                                                   |   |                   | 32     |   |   |   | 491 |   |   |   | - |   |   |   | 470 |   |   |   | - |   |
| Total non-performing loans                                                              |   |                   | 6,419  |   |   |   | 6,293 |   |   |   | 6,449 |   |   |   | 1,452 |   |   |   | 1,538 |   |
| Real estate owned                                                                       |   |                   | 1,074  |   |   |   | 1,561 |   |   |   | 1,211 |   |   |   | - |   |   |   | - |   |
| Other non-performing assets                                                             |   |                   | 46     |   |   |   | 46 |   |   |   | 46 |   |   |   | - |   |   |   | - |   |
| Total non-performing assets                                                             |   |                   | 7,539  |   |   |   | 7,900 |   |   |   | 7,706 |   |   |   | 1,452 |   |   |   | 1,538 |   |
|                                                                                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Troubled debt restructurings in compliance with restructured terms                      |   |                   | 4,644  | (2) |   |   | 930 | (2) |   |   | 259 |   |   |   | - |   |   |   | - |   |
| Troubled debt restructurings and                                                        |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  total non-performing assets                                                       |   | $                      | 12,183 |   |   | $ | 8,830 |   |   | $ | 7,965 |   |   | $ | 1,452 |   |   | $ | 1,538 |   |
| Total non-performing loans to total loans                                               |   |                   | 2.51   | % |   |   | 2.45 | % |   |   | 2.42 | % |   |   | 0.59 | % |   |   | 0.66 |   |
| Total non-performing loans to total assets                                              |   |                   | 1.36   | % |   |   | 1.29 | % |   |   | 1.35 | % |   |   | 0.29 | % |   |   | 0.31 | % |
| Total non-performing assets and  troubled debt restructurings to total assets |   |                   | 2.58   | % |   |   | 1.80 | % |   |   | 1.67 | % |   |   | 0.29 | % |   |   | 0.31 | % |

----

| (1) | Residential mortgage loans include one- to four-family mortgage loans, home equity loans, and home equity lines of credit. |
|-----|----------------------------------------------------------------------------------------------------------------------------|

| (2) | The gross interest income that would have been reported if the loans had performed in accordance with their original terms was $592,000 and $445,000 for the years ended June 30, 2011 and 2010, respectively. Actual income recognized in income was $202,000 and $154,000 for the years ended June 30, 2011 and 2010, respectively. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                             |   |                   |   |   |             |   |   |   |   |
|--------------------------------------------------|--------|------------------------|--------|--------|------------------|--------|--------|--------|--------|
|                                             |   | Loans Delinquent For   |   |   |             |   |
|                                             |   | 60-89 Days Past Due    |   |   | 90 Days and Over |   |   | Total  |   |
|                                             | Number |                   |   | Amount |             |   | Number |   |   | Amount |   |   | Number |   |   | Amount |   |
|                                             |   | (Dollars in thousands) |   |
| At June 30, 2011                                 |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential (1)          |   |                   | 2      |   |             | $      | 254    |   |   |   | 1 |   |   | $ | 32 |   |   |   | 3 |   |   | $ | 286 |   |
|     Commercial real estate   |   |                   | 1      |   |             |   | 229    |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | 229 |   |
|     Residential construction |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial               |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Consumer and other loans |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                            |   |                   | 3      |   |             | $      | 483    |   |   |   | 1 |   |   | $ | 32 |   |   |   | 4 |   |   | $ | 515 |   |
|                                             |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At June 30, 2010                                 |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential (1)          |   |                   | 6      |   |             | $      | 696    |   |   |   | 4 |   |   | $ | 491 |   |   |   | 10 |   |   | $ | 1,187 |   |
|     Commercial real estate   |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Residential construction |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial               |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Consumer and other loans |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                            |   |                   | 6      |   |             | $      | 696    |   |   |   | 4 |   |   | $ | 491 |   |   |   | 10 |   |   | $ | 1,187 |   |
|                                             |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At June 30, 2009                                 |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential (1)          |   |                   | 3      |   |             | $      | 581    |   |   |   | - |   |   | $ | - |   |   |   | 3 |   |   | $ | 581 |   |
|     Commercial real estate   |   |                   | 4      |   |             |   | 2,024  |   |   |   | - |   |   |   | - |   |   |   | 4 |   |   |   | 2,024 |   |
|     Residential construction |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial               |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Consumer and other loans |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                            |   |                   | 7      |   |             | $      | 2,605  |   |   |   | - |   |   | $ | - |   |   |   | 7 |   |   | $ | 2,605 |   |
|                                             |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At June 30, 2008                                 |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential (1)          |   |                   | -      |   |             | $      | -      |   |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | - |   |
|     Commercial real estate   |   |                   | 6      |   |             |   | 1,289  |   |   |   | 11 |   |   |   | 2,859 |   |   |   | 17 |   |   |   | 4,148 |   |
|     Residential construction |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial               |   |                   | 1      |   |             |   | 45     |   |   |   | 1 |   |   |   | 195 |   |   |   | 2 |   |   |   | 240 |   |
|     Consumer and other loans |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                            |   |                   | 7      |   |             | $      | 1,334  |   |   |   | 12 |   |   | $ | 3,054 | (2) |   |   | 19 |   |   | $ | 4,388 |   |
|                                             |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At June 30, 2007                                 |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential (1)          |   |                   | -      |   |             | $      | -      |   |   |   | 1 |   |   | $ | 16 |   |   |   | 1 |   |   | $ | 16 |   |
|     Commercial real estate   |   |                   | 1      |   |             |   | 128    |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | 128 |   |
|     Residential construction |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial               |   |                   | -      |   |             |   | -      |   |   |   | 1 |   |   |   | 3 |   |   |   | 1 |   |   |   | 3 |   |
|     Consumer and other loans |   |                   | -      |   |             |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                            |   |                   | 1      |   |             | $      | 128    |   |   |   | 2 |   |   | $ | 19 |   |   |   | 3 |   |   | $ | 147 |   |

----

| (1) | Residential mortgage loans include one- to four-family mortgage loans, home equity loans, and home equity lines of credit. |
|-----|----------------------------------------------------------------------------------------------------------------------------|

| (2) | The difference in loans delinquent 90 days and over and non-performing loans as of June 30, 2008 is primarily related to completion of underwriting for renewals and obtaining current financial information from borrowers, with these loans otherwise performing as agreed. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                        |   | Year Ended June 30,    |   |
|-----------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                        |   | 2011                   |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                        |   | (Dollars in thousands) |   |
|                                                                        |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of year                                                |   | $                      | 2,651  |   |   | $ | 2,200 |   |   | $ | 1,758 |   |   | $ | 1,780 |   |   | $ | 1,582 |   |
| Provision for loan losses                                                   |   |                   | 915    |   |   |   | 1,049 |   |   |   | 967 |   |   |   | 51 |   |   |   | 264 |   |
| Charge offs:                                                                |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential (1)                                     |   |                   | (208   | ) |   |   | (50 | ) |   |   | (53 | ) |   |   | - |   |   |   | - |   |
|     Commercial real estate                              |   |                   | (62    | ) |   |   | (410 | ) |   |   | (400 | ) |   |   | - |   |   |   | (26 | ) |
|     Residential construction                            |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial                                          |   |                   | (212   | ) |   |   | (49 | ) |   |   | - |   |   |   | (27 | ) |   |   | - |   |
|     Consumer and other                                  |   |                   | (72    | ) |   |   | (156 | ) |   |   | (118 | ) |   |   | (97 | ) |   |   | (86 | ) |
| Total charge-offs                                                           |   |                   | (554   | ) |   |   | (665 | ) |   |   | (571 | ) |   |   | (124 | ) |   |   | (112 | ) |
| Recoveries:                                                                 |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential (1)                                     |   |                   | 6      |   |   |   | 4 |   |   |   | 1 |   |   |   | - |   |   |   | - |   |
|     Commercial real estate                              |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | 10 |   |   |   | - |   |
|     Residential construction                            |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial                                          |   |                   | 18     |   |   |   | 25 |   |   |   | 5 |   |   |   | 4 |   |   |   | 19 |   |
|     Consumer and other                                  |   |                   | 36     |   |   |   | 38 |   |   |   | 40 |   |   |   | 37 |   |   |   | 27 |   |
| Total recoveries                                                            |   |                   | 60     |   |   |   | 67 |   |   |   | 46 |   |   |   | 51 |   |   |   | 46 |   |
| Net charge-offs                                                             |   |                   | (494   | ) |   |   | (598 | ) |   |   | (525 | ) |   |   | (73 | ) |   |   | (66 | ) |
| Transfer to allowance for off-balance sheet items                           |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Balance at end of year                              |   | $                      | 3,072  |   |   | $ | 2,651 |   |   | $ | 2,200 |   |   | $ | 1,758 |   |   | $ | 1,780 |   |
|                                                                        |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                                                     |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses to non-performing loans at end of year            |   |                   | 47.86  | % |   |   | 42.13 | % |   |   | 34.11 | % |   |   | 121.07 | % |   |   | 115.73 | % |
| Allowance for loan losses to total loans outstanding at the end of the year |   |                   | 1.20   | % |   |   | 1.03 | % |   |   | 0.83 | % |   |   | 0.72 | % |   |   | 0.74 | % |
| Net charge-offs to average loans outstanding                                |   |                   | 0.19   | % |   |   | 0.22 | % |   |   | 0.20 | % |   |   | 0.03 | % |   |   | 0.03 | % |
|                                                                        |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                            |   | Amount                 |   |   | % of Allowance to Total Allowance |   |   | % of Loans in Category to Total Loans |   |
|---------------------------------|--------|------------------------|--------|--------|-----------------------------------|--------|--------|---------------------------------------|--------|
|                            |   | (Dollars in thousands) |   |
| At June 30, 2011                |   |                   |   |   |                              |   |   |                                  |   |
| Residential mortgages (1)       |   | $                      | 1,548  |   |                              |   | 50.39  | %                                     |   |   | 76.05 | % |
| Commercial loans (2)            |   |                   | 1,426  |   |                              |   | 46.42  |                                  |   |   | 23.53 |   |
| Consumer loans                  |   |                   | 11     |   |                              |   | 0.36   |                                  |   |   | 0.42 |   |
| Unallocated                     |   |                   | 87     |   |                              |   | 2.83   |                                  |   |   | - |   |
| Total allowance for loan losses |   | $                      | 3,072  |   |                              |   | 100.00 | %                                     |   |   | 100.00 | % |
|                            |   |                   |   |   |                              |   |   |                                  |   |   |   |   |
| At June 30, 2010                |   |                   |   |   |                              |   |   |                                  |   |   |   |   |
| Residential mortgages (1)       |   | $                      | 1,342  |   |                              |   | 50.62  | %                                     |   |   | 75.89 | % |
| Commercial loans (2)            |   |                   | 1,198  |   |                              |   | 45.19  |                                  |   |   | 23.65 |   |
| Consumer loans                  |   |                   | 43     |   |                              |   | 1.62   |                                  |   |   | 0.46 |   |
| Unallocated                     |   |                   | 68     |   |                              |   | 2.57   |                                  |   |   | - |   |
| Total allowance for loan losses |   | $                      | 2,651  |   |                              |   | 100.00 | %                                     |   |   | 100.00 | % |
|                            |   |                   |   |   |                              |   |   |                                  |   |   |   |   |
| At June 30, 2009                |   |                   |   |   |                              |   |   |                                  |   |   |   |   |
| Residential mortgages (1)       |   | $                      | 1,085  |   |                              |   | 49.32  | %                                     |   |   | 75.27 | % |
| Commercial loans (2)            |   |                   | 1,016  |   |                              |   | 46.18  |                                  |   |   | 24.32 |   |
| Consumer loans                  |   |                   | 11     |   |                              |   | 0.50   |                                  |   |   | 0.41 |   |
| Unallocated                     |   |                   | 88     |   |                              |   | 4.00   |                                  |   |   | - |   |
| Total allowance for loan losses |   | $                      | 2,200  |   |                              |   | 100.00 | %                                     |   |   | 100.00 | % |
|                            |   |                   |   |   |                              |   |   |                                  |   |   |   |   |
| At June 30, 2008                |   |                   |
| Residential mortgages (1)       |   | $                      | 842    |   |                              |   | 47.89  | %                                     |   |   | 73.88 | % |
| Commercial loans (2)            |   |                   | 845    |   |                              |   | 48.07  |                                  |   |   | 25.56 |   |
| Consumer loans                  |   |                   | 15     |   |                              |   | 0.85   |                                  |   |   | 0.56 |   |
| Unallocated                     |   |                   | 56     |   |                              |   | 3.19   |                                  |   |   | - |   |
| Total allowance for loan losses |   | $                      | 1,758  |   |                              |   | 100.00 | %                                     |   |   | 100.00 | % |
|                            |   |                   |   |   |                              |   |   |                                  |   |   |   |   |
| At June 30, 2007                |   |                   |   |   |                              |   |   |                                  |   |   |   |   |
| Residential mortgages (1)       |   | $                      | 919    |   |                              |   | 51.63  | %                                     |   |   | 72.09 | % |
| Commercial loans (2)            |   |                   | 788    |   |                              |   | 44.27  |                                  |   |   | 27.31 |   |
| Consumer loans                  |   |                   | 25     |   |                              |   | 1.40   |                                  |   |   | 0.60 |   |
| Unallocated                     |   |                   | 48     |   |                              |   | 2.70   |                                  |   |   | - |   |
| Total allowance for loan losses |   | $                      | 1,780  |   |                              |   | 100.00 | %                                     |   |   | 100.00 | % |

----

| (1) | Residential mortgage loans include one- to four-family mortgage loans, home equity loans, and home equity lines of credit. |
|-----|----------------------------------------------------------------------------------------------------------------------------|

| (2) | Commercial loans include commercial real estate loans and commercial & industrial loans. |
|-----|--------------------------------------------------------------------------------------------------------|

----

----

----

----

| Issuer                  |   | Goldman Sachs |   |   | Merrill Lynch |   |   | Bank of America |   |   | Freddie Mac |   |   | Freddie Mac |   |
|-------------------------|--------|---------------|--------|--------|---------------|--------|--------|-----------------|--------|--------|-------------|--------|--------|-------------|--------|
| Par amount              |   | $3,000,000    |   |   | $5,000,000    |   |   | $2,000,000      |   |   | $2,000,000  |   |   | $2,000,000  |   |
| Book Value              |   | $3,000,000    |   |   | $5,000,000    |   |   | $2,000,000      |   |   | $23,000     |   |   | $23,000     |   |
| Purchase Date           |   | 12-12-07      |   |   | 09-04-07      |   |   | 11-20-07        |   |   | 11-09-07    |   |   | 01-03-08    |   |
| Maturity Date           |   | 08-23-26      |   |   | 05-28-27      |   |   | 08-17-47        |   |   | 06-30-20    |   |   | 06-30-20    |   |
| Next Reset Date         |   | 08-20-11      |   |   | 08-26-11      |   |   | 08-16-11        |   |   | 07-08-11    |   |   | 07-01-11    |   |
| Reset Frequency         |   | Quarterly     |   |   | Quarterly     |   |   | Quarterly       |   |   | Quarterly   |   |   | Quarterly   |   |
| Failed Auction          |   | Yes           |   |   | Yes           |   |   | Yes             |   |   | Yes         |   |   | Yes         |   |
| Receiving Default Rates |   | Yes           |   |   | Yes           |   |   | Yes             |   |   | No          |   |   | No          |   |
| Current Rate            |   | 4.647%        |   |   | 4.770%        |   |   | 4.677%          |   |   | 0.000%      |   |   | 0.000%      |   |
| Dividends Current:      |   | Yes           |   |   | Yes           |   |   | Yes             |   |   | No          |   |   | No          |   |

----

|                                             |   | At June 30, |    |
|--------------------------------------------------|--------|-------------|---------|
|                                             |   | 2011        |    |   | 2010 |   |   | 2009 |   |
|                                             |   | Carrying    |    |   | Percent |   |   | Carrying |   |   | Percent |   |   | Carrying |   |   | Percent |   |
|                                             |   | Value       |    |   | of total |   |   | Value |   |   | of total |   |   | Value |   |   | of total |   |
| (Dollars in thousands)                           |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities, available for sale:                  |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency securities            |   | $           | 666     |   |   |   | 0.4 | % |   | $ | 6,101 |   |   |   | 3.6 | % |   | $ | 19,667 |   |   |   | 11.8 | % |
| Corporate bonds and other securities             |   |        | 4,905   |   |   |   | 2.9 | % |   |   | 4,368 |   |   |   | 2.6 | % |   |   | 9,263 |   |   |   | 5.6 | % |
| Mortgage-backed securities and CMOs              |   |        | 42,038  |   |   |   | 24.3 | % |   |   | 66,967 |   |   |   | 39.6 | % |   |   | 123,596 |   |   |   | 74.0 | % |
| Equity securities                                |   |        | 10,400  |   |   |   | 6.0 | % |   |   | 8,457 |   |   |   | 5.0 | % |   |   | 12,362 |   |   |   | 7.4 | % |
|   Total securities, available for sale |   |        | 58,009  |   |   |   | 33.6 | % |   |   | 85,893 |   |   |   | 50.8 | % |   |   | 164,888 |   |   |   | 98.8 | % |
| Securities, held-to-maturity:                    |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency securities            |   |        | 16,085  |   |   |   | 9.3 | % |   |   | 45,275 |   |   |   | 26.8 | % |   |   | 2,000 |   |   |   | 1.2 | % |
| Mortgage-backed securities and CMOs              |   |        | 98,656  |   |   |   | 57.1 | % |   |   | 37,974 |   |   |   | 22.4 | % |   |   | - |   |   |   | - | % |
|   Total securities, held-to-maturity   |   |        | 114,741 |   |   |   | 66.4 | % |   |   | 83,249 |   |   |   | 49.2 | % |   |   | 2,000 |   |   |   | 1.2 | % |
|                                             |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Total securities               |   | $           | 172,750 |   |   |   | 100.0 | % |   | $ | 169,142 |   |   |   | 100.0 | % |   | $ | 166,888 |   |   |   | 100.0 | % |

|                                  |   |                |   |   |                              |   |   |                               |   |   |            |   |   |   |    |
|---------------------------------------|--------|---------------------|--------|--------|-----------------------------------|--------|--------|------------------------------------|--------|--------|-----------------|--------|--------|--------|---------|
|                                  |   | In One Year or Less |   |   | After One Year Through Five Years |   |   | After Five Years Through Ten Years |   |   | After Ten Years |   |   | Total  |    |
| (Dollars in thousands)                |   |                |   |   |                              |   |   |                               |   |   |            |   |   |   |    |
| Securities available for sale:        |   |                |   |   |                              |   |   |                               |   |   |            |   |   |   |    |
| U.S. Government and agency securities |   | $                   | -      |   |                              | $      | 666    |                               |   | $      | -               |   |   | $      | -       |   |   | $ | 666 |   |
| Corporate debt securities             |   |                | -      |   |                              |   | -      |                               |   |   | -               |   |   |   | 4,905   |   |   |   | 4,905 |   |
| Mortgage-backed securities            |   |                | -      |   |                              |   | 1,131  |                               |   |   | 4,414           |   |   |   | 36,493  |   |   |   | 42,038 |   |
| Total debt securities                 |   |                | -      |   |                              |   | 1,797  |                               |   |   | 4,414           |   |   |   | 41,398  |   |   |   | 47,609 |   |
| Equity securities                     |   |                | -      |   |                              |   | -      |                               |   |   | 400             |   |   |   | 10,000  |   |   |   | 10,400 |   |
|                                  |   |                |   |   |                              |   |   |                               |   |   |            |   |   |   |    |   |   |   |   |   |
| Total securities available for sale   |   |                | -      |   |                              |   | 1,797  |                               |   |   | 4,814           |   |   |   | 51,398  |   |   |   | 58,009 |   |
| Securities held to maturity:          |   |                |   |   |                              |   |   |                               |   |   |            |   |   |   |    |   |   |   |   |   |
| U.S. Government and agency securities |   |                | -      |   |                              |   | 2,000  |                               |   |   | 11,235          |   |   |   | 2,850   |   |   |   | 16,085 |   |
| Mortgage-backed securities            |   |                | -      |   |                              |   | -      |                               |   |   | 8,919           |   |   |   | 89,737  |   |   |   | 98,656 |   |
| Total securities held to maturity     |   |                | -      |   |                              |   | 2,000  |                               |   |   | 20,154          |   |   |   | 92,587  |   |   |   | 114,741 |   |
|                                  |   |                |   |   |                              |   |   |                               |   |   |            |   |   |   |    |   |   |   |   |   |
| Total securities                      |   | $                   | -      |   |                              | $      | 3,797  |                               |   | $      | 24,968          |   |   | $      | 143,985 |   |   | $ | 172,750 |   |
| Weighted average yield                |   |                | 0.00   | %      |                              |   | 3.61   | %                                  |   |   | 2.45            | %      |   |   | 3.26    | % |   |   | 3.16 | % |

----

----

|                                            |   | For the Year Ended June 30, |    |
|-------------------------------------------------|--------|-----------------------------|---------|
|                                            |   | 2011                        |    |   | 2010 |   |   | 2009 |   |
|                                            |   |                        |    |   |   |   |   | Weighted |   |   |   |   |   |   |   |   | Weighted |   |   |   |   |   |   |   |   | Weighted |   |
|                                            |   | Average                     |    |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
|                                            |   | Balance                     |    |   | Percent |   |   | Rate |   |   | Balance |   |   | Percent |   |   | Rate |   |   | Balance |   |   | Percent |   |   | Rate |   |
|                                            |   | (Dollars in thousands)      |    |
|                                            |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                 |   | $                           | 35,914  |   |   |   | 10.85 | % |   |   | - | % |   | $ | 35,279 |   |   |   | 10.99 | % |   |   | - | % |   | $ | 36,219 |   |   |   | 12.39 | % |   |   | - | % |
| NOW accounts                                    |   |                        | 90,186  |   |   |   | 27.25 |   |   |   | 0.81 |   |   |   | 80,526 |   |   |   | 25.08 |   |   |   | 1.11 |   |   |   | 42,360 |   |   |   | 14.49 |   |   |   | 1.90 |   |
| Regular savings                                 |   |                        | 48,004  |   |   |   | 14.50 |   |   |   | 0.34 |   |   |   | 46,447 |   |   |   | 14.46 |   |   |   | 0.35 |   |   |   | 45,684 |   |   |   | 15.63 |   |   |   | 0.46 |   |
| Money market accounts                           |   |                        | 13,517  |   |   |   | 4.09 |   |   |   | 0.68 |   |   |   | 11,036 |   |   |   | 3.44 |   |   |   | 0.88 |   |   |   | 12,006 |   |   |   | 4.10 |   |   |   | 1.08 |   |
| Club accounts                                   |   |                        | 199     |   |   |   | 0.06 |   |   |   | 0.30 |   |   |   | 237 |   |   |   | 0.07 |   |   |   | 0.30 |   |   |   | 261 |   |   |   | 0.09 |   |   |   | 3.79 |   |
|                                            |   |                        | 187,820 |   |   |   | 56.75 |   |   |   | 0.52 |   |   |   | 173,525 |   |   |   | 54.04 |   |   |   | 0.67 |   |   |   | 136,530 |   |   |   | 46.70 |   |   |   | 0.85 |   |
| Certificates of deposit                         |   |                        | 143,158 |   |   |   | 43.25 |   |   |   | 2.34 |   |   |   | 147,599 |   |   |   | 45.96 |   |   |   | 2.58 |   |   |   | 155,813 |   |   |   | 53.30 |   |   |   | 3.27 |   |
|        Total |   | $                           | 330,978 |   |   |   | 100.00 | % |   |   | 1.31 | % |   | $ | 321,124 |   |   |   | 100.00 | % |   |   | 1.55 | % |   | $ | 292,343 |   |   |   | 100.00 | % |   |   | 2.14 | % |

| Maturity Period                     |   | At June 30, 2011 |   |
|-------------------------------------|--------|------------------|--------|
|                                |   | (In thousands)   |   |
|                                |   |             |   |
| Three months or less                |   | $                | 19,268 |   |
| Over three through six months       |   |             | 5,362  |   |
| Over six months through one year    |   |             | 10,324 |   |
| Over one year through three years   |   |             | 19,412 |   |
| Over three years                    |   |             | 10,284 |   |
|      Total |   | $                | 64,650 |   |

----

|                                                                     |   | At and For The Year Ended |   |
|--------------------------------------------------------------------------|--------|---------------------------|--------|
|                                                                     |   | June 30,                  |   |
|                                                                     |   | 2011                      |   |   | 2010 |   |   | 2009 |   |
|                                                                     |   | (Dollars in thousands)    |   |
|                                                                     |   |                      |   |   |   |   |   |   |   |
| Maximum amount of advances outstanding                                   |   |                      |   |   |   |   |   |   |   |
| at any month end during the year:                                        |   |                      |   |   |   |   |   |   |   |
|       FHLB advances                        |   | $                         | 98,500 |   |   | $ | 120,500 |   |   | $ | 150,204 |   |
|       Repurchase Agreements with customers |   |                      | 11,651 |   |   |   | 15,179 |   |   |   | 8,637 |   |
|                                                                     |   |                      |   |   |   |   |   |   |   |   |   |   |
| Average advances outstanding during the year:                            |   |                      |   |   |   |   |   |   |   |   |   |   |
|       FHLB advances                        |   |                      | 93,799 |   |   |   | 106,473 |   |   |   | 140,685 |   |
|       Repurchase Agreements with customers |   |                      | 7,671  |   |   |   | 9,154 |   |   |   | 5,535 |   |
|                                                                     |   |                      |   |   |   |   |   |   |   |   |   |   |
| Balance outstanding at end of year:                                      |   |                      |   |   |   |   |   |   |   |   |   |   |
|       FHLB advances                        |   |                      | 83,500 |   |   |   | 100,500 |   |   |   | 120,500 |   |
|       Repurchase Agreements with customers |   |                      | 4,244  |   |   |   | 5,896 |   |   |   | 4,471 |   |
|                                                                     |   |                      |   |   |   |   |   |   |   |   |   |   |
| Weighted average interest rate during the year:                          |   |                      |   |   |   |   |   |   |   |   |   |   |
|       FHLB advances                        |   |                      | 3.84   | % |   |   | 3.95 | % |   |   | 4.05 | % |
|       Repurchase Agreements with customers |   |                      | 0.28   |   |   |   | 1.03 |   |   |   | 2.28 |   |
|                                                                     |   |                      |   |   |   |   |   |   |   |   |   |   |
| Weighted average interest rate at end of year:                           |   |                      |   |   |   |   |   |   |   |   |   |   |
|       FHLB advances                        |   |                      | 3.88   | % |   |   | 3.89 | % |   |   | 4.06 | % |
|       Repurchase Agreements with customers |   |                      | 0.27   |   |   |   | 0.33 |   |   |   | 2.30 |   |

----

----

----

----

|   |   ● | the total capital distributions for the applicable calendar year exceed the sum of the association’s net income for that year to date plus the association’s retained net income for the preceding two years still available for dividend; |
|--------|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   ● | the association would not be at least adequately capitalized following the distribution; |
|--------|----------------|------------------------------------------------------------------------------------------|

|   |   ● | the distribution would violate any applicable statute, regulation, agreement or Office of the Comptroller of the Currency-imposed condition; or |
|--------|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   ● | the association is not eligible for expedited treatment of its filings. |
|--------|----------------|-------------------------------------------------------------------------|

|   |   ● | the association would be undercapitalized following the distribution; |
|--------|----------------|-----------------------------------------------------------------------|

|   |   ● | the proposed capital distribution raises safety and soundness concerns; or |
|--------|----------------|----------------------------------------------------------------------------|

|   |   ● | the capital distribution would violate a prohibition contained in any statute, regulation or agreement. |
|--------|----------------|---------------------------------------------------------------------------------------------------------|

----

----

|   | ● | well-capitalized (at least 5% leverage capital, 6% Tier 1 risk-based capital and 10% total risk-based capital); |
|--------|---------|----------------------------------------------------------------------------------------------------------------------|

|   | ● | adequately capitalized (at least 4% leverage capital (3% for savings banks with a composite examination rating of 1), 4% Tier 1 risk-based capital and 8% total risk-based capital); |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | undercapitalized (less than 8% total risk-based capital, 4% Tier 1 risk-based capital or 4% leverage capital (3% for savings banks with a composite examination rating of 1); |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | significantly undercapitalized (less than 6% total risk-based capital, 3% Tier 1 risk-based capital or 3% leverage capital); and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | critically undercapitalized (less than 2% tangible capital). |
|--------|---------|--------------------------------------------------------------|

----

----

----

----

|  ITEM 1A. | Risk Factors |
|----------------|--------------|

----

|   | ● | the interest income we earn on our interest-earning assets, such as loans and securities; and |
|--------|---------|-----------------------------------------------------------------------------------------------|

|   | ● | the interest expense we pay on our interest-bearing liabilities, such as deposits and borrowings. |
|--------|---------|---------------------------------------------------------------------------------------------------|

----

----

----

----

| ITEM 1B. | Unresolved Staff Comments |
|----------|---------------------------|

|   | Not applicable. |
|--------|-----------------|

| ITEM 2. | Properties |
|--------------|------------|

----

|                                                        |   | Leased or |   | Year Acquired |   | Square  |   |   | Net Book Value   |    |
|-------------------------------------------------------------|--------|-----------|--------|---------------|--------|---------|--------|--------|------------------|---------|
| Location                                                    |   | Owned     |   | or Leased     |   | Footage |   |   | of Real Property |    |
|                                                        |   |      |   |          |   |    |   |   | (In thousands)   |    |
| Main Office:                                                |   |      |   |          |   |    |   |   |             |    |
| 40 Main Street                                              |   | Owned     |   | 1974          |   |    | 14,938 |   |             | $       | 1,127 |   |
| Putnam, Connecticut 06260                                   |   |      |   |          |   |    |   |   |             |    |   |   |
|                                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| Full Service Branches:                                      |   |      |   |          |   |    |   |   |             |    |   |   |
| 251 Kennedy Drive                                           |   | Leased    |   | 2006          |   |    | 473    |   |             |    | 82 |   |
| Putnam, Connecticut 06260                                   |   |      |   |          |   |    |   |   |             |    |   |   |
|                                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| 100 Averill Road                                            |   | Owned     |   | 1981          |   |    | 2,487  |   |             |    | 462 |   |
| Pomfret Center, Connecticut 06259                           |   |      |   |          |   |    |   |   |             |    |   |   |
|                                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| 125 Wauregan Road                                           |   | Owned     |   | 1993          |   |    | 2,452  |   |             |    | 333 |   |
| Danielson, Connecticut 06239                                |   |      |   |          |   |    |   |   |             |    |   |   |
|                                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| 11 Pratt Road                                               |   | Owned     |   | 2000          |   |    | 2,162  |   |             |    | 331 |   |
| Plainfield, Connecticut 06374                               |   |      |   |          |   |    |   |   |             |    |   |   |
|                                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| 461 Voluntown Road, Rte. 138                                |   | Leased    |   | 2005          |   |    | 2,600  |   |             |    | 41 |   |
| Griswold, Connecticut 06351                                 |   |      |   |          |   |    |   |   |             |    |   |   |
|                                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| 2 Chapman Lane                                              |   | Owned     |   | 2009          |   |    | 2,400  |   |             |    | 663 |   |
| Gales Ferry, Connecticut 06335                              |   |      |   |          |   |    |   |   |             |    |   |   |
|                                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| 40 High Street                                              |   | Owned     |   | 2009          |   |    | 2,800  |   |             |    | 1,166 |   |
| Norwich, Connecticut                                        |   |      |   |          |   |    |   |   |             |    |   |   |
|                                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| Loan Center:                                                |   |      |   |          |   |    |   |   |             |    |   |   |
| 50 Canal Street                                             |   | Owned     |   | 2000          |   |    | 2,940  |   |             |    | 148 |   |
| Putnam, Connecticut 06260                                   |   |      |   |          |   |    |   |   |             |    |   |   |
|                                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| ATM Remote Location:                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| 168 Route 169                                               |   | Leased    |   | 2003          |   |    | 30     |   |             | — |   |
| Woodstock, Connecticut 06281                                |   |      |   |          |   |    |   |   |             |    |   |   |
|                                                        |   |      |   |          |   |    |   |   |             |    |   |   |
| Special Needs Limited Branch (1):                           |   |      |   |          |   |    |   |   |             |    |   |   |
| Creamery Brook Retirement Village                           |   | —   |   |          |   | — |   |   | —          |    |
| 36 Vina Lane                                                |   |      |   |          |   |    |   |   |             |    |   |   |
| Brooklyn, Connecticut 06234                                 |   |      |   |          |   |    |   |   |             |    |   |   |
|          Total |   |      |   |          |   |    |   |   |             | $       | 4,353 |   |

----

| (1) | Our personnel are at this location for approximately three hours once a week. The facility provides a furnished room for us at no cost. Our personnel conduct limited banking activities, such as deposit-taking, check cashing, notary and certificate of deposit renewals. We began operating at this location in 2002. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM 3. | Legal Proceedings |
|--------------|-------------------|

| ITEM 4. | [Removed and Reserved] |
|--------------|------------------------|

----

| ITEM 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
|--------------|--------------------------------------------------------------------------------------------------------------------|

|                             |   | High   |   |   | Low    |   |   | Dividends |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|
| Fiscal 2010                      |   |   |   |   |   |   |   |      |   |
| Quarter ended September 30, 2009 |   | $      | 5.00   |   |   | $      | 2.78   |      |   | $ | 0.04 |   |
| Quarter ended December 31, 2009  |   |   | 4.00   |   |   |   | 2.61   |      |   |   | - |   |
| Quarter ended March 31, 2010     |   |   | 5.33   |   |   |   | 3.01   |      |   |   | - |   |
| Quarter ended June 30, 2010      |   |   | 5.18   |   |   |   | 4.00   |      |   |   | - |   |
|                             |   |   |   |   |   |   |   |      |   |   |   |   |
| Fiscal 2011                      |   |   |   |   |   |   |   |      |   |   |   |   |
| Quarter ended September 30, 2010 |   | $      | 4.89   |   |   | $      | 2.96   |      |   | $ | - |   |
| Quarter ended December 31, 2010  |   |   | 4.15   |   |   |   | 3.27   |      |   |   | - |   |
| Quarter ended March 31, 2011     |   |   | 5.75   |   |   |   | 4.15   |      |   |   | - |   |
| Quarter ended June 30, 2011      |   |   | 5.85   |   |   |   | 4.83   |      |   |   | - |   |

----

| ITEM 6. | Selected Financial Data  |
|---------|-------------------------------|

|                                                                              |   | At or For the Year Ended June 30, |    |
|-----------------------------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                                              |   | 2011                              |    |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                              |   | (Dollars in thousands)            |    |
| Selected Financial Condition Data:                                                |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Assets                                                                      |   | $                                 | 472,499 |   |   | $ | 489,359 |   |   | $ | 477,349 |   |   | $ | 494,499 |   |   | $ | 491,198 |   |
| Cash and cash equivalents                                                         |   |                              | 8,273   |   |   |   | 23,291 |   |   |   | 6,059 |   |   |   | 8,146 |   |   |   | 13,198 |   |
| Securities available-for-sale                                                     |   |                              | 58,009  |   |   |   | 85,893 |   |   |   | 164,888 |   |   |   | 212,083 |   |   |   | 215,322 |   |
| Securities held-to-maturity                                                       |   |                              | 114,741 |   |   |   | 83,249 |   |   |   | 2,000 |   |   |   | - |   |   |   | - |   |
| Loans receivable, net                                                             |   |                              | 253,225 |   |   |   | 254,772 |   |   |   | 264,317 |   |   |   | 242,728 |   |   |   | 230,902 |   |
| Loans held-for-sale                                                               |   |                              | 1,567   |   |   |   | 1,470 |   |   |   | 1,200 |   |   |   | 675 |   |   |   | 1,478 |   |
| Deposits                                                                          |   |                              | 333,773 |   |   |   | 335,146 |   |   |   | 308,099 |   |   |   | 283,724 |   |   |   | 293,473 |   |
| Borrowings                                                                        |   |                              | 87,744  |   |   |   | 106,396 |   |   |   | 124,971 |   |   |   | 156,621 |   |   |   | 141,857 |   |
| Total Stockholders’ Equity                                                  |   |                              | 46,747  |   |   |   | 43,855 |   |   |   | 39,896 |   |   |   | 49,437 |   |   |   | 51,251 |   |
|                                                                              |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   | At or For the Year Ended June 30, |    |
|                                                                              |   | 2011                              |    |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                              |   | (Dollars in thousands)            |    |
| Selected Operating Data:                                                          |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest and dividend income                                                      |   | $                                 | 19,730  |   |   | $ | 22,462 |   |   | $ | 25,318 |   |   | $ | 27,205 |   |   | $ | 25,364 |   |
| Interest expense                                                                  |   |                              | 8,370   |   |   |   | 10,125 |   |   |   | 12,726 |   |   |   | 15,229 |   |   |   | 14,795 |   |
|      Net interest income                                 |   |                              | 11,360  |   |   |   | 12,337 |   |   |   | 12,592 |   |   |   | 11,976 |   |   |   | 10,569 |   |
| Provision for loan losses                                                         |   |                              | 915     |   |   |   | 1,049 |   |   |   | 967 |   |   |   | 51 |   |   |   | 263 |   |
|      Net interest income after provision for loan losses |   |                              | 10,445  |   |   |   | 11,288 |   |   |   | 11,625 |   |   |   | 11,925 |   |   |   | 10,306 |   |
| Noninterest income (charge)                                                       |   |                              | 2,503   |   |   |   | 1,983 |   |   |   | (12,559 | ) |   |   | 3,193 |   |   |   | 2,741 |   |
| Noninterest expense                                                               |   |                              | 11,313  |   |   |   | 11,700 |   |   |   | 10,807 |   |   |   | 10,945 |   |   |   | 10,769 |   |
| Income (loss) before income taxes                                                 |   |                              | 1,635   |   |   |   | 1,571 |   |   |   | (11,741 | ) |   |   | 4,173 |   |   |   | 2,278 |   |
| Income tax expense (benefit)                                                      |   |                              | 537     |   |   |   | 309 |   |   |   | (4,610 | ) |   |   | 1,105 |   |   |   | 354 |   |
|      Net income (loss)                                   |   | $                                 | 1,098   |   |   | $ | 1,262 |   |   | $ | (7,131 | ) |   | $ | 3,068 |   |   | $ | 1,924 |   |

----

|                                                                    |   | June 30, |   |
|-------------------------------------------------------------------------|--------|----------|--------|
| Selected Financial Ratios and Other Data:                               |   | 2011     |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Performance Ratios:                                                     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average assets                                                |   |     | 0.23   | % |   |   | 0.26 | % |   |   | (1.47 | ) |   |   | 0.63 | % |   |   | 0.40 | % |
| Return on average equity                                                |   |     | 2.38   |   |   |   | 2.93 |   |   |   | (17.76 | ) |   |   | 5.95 |   |   |   | 3.74 |   |
| Interest rate spread (1)                                                |   |     | 2.29   |   |   |   | 2.47 |   |   |   | 2.46 |   |   |   | 2.04 |   |   |   | 1.76 |   |
| Net interest margin (2)                                                 |   |     | 2.53   |   |   |   | 2.74 |   |   |   | 2.79 |   |   |   | 2.59 |   |   |   | 2.35 |   |
| Noninterest expense to average assets                                   |   |     | 2.35   |   |   |   | 2.42 |   |   |   | 2.23 |   |   |   | 2.23 |   |   |   | 2.17 |   |
| Efficiency Ratio (3)                                                    |   |     | 81.61  |   |   |   | 81.70 |   |   | NA |   |   |   | 72.15 |   |   |   | 80.91 |   |
| Basic earnings (loss) per share                                         |   | $        | 0.17   |   |   | $ | 0.20 |   |   | $ | (1.14 | ) |   | $ | 0.49 |   |   | $ | 0.29 |   |
| Diluted earnings (loss) per share                                       |   | $        | 0.17   |   |   | $ | 0.20 |   |   | $ | (1.14 | ) |   | $ | 0.48 |   |   | $ | 0.28 |   |
| Average interest-earning assets to average interest-bearing liabilities |   |     | 113.11 | % |   |   | 112.03 | % |   |   | 112.01 | % |   |   | 116.77 | % |   |   | 117.87 | % |
|                                                                    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital Ratios:                                                         |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity to total assets at end of period                                 |   |     | 9.89   | % |   |   | 8.96 | % |   |   | 8.36 | % |   |   | 10.00 | % |   |   | 10.43 | % |
| Average equity to average assets                                        |   |     | 9.59   |   |   |   | 8.92 |   |   |   | 8.30 |   |   |   | 10.51 |   |   |   | 10.80 |   |
| Total capital to risk-weighted assets                                   |   |     | 16.04  |   |   |   | 13.42 |   |   |   | 10.92 |   |   |   | 16.24 |   |   |   | 16.60 |   |
| Tier 1 capital to risk-weighted assets                                  |   |     | 14.79  |   |   |   | 12.38 |   |   |   | 10.20 |   |   |   | 15.58 |   |   |   | 15.89 |   |
| Tier 1 capital to adjusted tangible assets                              |   |     | 7.68   |   |   |   | 6.91 |   |   |   | 6.62 |   |   |   | 8.34 |   |   |   | 8.22 |   |
| Dividend payout ratio                                                   |   |     | 0.00   |   |   |   | 0.20 |   |   |   | (0.25 | ) |   |   | 0.63 |   |   |   | 0.83 |   |
|                                                                    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset Quality Ratios:                                                   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses as a percent of total loans                   |   |     | 1.20   | % |   |   | 1.03 | % |   |   | 0.83 | % |   |   | 0.72 | % |   |   | 0.74 | % |
| Allowance for loan losses as a percent of nonperforming loans           |   |     | 47.86  |   |   |   | 42.13 |   |   |   | 34.11 |   |   |   | 121.07 |   |   |   | 115.73 |   |
| Net charge-offs to average outstanding loans during the period          |   |     | 0.19   |   |   |   | 0.22 |   |   |   | 0.20 |   |   |   | 0.03 |   |   |   | 0.03 |   |
| Nonperforming loans as a percent of total loans                         |   |     | 2.51   |   |   |   | 2.45 |   |   |   | 2.42 |   |   |   | 0.59 |   |   |   | 0.66 |   |
| Nonperforming assets as a percent of total assets                       |   |     | 2.58   |   |   |   | 1.80 |   |   |   | 1.67 |   |   |   | 0.29 |   |   |   | 0.31 |   |
|                                                                    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Data:                                                             |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number of full-service offices                                          |   |     | 8      |   |   |   | 8 |   |   |   | 7 |   |   |   | 7 |   |   |   | 7 |   |

| (1) | Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of interest-bearing liabilities. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Represents net interest income as a percent of average interest-earning assets.                                                                                |
| (3) | Represents noninterest expense divided by the sum of net interest income and noninterest income.                                                               |

| ITEM 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|--------------|---------------------------------------------------------------------------------------------|

----

----

----

----

|                                   |   | 2011    |    |   | 2010    |   |   | 2009   |   |
|----------------------------------------|--------|---------|---------|--------|---------|--------|--------|--------|--------|
| Years ended June 30,                   |   | Average |    |   | Income/ |   |   | Yield/ |   |   | Average |   |   | Income/ |   |   | Yield/ |   |   | Average |   |   | Income/ |   |   | Yield/ |   |
| (in thousands)                         |   | Balance |    |   | Expense |   |   | Cost   |   |   | Balance |   |   | Expense |   |   | Cost |   |   | Balance |   |   | Expense |   |   | Cost |   |
| Earning Assets:                        |   |    |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities                  |   | $       | 186,412 |   |    | $      | 6,032  |   |   |   | 3.24 | % |   | $ | 169,043 |   |   | $ | 7,811 |   |   |   | 4.62 | % |   | $ | 192,014 |   |   | $ | 10,584 |   |   |   | 5.51 | % |
| Loans                                  |   |    | 256,737 |   |    |   | 13,694 |   |   |   | 5.33 | % |   |   | 265,142 |   |   |   | 14,641 |   |   |   | 5.52 | % |   |   | 254,742 |   |   |   | 14,718 |   |   |   | 5.78 | % |
| Other earning assets                   |   |    | 5,353   |   |    |   | 4      |   |   |   | 0.07 | % |   |   | 15,606 |   |   |   | 10 |   |   |   | 0.06 | % |   |   | 4,281 |   |   |   | 16 |   |   |   | 0.37 | % |
| Total interest-earnings assets         |   |    | 448,502 |   |    |   | 19,730 |   |   |   | 4.40 | % |   |   | 449,791 |   |   |   | 22,462 |   |   |   | 4.99 | % |   |   | 451,037 |   |   |   | 25,318 |   |   |   | 5.61 | % |
| Non-interest-earning assets            |   |    | 32,209  |   |    |   |   |   |   |   |   |   |   |   | 32,813 |   |   |   |   |   |   |   |   |   |   |   | 32,808 |   |   |   |   |   |   |   |   |   |
| Total assets                           |   | $       | 480,711 |   |    |   |   |   |   |   |   |   |   | $ | 482,604 |   |   |   |   |   |   |   |   |   |   | $ | 483,845 |   |   |   |   |   |   |   |   |   |
|                                   |   |    |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:          |   |    |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW accounts                           |   | $       | 90,186  |   |    |   | 934    |   |   |   | 1.04 | % |   | $ | 80,526 |   |   |   | 1,317 |   |   |   | 1.64 | % |   | $ | 42,360 |   |   |   | 944 |   |   |   | 2.23 | % |
| Savings accounts                       |   |    | 48,004  |   |    |   | 168    |   |   |   | 0.35 | % |   |   | 46,447 |   |   |   | 195 |   |   |   | 0.42 | % |   |   | 45,684 |   |   |   | 250 |   |   |   | 0.55 | % |
| Money market accounts                  |   |    | 13,517  |   |    |   | 111    |   |   |   | 0.82 | % |   |   | 11,036 |   |   |   | 111 |   |   |   | 1.01 | % |   |   | 12,006 |   |   |   | 188 |   |   |   | 1.57 | % |
| Time deposits                          |   |    | 143,357 |   |    |   | 3,536  |   |   |   | 2.47 | % |   |   | 147,836 |   |   |   | 4,200 |   |   |   | 2.84 | % |   |   | 156,074 |   |   |   | 5,525 |   |   |   | 3.54 | % |
| Borrowed money                         |   |    | 101,469 |   |    |   | 3,621  |   |   |   | 3.57 | % |   |   | 115,630 |   |   |   | 4,302 |   |   |   | 3.72 | % |   |   | 146,220 |   |   |   | 5,819 |   |   |   | 3.98 | % |
| Total interest-bearing liabilities     |   |    | 396,533 |   |    |   | 8,370  |   |   |   | 2.11 | % |   |   | 401,475 |   |   |   | 10,125 |   |   |   | 2.52 | % |   |   | 402,344 |   |   |   | 12,726 |   |   |   | 3.16 | % |
| Non-interest-bearing demand deposits   |   |    | 35,914  |   |    |   |   |   |   |   |   |   |   |   | 35,280 |   |   |   |   |   |   |   |   |   |   |   | 36,219 |   |   |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities |   |    | 2,162   |   |    |   |   |   |   |   |   |   |   |   | 2,782 |   |   |   |   |   |   |   |   |   |   |   | 5,121 |   |   |   |   |   |   |   |   |   |
| Capital accounts                       |   |    | 46,102  |   |    |   |   |   |   |   |   |   |   |   | 43,067 |   |   |   |   |   |   |   |   |   |   |   | 40,161 |   |   |   |   |   |   |   |   |   |
| Total liabilities and capital accounts |   | $       | 480,711 |   |    |   |   |   |   |   |   |   |   | $ | 482,604 |   |   |   |   |   |   |   |   |   |   | $ | 483,845 |   |   |   |   |   |   |   |   |   |
|                                   |   |    |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                    |   |    |    |   |    | $      | 11,360 |   |   |   |   |   |   |   |   |   |   | $ | 12,337 |   |   |   |   |   |   |   |   |   |   | $ | 12,592 |   |   |   |   |   |
| Interest rate spread                   |   |    |    |   |    |   |   |   |   |   | 2.29 | % |   |   |   |   |   |   |   |   |   |   | 2.47 | % |   |   |   |   |   |   |   |   |   |   | 2.45 | % |
| Net interest-earning assets            |   | $       | 51,969  |   |    |   |   |   |   |   |   |   |   | $ | 48,316 |   |   |   |   |   |   |   |   |   |   | $ | 48,693 |   |   |   |   |   |   |   |   |   |
| Net interest margin                    |   |    |    |   |    |   |   |   |   |   | 2.53 | % |   |   |   |   |   |   |   |   |   |   | 2.74 | % |   |   |   |   |   |   |   |   |   |   | 2.79 | % |
| Average earning assets to              |   |    |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| average interest-bearing liabilities   |   |    |    |   |    |   |   |   |   |   | 113.11 | % |   |   |   |   |   |   |   |   |   |   | 112.03 | % |   |   |   |   |   |   |   |   |   |   | 112.10 | % |

----

|                               |   | 2011 Compared to 2010      |   |   | 2010 Compared to 2009      |   |
|------------------------------------|--------|----------------------------|--------|--------|----------------------------|--------|
| (Dollars in thousands)             |   | Increase (Decrease) Due to |   |   | Increase (Decrease) Due to |   |
| INTEREST-EARNING ASSETS:           |   | Rate                       |   |   | Volume                     |   |   | Net |   |   | Rate |   |   | Volume |   |   | Net |   |
| Interest and Dividend Income:      |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities              |   | $                          | (2,520 | )      |                       | $      | 741 |   |   | $ | (1,779 | ) |   | $ | (1,594 | ) |   | $ | (1,179 | ) |   | $ | (2,773 | ) |
| Loans                              |   |                       | (491   | )      |                       |   | (456 | ) |   |   | (947 | ) |   |   | (665 | ) |   |   | 588 |   |   |   | (77 | ) |
| Other interest-earning assets      |   |                       | 1      |   |                       |   | (7 | ) |   |   | (6 | ) |   |   | (22 | ) |   |   | 16 |   |   |   | (6 | ) |
| TOTAL INTEREST-EARNING ASSETS      |   |                       | (3,010 | )      |                       |   | 278 |   |   |   | (2,732 | ) |   |   | (2,281 | ) |   |   | (575 | ) |   |   | (2,856 | ) |
|                               |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST-BEARING LIABILITIES:      |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense:                  |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW accounts                       |   |                       | (527   | )      |                       |   | 144 |   |   |   | (383 | ) |   |   | (303 | ) |   |   | 676 |   |   |   | 373 |   |
| Savings accounts                   |   |                       | (33    | )      |                       |   | 6 |   |   |   | (27 | ) |   |   | (59 | ) |   |   | 4 |   |   |   | (55 | ) |
| Money Market accounts              |   |                       | (22    | )      |                       |   | 22 |   |   |   | - |   |   |   | (63 | ) |   |   | (14 | ) |   |   | (77 | ) |
| Time deposits                      |   |                       | (540   | )      |                       |   | (124 | ) |   |   | (664 | ) |   |   | (1,046 | ) |   |   | (279 | ) |   |   | (1,325 | ) |
| Other borrowed money               |   |                       | (170   | )      |                       |   | (511 | ) |   |   | (681 | ) |   |   | (360 | ) |   |   | (1,157 | ) |   |   | (1,517 | ) |
| TOTAL INTEREST-BEARING LIABILITIES |   |                       | (1,292 | )      |                       |   | (463 | ) |   |   | (1,755 | ) |   |   | (1,831 | ) |   |   | (770 | ) |   |   | (2,601 | ) |
|                               |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CHANGE IN NET INTEREST INCOME      |   | $                          | (1,718 | )      |                       | $      | 741 |   |   | $ | (977 | ) |   | $ | (450 | ) |   | $ | 195 |   |   | $ | (255 | ) |

----

| Net Interest Income At-Risk |
|-----------------------------|
|                        |   |   |   |   |   |
|                        |   | Estimated Increase (Decrease) |   |   | Estimated Increase (Decrease) |
| Change in Interest Rates    |   | in NII |   |   | in NII |
| (Basis Points)              |   | June 30, 2011 |   |   | June 30, 2010 |
|                        |   |   |   |   |   |
| Stable                      |   |   |   |   |   |
| + 100                       |   | -1.25% |   |   | -1.25% |
| + 200                       |   | -3.99% |   |   | -4.59% |

----

|                             |   |      |   |   |                             |   |    |    |   |   | NPV as a Percentage of Present |   |
|----------------------------------|--------|-----------|--------|--------|----------------------------------|--------|---------|---------|--------|--------|--------------------------------|--------|
|                             |   |      |   |   |                             |   |    |    |   |   | Value of Assets (3)            |   |
|                             |   |      |   |   | Estimated Increase (Decrease) in |   |    |    |   |   |                           |   |
| Change in                        |   |      |   |   | NPV                              |   |    |    |   |   | Increase                       |   |
| Interest Rates                   |   | Estimated |   |   |                             |   |    |    |   |   |                           |   |   | (Decrease) |   |
| (basis points) (1)               |   | NPV (2)   |   |   | Amount                           |   |    | Percent |   |   | NPV Ratio (4)                  |   |   | (basis points) |   |
|                             |   |      |   |   |                             |   |    |    |   |   |                           |   |   |   |   |
| +300                             |   | $         | 31,550 |   |                             | $      | (13,890 | )       |   |   | -31                            | %      |   |   | 6.88 | % |   |   | -252 |   |
| +200                             |   | $         | 38,445 |   |                             | $      | (6,995  | )       |   |   | -15                            | %      |   |   | 8.20 | % |   |   | -120 |   |
| +100                             |   | $         | 43,348 |   |                             | $      | (2,092  | )       |   |   | -5                             | %      |   |   | 9.08 | % |   |   | -32 |   |
|       0 |   | $         | 45,440 |   |                             | $      | -       |    |   |   | 0                              | %      |   |   | 9.40 | % |   |   | 0 |   |
| -100                             |   | $         | 46,293 |   |                             | $      | 854     |    |   |   | 2                              | %      |   |   | 9.49 | % |   |   | 9 |   |

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

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

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

|   | (4) | NPV ratio represents NPV divided by the present value of assets. |
|--------|-----|------------------------------------------------------------------|

----

| ITEM 7A. | Quantitative and Qualitative Disclosures About Market Risk |
|----------|------------------------------------------------------------|

| ITEM 8. | Financial Statements and Supplementary Data |
|--------------|---------------------------------------------|

----

|   |                                        |
|--------|----------------------------------------|
|   | SHATSWELL, MacLEOD & COMPANY, P.C. |

| 83 PINE STREET ● WEST PEABODY, MASSACHUSETTS 01960-3635 ● TELEPHONE (978) 535-0206 ● FACSIMILE (978) 535-9908 |
|------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                           | smc@shatswell.com | www.shatswell.com |

----

|                                                                                                                                        |   | 2011   |    |   | 2010   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| ASSETS                                                                                                                                      |   |   |    |   |   |   |
| Cash and due from depository institutions                                                                                                   |   | $      | 7,915   |   |   | $      | 21,298 |   |
| Interest-bearing demand deposits with other banks                                                                                           |   |   | 358     |   |   |   | 1,993 |   |
| Cash and cash equivalents                                                                                                                   |   |   | 8,273   |   |   |   | 23,291 |   |
| Investments in available-for-sale securities (at fair value)                                                                                |   |   | 58,009  |   |   |   | 85,893 |   |
| Investments in held-to-maturity securities (fair value of $115,962 as of June 30, 2011 and $83,698 as of June 30, 2010)                     |   |   | 114,741 |   |   |   | 83,249 |   |
| Federal Home Loan Bank stock, at cost                                                                                                       |   |   | 8,056   |   |   |   | 8,056 |   |
| Loans held-for-sale                                                                                                                         |   |   | 1,567   |   |   |   | 1,470 |   |
|                                                                                                                                        |   |   |    |   |   |   |   |   |
| Loans                                                                                                                                       |   |   | 256,297 |   |   |   | 257,423 |   |
| Allowance for loan losses                                                                                                                   |   |   | (3,072  | )      |   |   | (2,651 | ) |
| Net loans                                                                                                                                   |   |   | 253,225 |   |   |   | 254,772 |   |
|                                                                                                                                        |   |   |    |   |   |   |   |   |
| Premises and equipment                                                                                                                      |   |   | 4,849   |   |   |   | 5,292 |   |
| Accrued interest receivable                                                                                                                 |   |   | 1,528   |   |   |   | 1,698 |   |
| Other real estate owned                                                                                                                     |   |   | 1,074   |   |   |   | 1,561 |   |
| Goodwill                                                                                                                                    |   |   | 6,912   |   |   |   | 6,912 |   |
| Intangible assets                                                                                                                           |   |   | 324     |   |   |   | 473 |   |
| Bank owned life insurance                                                                                                                   |   |   | 6,431   |   |   |   | 6,191 |   |
| Other assets                                                                                                                                |   |   | 7,510   |   |   |   | 10,501 |   |
| Total assets                                                                                                                                |   | $      | 472,499 |   |   | $      | 489,359 |   |
|                                                                                                                                        |   |   |    |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                  |   |   |    |   |   |   |   |   |
| Deposits:                                                                                                                                   |   |   |    |   |   |   |   |   |
| Noninterest-bearing                                                                                                                         |   | $      | 36,814  |   |   | $      | 36,206 |   |
| Interest-bearing                                                                                                                            |   |   | 296,959 |   |   |   | 298,940 |   |
| Total deposits                                                                                                                              |   |   | 333,773 |   |   |   | 335,146 |   |
| Mortgagors’ escrow accounts                                                                                                           |   |   | 1,766   |   |   |   | 1,627 |   |
| Federal Home Loan Bank advances                                                                                                             |   |   | 83,500  |   |   |   | 100,500 |   |
| Securities sold under agreements to repurchase                                                                                              |   |   | 4,244   |   |   |   | 5,896 |   |
| Other liabilities                                                                                                                           |   |   | 2,469   |   |   |   | 2,335 |   |
| Total liabilities                                                                                                                           |   |   | 425,752 |   |   |   | 445,504 |   |
| Stockholders’ equity:                                                                                                                 |   |   |    |   |   |   |   |   |
| Common stock, $.10 par value, 12,000,000 shares authorized, 6,943,125 shares issued, 6,528,863 shares outstanding at June 30, 2011 and 2010 |   |   | 694     |   |   |   | 694 |   |
| Additional paid-in capital                                                                                                                  |   |   | 30,594  |   |   |   | 30,633 |   |
| Retained earnings                                                                                                                           |   |   | 22,648  |   |   |   | 21,550 |   |
| Accumulated other comprehensive loss                                                                                                        |   |   | (1,267  | )      |   |   | (2,776 | ) |
| Unearned ESOP shares                                                                                                                        |   |   | (1,693  | )      |   |   | (1,821 | ) |
| Unearned stock awards                                                                                                                       |   |   | (16     | )      |   |   | (212 | ) |
| Treasury stock, at cost (414,262 shares at June 30, 2011 and 2010)                                                                          |   |   | (4,213  | )      |   |   | (4,213 | ) |
| Total stockholders’ equity                                                                                                            |   |   | 46,747  |   |   |   | 43,855 |   |
| Total liabilities and stockholders’ equity                                                                                            |   | $      | 472,499 |   |   | $      | 489,359 |   |

----

|                                                                                                                                           |   | 2011   |      |   | 2010   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Interest and dividend income:                                                                                                                  |   |   |      |   |   |   |
| Interest and fees on loans                                                                                                                     |   | $      | 13,694    |   |   | $      | 14,641 |   |
| Interest on debt securities:                                                                                                                   |   |   |      |   |   |   |   |   |
| Taxable                                                                                                                                        |   |   | 5,547     |   |   |   | 7,270 |   |
| Dividends on marketable equity securities                                                                                                      |   |   | 473       |   |   |   | 541 |   |
| Dividends on FHLB stock                                                                                                                        |   |   | 12        |   |   |   | - |   |
| Interest on federal funds sold and other                                                                                                       |   |   | 4         |   |   |   | 10 |   |
| Total interest and dividend income                                                                                                             |   |   | 19,730    |   |   |   | 22,462 |   |
| Interest expense:                                                                                                                              |   |   |      |   |   |   |   |   |
| Interest on deposits                                                                                                                           |   |   | 4,749     |   |   |   | 5,823 |   |
| Interest on Federal Home Loan Bank advances                                                                                                    |   |   | 3,600     |   |   |   | 4,208 |   |
| Interest on securities sold under agreements to repurchase                                                                                     |   |   | 21        |   |   |   | 94 |   |
| Total interest expense                                                                                                                         |   |   | 8,370     |   |   |   | 10,125 |   |
| Net interest and dividend income                                                                                                               |   |   | 11,360    |   |   |   | 12,337 |   |
| Provision for loan losses                                                                                                                      |   |   | 915       |   |   |   | 1,049 |   |
| Net interest and dividend income after provision for loan losses                                                                               |   |   | 10,445    |   |   |   | 11,288 |   |
| Noninterest income:                                                                                                                            |   |   |      |   |   |   |   |   |
| Fees for services                                                                                                                              |   |   | 2,052     |   |   |   | 2,285 |   |
| Write-down of securities (includes total losses of $3,037 and $5,421, net of $1,972 and $2,972 recognized in other comprehensive loss, pretax) |   |   | (1,065    | )      |   |   | (2,449 | ) |
| Gain on sales and calls of securities, net                                                                                                     |   |   | 257       |   |   |   | 1,424 |   |
| Mortgage banking activities                                                                                                                    |   |   | 138       |   |   |   | 217 |   |
| Net commissions from brokerage service                                                                                                         |   |   | 134       |   |   |   | 82 |   |
| Bank owned life insurance income                                                                                                               |   |   | 407       |   |   |   | 279 |   |
| Income from legal settlement                                                                                                                   |   |   | 420       |   |   |   | - |   |
| Other income                                                                                                                                   |   |   | 160       |   |   |   | 145 |   |
| Total noninterest income                                                                                                                       |   |   | 2,503     |   |   |   | 1,983 |   |
| Noninterest expense:                                                                                                                           |   |   |      |   |   |   |   |   |
| Salaries and employee benefits                                                                                                                 |   |   | 5,849     |   |   |   | 5,888 |   |
| Occupancy and equipment expense                                                                                                                |   |   | 1,333     |   |   |   | 1,238 |   |
| Data processing                                                                                                                                |   |   | 884       |   |   |   | 770 |   |
| Advertising and marketing                                                                                                                      |   |   | 221       |   |   |   | 283 |   |
| Professional fees                                                                                                                              |   |   | 327       |   |   |   | 332 |   |
| Amortization of intangible asset                                                                                                               |   |   | 149       |   |   |   | 178 |   |
| Deposit insurance assessment                                                                                                                   |   |   | 773       |   |   |   | 764 |   |
| Prepayment penalty on Federal Home Loan Bank advances                                                                                          |   |   | 31        |   |   |   | 187 |   |
| OTS assessment                                                                                                                                 |   |   | 187       |   |   |   | 150 |   |
| Other real estate owned expense                                                                                                                |   |   | 140       |   |   |   | 78 |   |
| Write down of other real estate owned                                                                                                          |   |   | 95        |   |   |   | 321 |   |
| Other expense                                                                                                                                  |   |   | 1,324     |   |   |   | 1,511 |   |
| Total noninterest expense                                                                                                                      |   |   | 11,313    |   |   |   | 11,700 |   |
| Income before income tax expense                                                                                                               |   |   | 1,635     |   |   |   | 1,571 |   |
| Income tax expense                                                                                                                             |   |   | 537       |   |   |   | 309 |   |
| Net income                                                                                                                                     |   | $      | 1,098     |   |   | $      | 1,262 |   |
|                                                                                                                                           |   |   |      |   |   |   |   |   |
| Earnings per common share                                                                                                                      |   |   |      |   |   |   |   |   |
| Basic                                                                                                                                          |   | $      | 0.17      |   |   | $      | 0.20 |   |
| Diluted                                                                                                                                        |   | $      | 0.17      |   |   | $      | 0.20 |   |
|                                                                                                                                           |   |   |      |   |   |   |   |   |
| Weighted average common shares outstanding                                                                                                     |   |   |      |   |   |   |   |   |
| Basic                                                                                                                                          |   |   | 6,342,473 |   |   |   | 6,312,287 |   |
| Diluted                                                                                                                                        |   |   | 6,342,473 |   |   |   | 6,312,287 |   |

----

|                                                                                        |   |   |   |   |       |   |   |     |   |   | Accumulated   |   |   |     |   |   |     |   |   |     |   |   |   |   |
|---------------------------------------------------------------------------------------------|--------|--------|--------|--------|------------|--------|--------|----------|--------|--------|---------------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|--------|--------|
|                                                                                        |   |   |   |   | Additional |   |   |     |   |   | Other         |   |   | Unearned |   |   | Unearned |   |   |     |   |   |   |   |
|                                                                                        |   | Common |   |   | Paid-in    |   |   | Retained |   |   | Comprehensive |   |   | ESOP     |   |   | Stock    |   |   | Treasury |   |   |   |   |
|                                                                                        |   | Stock  |   |   | Capital    |   |   | Earnings |   |   | Loss (1)      |   |   | Shares   |   |   | Awards   |   |   | Stock    |   |   | Total  |   |
| Balance, June 30, 2009                                                                      |   | $      | 694    |   |       | $      | 30,656 |     |   | $      | 20,383        |   |   | $        | (5,277 | )      |     | $      | (1,940 | )        |   | $      | (409   | )      |   | $ | (4,211 | ) |   | $ | 39,896 |   |
| Comprehensive income:                                                                       |   |   |   |   |       |   |   |     |   |   |          |   |   |     |   |   |     |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                  |   |   | -      |   |       |   | -      |     |   |   | 1,262         |   |   |     | -      |   |     |   | -      |     |   |   | -      |   |   |   | - |   |   |   | - |   |
| Net change in unrealized holding losses on available-for-sale securities, net of tax effect |   |   | -      |   |       |   | -      |     |   |   | -             |   |   |     | 2,501  |   |     |   | -      |     |   |   | -      |   |   |   | - |   |   |   | - |   |
| Comprehensive income                                                                        |   |   | -      |   |       |   | -      |     |   |   | -             |   |   |     | -      |   |     |   | -      |     |   |   | -      |   |   |   | - |   |   |   | 3,763 |   |
| Dividends declared                                                                          |   |   | -      |   |       |   | -      |     |   |   | (95           | )      |   |     | -      |   |     |   | -      |     |   |   | -      |   |   |   | - |   |   |   | (95 | ) |
| ESOP shares released                                                                        |   |   | -      |   |       |   | (69    | )        |   |   | -             |   |   |     | -      |   |     |   | 119    |     |   |   | -      |   |   |   | - |   |   |   | 50 |   |
| Purchase of treasury stock                                                                  |   |   | -      |   |       |   | -      |     |   |   | -             |   |   |     | -      |   |     |   | -      |     |   |   | -      |   |   |   | (2 | ) |   |   | (2 | ) |
| Stock-based compensation expense                                                            |   |   | -      |   |       |   | 46     |     |   |   | -             |   |   |     | -      |   |     |   | -      |     |   |   | 197    |   |   |   | - |   |   |   | 243 |   |
| Balance, June 30, 2010                                                                      |   |   | 694    |   |       |   | 30,633 |     |   |   | 21,550        |   |   |     | (2,776 | )      |     |   | (1,821 | )        |   |   | (212   | )      |   |   | (4,213 | ) |   |   | 43,855 |   |
| Comprehensive income:                                                                       |   |   |   |   |       |   |   |     |   |   |          |   |   |     |   |   |     |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                  |   |   | -      |   |       |   | -      |     |   |   | 1,098         |   |   |     | -      |   |     |   | -      |     |   |   | -      |   |   |   | - |   |   |   | - |   |
| Net change in unrealized holding losses on available-for-sale securities, net of tax effect |   |   | -      |   |       |   | -      |     |   |   | -             |   |   |     | 1,509  |   |     |   | -      |     |   |   | -      |   |   |   | - |   |   |   | - |   |
| Comprehensive income                                                                        |   |   | -      |   |       |   | -      |     |   |   | -             |   |   |     | -      |   |     |   | -      |     |   |   | -      |   |   |   | - |   |   |   | 2,607 |   |
| ESOP shares released                                                                        |   |   | -      |   |       |   | (71    | )        |   |   | -             |   |   |     | -      |   |     |   | 128    |     |   |   | -      |   |   |   | - |   |   |   | 57 |   |
| Stock-based compensation expense                                                            |   |   | -      |   |       |   | 32     |     |   |   | -             |   |   |     | -      |   |     |   | -      |     |   |   | 196    |   |   |   | - |   |   |   | 228 |   |
| Balance, June 30, 2011                                                                      |   | $      | 694    |   |       | $      | 30,594 |     |   | $      | 22,648        |   |   | $        | (1,267 | )      |     | $      | (1,693 | )        |   | $      | (16    | )      |   | $ | (4,213 | ) |   | $ | 46,747 |   |

----

|                                                          |   |           |   |   |   |   |
|---------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                          |   | 2011           |   |   | 2010   |   |
|                                                          |   | (In Thousands) |   |
| Unrealized holding losses on available-for-sale securities:   |   |           |   |   |   |   |
| Net unrealized holding gains on available-for-sale securities |   | $              | 1,475  |   |   | $      | 2,751 |   |
| Reclassification adjustment for losses realized in net income |   |           | 811    |   |   |   | 1,037 |   |
|                                                          |   |           | 2,286  |   |   |   | 3,788 |   |
| Income tax expense                                            |   |           | (777   | )      |   |   | (1,287 | ) |
| Other comprehensive income, net of tax                        |   | $              | 1,509  |   |   | $      | 2,501 |   |

----

|                                                                              |   | 2011   |    |   | 2010   |   |
|-----------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Cash flows from operating activities:                                             |   |   |    |   |   |   |
| Net income                                                                        |   | $      | 1,098   |   |   | $      | 1,262 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |   |    |   |   |   |   |   |
| Amortization of securities, net                                                   |   |   | 1,197   |   |   |   | 450 |   |
| Gain on sales and calls of securities, net                                        |   |   | (257    | )      |   |   | (1,424 | ) |
| Write down of securities                                                          |   |   | 1,065   |   |   |   | 2,449 |   |
| Net increase in loans held-for-sale                                               |   |   | (97     | )      |   |   | (270 | ) |
| Change in deferred loan costs, net                                                |   |   | 94      |   |   |   | 39 |   |
| Provision for loan losses                                                         |   |   | 915     |   |   |   | 1,049 |   |
| (Gain) loss on sale of other real estate owned                                    |   |   | (59     | )      |   |   | 31 |   |
| Loss on disposal of equipment                                                     |   |   | 7       |   |   |   | - |   |
| Writedown of other real estate owned                                              |   |   | 95      |   |   |   | 321 |   |
| Depreciation and amortization                                                     |   |   | 512     |   |   |   | 527 |   |
| Amortization of core deposit intangible                                           |   |   | 149     |   |   |   | 178 |   |
| Decrease (increase) in accrued interest receivable and other assets               |   |   | 2,554   |   |   |   | (4,557 | ) |
| Increase in cash surrender value of bank owned life insurance                     |   |   | (407    | )      |   |   | (279 | ) |
| Increase (decrease) in other liabilities                                          |   |   | 288     |   |   |   | (383 | ) |
| Deferred tax (benefit) expense                                                    |   |   | (187    | )      |   |   | 1,970 |   |
| ESOP shares released                                                              |   |   | 57      |   |   |   | 50 |   |
| Stock-based compensation expense                                                  |   |   | 120     |   |   |   | 285 |   |
|                                                                              |   |   |    |   |   |   |   |   |
| Net cash provided by operating activities                                         |   |   | 7,144   |   |   |   | 1,698 |   |
|                                                                              |   |   |    |   |   |   |   |   |
| Cash flows from investing activities:                                             |   |   |    |   |   |   |   |   |
| Purchases of available-for-sale securities                                        |   |   | -       |   |   |   | (1,000 | ) |
| Proceeds from sales of available-for-sale securities                              |   |   | 6,636   |   |   |   | 31,706 |   |
| Proceeds from maturities of available-for-sale securities                         |   |   | 22,663  |   |   |   | 50,838 |   |
| Purchase of held-to-maturity securities                                           |   |   | (93,692 | )      |   |   | (104,335 | ) |
| Proceeds from maturities of held-to-maturity securities                           |   |   | 61,066  |   |   |   | 22,850 |   |
| Loan originations and principal collections, net                                  |   |   | 282     |   |   |   | 7,029 |   |
| Recoveries of loans previously charged off                                        |   |   | 60      |   |   |   | 67 |   |
| Proceeds from sale of other real estate owned                                     |   |   | 607     |   |   |   | 715 |   |
| Proceeds from the surrender of bank owned life insurance policy                   |   |   | 167     |   |   |   | - |   |
| Capital expenditures - premises and equipment                                     |   |   | (65     | )      |   |   | (617 | ) |
| Capital expenditures - other real estate owned                                    |   |   | -       |   |   |   | (16 | ) |
|                                                                              |   |   |    |   |   |   |   |   |
| Net cash (used in) provided by investing activities                               |   |   | (2,276  | )      |   |   | 7,237 |   |

----

|                                                                      |   | 2011   |    |   | 2010   |   |
|---------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Cash flows from financing activities:                                     |   |   |    |   |   |   |
| Net increase in demand deposits, NOW and savings accounts                 |   |   | 2,244   |   |   |   | 38,876 |   |
| Net decrease in time deposits                                             |   |   | (3,617  | )      |   |   | (11,829 | ) |
| Net increase in mortgagors’ escrow accounts                         |   |   | 139     |   |   |   | 63 |   |
| Proceeds from Federal Home Loan Bank advances                             |   |   | 10,000  |   |   |   | 9,500 |   |
| Repayment of Federal Home Loan Bank advances                              |   |   | (27,000 | )      |   |   | (29,500 | ) |
| Net (decrease) increase in securities sold under agreements to repurchase |   |   | (1,652  | )      |   |   | 1,425 |   |
| Acquisition of treasury stock                                             |   |   | -       |   |   |   | (2 | ) |
| Dividends paid                                                            |   |   | -       |   |   |   | (236 | ) |
|                                                                      |   |   |    |   |   |   |   |   |
| Net cash (used in) provided by financing activities                       |   |   | (19,886 | )      |   |   | 8,297 |   |
|                                                                      |   |   |    |   |   |   |   |   |
| Net (decrease) increase in cash and cash equivalents                      |   |   | (15,018 | )      |   |   | 17,232 |   |
| Cash and cash equivalents at beginning of year                            |   |   | 23,291  |   |   |   | 6,059 |   |
| Cash and cash equivalents at end of year                                  |   | $      | 8,273   |   |   | $      | 23,291 |   |
|                                                                      |   |   |    |   |   |   |   |   |
| Supplemental disclosures:                                                 |   |   |    |   |   |   |   |   |
| Interest paid                                                             |   |   | 8,429   |   |   | $      | 10,206 |   |
| Income taxes (received) paid                                              |   |   | (864    | )      |   |   | 646 |   |
| Loans transferred to other real estate owned                              |   |   | 709     |   |   |   | 2,040 |   |
| Deferred gain on sale of other real estate owned in other liabilities     |   |   | (40     | )      |   |   | 40 |   |
| Loans originated to finance sale of other real estate owned               |   |   | 513     |   |   |   | 679 |   |

----

----

|   | -- | Held-to-maturity securities are measured at amortized cost in the consolidated balance sheets.  Unrealized holding gains and losses are not included in earnings, or in a separate component of capital.  They are merely disclosed in the notes to the consolidated financial statements. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | -- | Available-for-sale securities are carried at fair value on the consolidated balance sheets.  Unrealized holding gains and losses are not included in earnings but are reported as a net amount (less expected tax) in a separate component of capital until realized. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | -- | Trading securities are carried at fair value on the consolidated balance sheets.  Unrealized holding gains and losses for trading securities are included in earnings. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|                                                              |   | Income      |      |   | Shares        |   |      | Per-Share |   |
|-------------------------------------------------------------------|--------|-------------|-----------|--------|---------------|--------|-----------|-----------|--------|
|                                                              |   | (Numerator) |      |   | (Denominator) |   |      | Amount    |   |
| Year ended June 30, 2011:                                         |   |        |      |   |          |   |      |      |   |
| Basic EPS                                                         |   |        |      |   |          |   |      |      |   |
| Net income                                                        |   | $           | 1,098,000 |   |          |   |      |      |   |   |
| Dividends and undistributed earnings allocated to unvested shares |   |        | (2,000    | )      |          |   |      |      |   |   |
| Net income and income allocated to common stockholders            |   |        | 1,096,000 |   |          |   | 6,342,473 |      |   | $ | 0.17 |   |
| Effect of dilutive securities options and warrants                |   |        |      |   |          |   | N/A       |      |   |   |   |   |
| Diluted EPS                                                       |   |        |      |   |          |   |      |      |   |   |   |   |
| Income allocated to common stockholders and assumed conversions   |   | $           | 1,096,000 |   |          |   | 6,342,473 |      |   | $ | 0.17 |   |
|                                                              |   |        |      |   |          |   |      |      |   |   |   |   |
| Year ended June 30, 2010:                                         |   |        |      |   |          |   |      |      |   |   |   |   |
| Basic EPS                                                         |   |        |      |   |          |   |      |      |   |   |   |   |
| Net income                                                        |   | $           | 1,262,000 |   |          |   |      |      |   |   |   |   |
| Dividends and undistributed earnings allocated to unvested shares |   |        | (6,000    | )      |          |   |      |      |   |   |   |   |
| Net income and income allocated to common stockholders            |   |        | 1,256,000 |   |          |   | 6,312,287 |      |   | $ | 0.20 |   |
| Effect of dilutive securities options and warrants                |   |        |      |   |          |   | N/A       |      |   |   |   |   |
| Diluted EPS                                                       |   |        |      |   |          |   |      |      |   |   |   |   |
| Income allocated to common stockholders and assumed conversions   |   | $           | 1,256,000 |   |          |   | 6,312,287 |      |   | $ | 0.20 |   |

----

----

----

|                                    |   |           |    |   | Gross      |   |   | Gross      |   |   |   |   |
|-----------------------------------------|--------|----------------|---------|--------|------------|--------|--------|------------|--------|--------|--------|--------|
|                                    |   | Amortized      |    |   | Unrealized |   |   | Unrealized |   |   | Fair   |   |
|                                    |   | Cost           |    |   | Gains      |   |   | Losses     |   |   | Value  |   |
|                                    |   | (In Thousands) |    |
| Available-for-sale:                     |   |           |    |   |       |   |   |       |   |   |   |   |
| June 30, 2011:                          |   |           |    |   |       |   |   |       |   |   |   |   |
| Debt securities:                        |   |           |    |   |       |   |   |       |   |   |   |   |
| U.S. government and agency obligations: |   |           |    |   |       |   |   |       |   |   |   |   |
| From one through five years             |   | $              | 630     |   |       | $      | 36     |       |   | $      | -      |   |   | $ | 666 |   |
|                                    |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Corporate bonds and other obligations:  |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| After ten years                         |   |           | 5,998   |   |       |   | -      |       |   |   | (1,093 | )      |   |   | 4,905 |   |
|                                    |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Mortgage-backed securities              |   |           | 43,253  |   |       |   | 1,673  |       |   |   | (2,888 | )      |   |   | 42,038 |   |
|                                    |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Equity securities:                      |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Auction rate preferred                  |   |           | 10,047  |   |       |   | 682    |       |   |   | (329   | )      |   |   | 10,400 |   |
| Total available-for-sale securities     |   | $              | 59,928  |   |       | $      | 2,391  |       |   | $      | (4,310 | )      |   | $ | 58,009 |   |
|                                    |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| June 30, 2010:                          |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Debt securities:                        |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| U.S. government and agency obligations: |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Due within one year                     |   | $              | 1,089   |   |       | $      | 33     |       |   | $      | -      |   |   | $ | 1,122 |   |
| From one through five years             |   |           | 894     |   |       |   | 63     |       |   |   | -      |   |   |   | 957 |   |
| From five through ten years             |   |           | 2,000   |   |       |   | 3      |       |   |   | -      |   |   |   | 2,003 |   |
| After ten years                         |   |           | 2,005   |   |       |   | 14     |       |   |   | -      |   |   |   | 2,019 |   |
|                                    |   |           | 5,988   |   |       |   | 113    |       |   |   | -      |   |   |   | 6,101 |   |
|                                    |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Corporate bonds and other obligations:  |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| After ten years                         |   |           | 5,998   |   |       |   | -      |       |   |   | (1,630 | )      |   |   | 4,368 |   |
|                                    |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Mortgage-backed securities              |   |           | 68,065  |   |       |   | 2,616  |       |   |   | (3,714 | )      |   |   | 66,967 |   |
|                                    |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Equity securities:                      |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Auction rate preferred                  |   |           | 10,047  |   |       |   | 6      |       |   |   | (1,596 | )      |   |   | 8,457 |   |
| Total available-for-sale securities     |   | $              | 90,098  |   |       | $      | 2,735  |       |   | $      | (6,940 | )      |   | $ | 85,893 |   |
|                                    |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Held-to-maturity:                       |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| June 30, 2011:                          |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Debt securities:                        |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| U.S. government and agency obligations: |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| From one through five years             |   | $              | 2,000   |   |       | $      | 34     |       |   | $      | -      |   |   | $ | 2,034 |   |
| From five through ten years             |   |           | 11,234  |   |       |   | 51     |       |   |   | (26    | )      |   |   | 11,259 |   |
| After ten years                         |   |           | 2,851   |   |       |   | -      |       |   |   | (15    | )      |   |   | 2,836 |   |
|                                    |   |           | 16,085  |   |       |   | 85     |       |   |   | (41    | )      |   |   | 16,129 |   |
|                                    |   |           |    |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Mortgage-backed securities              |   |           | 98,656  |   |       |   | 1,221  |       |   |   | (44    | )      |   |   | 99,833 |   |
| Total held-to-maturity securities       |   | $              | 114,741 |   |       | $      | 1,306  |       |   | $      | (85    | )      |   | $ | 115,962 |   |

----

|                                    |   |           |   |   | Gross      |   |   | Gross      |   |   |   |   |
|-----------------------------------------|--------|----------------|--------|--------|------------|--------|--------|------------|--------|--------|--------|--------|
|                                    |   | Amortized      |   |   | Unrealized |   |   | Unrealized |   |   | Fair   |   |
|                                    |   | Cost           |   |   | Gains      |   |   | Losses     |   |   | Value  |   |
|                                    |   | (In Thousands) |   |
| June 30, 2010:                          |   |           |   |   |       |   |   |       |   |   |   |   |
| Debt securities:                        |   |           |   |   |       |   |   |       |   |   |   |   |
| U.S. government and agency obligations: |   |           |   |   |       |   |   |       |   |   |   |   |
| From one through five years             |   | $              | 24,250 |   |       | $      | 74     |       |   | $      | -      |   |   | $ | 24,324 |   |
| From five through ten years             |   |           | 19,025 |   |       |   | 151    |       |   |   | -      |   |   |   | 19,176 |   |
| After ten years                         |   |           | 2,000  |   |       |   | 5      |       |   |   | -      |   |   |   | 2,005 |   |
|                                    |   |           | 45,275 |   |       |   | 230    |       |   |   | -      |   |   |   | 45,505 |   |
|                                    |   |           |   |   |       |   |   |       |   |   |   |   |   |   |   |   |
| Mortgage-backed securities              |   |           | 37,974 |   |       |   | 320    |       |   |   | (101   | )      |   |   | 38,193 |   |
| Total held-to-maturity securities       |   | $              | 83,249 |   |       | $      | 550    |       |   | $      | (101   | )      |   | $ | 83,698 |   |

|                                 |   | Amortized      |   |   | Fair   |   |
|--------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                 |   | Cost           |   |   | Value  |   |
| Issuer                               |   | (In Thousands) |   |
| Merrill Lynch Auction Rate Pass Thru |   | $              | 5,000  |   |   | $      | 4,763 |   |

|                                                                      |   | Less than 12 Months |   |   | 12 Months or Longer |   |   | Total  |   |
|---------------------------------------------------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|--------|--------|
|                                                                      |   | Fair                |   |   | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                                                      |   | Value               |   |   | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
|                                                                      |   | (In Thousands)      |   |
| June 30, 2011:                                                            |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S Government and agency obligations                                     |   | $                   | 3,810  |   |                | $      | 41     |   |   | $ | - |   |   | $ | - |   |   | $ | 3,810 |   |   | $ | 41 |   |
| Corporate bonds and other obligations                                     |   |                | -      |   |                |   | -      |   |   |   | 4,905 |   |   |   | 1,093 |   |   |   | 4,905 |   |   |   | 1,093 |   |
| Mortgage-backed securities                                                |   |                | 10,323 |   |                |   | 45     |   |   |   | - |   |   |   | - |   |   |   | 10,323 |   |   |   | 45 |   |
| Equity securities                                                         |   |                | -      |   |                |   | -      |   |   |   | 6,671 |   |   |   | 329 |   |   |   | 6,671 |   |   |   | 329 |   |
| Total temporarily impaired securities                                     |   |                | 14,133 |   |                |   | 86     |   |   |   | 11,576 |   |   |   | 1,422 |   |   |   | 25,709 |   |   |   | 1,508 |   |
|                                                                      |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other-than-temporarily impaired debt securities: (1)                      |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                                                |   |                | 4,567  |   |                |   | 537    |   |   |   | 7,155 |   |   |   | 2,350 |   |   |   | 11,722 |   |   |   | 2,887 |   |
| Total temporarily impaired and other-than-temporarily impaired securities |   | $                   | 18,700 |   |                | $      | 623    |   |   | $ | 18,731 |   |   | $ | 3,772 |   |   | $ | 37,431 |   |   | $ | 4,395 |   |

----

|                                                                      |   | Less than 12 Months |   |   | 12 Months or Longer |   |   | Total  |   |
|---------------------------------------------------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|--------|--------|
|                                                                      |   | Fair                |   |   | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                                                      |   | Value               |   |   | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
|                                                                      |   | (In Thousands)      |   |
| June 30, 2010:                                                            |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate bonds and other obligations                                     |   | $                   | -      |   |                | $      | -      |   |   | $ | 4,368 |   |   | $ | 1,630 |   |   | $ | 4,368 |   |   | $ | 1,630 |   |
| Mortgage-backed securities                                                |   |                | 12,307 |   |                |   | 101    |   |   |   | 1,032 |   |   |   | 188 |   |   |   | 13,339 |   |   |   | 289 |   |
| Equity securities                                                         |   |                | 2,744  |   |                |   | 256    |   |   |   | 5,660 |   |   |   | 1,340 |   |   |   | 8,404 |   |   |   | 1,596 |   |
| Total temporarily impaired securities                                     |   |                | 15,051 |   |                |   | 357    |   |   |   | 11,060 |   |   |   | 3,158 |   |   |   | 26,111 |   |   |   | 3,515 |   |
|                                                                      |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other-than-temporarily impaired debt securities: (1)                      |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                                                |   |                | 852    |   |                |   | 419    |   |   |   | 14,349 |   |   |   | 3,107 |   |   |   | 15,201 |   |   |   | 3,526 |   |
| Total temporarily impaired and other-than-temporarily impaired securities |   | $                   | 15,903 |   |                | $      | 776    |   |   | $ | 25,409 |   |   | $ | 6,265 |   |   | $ | 41,312 |   |   | $ | 7,041 |   |

----

|                                                                                    |   |           |   |   |       |   |   |            |   |   |   |   |
|-----------------------------------------------------------------------------------------|--------|----------------|--------|--------|------------|--------|--------|-----------------|--------|--------|--------|--------|
|                                                                                    |   |           |   |   |       |   |   | Non-Agency      |   |   |   |   |
|                                                                                    |   | Equity         |   |   | Corporate  |   |   | Mortgage-Backed |   |   |   |   |
|                                                                                    |   | Securities     |   |   | Securities |   |   | Securities      |   |   | Total  |   |
|                                                                                    |   | (In Thousands) |   |
| June 30, 2011:                                                                          |   |           |   |   |       |   |   |            |   |   |   |   |
| Total other-than-temporary impairment losses                                            |   | $              | -      |   |       | $      | -      |            |   | $      | 3,037  |   |   | $ | 3,037 |   |
| Less: unrealized other-than-temporary losses recognized in other comprehensive loss (1) |   |           | -      |   |       |   | -      |            |   |   | 1,972  |   |   |   | 1,972 |   |
|                                                                                    |   |           |   |   |       |   |   |            |   |   |   |   |   |   |   |   |
| Net impairment losses recognized in earnings (2)                                        |   | $              | -      |   |       | $      | -      |            |   | $      | 1,065  |   |   | $ | 1,065 |   |
|                                                                                    |   |           |   |   |       |   |   |            |   |   |   |   |   |   |   |   |
| June 30, 2010:                                                                          |   |           |   |   |       |   |   |            |   |   |   |   |   |   |   |   |
| Total other-than-temporary impairment losses                                            |   | $              | -      |   |       | $      | -      |            |   | $      | 5,421  |   |   | $ | 5,421 |   |
| Less: unrealized other-than-temporary losses recognized in other comprehensive loss (1) |   |           | -      |   |       |   | -      |            |   |   | 2,972  |   |   |   | 2,972 |   |
|                                                                                    |   |           |   |   |       |   |   |            |   |   |   |   |   |   |   |   |
| Net impairment losses recognized in earnings (2)                                        |   | $              | -      |   |       | $      | -      |            |   | $      | 2,449  |   |   | $ | 2,449 |   |
|                                                                                    |   |           |   |   |       |   |   |            |   |   |   |   |   |   |   |   |

|                                                                                                                         |   | 2011           |   |   | 2010   |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                                                                                         |   | Total          |   |   | Total  |   |
|                                                                                                                         |   | (In Thousands) |   |
| Balance, July 1                                                                                                              |   | $              | 12,242 |   |   | $      | 9,793 |   |
| Additions for the credit component on debt securities in which other-than-temporary impairment was not previously recognized |   |           | 3      |   |   |   | 48 |   |
| Additions for the credit component on debt securities in which other-than-temporary impairment was previously recognized     |   |           | 1,062  |   |   |   | 2,401 |   |
| Balance, June 30                                                                                                             |   | $              | 13,307 |   |   | $      | 12,242 |   |

|             |   | Weighted |   |   | Range   |   |
|------------------|--------|----------|--------|--------|---------|--------|
|             |   | Average  |   |   | Minimum |   |   | Maximum |   |
| Prepayment rates |   |     | 11.6   | %      |    |   | 0.2 | % |   |   | 23.8 | % |
| Default rates    |   |     | 21.8   |   |    |   | 9.2 |   |   |   | 36.8 |   |
| Loss severity    |   |     | 31.5   |   |    |   | 10.0 |   |   |   | 36.6 |   |

----

|                               |   | 2011           |    |   | 2010   |   |
|------------------------------------|--------|----------------|---------|--------|--------|--------|
|                               |   | (In Thousands) |    |
| Residential mortgages              |   | $              | 193,084 |   |   | $      | 194,960 |   |
| Commercial mortgages               |   |           | 53,248  |   |   |   | 54,398 |   |
| Residential construction mortgages |   |           | 2,824   |   |   |   | 1,338 |   |
| Commercial                         |   |           | 7,356   |   |   |   | 6,786 |   |
| Installment                        |   |           | 707     |   |   |   | 729 |   |
| Collateral                         |   |           | 258     |   |   |   | 309 |   |
| Other                              |   |           | 105     |   |   |   | 139 |   |
|                               |   |           | 257,582 |   |   |   | 258,659 |   |
| Unadvanced construction loans      |   |           | (1,476  | )      |   |   | (1,521 | ) |
|                               |   |           | 256,106 |   |   |   | 257,138 |   |
| Allowance for loan losses          |   |           | (3,072  | )      |   |   | (2,651 | ) |
| Deferred costs, net                |   |           | 191     |   |   |   | 285 |   |
| Net loans                          |   | $              | 253,225 |   |   | $      | 254,772 |   |
| Weighted average yield             |   |           | 5.33    | %      |   |   | 5.58 | % |

|                           |   |           |    |   |   |   |
|--------------------------------|--------|----------------|---------|--------|--------|--------|
|                           |   | 2011           |    |   | 2010   |   |
|                           |   | (In Thousands) |    |
| Fixed rate:                    |   |           |    |   |   |   |
| Term to maturity               |   |           |    |   |   |   |
| One month through one year     |   | $              | 8,701   |   |   | $      | 2,809 |   |
| One year through three years   |   |           | 12,800  |   |   |   | 11,967 |   |
| Three years through five years |   |           | 8,905   |   |   |   | 11,008 |   |
| Five years through ten years   |   |           | 24,098  |   |   |   | 27,584 |   |
| Over ten years                 |   |           | 97,888  |   |   |   | 93,715 |   |
|                           |   |           | 152,392 |   |   |   | 147,083 |   |
| Adjustable rate:               |   |           |    |   |   |   |   |   |
| Rate adjustment                |   |           |    |   |   |   |   |   |
| One month through one year     |   |           | 54,727  |   |   |   | 52,107 |   |
| One year through three years   |   |           | 24,702  |   |   |   | 23,599 |   |
| Three years through five years |   |           | 17,865  |   |   |   | 27,048 |   |
| Over five years                |   |           | 6,420   |   |   |   | 7,301 |   |
|                           |   |           | 103,714 |   |   |   | 110,055 |   |
| Total loans                    |   | $              | 256,106 |   |   | $      | 257,138 |   |

|                                       |   | 2011           |   |   | 2010   |   |
|--------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                       |   | (In Thousands) |   |
| Beginning balance                          |   | $              | 2,651  |   |   | $      | 2,200 |   |
| Charge offs                                |   |           | (554   | )      |   |   | (665 | ) |
| Recoveries of loans previously charged off |   |           | 60     |   |   |   | 67 |   |
| Provision for loan losses                  |   |           | 915    |   |   |   | 1,049 |   |
| Balance at end of period                   |   | $              | 3,072  |   |   | $      | 2,651 |   |

----

|                                                  |   |           |    |   |        |   |   |         |   |   |             |   |   |     |   |   |   |   |   |        |   |   |   |   |
|-------------------------------------------------------|--------|----------------|---------|--------|-------------|--------|--------|--------------|--------|--------|------------------|--------|--------|----------|--------|--------|--------|--------|--------|-------------|--------|--------|--------|--------|
|                                                  |   | Residential    |    |   | Commercial  |   |   | Residential  |   |   | Commercial       |   |   |     |   |   |   |   |   |        |   |   |   |   |
|                                                  |   | Real Estate    |    |   | Real Estate |   |   | Construction |   |   | & Industrial |   |   | Consumer |   |   | Other  |   |   | Unallocated |   |   | Total  |   |
|                                                  |   | (In Thousands) |    |
| June 30, 2011                                         |   |           |    |   |        |   |   |         |   |   |             |   |   |     |   |   |   |   |   |        |   |   |   |   |
| Allowance for credit losses:                          |   |           |    |   |        |   |   |         |   |   |             |   |   |     |   |   |   |   |   |        |   |   |   |   |
| Beginning balance                                     |   | $              | 1,332   |   |        | $      | 901    |         |   | $      | 10               |   |   | $        | 297    |   |   | $      | 37     |        |   | $      | 6      |   |   | $ | 68 |   |   | $ | 2,651 |   |
| Charge-offs                                           |   |           | 208     |   |        |   | 62     |         |   |   | -                |   |   |     | 212    |   |   |   | 3      |        |   |   | 69     |   |   |   | - |   |   |   | 554 |   |
| Recoveries                                            |   |           | 6       |   |        |   | -      |         |   |   | -                |   |   |     | 18     |   |   |   | 1      |        |   |   | 35     |   |   |   | - |   |   |   | 60 |   |
| Provision                                             |   |           | 390     |   |        |   | 447    |         |   |   | 18               |   |   |     | 37     |   |   |   | (27    | )           |   |   | 31     |   |   |   | 19 |   |   |   | 915 |   |
| Ending balance                                        |   | $              | 1,520   |   |        | $      | 1,286  |         |   | $      | 28               |   |   | $        | 140    |   |   | $      | 8      |        |   | $      | 3      |   |   | $ | 87 |   |   | $ | 3,072 |   |
|                                                  |   |           |    |   |        |   |   |         |   |   |             |   |   |     |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: Individually evaluated for impairment |   | $              | 236     |   |        | $      | 686    |         |   | $      | -                |   |   | $        | -      |   |   | $      | 6      |        |   | $      | -      |   |   | $ | - |   |   | $ | 928 |   |
|                                                  |   |           |    |   |        |   |   |         |   |   |             |   |   |     |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: Collectively evaluated for impairment |   | $              | 1,284   |   |        | $      | 600    |         |   | $      | 28               |   |   | $        | 140    |   |   | $      | 2      |        |   | $      | 3      |   |   | $ | 87 |   |   | $ | 2,144 |   |
|                                                  |   |           |    |   |        |   |   |         |   |   |             |   |   |     |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                                |   |           |    |   |        |   |   |         |   |   |             |   |   |     |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $              | 193,084 |   |        | $      | 52,686 |         |   | $      | 1,910            |   |   | $        | 7,356  |   |   | $      | 965    |        |   | $      | 105    |   |   | $ | - |   |   | $ | 256,106 |   |
|                                                  |   |           |    |   |        |   |   |         |   |   |             |   |   |     |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: Individually evaluated for impairment |   | $              | 2,415   |   |        | $      | 8,093  |         |   | $      | -                |   |   | $        | -      |   |   | $      | 57     |        |   | $      | -      |   |   | $ | - |   |   | $ | 10,565 |   |
|                                                  |   |           |    |   |        |   |   |         |   |   |             |   |   |     |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: Collectively evaluated for impairment |   | $              | 190,669 |   |        | $      | 44,593 |         |   | $      | 1,910            |   |   | $        | 7,356  |   |   | $      | 908    |        |   | $      | 105    |   |   | $ | - |   |   | $ | 245,541 |   |

|            |   | Residential    |    |   | Commercial  |   |   | Residential  |   |   | Commercial     |   |   |     |   |   |   |   |   |   |   |
|-----------------|--------|----------------|---------|--------|-------------|--------|--------|--------------|--------|--------|----------------|--------|--------|----------|--------|--------|--------|--------|--------|--------|--------|
|            |   | Real Estate    |    |   | Real Estate |   |   | Construction |   |   | and Industrial |   |   | Consumer |   |   | Other  |   |   | Total  |   |
|            |   | (In Thousands) |    |
| Grade:          |   |           |    |   |        |   |   |         |   |   |           |   |   |     |   |   |   |   |   |   |   |
| Pass            |   | $              | 191,309 |   |        | $      | 37,787 |         |   | $      | 1,910          |   |   | $        | 6,509  |   |   | $      | 965    |   |   | $ | 105 |   |   | $ | 238,585 |   |
| Special Mention |   |           | 23      |   |        |   | 3,783  |         |   |   | -              |   |   |     | 847    |   |   |   | -      |   |   |   | - |   |   |   | 4,653 |   |
| Substandard     |   |           | 1,752   |   |        |   | 11,116 |         |   |   | -              |   |   |     | -      |   |   |   | -      |   |   |   | - |   |   |   | 12,868 |   |
| Doubtful        |   |           | -       |   |        |   | -      |         |   |   | -              |   |   |     | -      |   |   |   | -      |   |   |   | - |   |   |   | - |   |
| Loss            |   |           | -       |   |        |   | -      |         |   |   | -              |   |   |     | -      |   |   |   | -      |   |   |   | - |   |   |   | - |   |
| Total           |   | $              | 193,084 |   |        | $      | 52,686 |         |   | $      | 1,910          |   |   | $        | 7,356  |   |   | $      | 965    |   |   | $ | 105 |   |   | $ | 256,106 |   |

----

|                      |   | 30-59 Days     |   |   | 60-89 Days |   |   | 90 Days    |   |   | Total    |   |   | Total       |   |
|---------------------------|--------|----------------|--------|--------|------------|--------|--------|------------|--------|--------|----------|--------|--------|-------------|--------|
|                      |   | Past Due       |   |   | Past Due   |   |   | or Greater |   |   | Past Due |   |   | Non-accrual |   |
|                      |   | (In Thousands) |   |
| Real estate:              |   |           |   |   |       |   |   |       |   |   |     |   |   |        |   |
| Residential               |   | $              | 92     |   |       | $      | 247    |       |   | $      | 1,126    |   |   | $           | 1,465  |   |   | $ | 1,752 |   |
| Commercial                |   |           | 629    |   |       |   | 488    |       |   |   | 3,324    |   |   |        | 4,441  |   |   |   | 4,635 |   |
| Residential construction  |   |           | -      |   |       |   | -      |       |   |   | -        |   |   |        | -      |   |   |   | - |   |
| Commercial and industrial |   |           | 150    |   |       |   | -      |       |   |   | -        |   |   |        | 150    |   |   |   | - |   |
| Consumer                  |   |           | -      |   |       |   | -      |       |   |   | -        |   |   |        | -      |   |   |   | - |   |
| Other                     |   |           | -      |   |       |   | -      |       |   |   | -        |   |   |        | -      |   |   |   | - |   |
| Total                     |   | $              | 871    |   |       | $      | 735    |       |   | $      | 4,450    |   |   | $           | 6,056  |   |   | $ | 6,387 |   |

|                                             |   | 2011           |   |   | 2010   |   |
|--------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                             |   | (In Thousands) |   |
|                                             |   |           |   |   |   |   |
| Total nonaccrual loans                           |   | $              | 6,387  |   |   | $      | 5,802 |   |
|                                             |   |           |   |   |   |   |   |   |
| Accruing loans which are 90 days or more overdue |   |           | 32     |   |   |   | 491 |   |
|                                             |   |           |   |   |   |   |   |   |
| Nonperforming loans                              |   | $              | 6,419  |   |   | $      | 6,293 |   |

----

|                                          |   |           |   |   | Unpaid    |   |   |      |   |   | Average    |   |   | Interest   |   |   | Amount        |   |
|-----------------------------------------------|--------|----------------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|--------|------------|--------|--------|---------------|--------|
|                                          |   | Recorded       |   |   | Principal |   |   | Related   |   |   | Recorded   |   |   | Income     |   |   | Recognized    |   |
|                                          |   | Investment     |   |   | Balance   |   |   | Allowance |   |   | Investment |   |   | Recognized |   |   | on Cash Basis |   |
| Impaired loans without a valuation allowance: |   | (In Thousands) |   |
| Real estate:                                  |   |           |   |   |      |   |   |      |   |   |       |   |   |       |   |   |          |   |
| Residential                                   |   | $              | 395    |   |      | $      | 393    |      |   | $      | -          |   |   | $          | 1,071  |   |          | $      | 4 |   |   | $ | 4 |   |
| Commercial                                    |   |           | 2,625  |   |      |   | 2,623  |      |   |   | -          |   |   |       | 2,719  |   |          |   | 22 |   |   |   | 9 |   |
| Residential construction                      |   |           | -      |   |      |   | -      |      |   |   | -          |   |   |       | -      |   |          |   | - |   |   |   | - |   |
| Commercial and industrial                     |   |           | -      |   |      |   | -      |      |   |   | -          |   |   |       | -      |   |          |   | - |   |   |   | - |   |
| Consumer                                      |   |           | 51     |   |      |   | 51     |      |   |   | -          |   |   |       | 17     |   |          |   | 3 |   |   |   | - |   |
| Total impaired with no related allowance      |   |           | 3,071  |   |      |   | 3,067  |      |   |   | -          |   |   |       | 3,807  |   |          |   | 29 |   |   |   | 13 |   |
|                                          |   |           |   |   |      |   |   |      |   |   |       |   |   |       |   |   |          |   |   |   |   |   |   |   |
| Impaired loans with a valuation allowance:    |   |           |   |   |      |   |   |      |   |   |       |   |   |       |   |   |          |   |   |   |   |   |   |   |
| Real estate:                                  |   |           |   |   |      |   |   |      |   |   |       |   |   |       |   |   |          |   |   |   |   |   |   |   |
| Residential                                   |   |           | 2,025  |   |      |   | 2,022  |      |   |   | 236        |   |   |       | 1,381  |   |          |   | 58 |   |   |   | 5 |   |
| Commercial                                    |   |           | 5,472  |   |      |   | 5,470  |      |   |   | 686        |   |   |       | 3,787  |   |          |   | 137 |   |   |   | 49 |   |
| Residential construction                      |   |           | -      |   |      |   | -      |      |   |   | -          |   |   |       | -      |   |          |   | - |   |   |   | - |   |
| Commercial and industrial                     |   |           | -      |   |      |   | -      |      |   |   | -          |   |   |       | 43     |   |          |   | - |   |   |   | - |   |
| Consumer                                      |   |           | 6      |   |      |   | 6      |      |   |   | 6          |   |   |       | 21     |   |          |   | - |   |   |   | - |   |
| Total impaired with an allowance recorded     |   |           | 7,503  |   |      |   | 7,498  |      |   |   | 928        |   |   |       | 5,232  |   |          |   | 195 |   |   |   | 54 |   |
|                                          |   |           |   |   |      |   |   |      |   |   |       |   |   |       |   |   |          |   |   |   |   |   |   |   |
| Total impaired loans:                         |   |           |   |   |      |   |   |      |   |   |       |   |   |       |   |   |          |   |   |   |   |   |   |   |
| Real estate:                                  |   |           |   |   |      |   |   |      |   |   |       |   |   |       |   |   |          |   |   |   |   |   |   |   |
| Residential                                   |   |           | 2,420  |   |      |   | 2,415  |      |   |   | 236        |   |   |       | 2,452  |   |          |   | 62 |   |   |   | 9 |   |
| Commercial                                    |   |           | 8,097  |   |      |   | 8,093  |      |   |   | 686        |   |   |       | 6,506  |   |          |   | 159 |   |   |   | 58 |   |
| Residential construction                      |   |           | -      |   |      |   | -      |      |   |   | -          |   |   |       | -      |   |          |   | - |   |   |   | - |   |
| Commercial and industrial                     |   |           | -      |   |      |   | -      |      |   |   | -          |   |   |       | 43     |   |          |   | - |   |   |   | - |   |
| Consumer                                      |   |           | 57     |   |      |   | 57     |      |   |   | 6          |   |   |       | 38     |   |          |   | 3 |   |   |   | - |   |
| Total impaired loans                          |   | $              | 10,574 |   |      | $      | 10,565 |      |   | $      | 928        |   |   | $          | 9,039  |   |          | $      | 224 |   |   | $ | 67 |   |

|                                                                                                                  |   |           |   |   |       |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|------------|--------|
|                                                                                                                  |   | Recorded       |   |   | Related    |   |
|                                                                                                                  |   | Investment     |   |   | Allowance  |   |
|                                                                                                                  |   | In Impaired    |   |   | For Credit |   |
|                                                                                                                  |   | Loans          |   |   | Losses     |   |
|                                                                                                                  |   | (In Thousands) |   |
| Loans for which there is a related allowance for credit losses                                                        |   | $              | 2,230  |   |       | $      | 446 |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |
| Loans for which there is no related allowance for credit losses                                                       |   |           | 3,934  |   |       |   | - |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |
| Totals                                                                                                                |   | $              | 6,164  |   |       | $      | 446 |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |
| Average recorded investment in impaired loans during the year ended June 30                                           |   | $              | 6,173  |   |       |   |   |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |
| Related amount of interest income recognized during the time, in the year ended June 30, that the loans were impaired |   |           |   |   |       |   |   |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |
| Total recognized                                                                                                      |   | $              | 107    |   |       |   |   |   |
| Amount recognized using a cash-basis method of accounting                                                             |   | $              | 57     |   |       |   |   |   |

----

|                                      |   |           |   |   |   |   |
|-------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                      |   | 2011           |   |   | 2010   |   |
|                                      |   | (In Thousands) |   |
| Land                                      |   | $              | 470    |   |   | $      | 470 |   |
| Buildings                                 |   |           | 6,266  |   |   |   | 6,293 |   |
| Furniture and equipment                   |   |           | 2,769  |   |   |   | 2,772 |   |
|                                      |   |           | 9,505  |   |   |   | 9,535 |   |
| Accumulated depreciation and amortization |   |           | (4,656 | )      |   |   | (4,243 | ) |
|                                      |   | $              | 4,849  |   |   | $      | 5,292 |   |

|                                  |   | June 30,       |   |
|---------------------------------------|--------|----------------|--------|
|                                  |   | 2011           |   |   | 2010 |   |
|                                  |   | (In Thousands) |   |
| Balances not subject to amortization: |   |           |   |   |   |   |
| Goodwill                              |   | $              | 6,912  |   |   | $ | 6,912 |   |
| Balances subject to amortization:     |   |           |   |   |   |   |   |   |
| Core Deposit Intangible               |   |           | 324    |   |   |   | 473 |   |
| Total intangible assets               |   | $              | 7,236  |   |   | $ | 7,385 |   |

|                 |   |           |   |
|----------------------|--------|----------------|--------|
| Years Ended June 30, |   | (In Thousands) |   |
| 2012                 |   | $              | 121    |   |
| 2013                 |   |           | 93     |   |
| 2014                 |   |           | 65     |   |
| 2015                 |   |           | 37     |   |
| 2016                 |   |           | 8      |   |
| Total                |   | $              | 324    |   |

----

|                    |   | 2011           |   |
|-------------------------|--------|----------------|--------|
|                    |   | (In Thousands) |   |
|                    |   | Gross          |   |   |   |   |   | Net |   |
|                    |   | Carrying       |   |   | Accumulated |   |   | Carrying |   |
|                    |   | Amount         |   |   | Amortization |   |   | Amount |   |
| Core deposit intangible |   | $              | 1,553  |   |   | $ | 1,229 |   |   | $ | 324 |   |
|                    |   |           |   |   |   |   |   |   |   |   |   |   |
|                    |   | 2010           |   |
|                    |   | (In Thousands) |   |
|                    |   | Gross          |   |   |   |   |   |   | Net |   |
|                    |   | Carrying       |   |   | Accumulated |   |   | Carrying |   |
|                    |   | Amount         |   |   | Amortization |   |   | Amount |   |
| Core deposit intangible |   | $              | 1,553  |   |   | $ | 1,080 |   |   | $ | 473 |   |

|                              |   | 2011                   |    |   | 2010     |   |
|-----------------------------------|--------|------------------------|---------|--------|----------|--------|
|                              |   |                   |    |   | Weighted |   |   |   |   |   | Weighted |   |
|                              |   |                   |    |   | Average  |   |   |   |   |   | Average |   |
|                              |   | Amount                 |    |   | Rate     |   |   | Amount |   |   | Rate |   |
|                              |   | (Dollars In Thousands) |    |
| Demand deposits                   |   | $                      | 36,814  |   |     |   | - | % |   | $ | 36,206 |   |   |   | - | % |
| NOW accounts                      |   |                   | 92,273  |   |     |   | 0.81 |   |   |   | 95,321 |   |   |   | 1.11 |   |
| Regular savings                   |   |                   | 50,283  |   |     |   | 0.34 |   |   |   | 48,105 |   |   |   | 0.35 |   |
| Money market accounts             |   |                   | 13,474  |   |     |   | 0.68 |   |   |   | 10,948 |   |   |   | 0.88 |   |
| Clubs                             |   |                   | 245     |   |     |   | 0.30 |   |   |   | 265 |   |   |   | 0.30 |   |
|                              |   |                   | 193,089 |   |     |   | 0.52 |   |   |   | 190,845 |   |   |   | 0.70 |   |
| Certificate accounts maturing in: |   |                   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Less than one year                |   |                   | 71,200  |   |     |   | 1.84 |   |   |   | 74,779 |   |   |   | 1.74 |   |
| One year to two years             |   |                   | 24,112  |   |     |   | 2.43 |   |   |   | 26,256 |   |   |   | 3.59 |   |
| Two years to three years          |   |                   | 22,182  |   |     |   | 3.25 |   |   |   | 15,641 |   |   |   | 3.18 |   |
| Three years to five years         |   |                   | 23,190  |   |     |   | 2.91 |   |   |   | 27,625 |   |   |   | 3.54 |   |
|                              |   |                   | 140,684 |   |     |   | 2.34 |   |   |   | 144,301 |   |   |   | 2.58 |   |
| Total deposits                    |   | $                      | 333,773 |   |     |   | 1.29 | % |   | $ | 335,146 |   |   |   | 1.51 | % |

----

|                                                       |   | 2011                   |   |   | 2010     |   |
|------------------------------------------------------------|--------|------------------------|--------|--------|----------|--------|
|                                                       |   |                   |   |   | Weighted |   |   |   |   |   | Weighted |   |
|                                                       |   |                   |   |   | Average  |   |   |   |   |   | Average |   |
|                                                       |   | Amount Due             |   |   | Rate     |   |   | Amount Due |   |   | Rate |   |
|                                                       |   | (Dollars In Thousands) |   |
| Short-term borrowing                                       |   |                   |   |   |     |   |   |   |   |   |   |   |
| Repurchase agreements                                      |   | $                      | 4,244  |   |     |   | 0.27 | % |   | $ | 5,896 |   |   |   | 0.30 | % |
| Total short-term borrowings                                |   |                   | 4,244  |   |     |   | 0.27 |   |   |   | 5,896 |   |   |   | 0.30 |   |
|                                                       |   |                   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Long-term Federal Home Loan Bank of Boston (FHLB) advances |   |                   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Year of maturity:                                          |   |                   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |
| 2011                                                       |   | $                      | -      |   |     |   | - |   |   |   | 19,000 |   |   |   | 3.40 |   |
| 2012                                                       |   |                   | 32,000 |   |     |   | 4.56 |   |   |   | 40,000 |   |   |   | 4.46 |   |
| 2013                                                       |   |                   | 5,000  |   |     |   | 3.23 |   |   |   | 5,000 |   |   |   | 3.23 |   |
| 2014                                                       |   |                   | 17,500 |   |     |   | 3.19 |   |   |   | 17,500 |   |   |   | 3.19 |   |
| 2015                                                       |   |                   | 1,000  |   |     |   | 3.35 |   |   |   | 1,000 |   |   |   | 3.35 |   |
| 2016                                                       |   |                   | 10,000 |   |     |   | 3.17 |   |   |   | - |   |   |   | - |   |
| 2017                                                       |   |                   | 10,000 |   |     |   | 4.15 |   |   |   | 10,000 |   |   |   | 4.15 |   |
| 2018                                                       |   |                   | 8,000  |   |     |   | 3.91 |   |   |   | 8,000 |   |   |   | 3.91 |   |
| Total long-term borrowings                                 |   |                   | 83,500 |   |     |   | 3.90 |   |   |   | 100,500 |   |   |   | 3.89 |   |
| Total borrowed funds                                       |   | $                      | 87,744 |   |     |   | 3.72 | % |   | $ | 106,396 |   |   |   | 3.69 | % |

|                          |   | 2011           |   |   | 2010   |   |
|-------------------------------|--------|----------------|--------|--------|--------|--------|
|                          |   | (In Thousands) |   |
| Current:                      |   |           |   |   |   |   |
| Federal                       |   | $              | 723    |   |   | $      | (1,662 | ) |
| State                         |   |           | 1      |   |   |   | 1 |   |
|                          |   |           | 724    |   |   |   | (1,661 | ) |
| Deferred:                     |   |           |   |   |   |   |   |   |
| Federal                       |   |           | (187   | )      |   |   | 1,970 |   |
| Change in valuation allowance |   |           | -      |   |   |   | - |   |
|                          |   |           | (187   | )      |   |   | 1,970 |   |
| Total income tax expense      |   | $              | 537    |   |   | $      | 309 |   |

----

|                                       |   | 2011           |   |   | 2010   |   |
|--------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                       |   | (In Thousands) |   |
| Federal income tax at statutory rate       |   | $              | 556    |   |   | $      | 534 |   |
| Increase (decrease) in tax resulting from: |   |           |   |   |   |   |   |   |
| State taxes, net of federal tax benefit    |   |           | 1      |   |   |   | 1 |   |
| Qualifying option expense                  |   |           | 9      |   |   |   | 18 |   |
| Dividends received deduction               |   |           | (113   | )      |   |   | (129 | ) |
| Bank-owned life insurance                  |   |           | (138   | )      |   |   | (95 | ) |
| Tax-exempt municipal income, net           |   |           | (14    | )      |   |   | (9 | ) |
| Expiration unused contributions            |   |           | 92     |   |   |   | - |   |
| Other, net                                 |   |           | 144    |   |   |   | (11 | ) |
| Income tax expense                         |   | $              | 537    |   |   | $      | 309 |   |
| Effective tax rates                        |   |           | 32.8   | %      |   |   | 19.6 | % |

|                                                         |   | 2011           |   |   | 2010   |   |
|--------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                         |   | (In Thousands) |   |
| Deferred tax assets:                                         |   |           |   |   |   |   |
| Net unrealized holding loss on available-for-sale securities |   | $              | 652    |   |   | $      | 1,429 |   |
| Allowance for loan losses                                    |   |           | 985    |   |   |   | 872 |   |
| Write down of securities                                     |   |           | 1,769  |   |   |   | 1,878 |   |
| Contribution carryforward                                    |   |           | -      |   |   |   | 102 |   |
| Deferred compensation                                        |   |           | 190    |   |   |   | 183 |   |
| Stock based compensation                                     |   |           | 59     |   |   |   | 93 |   |
| Postretirement benefits - ASC 715-60                         |   |           | 37     |   |   |   | 35 |   |
| Federal AMT carryover                                        |   |           | 1,043  |   |   |   | 705 |   |
| Interest receivable on nonaccrual loans                      |   |           | 134    |   |   |   | 101 |   |
| Other                                                        |   |           | 42     |   |   |   | 13 |   |
| Gross deferred tax asset                                     |   |           | 4,911  |   |   |   | 5,411 |   |
|                                                         |   |           |   |   |   |   |   |   |
| Deferred tax liabilities:                                    |   |           |   |   |   |   |   |   |
| Depreciation and amortization                                |   |           | (630   | )      |   |   | (508 | ) |
| Deferred loan fees                                           |   |           | (65    | )      |   |   | (97 | ) |
| Gross deferred tax liability                                 |   |           | (695   | )      |   |   | (605 | ) |
| Net deferred tax asset                                       |   | $              | 4,216  |   |   | $      | 4,806 |   |

----

|       |   | (In Thousands) |   |
|------------|--------|----------------|--------|
| 2012       |   | $              | 162    |   |
| 2013       |   |           | 156    |   |
| 2014       |   |           | 152    |   |
| 2015       |   |           | 97     |   |
| 2016       |   |           | 51     |   |
| Thereafter |   |           | 9      |   |
| Total      |   | $              | 627    |   |

----

|                                                                            |   | Fair Value Measurements at Reporting Date Using: |   |
|---------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|
|                                                                            |   |                                             |   |   | Quoted Prices in |   |   | Significant |   |   | Significant |   |
|                                                                            |   |                                             |   |   | Active Markets for |   |   | Other Observable |   |   | Unobservable |   |
|                                                                            |   |                                             |   |   | Identical Assets |   |   | Inputs |   |   | Inputs |   |
| (In Thousands)                                                                  |   | Total                                            |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
| June 30, 2011:                                                                  |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Securities available-for-sale:                                                  |   |                                             |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency securities                                               |   | $                                                | 666    |   |   | $ | - |   |   | $ | 666 |   |   | $ | - |   |
| Corporate securities                                                            |   |                                             | 4,905  |   |   |   | - |   |   |   | 4,905 |   |   |   | - |   |
| Mortgage-backed securities insured or guaranteed by U.S. Government enterprises |   |                                             | 30,316 |   |   |   | - |   |   |   | 30,316 |   |   |   | - |   |
| Non-agency mortgage-backed securities                                           |   |                                             | 11,722 |   |   |   | - |   |   |   | 11,722 |   |   |   | - |   |
| Equity securities                                                               |   |                                             | 10,400 |   |   |   | - |   |   |   | - |   |   |   | 10,400 |   |
| Totals                                                                          |   | $                                                | 58,009 |   |   | $ | - |   |   | $ | 47,609 |   |   | $ | 10,400 |   |

----

|                                                     |   | Fair Value Measurements at Reporting Date Using: |   |
|----------------------------------------------------------|--------|--------------------------------------------------|--------|
|                                                     |   |                                             |   |   | Quoted Prices in |   |   | Significant |   |   | Significant |   |
|                                                     |   |                                             |   |   | Active Markets for |   |   | Other Observable |   |   | Unobservable |   |
|                                                     |   |                                             |   |   | Identical Assets |   |   | Inputs |   |   | Inputs |   |
| (In Thousands)                                           |   | Total                                            |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
| June 30, 2010:                                           |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Securities available-for-sale:                           |   |                                             |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency securities                        |   | $                                                | 6,101  |   |   | $ | - |   |   | $ | 6,101 |   |   | $ | - |   |
| Corporate securities                                     |   |                                             | 4,368  |   |   |   | - |   |   |   | 4,368 |   |   |   | - |   |
| Mortgage-backed securities insured or guaranteed by U.S. |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government enterprises                                   |   |                                             | 50,734 |   |   |   | - |   |   |   | 50,734 |   |   |   | - |   |
| Non-agency mortgage-backed securities                    |   |                                             | 16,233 |   |   |   | - |   |   |   | 16,233 |   |   |   | - |   |
| Equity securities                                        |   |                                             | 8,457  |   |   |   | - |   |   |   | - |   |   |   | 8,457 |   |
| Totals                                                   |   | $                                                | 85,893 |   |   | $ | - |   |   | $ | 77,436 |   |   | $ | 8,457 |   |

|                                                                                                                                                                                 |   | Fair Value Measurements               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                                                                                                 |   | Using Significant Unobservable Inputs |   |
|                                                                                                                                                                                 |   | Level 3                               |   |
|                                                                                                                                                                                 |   | Available-for-Sale                    |   |   |   |   |
| (In Thousands)                                                                                                                                                                       |   | Securities                            |   |   | Total |   |
| Beginning balance, June 30, 2009                                                                                                                                                     |   | $                                     | 7,466  |   |   | $ | 7,466 |   |
| Total gains or losses (realized/unrealized)                                                                                                                                          |   |                                  |   |   |   |   |   |   |
| Included in earnings                                                                                                                                                                 |   |                                  | -      |   |   |   | - |   |
| Included in other comprehensive income                                                                                                                                               |   |                                  | 991    |   |   |   | 991 |   |
| Principal payments on securities                                                                                                                                                     |   |                                  | -      |   |   |   | - |   |
| Accretion of securities, net                                                                                                                                                         |   |                                  | -      |   |   |   | - |   |
| Transfers out of Level 3                                                                                                                                                             |   |                                  | -      |   |   |   | - |   |
| Ending balance, June 30, 2010                                                                                                                                                        |   |                                  | 8,457  |   |   |   | 8,457 |   |
| Total gains or losses (realized/unrealized)                                                                                                                                          |   |                                  |   |   |   |   |   |   |
| Included in earnings                                                                                                                                                                 |   |                                  | -      |   |   |   | - |   |
| Included in other comprehensive income                                                                                                                                               |   |                                  | 1,943  |   |   |   | 1,943 |   |
| Principal payments on securities                                                                                                                                                     |   |                                  | -      |   |   |   | - |   |
| Accretion of securities, net                                                                                                                                                         |   |                                  | -      |   |   |   | - |   |
| Transfers out of Level 3                                                                                                                                                             |   |                                  | -      |   |   |   | - |   |
| Ending balance, June 30, 2011                                                                                                                                                        |   | $                                     | 10,400 |   |   | $ | 10,400 |   |
|                                                                                                                                                                                 |   |                                  |   |   |   |   |   |   |
|                                                                                                                                                                                 |   | Fair Value Measurements               |   |
|                                                                                                                                                                                 |   | Using Significant Unobservable Inputs |   |
|                                                                                                                                                                                 |   | Level 3                               |   |
|                                                                                                                                                                                 |   | Available-for-Sale                    |   |   |   |   |   |
| (In Thousands)                                                                                                                                                                       |   | Securities                            |   |   | Total |   |
| June 30, 2011:                                                                                                                                                                       |   |                                  |   |   |   |   |   |   |
| The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at the reporting date |   | $                                     | -      |   |   | $ | - |   |
|                                                                                                                                                                                 |   |                                  |   |   |   |   |   |   |
| June 30, 2010:                                                                                                                                                                       |   |                                  |   |   |   |   |   |   |
| The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at the reporting date |   | $                                     | -      |   |   | $ | - |   |

----

|                    |   | Fair Value Measurements at Reporting Date Using: |   |
|-------------------------|--------|--------------------------------------------------|--------|
|                    |   |                                             |   |   | Quoted Prices in |   |   | Significant |   |   | Significant |   |
|                    |   |                                             |   |   | Active Markets for |   |   | Other Observable |   |   | Unobservable |   |
|                    |   |                                             |   |   | Identical Assets |   |   | Inputs |   |   | Inputs |   |
| (In Thousands)          |   | Total                                            |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
| June 30, 2011:          |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Impaired loans          |   | $                                                | 6,575  |   |   | $ | - |   |   | $ | - |   |   | $ | 6,575 |   |
| Other real estate owned |   |                                             | 1,074  |   |   |   | - |   |   |   | 343 |   |   |   | 731 |   |
| Totals                  |   | $                                                | 7,649  |   |   | $ | - |   |   | $ | 343 |   |   | $ | 7,306 |   |
|                    |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| June 30, 2010:          |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impaired loans          |   | $                                                | 1,784  |   |   | $ | - |   |   | $ | - |   |   | $ | 1,784 |   |
| Other real estate owned |   |                                             | 1,561  |   |   |   | - |   |   |   | 391 |   |   |   | 1,170 |   |
| Totals                  |   | $                                                | 3,345  |   |   | $ | - |   |   | $ | 391 |   |   | $ | 2,954 |   |

|                               |   | Fair Value Measurements               |   |
|------------------------------------|--------|---------------------------------------|--------|
|                               |   | Using Significant Unobservable Inputs |   |
|                               |   | Level 3                               |   |
|                               |   |                                  |   |   | Other Real |   |   |   |   |
|                               |   | Impaired Loans                        |   |   | Estate Owned |   |   | Total |   |
| (In Thousands)                     |   |                                  |   |   |   |   |   |   |   |
| Beginning balance, June 30, 2010   |   | $                                     | 1,784  |   |   | $ | 1,170 |   |   | $ | 2,954 |   |
| Total gains or (losses)            |   |                                  | -      |   |   |   | (95 | ) |   |   | (95 | ) |
| Transfers in and/or out of Level 3 |   |                                  | 4,791  |   |   |   | (344 | ) |   |   | 4,447 |   |
| Ending balance, June 30, 2011      |   | $                                     | 6,575  |   |   | $ | 731 |   |   | $ | 7,306 |   |

|                                           |   | 2011           |    |   | 2010   |   |
|------------------------------------------------|--------|----------------|---------|--------|--------|--------|
|                                           |   | Carrying       |    |   | Fair   |   |   | Carrying |   |   | Fair |   |
|                                           |   | Amount         |    |   | Value  |   |   | Amount |   |   | Value |   |
|                                           |   | (In Thousands) |    |
| Financial assets:                              |   |           |    |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                      |   | $              | 8,273   |   |   | $      | 8,273 |   |   | $ | 23,291 |   |   | $ | 23,291 |   |
| Available-for-sale securities                  |   |           | 58,009  |   |   |   | 58,009 |   |   |   | 85,893 |   |   |   | 85,893 |   |
| Held-to-maturity securities                    |   |           | 114,741 |   |   |   | 115,962 |   |   |   | 83,249 |   |   |   | 83,698 |   |
| Federal Home Loan Bank stock                   |   |           | 8,056   |   |   |   | 8,056 |   |   |   | 8,056 |   |   |   | 8,056 |   |
| Loans held-for-sale                            |   |           | 1,567   |   |   |   | 1,583 |   |   |   | 1,470 |   |   |   | 1,504 |   |
| Loans, net                                     |   |           | 253,225 |   |   |   | 257,835 |   |   |   | 254,772 |   |   |   | 257,194 |   |
| Accrued interest receivable                    |   |           | 1,528   |   |   |   | 1,528 |   |   |   | 1,698 |   |   |   | 1,698 |   |
|                                           |   |           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                         |   |           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                       |   |           | 333,773 |   |   |   | 331,132 |   |   |   | 335,146 |   |   |   | 338,166 |   |
| Mortgagors’ escrow accounts              |   |           | 1,766   |   |   |   | 1,766 |   |   |   | 1,627 |   |   |   | 1,627 |   |
| Federal Home Loan Bank advances                |   |           | 83,500  |   |   |   | 87,339 |   |   |   | 100,500 |   |   |   | 105,438 |   |
| Securities sold under agreements to repurchase |   |           | 4,244   |   |   |   | 4,244 |   |   |   | 5,896 |   |   |   | 5,896 |   |

----

|                           |   | 2011           |   |   | 2010   |   |
|--------------------------------|--------|----------------|--------|--------|--------|--------|
|                           |   | (In Thousands) |   |
| Commitments to originate loans |   | $              | 2,966  |   |   | $      | 1,305 |   |
| Unadvanced portions of loans:  |   |           |   |   |   |   |   |   |
| Construction loans             |   |           | 1,476  |   |   |   | 1,521 |   |
| Lines of credit                |   |           | 12,737 |   |   |   | 15,213 |   |
| Letters of credit              |   |           | 782    |   |   |   | 857 |   |
|                           |   | $              | 17,961 |   |   | $      | 18,896 |   |

----

|                                         |   |                          |   |   |              |   |   |              |   |   |              |   |   | To Be Well        |   |
|----------------------------------------------|--------|-------------------------------|--------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|                                         |   |                          |   |   |              |   |   |              |   |   |              |   |   | Capitalized Under |   |
|                                         |   |                          |   |   |              |   |   | For Capital       |   |   | Prompt Corrective |   |
|                                         |   | Actual                        |   |   | Adequacy Purposes |   |   | Action Provisions |   |
|                                         |   | Amount                        |   |   | Ratio             |   |   | Amount            |   |   | Ratio             |   |   | Amount            |   |   | Ratio |   |
|                                         |   | (Dollar amounts in thousands) |   |
| As of June 30, 2011:                         |   |                          |   |   |              |   |   |              |   |   |              |   |   |              |   |   |   |   |
| Tangible Equity Capital (to Tangible Assets) |   | $                             | 35,673 |   |              |   | 7.68   | %                 |   | $      | 6,967             |   |   |              | 1.50   | % |   |   | N/A |   |   |   | N/A |   |
| Core Capital (to Adjusted Tangible Assets)   |   |                          | 35,673 |   |              |   | 7.68   |              |   |   | 18,578            |   |   |              | 4.00   |   |   | $ | 23,222 |   |   |   | 5.00 | % |
| Tier 1 Capital (to Risk-Weighted Assets)     |   |                          | 35,673 |   |              |   | 14.79  |              |   |   | 9,095             |   |   |              | 4.00   |   |   |   | 13,643 |   |   |   | 6.00 |   |
| Total Capital (to Risk-Weighted Assets)      |   |                          | 36,465 |   |              |   | 16.04  |              |   |   | 18,190            |   |   |              | 8.00   |   |   |   | 22,738 |   |   |   | 10.00 |   |
|                                         |   |                          |   |   |              |   |   |              |   |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |
| As of June 30, 2010:                         |   |                          |   |   |              |   |   |              |   |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |
| Tangible Equity Capital (to Tangible Assets) |   |                          | 33,359 |   |              |   | 6.91   |              |   |   | 7,237             |   |   |              | 1.50   |   |   |   | N/A |   |   |   | N/A |   |
| Core Capital (to Adjusted Tangible Assets)   |   |                          | 33,359 |   |              |   | 6.91   |              |   |   | 19,298            |   |   |              | 4.00   |   |   |   | 24,122 |   |   |   | 5.00 |   |
| Tier 1 Capital (to Risk-Weighted Assets)     |   |                          | 33,359 |   |              |   | 12.38  |              |   |   | 9,916             |   |   |              | 4.00   |   |   |   | 14,874 |   |   |   | 6.00 |   |
| Total Capital (to Risk-Weighted Assets)      |   |                          | 33,268 |   |              |   | 13.42  |              |   |   | 19,832            |   |   |              | 8.00   |   |   |   | 24,790 |   |   |   | 10.00 |   |

|                                                    |   | 2011           |   |   | 2010   |   |
|---------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                    |   | (In Thousands) |   |
| Capital under generally accepted accounting principles  |   | $              | 42,765 |   |   | $      | 39,997 |   |
| Intangible assets                                       |   |           | (6,551 | )      |   |   | (6,865 | ) |
| Disallowed deferred tax assets                          |   |           | (1,813 | )      |   |   | (2,555 | ) |
| Unrealized losses on available-for-sale securities      |   |           | 1,272  |   |   |   | 2,782 |   |
| Tier 1 capital                                          |   |           | 35,673 |   |   |   | 33,359 |   |
| Allowance for loan losses                               |   |           | 2,845  |   |   |   | 2,585 |   |
| Deduction for low-level recourse and residual interests |   |           | (2,053 | )      |   |   | (2,676 | ) |
| Total Risk-Based capital                                |   | $              | 36,465 |   |   | $      | 33,268 |   |

----

----

|                    |   |                   |   |   |               |   |   |               |   |
|-------------------------|--------|------------------------|--------|--------|--------------------|--------|--------|--------------------|--------|
|                    |   | November 7, 2005 Grant |   |   | June 7, 2006 Grant |   |   | May 25, 2007 Grant |   |
| Dividend yield          |   |                   | 1.89   | %      |               |   | 2.23   | %                  |   |   | 2.24 | % |
| Expected volatility     |   |                   | 12.65  | %      |               |   | 12.17  | %                  |   |   | 11.04 | % |
| Risk-free interest rate |   |                   | 4.56   | %      |               |   | 4.95   | %                  |   |   | 4.86 | % |
| Expected life           |   |                   | 6.5    |   |               |   | 6.5    |               |   |   | 6.5 |   |
| Fair value              |   | $                      | 2.00   |   |               | $      | 1.97   |               |   | $ | 1.84 |   |

----

|                             |   | 2011   |    |   | 2010             |   |
|----------------------------------|--------|--------|---------|--------|------------------|--------|
|                             |   |   |    |   | Weighted-Average |   |   |   |   |   | Weighted-Average |   |
|                             |   | Shares |    |   | Exercise Price   |   |   | Shares |   |   | Exercise Price |   |
| Outstanding at beginning of year |   |   | 222,921 |   |             | $      | 10.62 |   |   |   | 222,921 |   |   | $ | 10.62 |   |
| Granted                          |   |   | -       |   |             |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                        |   |   | -       |   |             |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                        |   |   | -       |   |             |   | - |   |   |   | - |   |   |   | - |   |
| Outstanding at end of year       |   |   | 222,921 |   |             | $      | 10.62 |   |   |   | 222,921 |   |   | $ | 10.62 |   |
|                             |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Options exercisable at year-end  |   |   | 218,321 |   |             | $      | 10.61 |   |   |   | 173,737 |   |   | $ | 10.61 |   |

| Options Outstanding  |                                                                                                        |   | Options Exercisable |        |
|----------------------|-------------------------------------------------------------------------------------------------------------|--------|---------------------|-------------|
|                 |                                                                                                        |   |                | Number      |   |   | Weighted-Average |   |   |   |   |   | Number |   |   |   |   |
|                 |                                                                                                        |   |                | Outstanding |   |   | Remaining |   |   | Weighted-Average |   |   | Exercisable |   |   | Weighted-Average |   |
|  Exercise Price |                                                                                                        |   | as of 6/30/11       |        |   | Contractual Life |   |   | Exercise Price |   |   | as of 6/30/11 |   |   | Exercise Price |   |
| $               |               10.60                   |   |                |        | 193,921 |   |   | 4.36 years |   |   | $ | 10.60 |   |   |   | 193,921 |   |   | $ | 10.60 |   |
|                 |                  10.70 |   |                |        | 23,000 |   |   | 5.90 years |   |   |   | 10.70 |   |   |   | 18,400 |   |   |   | 10.70 |   |
|                 |                  10.78           |   |                |        | 6,000 |   |   | 4.94 years |   |   |   | 10.78 |   |   |   | 6,000 |   |   |   | 10.78 |   |

----

|                                                                                          |   | June 30,            |   |
|-----------------------------------------------------------------------------------------------|--------|---------------------|--------|
|                                                                                          |   | 2011                |   |   | 2010 |   |
| ASSETS                                                                                        |   |                |   |   |   |   |   |   |
| Cash and due from depository institutions                                                     |   | $                   | 434    |   |   | $ | 38 |   |
| Investment in Putnam Bank                                                                     |   |                | 42,765 |   |   |   | 39,996 |   |
| Investment in available-for-sale securities                                                   |   |                | 225    |   |   |   | 1,256 |   |
| Investment in held-to-maturity                                                                |   |                | 1,000  |   |   |   | - |   |
| Loan to ESOP                                                                                  |   |                | 1,985  |   |   |   | 2,103 |   |
| Other assets                                                                                  |   |                | 379    |   |   |   | 611 |   |
| Total assets                                                                                  |   | $                   | 46,788 |   |   | $ | 44,004 |   |
|                                                                                          |   |                |   |   |   |   |   |   |
|                                                                                          |   |                |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                    |   |                |   |   |   |   |   |   |
| Other liabilities                                                                             |   | $                   | 41     |   |   | $ | 149 |   |
| Stockholders’ equity                                                                    |   |                | 46,747 |   |   |   | 43,855 |   |
| Total liabilities and stockholders’ equity                                              |   | $                   | 46,788 |   |   | $ | 44,004 |   |
|                                                                                          |   |                |   |   |   |   |   |   |
| Statements of Income                                                                          |
| (In Thousands)                                                                                |
|                                                                                          |   |                |   |   |   |   |   |   |
|                                                                                          |   | For the Years Ended |   |
|                                                                                          |   | June 30,            |   |
|                                                                                          |   | 2011                |   |   | 2010 |   |
| Interest and dividends on investments                                                         |   | $                   | 26     |   |   | $ | 44 |   |
| Interest on loan                                                                              |   |                | 67     |   |   |   | 71 |   |
| Total interest and dividend income                                                            |   |                | 93     |   |   |   | 115 |   |
| Interest expense                                                                              |   |                | -      |   |   |   | 2 |   |
| Net interest and dividend income                                                              |   |                | 93     |   |   |   | 113 |   |
| Investment security gains                                                                     |   |                | -      |   |   |   | 44 |   |
| Other expense                                                                                 |   |                | 183    |   |   |   | 176 |   |
| Loss before income tax expense (benefit) and equity in undistributed net income of subsidiary |   |                | (90    | ) |   |   | (19 | ) |
| Income tax expense (benefit)                                                                  |   |                | 71     |   |   |   | (6 | ) |
| Loss before equity in undistributed net income of subsidiary                                  |   |                | (161   | ) |   |   | (13 | ) |
| Equity in undistributed net income of subsidiary                                              |   |                | 1,259  |   |   |   | 1,275 |   |
| Net income                                                                                    |   | $                   | 1,098  |   |   | $ | 1,262 |   |

----

|                                                                                        |   | For the Years Ended |   |
|---------------------------------------------------------------------------------------------|--------|---------------------|--------|
|                                                                                        |   | June 30,            |   |
|                                                                                        |   | 2011                |   |   | 2010 |   |
| Cash flows from operating activities:                                                       |   |                |   |   |   |   |
| Net income                                                                                  |   | $                   | 1,098  |   |   | $ | 1,262 |   |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |   |                |   |   |   |   |   |   |
| Amortization of securities, net                                                             |   |                | -      |   |   |   | 1 |   |
| Gain on sales of available-for-sale securities                                              |   |                | -      |   |   |   | (44 | ) |
| Deferred income tax expense                                                                 |   |                | -      |   |   |   | 4 |   |
| ESOP shares released                                                                        |   |                | 57     |   |   |   | 50 |   |
| Decrease (increase) in other assets                                                         |   |                | 60     |   |   |   | (10 | ) |
| Decrease (increase) in due from subsidiary                                                  |   |                | 176    |   |   |   | (219 | ) |
| Decrease in due to subsidiary                                                               |   |                | -      |   |   |   | (308 | ) |
| Decrease in Other Liabilities                                                               |   |                | (118   | ) |   |   | - |   |
| Stock-based compensation expense                                                            |   |                | 234    |   |   |   | 285 |   |
| Undistributed net income of subsidiary                                                      |   |                | (1,259 | ) |   |   | (1,275 | ) |
|                                                                                        |   |                |   |   |   |   |   |   |
| Net cash provided by (used in) operating activities                                         |   |                | 248    |   |   |   | (254 | ) |
|                                                                                        |   |                |   |   |   |   |   |   |
| Cash flows from investing activities:                                                       |   |                |   |   |   |   |   |   |
| Purchases of available-for-sale securities                                                  |   |                | -      |   |   |   | (1,000 | ) |
| Purchases of held-to-maturity securities                                                    |   |                | (1,000 | ) |   |   | - |   |
| Proceeds from sales of available-for-sale securities                                        |   |                | -      |   |   |   | 946 |   |
| Proceeds from maturities of available-for-sale securities                                   |   |                | 1,030  |   |   |   | 278 |   |
| Principal payments received on loans to ESOP                                                |   |                | 118    |   |   |   | 115 |   |
|                                                                                        |   |                |   |   |   |   |   |   |
| Net cash provided by investing activities                                                   |   |                | 148    |   |   |   | 339 |   |
|                                                                                        |   |                |   |   |   |   |   |   |
| Cash flows from financing activities:                                                       |   |                |   |   |   |   |   |   |
| Purchase of treasury stock                                                                  |   |                | -      |   |   |   | (2 | ) |
| Payment of cash dividends on common stock                                                   |   |                | -      |   |   |   | (236 | ) |
|                                                                                        |   |                |   |   |   |   |   |   |
| Net cash used in financing activities                                                       |   |                | -      |   |   |   | (238 | ) |
|                                                                                        |   |                |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                        |   |                | 396    |   |   |   | (153 | ) |
| Cash and cash equivalents at beginning of year                                              |   |                | 38     |   |   |   | 191 |   |
| Cash and cash equivalents at end of year                                                    |   | $                   | 434    |   |   | $ | 38 |   |

----

| ITEM 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure |
|--------------|--------------------------------------------------------------------------------------|

| ITEM 9A. | Controls and Procedures |
|---------------|-------------------------|

----

| ITEM 9B. | Other Information |
|---------------|-------------------|

----

| ITEM 10. | Directors, Executive Officers and Corporate Governance |
|---------------|--------------------------------------------------------|

| ITEM 11. | Executive Compensation |
|---------------|------------------------|

| ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
|---------------|------------------------------------------------------------------------------------------------|

|                                                   |   | Number of Securities to be |    |   |             |   |    |                     |   |
|--------------------------------------------------------|--------|----------------------------|---------|--------|------------------|--------|---------|--------------------------|--------|
|                                                   |   | Issued upon Exercise of    |    |   |             |   |    | Number of Securities     |   |
|                                                   |   | Outstanding Options and    |    |   | Weighted Average |   |    | Remaining Available for  |   |
| Plan                                                   |   | Rights                     |    |   | Exercise Price   |   |    | Issuance under the Plans |   |
| Equity compensation plans approved by stockholders     |   |                       | 343,289 | (1)    |             | $      | 10.62   | (2)                      |   |   | 133,009 | (3) |
|                                                   |   |                       |    |   |             |   |    |                     |   |   |   |   |
| Equity compensation plans not approved by stockholders |   |                       | ------- |   |             |   | ------- |                     |   |   | ------- |   |
| Total                                                  |   |                       | 343,289 | (1)    |             | $      | 10.62   | (2)                      |   |   | 133,009 | (3) |

| (1) | Includes 120,368 shares of restricted stock and 222,921 options to purchase shares of common stock awarded under the Incentive Plan.          |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Relates to 222,921 outstanding stock options.                                                                                                 |
| (3) | Includes 15,717 shares of restricted stock available for future issuance and 117,292 options available for issuance under the Incentive Plan. |

| ITEM 13. | Certain Relationships and Related Transactions, and Director Independence |
|---------------|---------------------------------------------------------------------------|

| ITEM 14. | Principal Accountant Fees and Services |
|---------------|----------------------------------------|

----

| ITEM 15. | Exhibits and Financial Statement Schedules |
|---------------|--------------------------------------------|

| * | Incorporated by reference to the Registration Statement on Form SB-2 of PSB Holdings, Inc. (file no. 333-116364), originally filed with the Securities and Exchange Commission on June 10, 2004, as amended. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ** | Incorporated by reference to Appendix B of the Company’s Definitive Proxy Statement dated September 20, 2005 as filed with the Securities and Exchange Commission on September 19, 2005. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *** | Incorporated by reference to Exhibit 14 of the Company’s Annual Report on Form 10-K for year ended June 30, 2007, filed with the Securities and Exchange Commission on September 21, 2007. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                     |   | PSB HOLDINGS, INC. |
|--------------------------|--------|--------------------|
|                     |   |               |   |
| Date: September 23, 2011 |   | By:                | /s/    Thomas A. Borner        |
|                     |   |               |   | Thomas A. Borner |
|                     |   |               |   | Chief Executive Officer and Director(Duly Authorized Representative) |

| Signatures                                         |   | Title                                                                           |   | Date               |
|----------------------------------------------------|--------|---------------------------------------------------------------------------------|--------|--------------------|
|                                               |   |                                                                            |   |               |
| /s/    Thomas A. Borner        |   | Chief Executive Officer and Chairman of the Board (Principal Executive Officer) |   | September 23, 2011 |
| Thomas A. Borner                                   |   |                                                                            |   |
|                                               |   |                                                                            |   |               |
| /s/    Robert J. Halloran, Jr. |   | President and Treasurer (Principal Financial and Accounting Officer)            |   | September 23, 2011 |
| Robert J. Halloran, Jr.                            |   |                                                                            |   |
|                                               |   |                                                                            |   |               |
| /s/    Charles W. Bentley, Jr. |   | Director                                                                        |   | September 23, 2011 |
| Charles W. Bentley, Jr.                            |   |                                                                            |   |               |
|                                               |   |                                                                            |   |               |
| /s/   jitendra k. sinha        |   | Director                                                                        |   | September 23, 2011 |
| Jitendra K. Sinha                                  |   |                                                                            |   |               |
|                                               |   |                                                                            |   |               |
| /s/    Paul M. Kelly           |   | Director                                                                        |   | September 23, 2011 |
| Paul M. Kelly                                      |   |                                                                            |   |               |
|                                               |   |                                                                            |   |               |
| /s/    Richard A. Loomis       |   | Director                                                                        |   | September 23, 2011 |
| Richard A. Loomis                                  |   |                                                                            |   |               |
|                                               |   |                                                                            |   |               |
| /s/    John P. Miller               |   | Director                                                                        |   | September 23, 2011 |
| John P. Miller                                     |   |                                                                            |   |               |
|                                               |   |                                                                            |   |               |
| /s/    Mary E. Patenaude       |   | Director                                                                        |   | September 23, 2011 |
| Mary E. Patenaude                                  |   |                                                                            |   |               |
|                                               |   |                                                                            |   |               |
| /s/    Charles H. Puffer       |   | Director                                                                        |   | September 23, 2011 |
| Charles H. Puffer                                  |   |                                                                            |   |               |