----

----

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

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

----

|   | 1. | Proxy Statement for the 2010 Annual Meeting of Stockholders (Part II and III) |
|--------|----|------------------------------------------------------------------------------------|

----

----

----

|                |                                                                                                               |                                               |
|---------------------|--------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|
|                |                                                                                                               | Page                                     |
| PART I         |          1                                                                 |
|                |                                                                                                               |                                               |
| ITEM 1.        | Business                                                                                                           |          1 |
|                |                                                                                                               |                                               |
| ITEM 1A.       | Risk Factors                                                                                                       |         31      |
|                |                                                                                                               |                                               |
| ITEM 1B.       | Unresolved Staff Comments                                                                                          |         37      |
|                |                                                                                                               |                                               |
| ITEM 2.        | Properties                                                                                                         |         37 |
|                |                                                                                                               |                                               |
| ITEM 3.        | Legal Proceedings                                                                                                  |         38 |
|                |                                                                                                               |                                               |
| ITEM 4.        | [Removed and Reserved]                                                                                             |         38 |
|                |                                                                                                               |
| PART II        |         39                                                                 |
|                |                                                                                                               |                                               |
| ITEM 5.        | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |         39 |
|                |                                                                                                               |                                               |
| ITEM 6.        | Selected Financial Data                                                                                            |         40      |
|                |                                                                                                               |                                               |
| ITEM 7.        | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        |         41 |
|                |                                                                                                               |                                               |
| ITEM 7A.       | Quantitative and Qualitative Disclosures About Market Risk                                                         |         49 |
|                |                                                                                                               |                                               |
| ITEM 8.        | Financial Statements and Supplementary Data                                                                        |         49 |
|                |                                                                                                               |                                               |
| ITEM 9.        | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure                               |         86 |
|                |                                                                                                               |                                               |
| ITEM 9A.       | Controls and Procedures                                                                                            |         86 |
|                |                                                                                                               |                                               |
| ITEM 9B.       | Other Information                                                                                                  |         86 |
|                |                                                                                                               |
| PART III  |         87                                                                 |
|                |                                                                                                               |                                               |
| ITEM 10.       | Directors, Executive Officers and Corporate Governance                                                             |         87 |
|                |                                                                                                               |                                               |
| ITEM 11.       | Executive Compensation                                                                                             |         87 |
|                |                                                                                                               |                                               |
| ITEM 12.       | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                     |         87 |
|                |                                                                                                               |                                               |
| ITEM 13.       | Certain Relationships and Related Transactions, and Director Independence                                          |         87 |
|                |                                                                                                               |                                               |
| ITEM 14.       | Principal Accountant Fees and Services                                                                             |         87 |
|                |                                                                                                               |
| PART IV   |         88                                                                 |
|                |                                                                                                               |
| ITEM 15.       | Exhibits and Financial Statement Schedules                                                                         |         88 |
|                |                                                                                                               |
| Signatures          |         89                                                                 |

----

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

----

----

|                                       |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |
|--------------------------------------------|--------|------------------------|---------|--------|---------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|---------|--------|
|                                       |   | 2010                   |    |   | 2009    |   |   | 2008   |   |   | 2007    |   |   | 2006   |   |
|                                       |   | Amount                 |    |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |    | Amount |   |   | Percent |   |   | Amount |    |   | Percent |   |
|                                       |   | (Dollars in thousands) |    |
| Mortgage Loans:                            |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |
|    Residential (1)          |   | $                      | 194,960 |   |    |   | 75.37  | %      |   | $      | 200,680 |   |   |   | 74.57  | %      |    | $      | 181,978 |   |   |   | 72.59   | %      |   | $      | 168,126 |   |    |   | 69.86 | % |   | $ | 147,706 |   |   |   | 71.50 | % |
|    Commercial real estate   |   |                   | 54,398  |   |    |   | 21.03  |   |   |   | 56,500  |   |   |   | 20.99  |   |    |   | 55,406  |   |   |   | 22.10   |   |   |   | 59,274  |   |    |   | 24.63 |   |   |   | 48,210 |   |   |   | 23.34 |   |
|    Residential construction |   |                   | 1,338   |   |    |   | 0.52   |   |   |   | 1,887   |   |   |   | 0.70   |   |    |   | 3,223   |   |   |   | 1.29    |   |   |   | 5,376   |   |    |   | 2.23 |   |   |   | 3,551 |   |   |   | 1.72 |   |
| Commercial                                 |   |                   | 6,786   |   |    |   | 2.62   |   |   |   | 8,958   |   |   |   | 3.33   |   |    |   | 8,687   |   |   |   | 3.46    |   |   |   | 6,449   |   |    |   | 2.68 |   |   |   | 5,693 |   |   |   | 2.76 |   |
| Consumer and other                         |   |                   | 1,177   |   |    |   | 0.46   |   |   |   | 1,097   |   |   |   | 0.41   |   |    |   | 1,394   |   |   |   | 0.56    |   |   |   | 1,439   |   |    |   | 0.60 |   |   |   | 1,410 |   |   |   | 0.68 |   |
|                                       |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Total loans                                |   | $                      | 258,659 |   |    |   | 100.00 | %      |   | $      | 269,122 |   |   |   | 100.00 | %      |    | $      | 250,688 |   |   |   | 100.00  | %      |   | $      | 240,664 |   |    |   | 100.00 | % |   | $ | 206,570 |   |   |   | 100.00 | % |
|                                       |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Unadvanced construction loans              |   |                   | (1,521  | )      |    |   |   |   |   |   | (2,929  | )      |   |   |   |   |    |   | (6,522  | )      |   |   |    |   |   |   | (8,264  | )      |    |   |   |   |   |   | (5,486 | ) |   |   |   |   |
|                                       |   |                   | 257,138 |   |    |   |   |   |   |   | 266,193 |   |   |   |   |   |    |   | 244,166 |   |   |   |    |   |   |   | 232,400 |   |    |   |   |   |   |   | 201,084 |   |   |   |   |   |
| Net deferred loan costs                    |   |                   | 285     |   |    |   |   |   |   |   | 324     |   |   |   |   |   |    |   | 320     |   |   |   |    |   |   |   | 282     |   |    |   |   |   |   |   | 35 |   |   |   |   |   |
| Allowance for loan losses                  |   |                   | (2,651  | )      |    |   |   |   |   |   | (2,200  | )      |   |   |   |   |    |   | (1,758  | )      |   |   |    |   |   |   | (1,780  | )      |    |   |   |   |   |   | (1,582 | ) |   |   |   |   |
|                                       |   |                   |    |   |    |   |   |   |   |   |    |   |   |   |   |   |    |   |    |   |   |   |    |   |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Loans, net                                 |   | $                      | 254,772 |   |    |   |   |   |   | $      | 264,317 |   |   |   |   |   |    | $      | 242,728 |   |   |   |    |   |   | $      | 230,902 |   |    |   |   |   |   | $ | 199,537 |   |   |   |   |   |

----

|                                      |   | Residential (1)        |    |   | Commercial Real Estate |   |   | Residential Construction |   |   | Commercial            |   |   | Consumer and Other Loans |   |   | Total Loans      |   |   |   |   |
|-------------------------------------------|--------|------------------------|---------|--------|------------------------|--------|--------|--------------------------|--------|--------|-----------------------|--------|--------|--------------------------|--------|--------|-----------------------|--------|--------|--------|--------|
|                                      |   | Amount                 |    |   | Weighted Average Rate  |   |   | Amount                   |   |   | Weighted Average Rate |   |   | Amount                   |   |   | Weighted Average Rate |   |   | Amount |   |   | Weighted Average Rate |   |   | Amount |   |   | Weighted Average Rate |   |   | Amount |   |   | Weighted Average Rate |   |
|                                      |   | (Dollars in thousands) |    |   |                   |   |   |                     |   |   |                  |   |   |                     |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Due During the Years                      |   |                   |    |   |                   |   |   |                     |   |   |                  |   |   |                     |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending June 30,                           |   |                   |    |   |                   |   |   |                     |   |   |                  |   |   |                     |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2011                                      |   | $                      | 47,259  |   |                   |   | 4.38   | %                        |   | $      | 26,686                |   |   |                     | 6.25   | %      |                  | $      | 1,006  |   |   |   | 5.30 | % |   | $ | 2,803 |   |   |   | 5.75 | % |   | $ | 531 |   |   |   | 6.25 | % |   | $ | 78,285 |   |   |   | 5.09 | % |
| 2012                                      |   |                   | 18,880  |   |                   |   | 5.59   | %                        |   |   | 5,830                 |   |   |                     | 7.12   | %      |                  |   | -      |   |   |   | 0.00 | % |   |   | 650 |   |   |   | 6.38 | % |   |   | 210 |   |   |   | 8.22 | % |   |   | 25,570 |   |   |   | 5.98 | % |
| 2013                                      |   |                   | 16,767  |   |                   |   | 5.73   | %                        |   |   | 6,162                 |   |   |                     | 7.23   | %      |                  |   | -      |   |   |   | 0.00 | % |   |   | 1,228 |   |   |   | 6.13 | % |   |   | 242 |   |   |   | 6.11 | % |   |   | 24,399 |   |   |   | 6.13 | % |
| 2014 to 2015                              |   |                   | 27,679  |   |                   |   | 5.54   | %                        |   |   | 7,603                 |   |   |                     | 6.77   | %      |                  |   | -      |   |   |   | 0.00 | % |   |   | 1,785 |   |   |   | 5.15 | % |   |   | 177 |   |   |   | 5.96 | % |   |   | 37,244 |   |   |   | 5.77 | % |
| 2016 to 2020                              |   |                   | 37,233  |   |                   |   | 5.56   | %                        |   |   | 5,974                 |   |   |                     | 6.81   | %      |                  |   | -      |   |   |   | 0.00 | % |   |   | 320 |   |   |   | 5.14 | % |   |   | 17 |   |   |   | 8.03 | % |   |   | 43,544 |   |   |   | 5.73 | % |
| 2021 and beyond                           |   |                   | 47,142  |   |                   |   | 5.60   | %                        |   |   | 954                   |   |   |                     | 7.56   | %      |                  |   | -      |   |   |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |   |   | 48,096 |   |   |   | 5.64 | % |
|                                      |   |                   |    |   |                   |   |   |                     |   |   |                  |   |   |                     |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Total |   | $                      | 194,960 |   |                   |   | 5.30   | %                        |   | $      | 53,209                |   |   |                     | 6.62   | %      |                  | $      | 1,006  |   |   |   | 5.30 | % |   | $ | 6,786 |   |   |   | 5.69 | % |   | $ | 1,177 |   |   |   | 6.55 | % |   | $ | 257,138 |   |   |   | 5.59 | % |
|                                      |   |                   |    |   |                   |   |   |                     |   |   |                  |   |   |                     |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

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

----

|                                                 |   |           |                     |   |       |   |                     |   |   |
|------------------------------------------------------|--------|----------------|--------------------------|--------|------------|--------|--------------------------|--------|--------|
|                                                 |   | Fixed          |      |   | Adjustable |   |      | Total  |   |
|                                                 |   | (In thousands) |
| Mortgage Loans:                                      |   |           |                     |   |       |   |                     |   |   |
|      Residential (1)        |   | $              | 108,259                  |   |       | $      | 39,443                   |   |   | $ | 147,702 |   |
|      Commercial real estate |   |           | 23,366                   |   |       |   | 3,157                    |   |   |   | 26,523 |   |
| Commercial                                           |   |           | 3,202                    |   |       |   | 781                      |   |   |   | 3,983 |   |
| Consumer and other                                   |   |           | 546                      |   |       |   | 100                      |   |   |   | 646 |   |
|                                                 |   |           |                     |   |       |   |                     |   |   |   |   |   |
|       Total            |   | $              | 135,373                  |   |       | $      | 43,481                   |   |   | $ | 178,854 |   |
|                                                 |   |           |                     |   |       |   |                     |   |   |   |   |   |

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

----

----

----

----

|                                                                         | At June 30,            |
|------------------------------------------------------------------------------|------------------------|
|                                                                         | 2010                   |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                         | (Dollars in thousands) |
|                                                                         |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-accrual loans:                                                           |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential mortgage loans (1)                       | $                      | 1,425 |   |   | $ | 1,277 |   |   | $ | - |   |   | $ | 55 |   |   | $ | 63 |   |
|     Commercial real estate                               |                   | 4,164 |   |   |   | 5,073 |   |   |   | 982 |   |   |   | 1,480 |   |   |   | 1,313 |   |
|     Residential construction                             |                   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                                                   |                   | 213 |   |   |   | 99 |   |   |   | - |   |   |   | 3 |   |   |   | - |   |
| Consumer and other                                                           |                   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|          Total                       |                   | 5,802 | (2) |   |   | 6,449 | (2) |   |   | 982 |   |   |   | 1,538 |   |   |   | 1,376 |   |
| Accruing loans past due over 90 days:                                        |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential mortgage loans (1)                       |                   | 491 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial real estate                               |                   | - |   |   |   | - |   |   |   | 470 |   |   |   | - |   |   |   | 75 |   |
|     Residential construction                             |                   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                                                   |                   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer and other                                                           |                   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|          Total                  |                   | 491 |   |   |   | - |   |   |   | 470 |   |   |   | - |   |   |   | 75 |   |
|          Total non-performing loans  |                   | 6,293 |   |   |   | 6,449 |   |   |   | 1,452 |   |   |   | 1,538 |   |   |   | 1,451 |   |
| Real estate owned                                                            |                   | 1,561 |   |   |   | 1,211 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other non-performing assets                                                  |                   | 46 |   |   |   | 46 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|          Total non-performing assets |                   | 7,900 |   |   |   | 7,706 |   |   |   | 1,452 |   |   |   | 1,538 |   |   |   | 1,451 |   |
| Trouble debt restructurings in compliance with restructure terms             |                   | 930 | (2) |   |   | 259 | (2) |   |   | - |   |   |   | - |   |   |   | - |   |
| Troubled debt restructures and                                               |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  total non-performing assets                                            | $                      | 8,830 |   |   | $ | 7,965 |   |   | $ | 1,452 |   |   | $ | 1,538 |   |   | $ | 1,451 |   |
| Total non-performing loans to total loans                                    |                   | 2.45 | % |   |   | 2.42 | % |   |   | 0.59 | % |   |   | 0.66 |   |   |   | 0.72 | % |
| Total non-performing loans to total assets                                   |                   | 1.29 | % |   |   | 1.35 | % |   |   | 0.29 | % |   |   | 0.31 | % |   |   | 0.31 | % |
| Total non-performing assets and                                              |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  troubled debt restructurings to total assets                           |                   | 1.80 | % |   |   | 1.67 | % |   |   | 0.29 | % |   |   | 0.31 | % |   |   | 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 $445,000 and $389,000 for the years ended June 30, 2010 and 2009, respectively. Actual income recognized in income was $154,000 and $136,000 for the years ended June 30, 2010 and 2009, 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, 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 |   |
|                                             |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At June 30, 2006                                 |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential (1)          |   |                   | 3      |   |             | $      | 133    |   |   |   | -      |   |   | $      | -      |   |   |   | 3 |   |   | $ | 133 |   |
|     Commercial real estate   |   |                   | 1      |   |             |   | 633    |   |   |   | 2      |   |   |   | 755    |   |   |   | 3 |   |   |   | 1,388 |   |
|     Residential construction |   |                   | -      |   |             |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | - |   |   |   | - |   |
|     Commercial               |   |                   | -      |   |             |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | - |   |   |   | - |   |
|     Consumer and other loans |   |                   | -      |   |             |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | - |   |   |   | - |   |
| Total                                            |   |                   | 4      |   |             | $      | 766    |   |   |   | 2      |   |   | $      | 755    |   |   |   | 6 |   |   | $ | 1,521 |   |
|                                             |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (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, 2010 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,    |   |
|---------------------------------------------------|--------|------------------------|--------|
|                                              |   | 2010                   |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                              |   | (Dollars in thousands) |
|                                              |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of year                      |   | $                      | 2,200  |   |   | $ | 1,758 |   |   | $ | 1,780 |   |   | $ | 1,582 |   |   | $ | 1,359 |   |
| Provision for loan losses                         |   |                   | 1,049  |   |   |   | 967 |   |   |   | 51 |   |   |   | 264 |   |   |   | 200 |   |
| Charge offs:                                      |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential (1)           |   |                   | (50    | ) |   |   | (53 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial real estate    |   |                   | (410   | ) |   |   | (400 | ) |   |   | - |   |   |   | (26 | ) |   |   | (10 | ) |
|     Residential construction  |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial                |   |                   | (49    | ) |   |   | - |   |   |   | (27 | ) |   |   | - |   |   |   | - |   |
|     Consumer and other        |   |                   | (156   | ) |   |   | (118 | ) |   |   | (97 | ) |   |   | (86 | ) |   |   | (72 | ) |
| Total charge-offs                                 |   |                   | (665   | ) |   |   | (571 | ) |   |   | (124 | ) |   |   | (112 | ) |   |   | (82 | ) |
| Recoveries:                                       |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential (1)           |   |                   | 4      |   |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial real estate    |   |                   | -      |   |   |   | - |   |   |   | 10 |   |   |   | - |   |   |   | - |   |
|     Residential construction  |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     Commercial                |   |                   | 25     |   |   |   | 5 |   |   |   | 4 |   |   |   | 19 |   |   |   | - |   |
|     Consumer and other        |   |                   | 38     |   |   |   | 40 |   |   |   | 37 |   |   |   | 27 |   |   |   | 7 |   |
| Total recoveries                                  |   |                   | 67     |   |   |   | 46 |   |   |   | 51 |   |   |   | 46 |   |   |   | 7 |   |
| Net (charge-offs) recoveries                      |   |                   | (598   | ) |   |   | (525 | ) |   |   | (73 | ) |   |   | (66 | ) |   |   | (75 | ) |
| Transfer to allowance for off-balance sheet items |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 98 |   |
|  Allowance at end of year                    |   | $                      | 2,651  |   |   | $ | 2,200 |   |   | $ | 1,758 |   |   | $ | 1,780 |   |   | $ | 1,582 |   |
|                                              |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                           |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses to non-performing loans |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  at end of year                              |   |                   | 42.13  | % |   |   | 34.11 | % |   |   | 121.07 | % |   |   | 115.73 | % |   |   | 109.03 | % |
| Allowance for loan losses to total loans          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  outstanding at the end of the year          |   |                   | 1.03   | % |   |   | 0.83 | % |   |   | 0.72 | % |   |   | 0.74 | % |   |   | 0.77 | % |
| Net charge-offs to average loans outstanding      |   |                   | 0.22   | % |   |   | 0.20 | % |   |   | 0.03 | % |   |   | 0.03 | % |   |   | 0.04 | % |
|                                              |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                            |                                             | Amount                 |   |                           | % of Allowance to Total Allowance |   |   | % of Loans in Category to Total Loans |   |
|---------------------------------|--------------------------------------------------|------------------------|--------|--------------------------------|-----------------------------------|--------|--------|-------------------------------------------------|--------|
|                            |                                             | (Dollars in thousands) |   |
|                            |                                             |                   |   |                           |                              |   |   |                                            |   |
| 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 | % |
|                            |                                             |                   |   |                           |                              |   |   |                                            |   |   |   |   |
| At June 30, 2006                |                                             |                   |   |                           |                              |   |   |                                            |   |   |   |   |
| Residential mortgages (1)       |                                             | $                      | 570    |                           |                              |   | 36.03  | %                                               |   |   | 73.22 | % |
| Commercial loans (2)            |                                             |                   | 978    |                           |                              |   | 61.82  |                                            |   |   | 26.10 |   |
| Consumer loans                  |                                             |                   | 29     |                           |                              |   | 1.83   |                                            |   |   | 0.68 |   |
| Unallocated                     |                                             |                   | 5      |                           |                              |   | 0.32   |                                            |   |   | - |   |
| Total allowance for loan losses |                                             | $                      | 1,582  |                           |                              |   | 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         | 08-20-10         |   | 08-27-10         |   | 08-16-10         |   | 07-09-10         |   | 07-02-10         |
| 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%           |   | 4.574%           |   | 4.679%           |   | 0.000%           |   | 0.000%           |
| Dividends Current:      | Yes              |   | Yes              |   | Yes              |   | No               |   | No               |
|                    |             |   |             |   |             |   |             |   |             |

----

|                                             |   | At June 30, |
|--------------------------------------------------|--------|-------------|
|                                             |   | 2010        |   |   | 2009 |   |   | 2008 |   |
|                                             |   | 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            |   | $           | 6,101 |   |   |   | 3.6 | % |   | $ | 19,667 |   |   |   | 11.8 | % |   | $ | 19,472 |   |   |   | 9.2 | % |
| State agency and municipal obligations           |   |        | - |   |   |   | - | % |   |   | - |   |   |   | - | % |   |   | 4,547 |   |   |   | 2.1 | % |
| Corporate bonds and other securities             |   |        | 4,368 |   |   |   | 2.6 | % |   |   | 9,263 |   |   |   | 5.6 | % |   |   | 17,214 |   |   |   | 8.1 | % |
| Mortgage-backed securities                       |   |        | 66,967 |   |   |   | 39.6 | % |   |   | 123,596 |   |   |   | 74.0 | % |   |   | 151,850 |   |   |   | 71.6 | % |
| Equity securities                                |   |        | 8,457 |   |   |   | 5.0 | % |   |   | 12,362 |   |   |   | 7.4 | % |   |   | 19,000 |   |   |   | 9.0 | % |
|   Total securities, available for sale |   |        | 85,893 |   |   |   | 50.8 | % |   |   | 164,888 |   |   |   | 98.8 | % |   |   | 212,083 |   |   |   | 100.0 | % |
| Securities, held-to-maturity:                    |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency securities            |   |        | 45,275 |   |   |   | 26.8 | % |   |   | 2,000 |   |   |   | 1.2 | % |   |   | - |   |   |   | - | % |
| Mortgage-backed securities                       |   |        | 37,974 |   |   |   | 22.4 | % |   |   | - |   |   |   | - | % |   |   | - |   |   |   | - | % |
|   Total securities, held-to-maturity   |   |        | 83,249 |   |   |   | 49.2 | % |   |   | 2,000 |   |   |   | 1.2 | % |   |   | 0 |   |   |   | 0.0 | % |
|                                             |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Total securities               |   | $           | 169,142 |   |   |   | 100.0 | % |   | $ | 166,888 |   |   |   | 100.0 | % |   | $ | 212,083 |   |   |   | 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 |   | $                   | 1,122  |   |                              | $      | 957    |                               |   | $      | 2,003           |   |   | $      | 2,019   |   |   | $ | 6,101 |   |
| Corporate debt securities             |   |                | -      |   |                              |   | -      |                               |   |   | -               |   |   |   | 4,368   |   |   | $ | 4,368 |   |
| Mortgage-backed securities            |   |                | 293    |   |                              |   | 3,978  |                               |   |   | 5,052           |   |   |   | 57,644  |   |   | $ | 66,967 |   |
| Total debt securities                 |   |                | 1,415  |   |                              |   | 4,935  |                               |   |   | 7,055           |   |   |   | 64,031  |   |   |   | 77,436 |   |
| Equity securities                     |   |                | -      |   |                              |   | -      |                               |   |   | -               |   |   |   | 8,457   |   |   | $ | 8,457 |   |
|                                  |   |                |   |   |                              |   |   |                               |   |   |            |   |   |   |    |   |   |   |   |   |
| Total securities available-for-sale   |   | $                   | 1,415  |   |                              | $      | 4,935  |                               |   | $      | 7,055           |   |   | $      | 72,488  |   |   | $ | 85,893 |   |
| Securities held-to-maturity:          |   |                |   |   |                              |   |   |                               |   |   |            |   |   |   |    |   |   |   |   |   |
| U.S. Government and agency securities |   |                | -      |   |                              |   | 24,250 |                               |   |   | 19,025          |   |   |   | 2,000   |   |   | $ | 45,275 |   |
| Mortgage-backed securities            |   |                | -      |   |                              |   | -      |                               |   |   | -               |   |   |   | 37,974  |   |   | $ | 37,974 |   |
| Total securities held-to-maturity     |   |                | -      |   |                              |   | 24,250 |                               |   |   | 19,025          |   |   |   | 39,974  |   |   | $ | 83,249 |   |
|                                  |   |                |   |   |                              |   |   |                               |   |   |            |   |   |   |    |   |   |   |   |   |
| Total securities                      |   | $                   | 1,415  |   |                              | $      | 29,185 |                               |   | $      | 26,080          |   |   | $      | 112,462 |   |   | $ | 169,142 |   |
| Weighted average yield                |   |                | 4.60   | %      |                              |   | 2.38   | %                                  |   |   | 3.07            | %      |   |   | 4.17    | % |   |   | 3.71 | % |
|                                  |   |                |   |   |                              |   |   |                               |   |   |            |   |   |   |    |   |   |   |   |   |

----

----

|                                                          |   | For the Year Ended June 30, |    |
|---------------------------------------------------------------|--------|-----------------------------|---------|
|                                                          |   | 2010                        |    |   | 2009 |   |   | 2008 |   |
|                                                          |   |                        |    |   |   |   |   | Weighted |   |   |   |   |   |   |   |   | Weighted |   |   |   |   |   |   |   |   | Weighted |   |
|                                                          |   | Average                     |    |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
|                                                          |   | Balance                     |    |   | Percent |   |   | Rate |   |   | Balance |   |   | Percent |   |   | Rate |   |   | Balance |   |   | Percent |   |   | Rate |   |
|                                                          |   | (Dollars in thousands)      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                               |   | $                           | 35,279  |   |   |   | 10.99 | % |   |   | - | % |   | $ | 36,219 |   |   |   | 12.39 | % |   |   | - | % |   | $ | 38,846 |   |   |   | 13.64 | % |   |   | - | % |
| NOW accounts                                                  |   |                        | 80,526  |   |   |   | 25.08 |   |   |   | 1.11 |   |   |   | 42,360 |   |   |   | 14.49 |   |   |   | 1.90 |   |   |   | 29,813 |   |   |   | 10.47 |   |   |   | 2.37 |   |
| Regular savings                                               |   |                        | 46,447  |   |   |   | 14.46 |   |   |   | 0.35 |   |   |   | 45,684 |   |   |   | 15.63 |   |   |   | 0.46 |   |   |   | 47,397 |   |   |   | 16.64 |   |   |   | 0.60 |   |
| Money market accounts      |   |                        | 11,036  |   |   |   | 3.43 |   |   |   | 0.88 |   |   |   | 12,006 |   |   |   | 4.10 |   |   |   | 1.08 |   |   |   | 15,496 |   |   |   | 5.44 |   |   |   | 1.70 |   |
| Club accounts                                                 |   |                        | 237     |   |   |   | 0.07 |   |   |   | 0.30 |   |   |   | 261 |   |   |   | 0.09 |   |   |   | 3.79 |   |   |   | 250 |   |   |   | 0.09 |   |   |   | 4.17 |   |
|                                                          |   |                        | 173,525 |   |   |   | 54.04 |   |   |   | 0.67 |   |   |   | 136,530 |   |   |   | 46.70 |   |   |   | 0.85 |   |   |   | 131,802 |   |   |   | 46.28 |   |   |   | 0.96 |   |
| Certificates of deposit                                       |   |                        | 147,599 |   |   |   | 45.96 |   |   |   | 2.58 |   |   |   | 155,813 |   |   |   | 53.30 |   |   |   | 3.27 |   |   |   | 153,012 |   |   |   | 53.72 |   |   |   | 3.87 |   |
|        Total               |   | $                           | 321,124 |   |   |   | 100.00 | % |   |   | 1.55 | % |   | $ | 292,343 |   |   |   | 100.00 | % |   |   | 2.14 | % |   | $ | 284,814 |   |   |   | 100.00 | % |   |   | 2.52 | % |
|                                                          |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Maturity Period                     |                                 | At June 30, 2010 |   |
|-------------------------------------|--------------------------------------|----------------------------|--------|
|                                |                                 |                       |   |
|                                |                                 | (In thousands)        |   |
|                                |        |                       |   |
| Three months or less                |                                 | $                          | 19,542 |   |
| Over three through six months       |                                 |                       | 4,509  |   |
| Over six months through one year    |                                 |                       | 11,148 |   |
| Over one year through three years   |                                 |                       | 16,657 |   |
| Over three years                    |                                 |                       | 12,569 |   |
|      Total |                                 | $                          | 64,425 |   |
|                                |                                 |                       |   |   |

----

|                                                                           |   | At and For The Year Ended |
|--------------------------------------------------------------------------------|--------|---------------------------|
|                                                                           |   | June 30,                  |
|                                                                           |   | 2010                      |   |   | 2009 |   |   | 2008 |   |
|                                                                           |   | (Dollars in thousands)    |   |
|                                                                           |   |                      |   |   |   |   |   |   |   |
| Maximum amount of advances outstanding                                         |   |                      |   |   |   |   |   |   |   |
| at any month end during the year:                                              |   |                      |   |   |   |   |   |   |   |
|       FHLB advances                              |   | $                         | 120,500 |   |   | $ | 150,204 |   |   | $ | 152,236 |   |
|       Repurchase Agreements with other companies |   |                      | - |   |   |   | - |   |   |   | - |   |
|       Repurchase Agreements with customers       |   |                      | 15,179 |   |   |   | 8,637 |   |   |   | 6,406 |   |
| Average advances outstanding during the year:                                  |   |                      |   |   |   |   |   |   |   |   |   |   |
|       FHLB advances                              |   |                      | 106,473 |   |   |   | 140,685 |   |   |   | 145,691 |   |
|       Repurchase Agreements with other companies |   |                      | - |   |   |   | - |   |   |   | - |   |
|       Repurchase Agreements with customers       |   |                      | 9,154 |   |   |   | 5,535 |   |   |   | 4,603 |   |
| Balance outstanding at end of year:                                            |   |                      |   |   |   |   |   |   |   |   |   |   |
|       FHLB advances                              |   |                      | 100,500 |   |   |   | 120,500 |   |   |   | 150,215 |   |
|       Repurchase Agreements with other companies |   |                      | - |   |   |   | - |   |   |   | - |   |
|       Repurchase Agreements with customers       |   |                      | 5,896 |   |   |   | 4,471 |   |   |   | 6,406 |   |
| Weighted average interest rate during the year:                                |   |                      |   |   |   |   |   |   |   |   |   |   |
|       FHLB advances                              |   |                      | 3.95 | % |   |   | 4.05 | % |   |   | 4.62 | % |
|       Repurchase Agreements with other companies |   |                      | - |   |   |   | - |   |   |   | - |   |
|       Repurchase Agreements with customers       |   |                      | 1.03 |   |   |   | 2.28 |   |   |   | 2.84 |   |
| Weighted average interest rate at end of year:                                 |   |                      |   |   |   |   |   |   |   |   |   |   |
|       FHLB advances                              |   |                      | 3.89 | % |   |   | 4.06 | % |   |   | 3.95 | % |
|       Repurchase Agreements with other companies |   |                      | - |   |   |   | - |   |   |   | - |   |
|       Repurchase Agreements with customers       |   |                      | 0.33 |   |   |   | 2.30 |   |   |   | 2.17 |   |
|                                                                           |   |                      |   |   |   |   |   |   |   |   |   |   |

----

----

----

----

|   | ● | 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 Thrift Supervision-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. |
|---------------------------------------------|---------------------------------------------------------------------------------------------------|

----

----

----

----

----

|                                                        | 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 |   |             | $      | 1,201 |   |
| Putnam, Connecticut 06260                                   |      |   |          |   |    |   |   |             |   |   |   |
|                                                        |      |   |          |   |    |   |   |             |   |   |   |
| Full Service Branches:                                      |      |   |          |   |    |   |   |             |   |   |   |
| 251 Kennedy Drive                                           | Leased    |   | 2006          |   |    | 473    |   |             |   | 89 |   |
| Putnam, Connecticut 06260                                   |      |   |          |   |    |   |   |             |   |   |   |
|                                                        |      |   |          |   |    |   |   |             |   |   |   |
| 100 Averill Road                                            | Owned     |   | 1981          |   |    | 2,487  |   |             |   | 519 |   |
| Pomfret Center, Connecticut 06259                           |      |   |          |   |    |   |   |             |   |   |   |
|                                                        |      |   |          |   |    |   |   |             |   |   |   |
| 125 Wauregan Road                                           | Owned     |   | 1993          |   |    | 2,452  |   |             |   | 350 |   |
| Danielson, Connecticut 06239                                |      |   |          |   |    |   |   |             |   |   |   |
|                                                        |      |   |          |   |    |   |   |             |   |   |   |
| 11 Pratt Road                                               | Owned     |   | 2000          |   |    | 2,162  |   |             |   | 343 |   |
| Plainfield, Connecticut 06374                               |      |   |          |   |    |   |   |             |   |   |   |
|                                                        |      |   |          |   |    |   |   |             |   |   |   |
| 461 Voluntown Road, Rte. 138                                | Leased    |   | 2005          |   |    | 2,600  |   |             |   | 46 |   |
| Griswold, Connecticut 06351                                 |      |   |          |   |    |   |   |             |   |   |   |
|                                                        |      |   |          |   |    |   |   |             |   |   |   |
| 2 Chapman Lane                                              | Owned     |   | 2009          |   |    | 2,400  |   |             |   | 711 |   |
| Gales Ferry, Connecticut 06335                              |      |   |          |   |    |   |   |             |   |   |   |
|                                                        |      |   |          |   |    |   |   |             |   |   |   |
| 40 High Street                                              | Owned     |   | 2009          |   |    | 2,800  |   |             |   | 1,199 |   |
| Norwich, Connecticut (2)                                    |      |   |          |   |    |   |   |             |   |   |   |
|                                                        |      |   |          |   |    |   |   |             |   |   |   |
| Loan Center:                                                |      |   |          |   |    |   |   |             |   |   |   |
| 50 Canal Street                                             | Owned     |   | 2000          |   |    | 2,940  |   |             |   | 163 |   |
| 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 |      |   |          |   |    |   |   |             | $      | 4,621 |   |

----

| (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. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The Norwich branch opened for business on September 2, 2009. |
|-----|--------------------------------------------------------------|

| 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 2009                      |   |   |   |                           |   |   |   |                     |   |
| Quarter ended September 30, 2008 |   | $      | 9.50   |                           |   | $      | 7.80   |                     |   | $ | 0.10 |   |
| Quarter ended December 31, 2008  |   |   | 8.26   |                           |   |   | 3.23   |                     |   |   | 0.09 |   |
| Quarter ended March 31, 2009     |   |   | 4.72   |       |   |   | 3.60   |      |   |   | 0.05 |   |
| Quarter ended June 30, 2009      |   |   | 5.20   |                           |   |   | 3.60   |                     |   |   | 0.05 |   |
| 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   |                     |   |   | - |   |
|                             |   |   |   |                           |   |   |   |                     |   |   |   |   |

----

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

|                                                                  |   | At or For the Year Ended June 30, |    |
|-----------------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                                  |   | 2010                              |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                  |   | (Dollars in thousands)            |
| Selected Financial Condition Data:                                    |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Assets                                                          |   | $                                 | 489,359 |   |   | $ | 477,349 |   |   | $ | 494,499 |   |   | $ | 491,198 |   |   | $ | 474,417 |   |
| Cash and cash equivalents                                             |   |                              | 23,291  |   |   |   | 6,059 |   |   |   | 8,146 |   |   |   | 13,198 |   |   |   | 8,195 |   |
| Securities available-for-sale                                         |   |                              | 85,893  |   |   |   | 164,888 |   |   |   | 212,083 |   |   |   | 215,322 |   |   |   | 238,730 |   |
| Securities held-to-maturity                                           |   |                              | 83,249  |   |   |   | 2,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Loans receivable, net                                                 |   |                              | 254,772 |   |   |   | 264,317 |   |   |   | 242,728 |   |   |   | 230,902 |   |   |   | 199,537 |   |
| Loans held-for-sale                                                   |   |                              | 1,470   |   |   |   | 1,200 |   |   |   | 675 |   |   |   | 1,478 |   |   |   | 934 |   |
| Deposits                                                              |   |                              | 335,146 |   |   |   | 308,099 |   |   |   | 283,724 |   |   |   | 293,473 |   |   |   | 296,965 |   |
| Borrowings                                                            |   |                              | 106,396 |   |   |   | 124,971 |   |   |   | 156,621 |   |   |   | 141,857 |   |   |   | 124,593 |   |
| Total capital                                                         |   |                              | 43,855  |   |   |   | 39,896 |   |   |   | 49,437 |   |   |   | 51,251 |   |   |   | 48,912 |   |
|                                                                  |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   | At or For the Year Ended June 30, |
|                                                                  |   |                              | 2010    |   |   |   | 2008 |   |   |   | 2007 |   |   |   | 2006 |   |   |   | 2005 |   |
|                                                                  |   | (Dollars in thousands)            |    |
| Selected Operating Data:                                              |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest and dividend income                                          |   | $                                 | 22,462  |   |   | $ | 25,318 |   |   | $ | 27,205 |   |   | $ | 25,364 |   |   | $ | 19,437 |   |
| Interest expense                                                      |   |                              | 10,125  |   |   |   | 12,726 |   |   |   | 15,229 |   |   |   | 14,795 |   |   |   | 8,801 |   |
|      Net interest income                     |   |                              | 12,337  |   |   |   | 12,592 |   |   |   | 11,976 |   |   |   | 10,569 |   |   |   | 10,636 |   |
| Provision for loan losses                                             |   |                              | 1,049   |   |   |   | 967 |   |   |   | 51 |   |   |   | 263 |   |   |   | 200 |   |
|      Net interest income after provision for |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      loan losses                             |   |                              | 11,288  |   |   |   | 11,625 |   |   |   | 11,925 |   |   |   | 10,306 |   |   |   | 10,436 |   |
| Noninterest income (charge)                                           |   |                              | 1,983   |   |   |   | (12,559 | ) |   |   | 3,193 |   |   |   | 2,741 |   |   |   | 2,436 |   |
| Noninterest expense                                                   |   |                              | 11,700  |   |   |   | 10,807 |   |   |   | 10,945 |   |   |   | 10,769 |   |   |   | 10,139 |   |
| Income (loss) before income taxes                                     |   |                              | 1,571   |   |   |   | (11,741 | ) |   |   | 4,173 |   |   |   | 2,278 |   |   |   | 2,733 |   |
| Income tax expense (benefit)                                          |   |                              | 309     |   |   |   | (4,610 | ) |   |   | 1,105 |   |   |   | 354 |   |   |   | 617 |   |
|      Net income (loss)                       |   | $                                 | 1,262   |   |   | $ | (7,131 | ) |   | $ | 3,068 |   |   | $ | 1,924 |   |   | $ | 2,116 |   |
|                                                                  |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                    |   | June 30, |   |
|-------------------------------------------------------------------------|--------|----------|--------|
| Selected Financial Ratios and Other Data:                               |   | 2010     |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Performance Ratios:                                                     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average assets                                                |   |     | 0.26   | % |   |   | -1.47 | % |   |   | 0.63 | % |   |   | 0.40 | % |   |   | 0.54 | % |
| Return on average equity                                                |   |     | 2.93   |   |   |   | -17.76 |   |   |   | 5.95 |   |   |   | 3.74 |   |   |   | 4.09 |   |
| Interest rate spread (1)                                                |   |     | 2.47   |   |   |   | 2.46 |   |   |   | 2.04 |   |   |   | 1.76 |   |   |   | 2.33 |   |
| Net interest margin (2)                                                 |   |     | 2.74   |   |   |   | 2.79 |   |   |   | 2.59 |   |   |   | 2.35 |   |   |   | 2.84 |   |
| Noninterest expense to average assets                                   |   |     | 2.42   |   |   |   | 2.23 |   |   |   | 2.23 |   |   |   | 2.17 |   |   |   | 2.57 |   |
| Efficiency Ratio (3)                                                    |   |     | 81.70  |   |   | NA |   |   |   | 72.15 |   |   |   | 80.91 |   |   |   | 77.56 |   |
| Basic earnings (loss) per share                                         |   | $        | 0.20   |   |   | $ | (1.14 | ) |   | $ | 0.49 |   |   | $ | 0.29 |   |   | $ | 0.31 |   |
| Diluted earnings (loss) per share                                       |   | $        | 0.20   |   |   | $ | (1.14 | ) |   | $ | 0.48 |   |   | $ | 0.28 |   |   | $ | 0.30 |   |
| Average interest-earning assets to average interest-bearing liabilities |   |     | 112.03 | % |   |   | 112.01 | % |   |   | 116.77 | % |   |   | 117.87 | % |   |   | 121.72 | % |
|                                                                    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital Ratios:                                                         |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity to total assets at end of period                                 |   |     | 8.96   | % |   |   | 8.36 | % |   |   | 10.00 | % |   |   | 10.43 | % |   |   | 10.31 | % |
| Average equity to average assets                                        |   |     | 8.92   |   |   |   | 8.30 |   |   |   | 10.51 |   |   |   | 10.80 |   |   |   | 13.10 |   |
| Total capital to risk-weighted assets                                   |   |     | 13.42  |   |   |   | 10.92 |   |   |   | 16.24 |   |   |   | 16.60 |   |   |   | 13.25 |   |
| Tier 1 capital to risk-weighted assets                                  |   |     | 12.38  |   |   |   | 10.20 |   |   |   | 15.58 |   |   |   | 15.89 |   |   |   | 12.66 |   |
| Tier 1 capital to adjusted tangible assets                              |   |     | 6.91   |   |   |   | 6.62 |   |   |   | 8.34 |   |   |   | 8.22 |   |   |   | 7.26 |   |
| Dividend payout ratio                                                   |   |     | 0.20   |   |   |   | (0.25 | ) |   |   | 0.63 |   |   |   | 0.83 |   |   |   | 0.74 |   |
|                                                                    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset Quality Ratios:                                                   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses as a percent of total loans                   |   |     | 1.03   | % |   |   | 0.83 | % |   |   | 0.72 | % |   |   | 0.74 | % |   |   | 0.77 | % |
| Allowance for loan losses as a percent of nonperforming loans           |   |     | 42.13  |   |   |   | 34.11 |   |   |   | 121.07 |   |   |   | 115.73 |   |   |   | 109.03 |   |
| Net charge-offs to average outstanding loans during the period          |   |     | 0.22   |   |   |   | 0.20 |   |   |   | 0.03 |   |   |   | 0.03 |   |   |   | 0.04 |   |
| Nonperforming loans as a percent of total loans                         |   |     | 2.45   |   |   |   | 2.42 |   |   |   | 0.59 |   |   |   | 0.66 |   |   |   | 0.72 |   |
| Nonperforming assets as a percent of total assets                       |   |     | 1.80   |   |   |   | 1.67 |   |   |   | 0.29 |   |   |   | 0.31 |   |   |   | 0.31 |   |
|                                                                    |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Data:                                                             |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number of full-service offices                                          |   |     | 8      |   |   |   | 7 |   |   |   | 7 |   |   |   | 7 |   |   |   | 6 |   |

----

|   |  (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 |
|--------------|---------------------------------------------------------------------------------------------|

----

----

----

----

|                                                         |   | 2010    |    |    | 2009   |   |   | 2008   |    |
|--------------------------------------------------------------|--------|---------|---------|---------|--------|--------|--------|--------|---------|
| 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                                  |   | $       | 169,043 |    | $      | 7,811  |   |   | 4.62    | % |   | $ | 192,014 |   | $ | 10,584 |   |   |   | 5.51 | % |   | $ | 219,397 |   |   | $ | 11,821 |   |   | 5.39 | % |
|  Loans                                                  |   |    | 265,142 |    |   | 14,641 |   |   | 5.52    | % |   |   | 254,742 |   |   | 14,718 |   |   |   | 5.78 | % |   |   | 240,403 |   |   |   | 15,274 |   |   | 6.35 | % |
|  Other earning assets                                   |   |    | 15,606  |    |   | 10     |   |   | 0.06    | % |   |   | 4,281 |   |   | 16 |   |   |   | 0.37 | % |   |   | 2,921 |   |   |   | 110 |   |   | 3.77 | % |
|  Total interest-earnings assets                         |   |    | 449,791 |    |   | 22,462 |   |   | 4.99    | % |   |   | 451,037 |   |   | 25,318 |   |   |   | 5.61 | % |   |   | 462,721 |   |   |   | 27,205 |   |   | 5.88 | % |
|  Non-interest-earning assets                            |   |    | 32,813  |    |   |   |   |   |    |   |   |   | 32,808 |   |   |   |   |   |   |   |   |   |   | 27,909 |   |   |   |   |   |   |   |   |
|  Total assets                                           |   | $       | 482,604 |    |   |   |   |   |    |   |   | $ | 483,845 |   |   |   |   |   |   |   |   |   | $ | 490,630 |   |   |   |   |   |   |   |   |
|                                                         |   |    |    |    |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest-bearing liabilities:                          |   |    |    |    |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  NOW accounts                                           |   | $       | 80,526  |    |   | 1,317  |   |   | 1.64    | % |   | $ | 42,360 |   |   | 944 |   |   |   | 2.23 | % |   | $ | 29,813 |   |   |   | 777 |   |   | 2.61 | % |
|  Savings accounts                                       |   |    | 46,447  |    |   | 195    |   |   | 0.42    | % |   |   | 45,684 |   |   | 250 |   |   |   | 0.55 | % |   |   | 47,397 |   |   |   | 329 |   |   | 0.69 | % |
|  Money market accounts                                  |   |    | 11,036  |    |   | 111    |   |   | 1.01    | % |   |   | 12,006 |   |   | 188 |   |   |   | 1.57 | % |   |   | 15,496 |   |   |   | 300 |   |   | 1.94 | % |
|  Time deposits                                          |   |    | 147,836 |    |   | 4,200  |   |   | 2.84    | % |   |   | 156,074 |   |   | 5,525 |   |   |   | 3.54 | % |   |   | 153,262 |   |   |   | 6,967 |   |   | 4.55 | % |
|  Borrowed money                                         |   |    | 115,630 |    |   | 4,302  |   |   | 3.72    | % |   |   | 146,220 |   |   | 5,819 |   |   |   | 3.98 | % |   |   | 150,294 |   |   |   | 6,856 |   |   | 4.56 | % |
|  Total interest-bearing liabilities                     |   |    | 401,475 |    |   | 10,125 |   |   | 2.52    | % |   |   | 402,344 |   |   | 12,726 |   |   |   | 3.16 | % |   |   | 396,262 |   |   |   | 15,229 |   |   | 3.84 | % |
|  Non-interest-bearing demand deposits                   |   |    | 35,280  |    |   |   |   |   |    |   |   |   | 36,219 |   |   |   |   |   |   |   |   |   |   | 38,846 |   |   |   |   |   |   |   |   |
|  Other non-interest-bearing liabilities                 |   |    | 2,782   |    |   |   |   |   |    |   |   |   | 5,121 |   |   |   |   |   |   |   |   |   |   | 3,954 |   |   |   |   |   |   |   |   |
|  Capital accounts                                       |   |    | 43,067  |    |   |   |   |   |    |   |   |   | 40,161 |   |   |   |   |   |   |   |   |   |   | 51,568 |   |   |   |   |   |   |   |   |
|  Total liabilities and capital accounts                 |   | $       | 482,604 |    |   |   |   |   |    |   |   | $ | 483,845 |   |   |   |   |   |   |   |   |   | $ | 490,630 |   |   |   |   |   |   |   |   |
|                                                         |   |    |    |    |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net interest income                                    |   |    |    |    | $      | 12,337 |   |   |    |   |   |   |   |   | $ | 12,592 |   |   |   |   |   |   |   |   |   |   | $ | 11,976 |   |   |   |   |
|  Interest rate spread                                   |   |    |    |    |   |   |   |   | 2.47    | % |   |   |   |   |   |   |   |   |   | 2.45 | % |   |   |   |   |   |   |   |   |   | 2.04 | % |
|  Net interest-earning assets                            |   | $       | 48,316  |    |   |   |   |   |    |   |   | $ | 48,693 |   |   |   |   |   |   |   |   |   | $ | 66,459 |   |   |   |   |   |   |   |   |
|  Net interest margin                                    |   |    |    |    |   |   |   |   | 2.74    | % |   |   |   |   |   |   |   |   |   | 2.79 | % |   |   |   |   |   |   |   |   |   | 2.59 | % |
|  Average earning assets to                              |   |    |    |    |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     average interest-bearing liabilities |   |    |    |    |   |   |   |   | 112.03  | % |   |   |   |   |   |   |   |   |   | 112.10 | % |   |   |   |   |   |   |   |   |   | 116.77 | % |

----

|                                     |   | 2010 Compared to 2009      |   |   | 2009 Compared to 2008      |   |   | 2008 Compared to 2007      |   |
|------------------------------------------|--------|----------------------------|--------|--------|----------------------------|--------|--------|----------------------------|--------|
|  (Dollars in thousands)             |   | Increase (Decrease) Due to |   |   | Increase (Decrease) Due to |   |   | Increase (Decrease) Due to |   |
|  INTEREST-EARNING ASSETS:           |   | Rate                       |   |   | Volume                     |   |   | Net                        |   |   | Rate |   |   | Volume |   |   | Net |   |   | Rate |   |   | Volume |   |   | Net |   |
|  Interest and Dividend Income:      |   |                       |   |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Investment securities              |   | $                          | (1,594 | )      |                       | $      | (1,179 | )                          |   | $ | (2,773 | ) |   | $ | 267 |   |   | $ | (1,504 | ) |   | $ | (1,237 | ) |   | $ | 994 |   |   | $ | (416 | ) |     | $ | 578 |   |
|  Loans                              |   |                       | (665   | )      |                       |   | 588    |                       |   |   | (77 | ) |   |   | (1,434 | ) |   |   | 878 |   |   |   | (556 | ) |   |   | (34 | ) |   |   | 1,362 |   |   |   | 1,328 |   |
|  Other interest-earning assets      |   |                       | (22    | )      |                       |   | 16     |                       |   |   | (6 | ) |   |   | (122 | ) |   |   | 28 |   |   |   | (94 | ) |   |   | (42 | ) |   |   | (23 | ) |   |   | (65 | ) |
|  TOTAL INTEREST-EARNING ASSETS      |   |                       | (2,281 | )      |                       |   | (575   | )                          |   |   | (2,856 | ) |   |   | (1,289 | ) |   |   | (598 | ) |   |   | (1,887 | ) |   |   | 918 |   |   |   | 923 |   |   |   |        1,841 |   |
|                                     |   |                       |   |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST-BEARING LIABILITIES:            |   |                       |   |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest Expense:                  |   |                       |   |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  NOW accounts                       |   |                       | (303   | )      |                       |   | 676    |                       |   |   | 373 |   |   |   | (125 | ) |   |   | 292 |   |   |   | 167 |   |   |   | 296 |   |   |   | 91 |   |   |   | 387 |   |
|  Savings accounts                   |   |                       | (59    | )      |                       |   | 4      |                       |   |   | (55 | ) |   |   | (67 | ) |   |   | (12 | ) |   |   | (79 | ) |   |   | (24 | ) |   |   | (30 | ) |   |   | (54 | ) |
|  Money Market accounts              |   |                       | (63    | )      |                       |   | (14    | )                          |   |   | (77 | ) |   |   | (51 | ) |   |   | (61 | ) |   |   | (112 | ) |   |   | 37 |   |   |   | (88 | ) |   |   | (51 | ) |
|  Time deposits                      |   |                       | (1,046 | )      |                       |   | (279   | )                          |   |   | (1,325 | ) |   |   | (1,568 | ) |   |   | 126 |   |   |   | (1,442 | ) |   |   | 93 |   |   |   | (56 | ) |   |   | 37 |   |
|  Other borrowed money               |   |                       | (360   | )      |                       |   | (1,157 | )                          |   |   | (1,517 | ) |   |   | (855 | ) |   |   | (182 | ) |   |   | (1,037 | ) |   |   | (834 | ) |   |   | 949 |   |   |   | 115 |   |
|  TOTAL INTEREST-BEARING LIABILITIES |   |                       | (1,831 | )      |                       |   | (770   | )                          |   |   | (2,601 | ) |   |   | (2,666 | ) |   |   | 163 |   |   |   | (2,503 | ) |   |   | (432 | ) |   |   | 866 |   |   |   | 434 |   |
|                                     |   |                       |   |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  CHANGE IN NET INTEREST INCOME      |   | $                          | (450   | )      |                       | $      | 195    |                       |   | $ | (255 | ) |   | $ | 1,377 |   |   | $ | (761 | ) |   | $ | 616 |   |   | $ | 1,350 |   |   | $ | 57 |   |   | $ | 1,407 |   |

----

|                        |   |                          |   |                          |
|-----------------------------|--------|-------------------------------|--------|-------------------------------|
| Net Interest Income At-Risk |
|                        |   |                          |   |                          |
|                        |   | Estimated Increase (Decrease) |   | Estimated Increase (Decrease) |
| Change in Interest Rates    |   | in NII                        |   | in NII                        |
| (Basis Points)              |   | June 30, 2010                 |   | June 30, 2009                 |
|                        |   |                          |   |                          |
| Stable                      |   |                          |   |                          |
| + 100                       |   | -1.25%                        |   | -1.50%                        |
| + 200                       |   | -4.59%                        |   | -4.14%                        |

----

|               |   |                                                                                        |   |                                                                                                                                          |   |    |   |                           |   |           |
|--------------------|--------|---------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------------------------------|--------|----------------|
|               |   |                                                                                        |   |                                                                                                                                          |   |    |   | 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               |   |  $             34,033 |   |  $           (11,736)                                                             |   | -26%    |   | 7.09%                          |   | -199           |
| +200               |   |  $             40,086 |   |  $             (5,683)                                                  |   | -12%    |   | 8.19%                          |   | -90            |
| +100               |   |  $             44,158 |   |  $             (1,611)                                                  |   | -4%     |   | 8.87%                          |   | -21            |
| 0                  |   |  $             45,769 |   |  $                       - |   | 0%      |   | 9.08%                          |   | 0              |
| -100               |   |  $             45,872 |   |  $                  104                        |   | 0%      |   | 9.02%                          |   | -7             |

| (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 |
|--------------|---------------------------------------------|

----

|         |                                      |
|--------------|-------------------------------------------|
|    | /s/Shatswell, Macleod & Company, P.C. |
|         | SHATSWELL, MacLEOD & COMPANY, P.C.    |

----

|                                                                                                                                                                    |   | 2010   |    |   | 2009   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| ASSETS                                                                                                                                                                  |   |   |    |   |   |   |
| Cash and due from depository institutions                                                                                                                               |   | $      | 21,711  |   |   | $      | 5,509 |   |
| Interest-bearing demand deposits with other banks                                                                                                                       |   |   | 1,580   |   |   |   | - |   |
| Federal funds sold                                                                                                                                                      |   |   | -       |   |   |   | 550 |   |
| Cash and cash equivalents                                                                                                                                               |   |   | 23,291  |   |   |   | 6,059 |   |
| Investments in available-for-sale securities (at fair value)                                                                                                            |   |   | 85,893  |   |   |   | 164,888 |   |
| Investments in held-to-maturity securities (fair value of $83,698 as of June 30, 2010 and $1,945 as of June 30, 2009)                                                   |   |   | 83,249  |   |   |   | 2,000 |   |
| Federal Home Loan Bank stock, at cost                                                                                                                                   |   |   | 8,056   |   |   |   | 8,056 |   |
| Loans held-for-sale                                                                                                                                                     |   |   | 1,470   |   |   |   | 1,200 |   |
|                                                                                                                                                                    |   |   |    |   |   |   |   |   |
| Loans                                                                                                                                                                   |   |   | 257,423 |   |   |   | 266,517 |   |
| Allowance for loan losses                                                                                                                                               |   |   | (2,651  | )      |   |   | (2,200 | ) |
| Net loans                                                                                                                                                               |   |   | 254,772 |   |   |   | 264,317 |   |
|                                                                                                                                                                    |   |   |    |   |   |   |   |   |
| Premises and equipment                                                                                                                                                  |   |   | 5,292   |   |   |   | 5,159 |   |
| Accrued interest receivable                                                                                                                                             |   |   | 1,698   |   |   |   | 1,891 |   |
| Other real estate owned                                                                                                                                                 |   |   | 1,561   |   |   |   | 1,211 |   |
| Goodwill                                                                                                                                                                |   |   | 6,912   |   |   |   | 6,912 |   |
| Intangible assets                                                                                                                                                       |   |   | 473     |   |   |   | 651 |   |
| Bank owned life insurance                                                                                                                                               |   |   | 6,191   |   |   |   | 5,912 |   |
| Other assets                                                                                                                                                            |   |   | 10,501  |   |   |   | 9,093 |   |
| Total assets                                                                                                                                                            |   | $      | 489,359 |   |   | $      | 477,349 |   |
|                                                                                                                                                                    |   |   |    |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’EQUITY                                                                                                                               |   |   |    |   |   |   |   |   |
| Deposits:                                                                                                                                                               |   |   |    |   |   |   |   |   |
| Noninterest-bearing                                                                                                                                                     |   | $      | 36,206  |   |   | $      | 35,246 |   |
| Interest-bearing                                                                                                                                                        |   |   | 298,940 |   |   |   | 272,853 |   |
| Total deposits                                                                                                                                                          |   |   | 335,146 |   |   |   | 308,099 |   |
| Mortgagors’ escrow accounts                                                                                                                                       |   |   | 1,627   |   |   |   | 1,564 |   |
| Federal Home Loan Bank advances                                                                                                                                         |   |   | 100,500 |   |   |   | 120,500 |   |
| Securities sold under agreements to repurchase                                                                                                                          |   |   | 5,896   |   |   |   | 4,471 |   |
| Other liabilities                                                                                                                                                       |   |   | 2,335   |   |   |   | 2,819 |   |
| Total liabilities                                                                                                                                                       |   |   | 445,504 |   |   |   | 437,453 |   |
| Stockholders’ equity:                                                                                                                                             |   |   |    |   |   |   |   |   |
| Preferred stock, $.10 par value, 1,000,000 shares authorized, no shares issued and outstanding                                                                          |   |   | -       |   |   |   | - |   |
| Common stock, $.10 par value, 12,000,000 shares authorized, 6,943,125 shares issued, 6,528,863 and 6,529,209 shares outstanding at June 30, 2010 and 2009, respectively |   |   | 694     |   |   |   | 694 |   |
| Additional paid-in capital                                                                                                                                              |   |   | 30,633  |   |   |   | 30,656 |   |
| Retained earnings                                                                                                                                                       |   |   | 21,550  |   |   |   | 20,383 |   |
| Accumulated other comprehensive loss                                                                                                                                    |   |   | (2,776  | )      |   |   | (5,277 | ) |
| Unearned ESOP shares                                                                                                                                                    |   |   | (1,821  | )      |   |   | (1,940 | ) |
| Unearned stock awards                                                                                                                                                   |   |   | (212    | )      |   |   | (409 | ) |
| Treasury stock, at cost (414,262 and 413,916 shares at June 30, 2010 and 2009, respectively)                                                                            |   |   | (4,213  | )      |   |   | (4,211 | ) |
| Total stockholders’ equity                                                                                                                                        |   |   | 43,855  |   |   |   | 39,896 |   |
| Total liabilities and stockholders’ equity                                                                                                                        |   | $      | 489,359 |   |   | $      | 477,349 |   |

----

|                                                                                                                                            |   | 2010   |      |   | 2009   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Interest and dividend income:                                                                                                                   |   |   |      |   |   |   |
| Interest and fees on loans                                                                                                                      |   | $      | 14,641    |   |   | $      | 14,718 |   |
| Interest on debt securities:                                                                                                                    |   |   |      |   |   |   |   |   |
| Taxable                                                                                                                                         |   |   | 7,270     |   |   |   | 9,607 |   |
| Tax-exempt                                                                                                                                      |   |   | -         |   |   |   | 138 |   |
| Dividends on marketable equity securities                                                                                                       |   |   | 541       |   |   |   | 729 |   |
| Dividends on Federal Home Loan Bank stock                                                                                                       |   |   | -         |   |   |   | 110 |   |
| Interest on federal funds sold and other                                                                                                        |   |   | 10        |   |   |   | 16 |   |
| Total interest and dividend income                                                                                                              |   |   | 22,462    |   |   |   | 25,318 |   |
| Interest expense:                                                                                                                               |   |   |      |   |   |   |   |   |
| Interest on deposits                                                                                                                            |   |   | 5,823     |   |   |   | 6,907 |   |
| Interest on Federal Home Loan Bank advances                                                                                                     |   |   | 4,208     |   |   |   | 5,693 |   |
| Interest on securities sold under agreements to repurchase                                                                                      |   |   | 94        |   |   |   | 126 |   |
| Total interest expense                                                                                                                          |   |   | 10,125    |   |   |   | 12,726 |   |
| Net interest and dividend income                                                                                                                |   |   | 12,337    |   |   |   | 12,592 |   |
| Provision for loan losses                                                                                                                       |   |   | 1,049     |   |   |   | 967 |   |
| Net interest and dividend income after provision for loan losses                                                                                |   |   | 11,288    |   |   |   | 11,625 |   |
| Noninterest income (charges):                                                                                                                   |   |   |      |   |   |   |   |   |
| Fees for services                                                                                                                               |   |   | 2,285     |   |   |   | 2,337 |   |
| Write-down of securities (includes total losses of $5,421 and $20,792, net of $2,972 and $4,821 recognized in other comprehensive loss, pretax) |   |   | (2,449    | )      |   |   | (15,971 | ) |
| Gain on sales and calls of securities, net                                                                                                      |   |   | 1,424     |   |   |   | 128 |   |
| Mortgage banking activities                                                                                                                     |   |   | 217       |   |   |   | 173 |   |
| Net commissions from brokerage service                                                                                                          |   |   | 82        |   |   |   | 152 |   |
| Bank owned life insurance income                                                                                                                |   |   | 279       |   |   |   | 457 |   |
| Other income                                                                                                                                    |   |   | 145       |   |   |   | 165 |   |
| Total noninterest income (charges)                                                                                                              |   |   | 1,983     |   |   |   | (12,559 | ) |
| Noninterest expense:                                                                                                                            |   |   |      |   |   |   |   |   |
| Salaries and employee benefits                                                                                                                  |   |   | 5,888     |   |   |   | 5,785 |   |
| Occupancy and equipment expense                                                                                                                 |   |   | 1,238     |   |   |   | 1,172 |   |
| Data processing                                                                                                                                 |   |   | 770       |   |   |   | 699 |   |
| Advertising and marketing                                                                                                                       |   |   | 283       |   |   |   | 348 |   |
| Professional fees                                                                                                                               |   |   | 332       |   |   |   | 301 |   |
| Amortization of intangible asset                                                                                                                |   |   | 178       |   |   |   | 206 |   |
| Deposit insurance assessment                                                                                                                    |   |   | 764       |   |   |   | 695 |   |
| Prepayment penalty on Federal Home Loan Bank advances                                                                                           |   |   | 187       |   |   |   | - |   |
| Write down of other real estate owned                                                                                                           |   |   | 321       |   |   |   | - |   |
| Other expense                                                                                                                                   |   |   | 1,739     |   |   |   | 1,601 |   |
| Total noninterest expense                                                                                                                       |   |   | 11,700    |   |   |   | 10,807 |   |
| Income (loss) before income tax expense (benefit)                                                                                               |   |   | 1,571     |   |   |   | (11,741 | ) |
| Income tax expense (benefit)                                                                                                                    |   |   | 309       |   |   |   | (4,610 | ) |
| Net income (loss)                                                                                                                               |   | $      | 1,262     |   |   | $      | (7,131 | ) |
|                                                                                                                                            |   |   |      |   |   |   |   |   |
| Earnings (loss) per common share                                                                                                                |   |   |      |   |   |   |   |   |
| Basic                                                                                                                                           |   | $      | 0.20      |   |   | $      | (1.14 | ) |
| Diluted                                                                                                                                         |   | $      | 0.20      |   |   | $      | (1.14 | ) |
|                                                                                                                                            |   |   |      |   |   |   |   |   |
| Weighted average common shares outstanding                                                                                                      |   |   |      |   |   |   |   |   |
| Basic                                                                                                                                           |   |   | 6,312,287 |   |   |   | 6,279,399 |   |
| Diluted                                                                                                                                         |   |   | 6,312,287 |   |   |   | 6,279,399 |   |

----

|                                                                                        |   |        |   |   |                     |   |   |             |   |   |                                        |   |   |               |   |   |                |   |   |          |   |   |   |   |
|---------------------------------------------------------------------------------------------|--------|-------------|--------|--------|--------------------------|--------|--------|------------------|--------|--------|---------------------------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|--------|---------------|--------|--------|--------|--------|
|                                                                                        |   | CommonStock |   |   | AdditionalPaid-inCapital |   |   | RetainedEarnings |   |   | AccumulatedOtherComprehensive Loss (1) |   |   | UnearnedESOPShares |   |   | UnearnedStockAwards |   |   | TreasuryStock |   |   | Total  |   |
| Balance, June 30, 2008                                                                      |   | $           | 694    |   |                     | $      | 30,795 |             |   | $      | 28,663                                      |   |   | $                  | (3,816 | )      |                | $      | (2,089 | )             |   | $      | (605   | )      |   | $ | (4,205 | ) |   | $ | 49,437 |   |
| Comprehensive loss:                                                                         |   |        |   |   |                     |   |   |             |   |   |                                        |   |   |               |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                    |   |        | -      |   |                     |   | -      |             |   |   | (7,131                                      | )      |   |               | -      |   |                |   | -      |          |   |   | -      |   |   |   | - |   |   |   | - |   |
| Net change in unrealized holding losses on available-for-sale securities, net of tax effect |   |        | -      |   |                     |   | -      |             |   |   | -                                           |   |   |               | (1,461 | )      |                |   | -      |          |   |   | -      |   |   |   | - |   |   |   | - |   |
| Comprehensive loss                                                                          |   |        | -      |   |                     |   | -      |             |   |   | -                                           |   |   |               | -      |   |                |   | -      |          |   |   | -      |   |   |   | - |   |   |   | (8,592 | ) |
| Dividends declared                                                                          |   |        | -      |   |                     |   | -      |             |   |   | (1,084                                      | )      |   |               | -      |   |                |   | -      |          |   |   | -      |   |   |   | - |   |   |   | (1,084 | ) |
| ESOP shares released                                                                        |   |        | -      |   |                     |   | (64    | )                |   |   | -                                           |   |   |               | -      |   |                |   | 149    |          |   |   | -      |   |   |   | - |   |   |   | 85 |   |
| Purchase of treasury stock                                                                  |   |        | -      |   |                     |   | -      |             |   |   | -                                           |   |   |               | -      |   |                |   | -      |          |   |   | -      |   |   |   | (6 | ) |   |   | (6 | ) |
| Stock-based compensation expense                                                            |   |        | -      |   |                     |   | (75    | )                |   |   | -                                           |   |   |               | -      |   |                |   | -      |          |   |   | 196    |   |   |   | - |   |   |   | 121 |   |
| Cumulative effect of a change in accounting principle - initial adoption of ASC 715-60      |   |        | -      |   |                     |   | -      |             |   |   | (65                                         | )      |   |               | -      |   |                |   | -      |          |   |   | -      |   |   |   | - |   |   |   | (65 | ) |
| 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 |   |

----

|                                                                   |   |           |   |   |   |   |
|------------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                                   |   | 2010           |   |   | 2009   |   |
|                                                                   |   | (In Thousands) |   |
| Unrealized holding losses on available-for-sale securities:            |   |           |   |   |   |   |
| Net unrealized holding gains (losses) on available-for-sale securities |   | $              | 2,751  |   |   | $      | (18,052 | ) |
| Reclassification adjustment for losses realized in net income          |   |           | 1,037  |   |   |   | 15,843 |   |
|                                                                   |   |           | 3,788  |   |   |   | (2,209 | ) |
| Income tax (expense) benefit                                           |   |           | (1,287 | )      |   |   | 748 |   |
| Other comprehensive income (loss), net of tax                          |   | $              | 2,501  |   |   | $      | (1,461 | ) |

----

|                                                                                     |   |   |     |   |   |   |
|------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                                                                     |   | 2010   |     |   | 2009   |   |
| Cash flows from operating activities:                                                    |   |   |     |   |   |   |
| Net income (loss)                                                                        |   | $      | 1,262    |   |   | $      | (7,131 | ) |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: |   |   |     |   |   |   |   |   |
| Amortization of securities, net                                                          |   |   | 450      |   |   |   | 101 |   |
| Gain on sales and calls of securities, net                                               |   |   | (1,424   | )      |   |   | (128 | ) |
| Write down of securities                                                                 |   |   | 2,449    |   |   |   | 15,971 |   |
| Net increase in loans held-for-sale                                                      |   |   | (270     | )      |   |   | (525 | ) |
| Amortization of premium on purchased loans                                               |   |   | -        |   |   |   | 1 |   |
| Change in deferred loan costs, net                                                       |   |   | 39       |   |   |   | (5 | ) |
| Provision for loan losses                                                                |   |   | 1,049    |   |   |   | 967 |   |
| Loss on sale of other real estate owned                                                  |   |   | 31       |   |   |   | 7 |   |
| Writedown of other real estate owned                                                     |   |   | 321      |   |   |   | - |   |
| Loss on disposal of equipment                                                            |   |   | -        |   |   |   | 2 |   |
| Depreciation and amortization                                                            |   |   | 527      |   |   |   | 496 |   |
| Amortization of core deposit intangible                                                  |   |   | 178      |   |   |   | 206 |   |
| Increase in accrued interest receivable and other assets                                 |   |   | (4,557   | )      |   |   | (233 | ) |
| Increase in cash surrender value of bank owned life insurance                            |   |   | (279     | )      |   |   | (295 | ) |
| Bank owned life insurance death benefit income                                           |   |   | -        |   |   |   | (162 | ) |
| Decrease in other liabilities                                                            |   |   | (383     | )      |   |   | (446 | ) |
| Deferred tax expense (benefit)                                                           |   |   | 1,970    |   |   |   | (4,427 | ) |
| ESOP shares released                                                                     |   |   | 50       |   |   |   | 85 |   |
| Stock-based compensation expense                                                         |   |   | 285      |   |   |   | 165 |   |
|                                                                                     |   |   |     |   |   |   |   |   |
| Net cash provided by operating activities                                                |   |   | 1,698    |   |   |   | 4,649 |   |
|                                                                                     |   |   |     |   |   |   |   |   |
| Cash flows from investing activities:                                                    |   |   |     |   |   |   |   |   |
| Purchases of available-for-sale securities                                               |   |   | (1,000   | )      |   |   | (12,847 | ) |
| Proceeds from sales of available-for-sale securities                                     |   |   | 31,706   |   |   |   | 4,629 |   |
| Proceeds from maturities of available-for-sale securities                                |   |   | 50,838   |   |   |   | 37,260 |   |
| Purchase of held-to-maturity securities                                                  |   |   | (104,335 | )      |   |   | (2,000 | ) |
| Proceeds from maturities of held-to-maturity securities                                  |   |   | 22,850   |   |   |   | - |   |
| Purchase of Federal Home Loan Bank stock                                                 |   |   | -        |   |   |   | (113 | ) |
| Loan originations and principal collections, net                                         |   |   | 7,029    |   |   |   | (23,884 | ) |
| Recoveries of loans previously charged off                                               |   |   | 67       |   |   |   | 46 |   |
| Proceeds from sale of other real estate owned                                            |   |   | 715      |   |   |   | 71 |   |
| Proceeds from surrender of bank owned life insurance policy                              |   |   | -        |   |   |   | 343 |   |
| Net cash provided by branch acquisition                                                  |   |   | -        |   |   |   | 708 |   |
| Capital expenditures - premises and equipment                                            |   |   | (617     | )      |   |   | (919 | ) |
| Capital expenditures - other real estate owned                                           |   |   | (16      | )      |   |   | - |   |
|                                                                                     |   |   |     |   |   |   |   |   |
| Net cash provided by investing activities                                                |   |   | 7,237    |   |   |   | 3,294 |   |

----

|                                                                      |   |   |    |   |   |   |
|---------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                      |   | 2010   |    |   | 2009   |   |
| Cash flows from financing activities:                                     |   |   |    |   |   |   |
| Net increase in demand deposits, NOW and savings accounts                 |   |   | 38,876  |   |   |   | 17,620 |   |
| Net (decrease) increase in time deposits                                  |   |   | (11,829 | )      |   |   | 5,087 |   |
| Net increase in mortgagors’ escrow accounts                         |   |   | 63      |   |   |   | 141 |   |
| Net change in short-term Federal Home Loan Bank advances                  |   |   | -       |   |   |   | (13,000 | ) |
| Proceeds from Federal Home Loan Bank advances                             |   |   | 9,500   |   |   |   | 24,000 |   |
| Repayment of Federal Home Loan Bank advances                              |   |   | (29,500 | )      |   |   | (40,715 | ) |
| Net increase (decrease) in securities sold under agreements to repurchase |   |   | 1,425   |   |   |   | (1,935 | ) |
| Acquisition of treasury stock                                             |   |   | (2      | )      |   |   | (6 | ) |
| Dividends paid                                                            |   |   | (236    | )      |   |   | (1,222 | ) |
|                                                                      |   |   |    |   |   |   |   |   |
| Net cash provided by (used in) financing activities                       |   |   | 8,297   |   |   |   | (10,030 | ) |
|                                                                      |   |   |    |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                      |   |   | 17,232  |   |   |   | (2,087 | ) |
| Cash and cash equivalents at beginning of year                            |   |   | 6,059   |   |   |   | 8,146 |   |
| Cash and cash equivalents at end of year                                  |   | $      | 23,291  |   |   | $      | 6,059 |   |
|                                                                      |   |   |    |   |   |   |   |   |
| Supplemental disclosures:                                                 |   |   |    |   |   |   |   |   |
| Interest paid                                                             |   | $      | 10,206  |   |   | $      | 12,793 |   |
| Income taxes paid                                                         |   |   | 646     |   |   |   | 407 |   |
| Loans transferred to other real estate owned                              |   |   | 2,040   |   |   |   | 1,289 |   |
| Deferred gain on sale of other real estate owned in other liabilities     |   |   | 40      |   |   |   | - |   |
| Loans originated to finance sale of other real estate owned               |   |   | 679     |   |   |   | - |   |
|                                                                      |   |   |    |   |   |   |   |   |
| Savings Institute Bank & Trust Company Branch Acquisition             |   |   |    |   |   |   |   |   |
| Net loans acquired                                                        |   |   |    |   |   | $      | 3 |   |
| Fixed assets acquired                                                     |   |   |    |   |   |   | 950 |   |
| Other assets                                                              |   |   |    |   |   |   | 7 |   |
|                                                                      |   |   |    |   |   |   | 960 |   |
|                                                                      |   |   |    |   |   |   |   |   |
| Deposits assumed                                                          |   |   |    |   |   |   | 1,668 |   |
| Net cash provided by acquisition                                          |   |   |    |   |   | $      | 708 |   |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | USE OF ESTIMATES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | BASIS OF PRESENTATION:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank, and the Bank’s wholly owned subsidiaries, Windham North, LLC, PSB Realty, LLC and Putnam Bank Mortgage Servicing Company. All significant intercompany accounts and transactions have been eliminated in the consolidation.                                                                                                                                                      |

----

|   | CASH AND CASH EQUIVALENTS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | For the purposes of reporting cash flows, cash and cash equivalents include cash, amounts due from depository institutions, interest-bearing demand deposits with other banks and federal funds sold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Cash and due from banks as of June 30, 2010 includes $5,650,000, which is subject to withdrawals and usage restrictions to satisfy the reserve requirements of the Federal Reserve Bank, target balances at Bankers Bank and for other purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | SECURITIES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Investments in debt securities are adjusted for amortization of premiums and accretion of discounts computed so as to approximate the interest method. Gains or losses on sales of investment securities are computed on a specific identification basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The Company classifies debt and equity securities into one of three categories: held-to-maturity, available-for-sale, or trading. These security classifications may be modified after acquisition only under certain specified conditions. In general, securities may be classified as held-to-maturity only if the Company has the positive intent and ability to hold them to maturity. Trading securities are defined as those bought and held principally for the purpose of selling them in the near term. All other securities must be classified as available-for-sale.                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | --                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 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. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|   | For any debt security with a fair value less than its amortized cost basis, the Company will determine whether it has the intent to sell the debt security or whether it is more likely than not it will be required to sell the debt security before the recovery of its amortized cost basis. If either condition is met, the Company will recognize a full impairment charge to earnings. For all other debt securities that are considered other-than-temporarily impaired and do not meet either condition, the credit loss portion of impairment will be recognized in earnings as realized losses. The temporary impairment related to all other factors will be recorded in other comprehensive income. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Declines in marketable equity securities below their cost that are deemed other than temporary are reflected in earnings as realized losses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

|   | FEDERAL HOME LOAN BANK OF BOSTON STOCK, AT COST:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | As a member of the Federal Home Loan Bank (FHLB), the Bank is required to invest in $100 par value stock of the FHLB. The FHLB capital structure mandates that members must own stock as determined by their Total Stock Investment Requirement which is the sum of a member’s Membership Stock Investment Requirement and Activity-Based Stock Investment Requirement. The Membership Stock Investment Requirement is calculated as 0.35% of member’s Stock Investment Base, subject to a minimum investment of $10,000 and a maximum investment of $25,000,000. The Stock Investment Base is an amount calculated based on certain assets held by a member that are reflected on call reports submitted to applicable regulatory authorities. The Activity-Based Stock Investment Requirement is calculated as 4.5% of a member’s outstanding principal balances of FHLB advances plus a percentage of advance commitments, 4.5% of standby letters of credit issued by the FHLB and 4.5% of the value of intermediated derivative contracts. Management evaluates the Bank’s investment in FHLB of Boston stock for other-than-temporary impairment at least on a quarterly basis and more frequently when economic or market conditions warrant such evaluation. Based on its most recent analysis of the FHLB of Boston as of June 30, 2010, management deems its investment in FHLB of Boston stock to be not other-than-temporarily impaired. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | On December 8, 2008, the Federal Home Loan Bank of Boston announced a moratorium on the repurchase of excess stock held by its members. The moratorium will remain in effect indefinitely.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | LOANS HELD-FOR-SALE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Loans held-for-sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses are provided for in a valuation allowance by charges to operations. Interest income on mortgages held-for-sale is accrued currently and classified as interest on loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | LOANS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Loans receivable that management has the intent and ability to hold until maturity or payoff, are reported at their outstanding principal balances adjusted for amounts due to borrowers on unadvanced loans, any charge-offs, the allowance for loan losses and any deferred fees or costs on originated loans, or unamortized premiums or discounts on purchased loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Interest on loans is recognized on a simple interest basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Loan origination and commitment fees and certain direct origination costs are deferred, and the net amount amortized as an adjustment of the related loan’s yield. The Company is amortizing these amounts over the contractual life of the related loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Residential mortgage loans, home equity loans and lines are generally placed on nonaccrual when reaching 90 days past due or in process of foreclosure. Secured consumer loans are written down to realizable value and unsecured consumer loans are charged-off when they are greater than 90 days past due. Commercial real estate loans and commercial business loans which are 90 days or more past due are generally placed on nonaccrual status, unless secured by sufficient cash or other assets immediately convertible to cash. When a loan has been placed on nonaccrual status, previously accrued and uncollected interest is reversed against interest on loans. A loan can be returned to accrual status when collectability of principal is reasonably assured and the loan has performed for a period of time, generally six months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Cash receipts of interest income on impaired loans are credited to principal to the extent necessary to eliminate doubt as to the collectibility of the net carrying amount of the loan. Some or all of the cash receipts of interest income on impaired loans is recognized as interest income if the remaining net carrying amount of the loan is deemed to be fully collectible. When recognition of interest income on an impaired loan on a cash basis is appropriate, the amount of income that is recognized is limited to that which would have been accrued on the net carrying amount of the loan at the contractual interest rate. Any cash interest payments received in excess of the limit and not applied to reduce the net carrying amount of the loan are recorded as recoveries of charge-offs until the charge-offs are fully recovered.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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|   | ALLOWANCE FOR LOAN LOSSES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment disclosures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | PREMISES AND EQUIPMENT:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Premises and equipment are stated at cost, less accumulated depreciation and amortization. Cost and related allowances for depreciation and amortization of premises and equipment retired or otherwise disposed of are removed from the respective accounts with any gain or loss included in income or expense. Depreciation and amortization are calculated principally on the straight-line method over the estimated useful lives of the assets. Estimated lives are 5 to 40 years for buildings and premises and 3 to 20 years for furniture, fixtures and equipment. Expenditures for replacements or major improvements are capitalized; expenditures for normal maintenance and repairs are charged to expense as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | OTHER REAL ESTATE OWNED AND IN-SUBSTANCE FORECLOSURES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Other real estate owned includes properties acquired through foreclosure and properties classified as in-substance foreclosures in accordance with ASC 310-40, “Receivables – Troubled Debt Restructuring by Creditors.” These properties are carried at the lower of cost or estimated fair value less estimated costs to sell. Any writedown from cost to estimated fair value required at the time of foreclosure or classification as in-substance foreclosure is charged to the allowance for loan losses. Expenses incurred in connection with maintaining these assets, subsequent writedowns and gains or losses recognized upon sale are included in other expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | In accordance with ASC 310-10-35, “Receivables – Overall – Subsequent Measurements,” the Company classifies loans as in-substance repossessed or foreclosed if the Company receives physical possession of the debtor’s assets regardless of whether formal foreclosure proceedings take place.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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|   | FAIR VALUES OF FINANCIAL INSTRUMENTS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | ASC 825, “Financial Instruments,” requires that the Company disclose estimated fair values for its financial instruments. Fair value methods and assumptions used by the Company in estimating its fair value disclosures are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Cash and cash equivalents: The carrying amounts reported in the balance sheet for cash and cash equivalents approximate those assets’ fair values.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Securities: Fair values for securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Loans held-for-sale: Fair values for loans held-for-sale are estimated based on outstanding investor commitments, or in the absence of such commitments, are based on current investor yield requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Loans receivable: For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair values for other loans are estimated by discounting the future cash flows, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Accrued interest receivable: The carrying amount of accrued interest receivable approximates its fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Deposit liabilities: The fair values disclosed for demand deposits, regular savings, NOW accounts, and money market accounts are equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Mortgagors’ escrow accounts: The carrying value of escrow accounts approximates fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Federal Home Loan Bank Advances: Fair values for Federal Home Loan Bank advances are estimated using a discounted cash flow technique that applies interest rates currently being offered on advances to a schedule of aggregated expected monthly maturities on Federal Home Loan Bank advances.                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Securities sold under agreements to repurchase: The carrying amounts reported on the consolidated balance sheets for securities sold under agreements to repurchase approximate their fair values.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Off-balance sheet instruments: The fair value of commitments to originate loans is estimated using the fees currently charged to enter similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments and the unadvanced portion of loans, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligation with the counterparties at the reporting date. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | EARNINGS PER SHARE (EPS):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | EPS is computed by dividing net income allocated to common stockholders by the weighted average common shares outstanding. Net income allocated to common stockholders represents net income less income allocated to participating securities (see discussion below). Diluted earnings per common share is computed by dividing income allocated to common stockholders by the weighted average common shares outstanding plus amounts representing the dilutive effect of stock options outstanding and restricted stock, if applicable.                                                                                                                                              |

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|   | On July 1, 2009, the Company adopted new accounting guidance on earnings per share that defines unvested share-based payment awards that contain nonforfeitable rights to dividends as participating securities that are included in computing EPS using the two-class method. The two-class method is an earnings allocation formula under which EPS is calculated for common stock and participating securities according to dividends declared and participating rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to participating securities and common shares based on their respective rights to receive dividends. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                              |   | Income(Numerator) |       |   | Shares(Denominator) |   |      | Per-ShareAmount |   |
|--------|-------------------------------------------------------------------|--------|-------------------|------------|--------|---------------------|--------|-----------|-----------------|--------|
|   | 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 |   |
|   |                                                              |   |              |       |   |                |   |      |            |   |   |   |   |
|   | Year ended June 30, 2009:                                         |   |              |       |   |                |   |      |            |   |   |   |   |
|   | Basic EPS                                                         |   |              |       |   |                |   |      |            |   |   |   |   |
|   | Net loss                                                          |   | $                 | (7,131,000 | )      |                |   |      |            |   |   |   |   |
|   | Dividends and loss allocated to unvested shares                   |   |              | (9,000     | )      |                |   |      |            |   |   |   |   |
|   | Net loss and loss allocated to common stockholders                |   |              | (7,140,000 | )      |                |   | 6,279,399 |            |   | $ | (1.14 | ) |
|   | Effect of dilutive securities options and warrants                |   |              |       |   |                |   | N/A       |            |   |   |   |   |
|   | Diluted EPS                                                       |   |              |       |   |                |   |      |            |   |   |   |   |
|   | Loss allocated to common stockholders and assumed conversions     |   | $                 | (7,140,000 | )      |                |   | 6,279,399 |            |   | $ | (1.14 | ) |

|   | ADVERTISING:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The Company directly expenses costs associated with advertising as they are incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | INCOME TAXES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The Company recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are established for the temporary differences between the accounting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when the amounts related to such temporary differences are realized or settled. The Company’s policy is to recognize interest and penalties assessed on tax positions in income tax expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | EMPLOYEE STOCK OWNERSHIP PLAN:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The Company established an Employee Stock Ownership Plan (the ESOP) as part of its minority stock issuance on October 4, 2004. The ESOP is accounted for in accordance with ASC 718-40, “Compensation - Stock Compensation - Employee Stock Ownership Plan.” Under ASC 718-40, unearned ESOP shares are not considered outstanding and are therefore not taken into account when computing earnings per share. Unearned ESOP shares are presented as a reduction to stockholders’ equity and represent shares to be allocated to ESOP participants in future periods for services provided to the Company. As shares are committed to be released, compensation expense is recognized for the fair market value of the stock and stockholders’ equity is increased by a corresponding amount. The loan to the ESOP will be repaid principally from the Bank’s contributions to the ESOP and dividends payable on common stock held by ESOP over a period of 20 years. |

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|   | STOCK BASED COMPENSATION:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | As more fully described in Note 15, the Company has a stock based incentive plan authorizing various types of incentive awards that may be granted to directors, officers and employees. The Company accounts for the plan under ASC 718-10, “Compensation - Stock Compensation - Overall.” In accordance with ASC 718-10, the Company records share-based compensation expense related to outstanding stock option and restricted stock awards based upon the fair value at the date of grant over the vesting period of such awards on a straight-line basis. During the years ended June 30, 2010 and 2009, $285,000 and $165,000, respectively, in stock-based employee compensation was recognized.                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | RECENT ACCOUNTING PRONOUNCEMENTS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | In June 2009, the Financial Accounting Standards Board (“FASB”) issued an update to Accounting Standard Codification 105-10, “Generally Accepted Accounting Principles.” This standard establishes the FASB Accounting Standard Codification (“Codification” or “ASC”) as the source of authoritative U.S. GAAP recognized by the FASB for nongovernmental entities. The Codification is effective for interim and annual periods ending after September 15, 2009. The Codification is a reorganization of existing U.S. GAAP and does not change existing U.S. GAAP. The Company adopted this standard during the third quarter of 2009. The adoption had no impact on the Company’s financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets,” and SFAS No. 167, “Amendments to FASB Interpretation No. 46(R).” These standards are effective for the first interim reporting period of fiscal year 2011. SFAS No. 166 amends the guidance in ASC 860 to eliminate the concept of a qualifying special-purpose entity (“QSPE”) and changes some of the requirements for derecognizing financial assets. SFAS No. 167 amends the consolidation guidance in ASC 810-10. Specifically, the amendments will (a) eliminate the exemption for QSPEs from the new guidance, (b) shift the determination of which enterprise should consolidate a variable interest entity (“VIE”) to a current control approach, such that an entity that has both the power to make decisions and right to receive benefits or absorb losses that could potentially be significant, will consolidate a VIE, and (c) change when it is necessary to reassess who should consolidate a VIE. These standards are not expected to have a significant impact on the Company’s financial statements. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | In August 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-05, “Measuring Liabilities at Fair Value,” which updates ASC 820-10, “Fair Value Measurements and Disclosures.” The updated guidance clarifies that the fair value of a liability can be measured in relation to the quoted price of the liability when it trades as an asset in an active market, without adjusting the price for restrictions that prevent the sale of the liability. This guidance was effective beginning October 1, 2009. The guidance did not change the Company’s valuation techniques for measuring liabilities at fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | In June 2008, the FASB updated ASC 260-10, “Earnings Per Share”. The guidance concludes that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities that should be included in the earnings allocation in computing earnings per share under the two-class method. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. All prior period earnings per share data presented must be adjusted retrospectively. The adoption of this update, effective July 1, 2009, did not have a material impact on the Company’s earnings per share.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | In February 2008, the FASB updated ASC 860, “Transfers and Servicing.” This guidance clarifies how the transferor and transferee should separately account for a transfer of a financial asset and a related repurchase financing if certain criteria are met. This guidance became effective July 1, 2009. The adoption of this guidance did not have a material effect on the Company’s results of operations or financial position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

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|   | In December 2007, the FASB updated ASC 805, “Business Combinations.” The updated guidance will significantly change the accounting for business combinations. Under ASC 805, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. It also amends the accounting treatment for certain specific items including acquisition costs and non controlling minority interests and includes a substantial number of new disclosure requirements. ASC 805 applies prospectively to business combinations for which the acquisition date is on or after July 1, 2009. The adoption of this statement did not have a material impact on its financial condition and results of operations.                                                                                                                                                                                                                                 |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | In March 2010, the FASB issued ASU 2010-11, “Scope Exception Related to Embedded Credit Derivatives.” The ASU clarifies that certain embedded derivatives, such as those contained in certain securitizations, CDOs and structured notes, should be considered embedded credit derivatives subject to potential bifurcation and separate fair value accounting. The ASU allows any beneficial interest issued by a securitization vehicle to be accounted for under the fair value option at transition. At transition, the Company may elect to reclassify various debt securities (on an instrument-by-instrument basis) from held-to-maturity (HTM) or available-for-sale (AFS) to trading. The new rules are effective July 1, 2010. The Company is currently analyzing the impact of the changes to determine the population of instruments that may be reclassified to trading upon adoption.                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | In January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about Fair Value Measurements.” The ASU requires disclosing the amounts of significant transfers in and out of Level 1 and 2 of the fair value hierarchy and describing the reasons for the transfers. The disclosures are effective for reporting periods beginning after December 15, 2009. The Company adopted ASU 2010-06 as of July 1, 2010. Additionally, disclosures of the gross purchases, sales, issuances and settlements activity in the Level 3 of the fair value measurement hierarchy will be required for fiscal years beginning after December 15, 2010.                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | In April 2010, the FASB issued ASU 2010-18, “Effect of a Loan Modification When the Loan is Part of a Pool That is Accounted for as a Single Asset.” As a result of this ASU, modifications of loans that are accounted for within a pool under Subtopic 310-30 do not result in the removal of those loans from the pool even if the modification of those loans would otherwise be considered a troubled debt restructuring. An entity will continue to be required to consider whether the pool of assets in which the loan is included is impaired if expected cash flows for the pool change. The amendments in this ASU are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early application is permitted.                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | In July 2010, the FASB issued ASU 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.” This ASU is created to provide financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. This ASU is intended to provide additional information to assist financial statement users in assessing the entity’s credit risk exposures and evaluating the adequacy of its allowance for credit losses. The amendments in this ASU are effective for public entities as of the end of a reporting period for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. For nonpublic entities, the disclosures are effective for annual reporting periods ending on or after December 15, 2011. |

----

|                                    |   |           |    |   |                 |   |   |                  |   |   |      |   |
|-----------------------------------------|--------|----------------|---------|--------|----------------------|--------|--------|-----------------------|--------|--------|-----------|--------|
|                                    |   | AmortizedCost  |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
|                                    |   | (In Thousands) |    |
| Available-for-sale:                     |   |           |    |   |                 |   |   |                  |   |   |      |   |
| 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 |   |
|                                    |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| June 30, 2009:                          |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Debt securities:                        |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| U.S. government and agency obligations: |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| From one through five years             |   | $              | 3,787   |   |                 | $      | 159    |                  |   | $      | -         |   |   | $ | 3,946 |   |
| From five through ten years             |   |           | 1,005   |   |                 |   | 21     |                  |   |   | -         |   |   |   | 1,026 |   |
| After ten years                         |   |           | 14,501  |   |                 |   | 210    |                  |   |   | (16       | )      |   |   | 14,695 |   |
|                                    |   |           | 19,293  |   |                 |   | 390    |                  |   |   | (16       | )      |   |   | 19,667 |   |
|                                    |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Corporate bonds and other obligations:  |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Due within one year                     |   |           | 1,994   |   |                 |   | 6      |                  |   |   | (49       | )      |   |   | 1,951 |   |
| From one through five years             |   |           | 2,741   |   |                 |   | 39     |                  |   |   | (4        | )      |   |   | 2,776 |   |
| After ten years                         |   |           | 6,995   |   |                 |   | 16     |                  |   |   | (2,475    | )      |   |   | 4,536 |   |
|                                    |   |           | 11,730  |   |                 |   | 61     |                  |   |   | (2,528    | )      |   |   | 9,263 |   |
|                                    |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Mortgage-backed securities              |   |           | 126,811 |   |                 |   | 3,568  |                  |   |   | (6,783    | )      |   |   | 123,596 |   |
|                                    |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Equity securities:                      |   |           |    |   |                 |   |   |                  |   |   |      |   |   |   |   |   |
| Auction rate preferred                  |   |           | 15,047  |   |                 |   | 88     |                  |   |   | (2,773    | )      |   |   | 12,362 |   |
| Total available-for-sale securities     |   | $              | 172,881 |   |                 | $      | 4,107  |                  |   | $      | (12,100   | )      |   | $ | 164,888 |   |

----

|                                    |   | AmortizedCost  |   |   | GrossUnrealizedGains |   |   | GrossUnrealized Losses |   |   | FairValue |   |
|-----------------------------------------|--------|----------------|--------|--------|----------------------|--------|--------|-----------------------------|--------|--------|-----------|--------|
|                                    |   | (In Thousands) |   |
| Held-to-maturity:                       |   |           |   |   |                 |   |   |                        |   |   |      |   |
| 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 |   |
|                                    |   |           |   |   |                 |   |   |                        |   |   |      |   |   |   |   |   |
| June 30, 2009:                          |   |           |   |   |                 |   |   |                        |   |   |      |   |   |   |   |   |
| Debt securities:                        |   |           |   |   |                 |   |   |                        |   |   |      |   |   |   |   |   |
| U.S. government and agency obligations: |   |           |   |   |                 |   |   |                        |   |   |      |   |   |   |   |   |
| After ten years                         |   | $              | 2,000  |   |                 | $      | -      |                        |   | $      | (55       | )      |   | $ | 1,945 |   |
| Total held-to-maturity securities       |   | $              | 2,000  |   |                 | $      | -      |                        |   | $      | (55       | )      |   | $ | 1,945 |   |

|   | Issuer                               |   |   | AmortizedCost  |   |   | FairValue |   |
|--------|--------------------------------------|--------|--------|----------------|--------|--------|-----------|--------|
|   |                                 |   |   | (In Thousands) |   |
|   | Merrill Lynch Auction Rate Pass Thru |   |   | $              | 5,000  |   |      | $      | 3,980 |   |

----

|                                                                      |   |                |   |   |                |   |   |      |   |   |             |   |   |      |   |   |             |   |
|---------------------------------------------------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|-----------|--------|--------|------------------|--------|--------|-----------|--------|--------|------------------|--------|
|                                                                      |   | Less than 12 Months |   |   | 12 Months or Longer |   |   | Total     |   |
|                                                                      |   | FairValue           |   |   | UnrealizedLosses    |   |   | FairValue |   |   | UnrealizedLosses |   |   | FairValue |   |   | UnrealizedLosses |   |
|                                                                      |   | (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 |   |
|                                                                      |   |                |   |   |                |   |   |      |   |   |             |   |   |      |   |   |             |   |   |   |   |   |   |   |
| June 30, 2009:                                                            |   |                |   |   |                |   |   |      |   |   |             |   |   |      |   |   |             |   |   |   |   |   |   |   |
| U.S. government agencies                                                  |   | $                   | 2,929  |   |                | $      | 71     |      |   | $      | -                |   |   | $         | -      |   |             | $      | 2,929 |   |   | $ | 71 |   |
| Corporate bonds and other obligations                                     |   |                | -      |   |                |   | -      |      |   |   | 5,493            |   |   |      | 2,528  |   |             |   | 5,493 |   |   |   | 2,528 |   |
| Mortgage-backed securities                                                |   |                | 5,268  |   |                |   | 1,053  |      |   |   | 1,892            |   |   |      | 724    |   |             |   | 7,160 |   |   |   | 1,777 |   |
| Equity securities                                                         |   |                | 12,227 |   |                |   | 2,773  |      |   |   | -                |   |   |      | -      |   |             |   | 12,227 |   |   |   | 2,773 |   |
| Total temporarily impaired securities                                     |   |                | 20,424 |   |                |   | 3,897  |      |   |   | 7,385            |   |   |      | 3,252  |   |             |   | 27,809 |   |   |   | 7,149 |   |
|                                                                      |   |                |   |   |                |   |   |      |   |   |             |   |   |      |   |   |             |   |   |   |   |   |   |   |
| Other-than-temporarily impaired debt securities: (1)                      |   |                |   |   |                |   |   |      |   |   |             |   |   |      |   |   |             |   |   |   |   |   |   |   |
| Mortgage-backed securities                                                |   |                | -      |   |                |   | -      |      |   |   | 14,231           |   |   |      | 5,006  |   |             |   | 14,231 |   |   |   | 5,006 |   |
| Total temporarily impaired and other-than-temporarily impaired securities |   | $                   | 20,424 |   |                | $      | 3,897  |      |   | $      | 21,616           |   |   | $         | 8,258  |   |             | $      | 42,040 |   |   | $ | 12,155 |   |

----

|                                                                                    |   |             |   |   |                |   |   |                                |   |   |   |   |
|-----------------------------------------------------------------------------------------|--------|------------------|--------|--------|---------------------|--------|--------|-------------------------------------|--------|--------|--------|--------|
|                                                                                    |   | EquitySecurities |   |   | CorporateSecurities |   |   | Non-AgencyMortgage-BackedSecurities |   |   | Total  |   |
|                                                                                    |   | (In Thousands)   |   |
| 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 |   |
|                                                                                    |   |             |   |   |                |   |   |                                |   |   |   |   |   |   |   |   |
| June 30, 2009:                                                                          |   |             |   |   |                |   |   |                                |   |   |   |   |   |   |   |   |
| Total other-than-temporary impairment losses                                            |   | $                | 3,953  |   |                | $      | 2,225  |                                |   | $      | 14,614 |   |   | $ | 20,792 |   |
| Less: unrealized other-than-temporary losses recognized in other comprehensive loss (1) |   |             | -      |   |                |   | -      |                                |   |   | 4,821  |   |   |   | 4,821 |   |
|                                                                                    |   |             |   |   |                |   |   |                                |   |   |   |   |   |   |   |   |
| Net impairment losses recognized in earnings (2)                                        |   | $                | 3,953  |   |                | $      | 2,225  |                                |   | $      | 9,793  |   |   | $ | 15,971 |   |

|                                                                                                                         |           |   |           |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------|----------------|--------|----------------|--------|--------|--------|
|                                                                                                                         | 2010           |   | 2009           |   |
|                                                                                                                         | Total          |   | Total          |   |
|                                                                                                                         | (In Thousands) |   | (In Thousands) |   |
| Balance, July 1                                                                                                              |           | $      | 9,793          |   |   | $      | - |   |
| Additions for the credit component on debt securities in which other-than-temporary impairment was not previously recognized |           |   | 48             |   |   |   | 9,793 |   |
| Additions for the credit component on debt securities in which other-than-temporary impairment was previously recognized     |           |   | 2,401          |   |   |   | - |   |
| Balance, June 30                                                                                                             |           | $      | 12,242         |   |   | $      | 9,793 |   |

----

|             |   |            |    |   |    |   |   |   |   |   |
|------------------|--------|-----------------|---------|--------|---------|--------|--------|--------|--------|--------|
|             |   | WeightedAverage |    | Range  |    |
|             |   |            | Minimum |   | Maximum |   |
| Prepayment rates |   |            | 13.8    | %      |    | 7.2    | %      |   | 24.5   | %      |
| Default rates    |   |            | 15.5    | %      |    | 5.3    | %      |   | 29.7   | %      |
| Loss severity    |   |            | 39.7    | %      |    | 23.3   | %      |   | 48.5   | %      |

|                          |   |                   |    |   |   |   |
|-------------------------------|--------|------------------------|---------|--------|--------|--------|
|                          |   | 2010                   |    |   | 2009   |   |
|                          |   | (Dollars In Thousands) |    |
| Residential mortgages         |   | $                      | 194,960 |   |   | $      | 200,680 |   |
| Commercial mortgages          |   |                   | 54,398  |   |   |   | 56,500 |   |
| Construction mortgages        |   |                   | 1,338   |   |   |   | 1,887 |   |
| Commercial                    |   |                   | 6,786   |   |   |   | 8,958 |   |
| Installment                   |   |                   | 729     |   |   |   | 812 |   |
| Collateral                    |   |                   | 309     |   |   |   | 130 |   |
| Other                         |   |                   | 139     |   |   |   | 155 |   |
|                          |   |                   | 258,659 |   |   |   | 269,122 |   |
| Unadvanced construction loans |   |                   | (1,521  | )      |   |   | (2,929 | ) |
|                          |   |                   | 257,138 |   |   |   | 266,193 |   |
| Allowance for loan losses     |   |                   | (2,651  | )      |   |   | (2,200 | ) |
| Deferred costs, net           |   |                   | 285     |   |   |   | 324 |   |
| Net loans                     |   | $                      | 254,772 |   |   | $      | 264,317 |   |
| Weighted average yield        |   |                   | 5.58    | %      |   |   | 5.72 | % |

----

|                           |   | 2010           |    |   | 2009   |   |
|--------------------------------|--------|----------------|---------|--------|--------|--------|
|                           |   | (In Thousands) |    |
| Fixed rate:                    |   |           |    |   |   |   |
| Term to maturity               |   |           |    |   |   |   |
| One month through one year     |   | $              | 2,809   |   |   | $      | 5,194 |   |
| One year through three years   |   |           | 11,967  |   |   |   | 10,545 |   |
| Three years through five years |   |           | 11,008  |   |   |   | 15,350 |   |
| Five years through ten years   |   |           | 27,584  |   |   |   | 28,145 |   |
| Over ten years                 |   |           | 93,715  |   |   |   | 96,336 |   |
|                           |   |           | 147,083 |   |   |   | 155,570 |   |
| Adjustable rate:               |   |           |    |   |   |   |   |   |
| Rate adjustment                |   |           |    |   |   |   |   |   |
| One month through one year     |   |           | 52,107  |   |   |   | 57,444 |   |
| One year through three years   |   |           | 23,599  |   |   |   | 24,315 |   |
| Three years through five years |   |           | 27,048  |   |   |   | 20,172 |   |
| Over five years                |   |           | 7,301   |   |   |   | 8,692 |   |
|                           |   |           | 110,055 |   |   |   | 110,623 |   |
| Total loans                    |   | $              | 257,138 |   |   | $      | 266,193 |   |

|                                       |   | 2010           |   |   | 2009   |   |
|--------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                       |   | (In Thousands) |   |
| Beginning balance                          |   | $              | 2,200  |   |   | $      | 1,758 |   |
| Recoveries of loans previously charged off |   |           | 67     |   |   |   | 46 |   |
| Charge offs                                |   |           | (665   | )      |   |   | (571 | ) |
| Provision for loan losses                  |   |           | 1,049  |   |   |   | 967 |   |
| Balance at end of period                   |   | $              | 2,651  |   |   | $      | 2,200 |   |

|                                             |   | 2010           |   |   | 2009   |   |
|--------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                             |   | (In Thousands) |   |
|                                             |   |           |   |   |   |   |
| Total nonaccrual loans                           |   | $              | 5,802  |   |   | $      | 6,449 |   |
|                                             |   |           |   |   |   |   |   |   |
| Accruing loans which are 90 days or more overdue |   |           | 491    |   |   |   | - |   |
|                                             |   |           |   |   |   |   |   |   |
| Nonperforming loans                              |   | $              | 6,293  |   |   | $      | 6,449 |   |

----

|                                                                                                                  |   | 2010           |   |   | 2009       |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|------------|--------|
|                                                                                                                  |   | Recorded       |   |   | Related    |   |   | Recorded |   |   | Related |   |
|                                                                                                                  |   | Investment     |   |   | Allowance  |   |   | Investment |   |   | Allowance |   |
|                                                                                                                  |   | In Impaired    |   |   | For Credit |   |   | In Impaired |   |   | For Credit |   |
|                                                                                                                  |   | Loans          |   |   | Losses     |   |   | Loans |   |   | Losses |   |
|                                                                                                                  |   | (In Thousands) |   |
| Loans for which there is a related allowance for credit losses                                                        |   | $              | 2,230  |   |       | $      | 446 |   |   | $ | 3,556 |   |   | $ | 289 |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Loans for which there is no related allowance for credit losses                                                       |   |           | 3,934  |   |       |   | - |   |   |   | 1,874 |   |   |   | - |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Totals                                                                                                                |   | $              | 6,164  |   |       | $      | 446 |   |   | $ | 5,430 |   |   | $ | 289 |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Average recorded investment in impaired loans during the year ended June 30                                           |   | $              | 6,173  |   |       |   |   |   |   | $ | 2,410 |   |   |   |   |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Related amount of interest income recognized during the time, in the year ended June 30, that the loans were impaired |   |           |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Total recognized                                                                                                      |   | $              | 107    |   |       |   |   |   |   | $ | 5 |   |   |   |   |   |
|                                                                                                                  |   |           |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Amount recognized using a cash-basis method of accounting                                                             |   | $              | 57     |   |       |   |   |   |   | $ | 0 |   |   |   |   |   |

|                                      |   | 2010           |   |   | 2009   |   |
|-------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                      |   | (In Thousands) |   |
| Land                                      |   | $              | 470    |   |   | $      | 470 |   |
| Buildings                                 |   |           | 6,293  |   |   |   | 5,953 |   |
| Furniture and equipment                   |   |           | 2,772  |   |   |   | 2,530 |   |
|                                      |   |           | 9,535  |   |   |   | 8,953 |   |
| Accumulated depreciation and amortization |   |           | (4,243 | )      |   |   | (3,794 | ) |
|                                      |   | $              | 5,292  |   |   | $      | 5,159 |   |

----

|                                  |   | June 30,       |   |
|---------------------------------------|--------|----------------|--------|
|                                  |   | 2010           |   |   | 2009 |   |
|                                  |   | (In Thousands) |   |
| Balances not subject to amortization: |   |           |   |   |   |   |
| Goodwill                              |   | $              | 6,912  |   |   | $ | 6,912 |   |
| Balances subject to amortization:     |   |           |   |   |   |   |   |   |
| Core Deposit Intangible               |   |           | 473    |   |   |   | 651 |   |
| Total intangible assets               |   | $              | 7,385  |   |   | $ | 7,563 |   |

|                 |   | (In Thousands) |   |
|----------------------|--------|----------------|--------|
| Years Ended June 30, |   |           |   |
| 2011                 |   | $              | 149    |   |
| 2012                 |   |           | 121    |   |
| 2013                 |   |           | 93     |   |
| 2014                 |   |           | 65     |   |
| 2015                 |   |           | 37     |   |
| Thereafter           |   |           | 8      |   |
| Total                |   | $              | 473    |   |

|                    |   | 2010           |   |
|-------------------------|--------|----------------|--------|
|                    |   | (In Thousands) |   |
|                    |   | Gross          |   |   |   |   |   | Net |   |
|                    |   | Carrying       |   |   | Accumulated |   |   | Carrying |   |
|                    |   | Amount         |   |   | Amortization |   |   | Amount |   |
| Core deposit intangible |   | $              | 1,553  |   |   | $ | 1,080 |   |   | $ | 473 |   |
|                    |   |           |   |   |   |   |   |   |   |   |   |   |
|                    |   | 2009           |   |
|                    |   | (In Thousands) |   |
|                    |   | Gross          |   |   |   |   |   |   | Net |   |
|                    |   | Carrying       |   |   | Accumulated |   |   | Carrying |   |
|                    |   | Amount         |   |   | Amortization |   |   | Amount |   |
| Core deposit intangible |   | $              | 1,553  |   |   | $ | 902 |   |   | $ | 651 |   |

----

|                              |   | 2010                   |    |   | 2009     |   |
|-----------------------------------|--------|------------------------|---------|--------|----------|--------|
|                              |   |                   |    |   | Weighted |   |   |   |   |   | Weighted |   |
|                              |   |                   |    |   | Average  |   |   |   |   |   | Average |   |
|                              |   | Amount                 |    |   | Rate     |   |   | Amount |   |   | Rate |   |
|                              |   | (Dollars In Thousands) |
| Demand deposits                   |   | $                      | 36,206  |   |     |   | - | % |   | $ | 35,246 |   |   |   | - | % |
| NOW accounts                      |   |                   | 95,321  |   |     |   | 1.11 |   |   |   | 57,612 |   |   |   | 1.90 |   |
| Regular savings                   |   |                   | 48,105  |   |     |   | 0.35 |   |   |   | 47,285 |   |   |   | 0.46 |   |
| Money market accounts             |   |                   | 10,948  |   |     |   | 0.88 |   |   |   | 11,504 |   |   |   | 1.08 |   |
| Clubs                             |   |                   | 265     |   |     |   | 0.30 |   |   |   | 322 |   |   |   | 3.79 |   |
|                              |   |                   | 190,845 |   |     |   | 0.70 |   |   |   | 151,969 |   |   |   | 0.96 |   |
| Certificate accounts maturing in: |   |                   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Less than one year                |   |                   | 74,779  |   |     |   | 1.74 |   |   |   | 104,428 |   |   |   | 2.91 |   |
| One year to two years             |   |                   | 26,256  |   |     |   | 3.59 |   |   |   | 16,884 |   |   |   | 3.25 |   |
| Two years to three years          |   |                   | 15,641  |   |     |   | 3.18 |   |   |   | 16,662 |   |   |   | 4.70 |   |
| Three years to five years         |   |                   | 27,625  |   |     |   | 3.54 |   |   |   | 18,156 |   |   |   | 4.06 |   |
|                              |   |                   | 144,301 |   |     |   | 2.58 |   |   |   | 156,130 |   |   |   | 3.27 |   |
| Total deposits                    |   | $                      | 335,146 |   |     |   | 1.51 | % |   | $ | 308,099 |   |   |   | 2.13 | % |

|                                                       |   | 2010                   |    |   | 2009     |   |
|------------------------------------------------------------|--------|------------------------|---------|--------|----------|--------|
|                                                       |   |                   |    |   | Weighted |   |   |   |   |   | Weighted |   |
|                                                       |   |                   |    |   | Average  |   |   |   |   |   | Average |   |
|                                                       |   | Amount Due             |    |   | Rate     |   |   | Amount Due |   |   | Rate |   |
|                                                       |   | (Dollars In Thousands) |    |
| Short-term borrowing                                       |   |                   |    |   |     |   |   |   |   |   |   |   |
| FHLB advances                                              |   | $                      | -       |   |     |   | - | % |   | $ | - |   |   |   | - | % |
| Repurchase agreements                                      |   |                   | 5,896   |   |     |   | 0.30 |   |   |   | 4,471 |   |   |   | 2.30 |   |
| Total short-term borrowings                                |   |                   | 5,896   |   |     |   | 0.30 |   |   |   | 4,471 |   |   |   | 2.30 |   |
|                                                       |   |                   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Long-term Federal Home Loan Bank of Boston (FHLB) advances |   |                   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Year of maturity:                                          |   |                   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| 2010                                                       |   |                   | -       |   |     |   | - |   |   |   | 19,000 |   |   |   | 4.72 |   |
| 2011                                                       |   |                   | 19,000  |   |     |   | 3.40 |   |   |   | 29,500 |   |   |   | 3.51 |   |
| 2012                                                       |   |                   | 40,000  |   |     |   | 4.46 |   |   |   | 40,000 |   |   |   | 4.46 |   |
| 2013                                                       |   |                   | 5,000   |   |     |   | 3.23 |   |   |   | 5,000 |   |   |   | 3.23 |   |
| 2014                                                       |   |                   | 17,500  |   |     |   | 3.19 |   |   |   | 9,000 |   |   |   | 3.15 |   |
| 2015                                                       |   |                   | 1,000   |   |     |   | 3.35 |   |   |   | - |   |   |   | - |   |
| 2017                                                       |   |                   | 10,000  |   |     |   | 4.15 |   |   |   | 10,000 |   |   |   | 4.15 |   |
| 2018                                                       |   |                   | 8,000   |   |     |   | 3.91 |   |   |   | 8,000 |   |   |   | 3.91 |   |
| Total long-term borrowings                                 |   |                   | 100,500 |   |     |   | 3.89 |   |   |   | 120,500 |   |   |   | 4.06 |   |
| Total borrowed funds                                       |   | $                      | 106,396 |   |     |   | 3.69 | % |   | $ | 124,971 |   |   |   | 3.99 | % |

----

|                               |   |           |   |   |   |   |
|------------------------------------|--------|----------------|--------|--------|--------|--------|
|                               |   | 2010           |   |   | 2009   |   |
|                               |   | (In Thousands) |   |
| Current:                           |   |           |   |   |   |   |
| Federal                            |   | $              | (1,662 | )      |   | $      | (184 | ) |
| State                              |   |           | 1      |   |   |   | 1 |   |
|                               |   |           | (1,661 | )      |   |   | (183 | ) |
| Deferred:                          |   |           |   |   |   |   |   |   |
| Federal                            |   |           | 1,970  |   |   |   | (4,415 | ) |
| Change in valuation allowance      |   |           | -      |   |   |   | (12 | ) |
|                               |   |           | 1,970  |   |   |   | (4,427 | ) |
| Total income tax expense (benefit) |   | $              | 309    |   |   | $      | (4,610 | ) |

|                                       |   |           |   |   |   |   |
|--------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                       |   | 2010           |   |   | 2009   |   |
|                                       |   | (In Thousands) |   |
| Federal income tax at statutory rate       |   | $              | 534    |   |   | $      | (3,992 | ) |
| Increase (decrease) in tax resulting from: |   |           |   |   |   |   |   |   |
| State taxes, net of federal tax benefit    |   |           | 1      |   |   |   | 1 |   |
| Qualifying option expense (benefit)        |   |           | 18     |   |   |   | (7 | ) |
| Dividends received deduction               |   |           | (129   | )      |   |   | (174 | ) |
| Bank-owned life insurance                  |   |           | (95    | )      |   |   | (155 | ) |
| Tax-exempt municipal income, net           |   |           | (9     | )      |   |   | (52 | ) |
| Change in valuation allowance              |   |           | -      |   |   |   | (12 | ) |
| Other, net                                 |   |           | (11    | )      |   |   | (219 | ) |
| Income tax (benefit) expense               |   | $              | 309    |   |   | $      | (4,610 | ) |
| Effective tax rates                        |   |           | 19.6   | %      |   |   | (39.3 | )% |

----

|                                                         |   |           |   |   |   |   |
|--------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                         |   | 2010           |   |   | 2009   |   |
|                                                         |   | (In Thousands) |   |
| Deferred tax assets:                                         |   |           |   |   |   |   |
| Net unrealized holding loss on available-for-sale securities |   | $              | 1,429  |   |   | $      | 2,716 |   |
| Allowance for loan losses                                    |   |           | 872    |   |   |   | 748 |   |
| Write down of securities                                     |   |           | 1,878  |   |   |   | 4,565 |   |
| Contribution carryforward                                    |   |           | 102    |   |   |   | 102 |   |
| Deferred compensation                                        |   |           | 183    |   |   |   | 177 |   |
| Stock based compensation                                     |   |           | 93     |   |   |   | 81 |   |
| Post retirement benefits - ASC 715-60                        |   |           | 35     |   |   |   | 33 |   |
| Federal AMT carryover                                        |   |           | 705    |   |   |   | 81 |   |
| Interest receivable on nonaccrual loans                      |   |           | 101    |   |   |   | 42 |   |
| Other                                                        |   |           | 13     |   |   |   | - |   |
| Gross deferred tax asset                                     |   |           | 5,411  |   |   |   | 8,545 |   |
|                                                         |   |           |   |   |   |   |   |   |
| Deferred tax liabilities:                                    |   |           |   |   |   |   |   |   |
| Depreciation and amortization                                |   |           | (508   | )      |   |   | (372 | ) |
| Deferred loan fees                                           |   |           | (97    | )      |   |   | (110 | ) |
| Gross deferred tax liability                                 |   |           | (605   | )      |   |   | (482 | ) |
| Net deferred tax asset                                       |   | $              | 4,806  |   |   | $      | 8,063 |   |

|   |   | (In Thousands) |   |
|--------|--------|----------------|--------|
| 2011   |   | $              | 162    |   |
| 2012   |   |           | 118    |   |
| 2013   |   |           | 105    |   |
| 2014   |   |           | 101    |   |
| 2015   |   |           | 46     |   |
| Total  |   | $              | 532    |   |

----

----

|                                                                            |   |                                             |    |   |                                                      |   |   |                                     |   |   |                                 |   |
|---------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|--------|-----------------------------------------------------------|--------|--------|------------------------------------------|--------|--------|--------------------------------------|--------|
|                                                                            |   | Fair Value Measurements at Reporting Date Using: |    |
| (In Thousands)                                                                  |   | Total                                            |    |   | Quoted Prices inActive Markets forIdentical AssetsLevel 1 |   |   | SignificantOther ObservableInputsLevel 2 |   |   | SignificantUnobservableInputsLevel 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 |   |
|                                                                            |   |                                             |    |   |                                                      |   |   |                                     |   |   |                                 |   |   |   |   |   |
| June 30, 2009:                                                                  |   |                                             |    |   |                                                      |   |   |                                     |   |   |                                 |   |   |   |   |   |
| Securities available-for-sale:                                                  |   |                                             |    |   |                                                      |   |   |                                     |   |   |                                 |   |   |   |   |   |
| U.S. Government agency securities                                               |   | $                                                | 19,667  |   |                                                      | $      | -      |                                     |   | $      | 19,667                               |   |   | $ | - |   |
| Corporate securities                                                            |   |                                             | 9,263   |   |                                                      |   | -      |                                     |   |   | 9,263                                |   |   |   | - |   |
| Mortgage-backed securities insured or guaranteed by U.S. Government enterprises |   |                                             | 103,330 |   |                                                      |   | -      |                                     |   |   | 103,330                              |   |   |   | - |   |
| Non-agency mortgage-backed securities                                           |   |                                             | 20,266  |   |                                                      |   | -      |                                     |   |   | 20,266                               |   |   |   | - |   |
| Equity securities                                                               |   |                                             | 12,362  |   |                                                      |   | -      |                                     |   |   | 4,896                                |   |   |   | 7,466 |   |
| Totals                                                                          |   | $                                                | 164,888 |   |                                                      | $      | -      |                                     |   | $      | 157,422                              |   |   | $ | 7,466 |   |

|                                        |   | Fair Value MeasurementsUsing Significant Unobservable InputsLevel 3 |    |
|---------------------------------------------|--------|---------------------------------------------------------------------|---------|
| (In Thousands)                              |   | Available-for-SaleSecurities                                        |    |   | Total |   |
| Beginning balance July 1, 2008              |   | $                                                                   | 19,000  |   |   | $ | 19,000 |   |
| Total gains or losses (realized/unrealized) |   |                                                                |    |   |   |   |   |   |
| Included in earnings                        |   |                                                                | (13,472 | ) |   |   | (13,472 | ) |
| Included in other comprehensive loss        |   |                                                                | 14,080  |   |   |   | 14,080 |   |
| Principal payments on securities            |   |                                                                | (1,114  | ) |   |   | (1,114 | ) |
| Accretion of securities, net                |   |                                                                | 1       |   |   |   | 1 |   |
| Transfers out of Level 3                    |   |                                                                | (11,029 | ) |   |   | (11,029 | ) |
| Ending 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 |   |

----

|                                                                                                                                                                                 |   | Fair Value MeasurementsUsing Significant Unobservable InputsLevel 3 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
| (In Thousands)                                                                                                                                                                       |   | Available-for-SaleSecurities                                        |   |   | Total |   |
| 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 |   | $                                                                   | -      |   |   | $ | - |   |
|                                                                                                                                                                                 |   |                                                                |   |   |   |   |   |   |
| June 30, 2009:                                                                                                                                                                       |   |                                                                |   |   |   |   |   |   |
| 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: |   |
| (In Thousands)          |   | Total                                            |   |   | Quoted Prices inActive Markets forIdentical AssetsLevel 1 |   |   | SignificantOther ObservableInputsLevel 2 |   |   | SignificantUnobservableInputsLevel 3 |   |
| June 30, 2010:          |   |                                             |   |   |                                                      |   |   |                                     |   |   |                                 |   |
| Impaired loans          |   | $                                                | 1,784  |   |                                                      | $      | -      |                                     |   | $      | -                                    |   |   | $ | 1,784 |   |
| Other real estate owned |   |                                             | 1,561  |   |                                                      |   | -      |                                     |   |   | 391                                  |   |   |   | 1,170 |   |
| Totals                  |   | $                                                | 3,345  |   |                                                      | $      | -      |                                     |   | $      | 391                                  |   |   | $ | 2,954 |   |
|                    |   |                                             |   |   |                                                      |   |   |                                     |   |   |                                 |   |   |   |   |   |
| June 30, 2009:          |   |                                             |   |   |                                                      |   |   |                                     |   |   |                                 |   |   |   |   |   |
| Impaired loans          |   | $                                                | 3,267  |   |                                                      | $      | -      |                                     |   | $      | 3,267                                |   |   | $  | - |   |
| Totals                  |   | $                                                | 3,267  |   |                                                      | $      | -      |                                     |   | $      | 3,267                                |   |   | $ | - |   |

|                                                                    |   |  Fair Value Measurements               |   |
|-------------------------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                                    |   |  Using Significant Unobservable Inputs |   |
|                                                                    |   |  Level 3                               |   |
|                                                                    |   |                                        |   |   | Other Real |   |   |   |   |
|                                                                    |   | Impaired Loans                              |   |   | Estate Owned |   |   | Total |   |
| (In Thousands)                                                          |   |                                        |   |   |   |   |   |   |   |
| Beginning balance, June 30, 2009                                        |   | $                                           | -      |   |   | $ | - |   |   | $ | - |   |
|        Total gains or losses              |   |                                        |   |   |   |   |   |   |   |   |   |   |
|        Transfers in and/or out of Level 3 |   |                                        | 1,784  |   |   |   | 1,170 |   |   |   | 2,954 |   |
| Ending balance, June 30, 2010                                           |   | $                                           | 1,784  |   |   | $ | 1,170 |   |   | $ | 2,954 |   |

----

|                                           |   |           |    |   |   |   |    |     |   |   |    |   |
|------------------------------------------------|--------|----------------|---------|--------|--------|--------|---------|----------|--------|--------|---------|--------|
|                                           |   | 2010           |    |   | 2009   |   |
|                                           |   | Carrying       |    |   | Fair   |   |    | Carrying |   |   | Fair    |   |
|                                           |   | Amount         |    |   | Value  |   |    | Amount   |   |   | Value   |   |
|                                           |   | (In Thousands) |    |
| Financial assets:                              |   |           |    |   |   |   |    |     |   |   |    |   |
| Cash and cash equivalents                      |   | $              | 23,291  |   |   | $      | 23,291  |     |   | $      | 6,059   |   |   | $ | 6,059 |   |
| Available-for-sale securities                  |   |           | 85,893  |   |   |   | 85,893  |     |   |   | 164,888 |   |   |   | 164,888 |   |
| Held-to-maturity securities                    |   |           | 83,249  |   |   |   | 83,698  |     |   |   | 2,000   |   |   |   | 1,945 |   |
| Federal Home Loan Bank stock                   |   |           | 8,056   |   |   |   | 8,056   |     |   |   | 8,056   |   |   |   | 8,056 |   |
| Loans held-for-sale                            |   |           | 1,470   |   |   |   | 1,504   |     |   |   | 1,200   |   |   |   | 1,214 |   |
| Loans, net                                     |   |           | 254,772 |   |   |   | 257,194 |     |   |   | 264,317 |   |   |   | 266,369 |   |
| Accrued interest receivable                    |   |           | 1,698   |   |   |   | 1,698   |     |   |   | 1,891   |   |   |   | 1,891 |   |
|                                           |   |           |    |   |   |   |    |     |   |   |    |   |   |   |   |   |
| Financial liabilities:                         |   |           |    |   |   |   |    |     |   |   |    |   |   |   |   |   |
| Deposits                                       |   |           | 335,146 |   |   |   | 338,166 |     |   |   | 308,099 |   |   |   | 311,070 |   |
| Mortgagors’ escrow accounts              |   |           | 1,627   |   |   |   | 1,627   |     |   |   | 1,564   |   |   |   | 1,564 |   |
| Federal Home Loan Bank advances                |   |           | 100,500 |   |   |   | 105,438 |     |   |   | 120,500 |   |   |   | 126,057 |   |
| Securities sold under agreements to repurchase |   |           | 5,896   |   |   |   | 5,896   |     |   |   | 4,471   |   |   |   | 4,471 |   |

----

|                           |   |           |   |   |   |   |
|--------------------------------|--------|----------------|--------|--------|--------|--------|
|                           |   | 2010           |   |   | 2009   |   |
|                           |   | (In Thousands) |   |
| Commitments to originate loans |   | $              | 1,305  |   |   | $      | 4,687 |   |
| Unadvanced portions of loans:  |   |           |   |   |   |   |   |   |
| Construction loans             |   |           | 1,521  |   |   |   | 2,929 |   |
| Lines of credit                |   |           | 15,213 |   |   |   | 16,859 |   |
| Letters of credit              |   |           | 857    |   |   |   | 898 |   |
|                           |   | $              | 18,896 |   |   | $      | 25,373 |   |

|                                         |   |                          |   |   |              |   |   |              |   |   |              |   |   |              |   |   |   |   |
|----------------------------------------------|--------|-------------------------------|--------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|--------|--------|--------|
|                                         |   |                          |   |   |              |   |   |              |   |   |              |   |   | 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, 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 |   |

----

|                                         |   |                          |   |   |              |   |   |              |   |   |              |   |   | 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, 2009:                         |   |                          |   |   |              |   |   |              |   |   |              |   |   |              |   |   |   |   |
| Tangible Equity Capital (to Tangible Assets) |   |                          | 31,376 |   |              |   | 6.62   |              |   |   | 7,105             |   |   |              | 1.50   |   |   |   | N/A |   |   |   | N/A |   |
| Core Capital (to Adjusted Tangible Assets)   |   |                          | 31,376 |   |              |   | 6.62   |              |   |   | 18,947            |   |   |              | 4.00   |   |   |   | 23,683 |   |   |   | 5.00 |   |
| Tier 1 Capital (to Risk-Weighted Assets)     |   |                          | 31,376 |   |              |   | 10.20  |              |   |   | 12,302            |   |   |              | 4.00   |   |   |   | 18,453 |   |   |   | 6.00 |   |
| Total Capital (to Risk-Weighted Assets)      |   |                          | 33,569 |   |              |   | 10.92  |              |   |   | 24,604            |   |   |              | 8.00   |   |   |   | 30,755 |   |   |   | 10.00 |   |

|                                                    |   | 2010           |   |   | 2009   |   |
|---------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                    |   | (In Thousands) |   |
| Capital under generally accepted accounting principles  |   | $              | 39,997 |   |   | $      | 36,209 |   |
| Intangible assets                                       |   |           | (6,865 | )      |   |   | (7,150 | ) |
| Disallowed deferred tax assets                          |   |           | (2,555 | )      |   |   | (2,978 | ) |
| Unrealized losses on available-for-sale securities      |   |           | 2,782  |   |   |   | 5,295 |   |
| Tier 1 capital                                          |   |           | 33,359 |   |   |   | 31,376 |   |
| Allowance for loan losses                               |   |           | 2,585  |   |   |   | 2,193 |   |
| Deduction for low-level recourse and residual interests |   |           | (2,676 | )      |   |   | - |   |
| Total Risk-Based capital                                |   | $              | 33,268 |   |   | $      | 33,569 |   |

----

----

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

|                             |   | 2010   |    |   | 2009             |   |
|----------------------------------|--------|--------|---------|--------|------------------|--------|
|                             |   |   |    |   | Weighted-Average |   |   |   |   |   | Weighted-Average |   |
|                             |   | Shares |    |   | Exercise Price   |   |   | Shares |   |   | Exercise Price |   |
| Outstanding at beginning of year |   |   | 222,921 |   |             | $      | 10.62 |   |   |   | 269,747 |   |   | $ | 10.62 |   |
| Granted                          |   |   | -       |   |             |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                        |   |   | -       |   |             |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                        |   |   | -       |   |             |   | - |   |   |   | (46,826 | ) |   |   | 10.62 |   |
| Outstanding at end of year       |   |   | 222,921 |   |             | $      | 10.62 |   |   |   | 222,921 |   |   | $ | 10.62 |   |
|                             |   |   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Options exercisable at year-end  |   |   | 173,737 |   |             | $      | 10.61 |   |   |   | 129,153 |   |   | $ | 10.61 |   |

| Options Outstanding |   |   | Options Exercisable |   |
|---------------------|--------|--------|---------------------|--------|
|                |   |   | Number              |   | Weighted-Average |   |   |   |   | Number |   |   |   |   |
|                |   |   | Outstanding         |   | Remaining |   | Weighted-Average |   |   | Exercisable |   |   | Weighted-Average |   |
| Exercise Price      |   |   | as of 6/30/10       |   | Contractual Life |   | Exercise Price |   |   | as of 6/30/10 |   |   | Exercise Price |   |
| $                   | 10.60  |   |                |   | 193,921 |   | 5.36 years |   | $ | 10.60 |   |   |   | 155,137 |   |   | $ | 10.60 |   |
|                | 10.70  |   |                |   | 23,000 |   | 6.90 years |   |   | 10.70 |   |   |   | 13,800 |   |   |   | 10.70 |   |
|                | 10.78  |   |                |   | 6,000 |   | 5.94 years |   |   | 10.78 |   |   |   | 4,800 |   |   |   | 10.78 |   |

----

|                                             |   | June 30, |   |
|--------------------------------------------------|--------|----------|--------|
| ASSETS                                           |   | 2010     |   |   | 2009 |   |
| Cash and due from depository institutions        |   | $        | 38     |   |   | $ | 191 |   |
| Investment in Putnam Bank                        |   |     | 39,996 |   |   |   | 36,209 |   |
| Investment in available-for-sale securities      |   |     | 1,256  |   |   |   | 1,457 |   |
| Loan to ESOP                                     |   |     | 2,103  |   |   |   | 2,218 |   |
| Other assets                                     |   |     | 611    |   |   |   | 419 |   |
| Total assets                                     |   | $        | 44,004 |   |   | $ | 40,494 |   |
|                                             |   |     |   |   |   |   |   |   |
|                                             |   |     |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY       |   |     |   |   |   |   |   |   |
| Other liabilities                                |   | $        | 149    |   |   | $ | 598 |   |
| Stockholders’ equity                       |   |     | 43,855 |   |   |   | 39,896 |   |
| Total liabilities and stockholders’ equity |   | $        | 44,004 |   |   | $ | 40,494 |   |

|                                                                                                          |   | For the Years Ended |   |
|---------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|
|                                                                                                          |   | June 30,            |   |
|                                                                                                          |   | 2010                |   |   | 2009 |   |
| Interest and dividends on investments                                                                         |   | $                   | 44     |   |   | $ | 78 |   |
| Interest on loan                                                                                              |   |                | 71     |   |   |   | 123 |   |
| Total interest and dividend income                                                                            |   |                | 115    |   |   |   | 201 |   |
| Interest expense                                                                                              |   |                | 2      |   |   |   | 6 |   |
| Net interest and dividend income                                                                              |   |                | 113    |   |   |   | 195 |   |
| Investment security gains                                                                                     |   |                | 44     |   |   |   | - |   |
| Other expense                                                                                                 |   |                | 176    |   |   |   | 193 |   |
|                                                                                                          |   |                |   |   |   |   |   |   |
| (Loss) income before income tax (benefit) expense and equity in undistributed net income (loss) of subsidiary |   |                | (19    | ) |   |   | 2 |   |
| Income tax (benefit) expense                                                                                  |   |                | (6     | ) |   |   | 1 |   |
| (Loss) income before equity in undistributed net income (loss) of subsidiary                                  |   |                | (13    | ) |   |   | 1 |   |
| Equity in undistributed net income (loss) of subsidiary                                                       |   |                | 1,275  |   |   |   | (7,132 | ) |
|          Net income (loss)                                            |   | $                   | 1,262  |   |   | $ | (7,131 | ) |

----

|                                                                                               |   | For the Years Ended |   |
|----------------------------------------------------------------------------------------------------|--------|---------------------|--------|
|                                                                                               |   | June 30,            |   |
|                                                                                               |   | 2010                |   |   | 2009 |   |
| Cash flows from operating activities:                                                              |   |                |   |   |   |   |
| Net income (loss)                                                                                  |   | $                   | 1,262  |   |   | $ | (7,131 | )  |
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |   |                |   |   |   |   |   |   |
| Amortization of securities, net                                                                    |   |                | 1      |   |   |   | 2 |   |
| Gain on sales of available-for-sale securities                                                     |   |                | (44    | ) |   |   | - |   |
| Deferred income tax expense                                                                        |   |                | 4      |   |   |   | 5 |   |
| ESOP shares released                                                                               |   |                | 50     |   |   |   | 85 |   |
| (Increase) decrease in other assets                                                                |   |                | (10    | ) |   |   | 1 |   |
| Increase in due from subsidiary                                                                    |   |                | (219   | ) |   |   | - |   |
| (Decrease) increase in due to subsidiary                                                           |   |                | (308   | ) |   |   | 72 |   |
| (Decrease) increase in other liabilities                                                           |   |                | -      |   |   |   | 13 |   |
| Stock-based compensation expense                                                                   |   |                | 285    |   |   |   | 165 |   |
| Undistributed net (income) loss of subsidiary                                                      |   |                | (1,275 | ) |   |   | 7,132 |   |
|                                                                                               |   |                |   |   |   |   |   |   |
| Net cash (used in) provided by operating activities                                                |   |                | (254   | ) |   |   | 344 |   |
|                                                                                               |   |                |   |   |   |   |   |   |
| Cash flows from investing activities:                                                              |   |                |   |   |   |   |   |   |
| Purchases of available-for-sale securities                                                         |   |                | (1,000 | ) |   |   | - |   |
| Proceeds from sales of available-for-sale securities                                               |   |                | 946    |   |   |   | - |   |
| Proceeds from maturities of available-for-sale securities                                          |   |                | 278    |   |   |   | 397 |   |
| Principal payments received on loans to ESOP                                                       |   |                | 115    |   |   |   | 93 |   |
|                                                                                               |   |                |   |   |   |   |   |   |
| Net cash (used in) provided by investing activities                                                |   |                | 339    |   |   |   | 490 |   |
|                                                                                               |   |                |   |   |   |   |   |   |
| Cash flows from financing activities:                                                              |   |                |   |   |   |   |   |   |
| Purchase of treasury stock                                                                         |   |                | (2     | ) |   |   | (6 | ) |
| Payment of cash dividends on common stock                                                          |   |                | (236   | ) |   |   | (1,222 | ) |
|                                                                                               |   |                |   |   |   |   |   |   |
| Net cash used in financing activities                                                              |   |                | (238   | ) |   |   | (1,228 | ) |
|                                                                                               |   |                |   |   |   |   |   |   |
| Net decrease in cash and cash equivalents                                                          |   |                | (153   | ) |   |   | (394 | ) |
| Cash and cash equivalents at beginning of year                                                     |   |                | 191    |   |   |   | 585 |   |
| Cash and cash equivalents at end of year                                                           |   | $                   | 38     |   |   | $ | 191 |   |

----

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

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

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

----

|   | PART III |
|--------|----------|

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

| 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 Exhibit 10.1 of the current report on form 8-K of PSB Holdings, Inc. originally filed with the Securities and Exchange Commission on June 16, 2005. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *** | 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 10K for year ended June 30, 2008, filed with the Securities and Exchange Commission on September 23, 2008. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                     |   |               |                                                                                        |                                                                 |
|--------------------------|--------|--------------------|---------------------------------------------------------------------------------------------|----------------------------------------------------------------------|
|                     |   | PSB HOLDINGS, INC. |
|                     |   |               |                                                                                        |
| Date: September 24, 2010 |   | 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 |   |  September 24, 2010 |
| Thomas A. Borner                                         |   |   Executive Officer)                                          |   |                     |
|                                                     |   |                                                               |   |                     |
|  /S/    ROBERT J. HALLORAN, JR. |   |  President and Treasurer (Principal Financial                 |   |  September 24, 2010 |
| Robert J. Halloran, Jr.                                  |   |   and Accounting Officer)                                     |   |                     |
|                                                     |   |                                                               |   |                     |
|  /S/    CHARLES W. BENTLEY, JR. |   |  Director                                                     |   |  September 24, 2010 |
| Charles W. Bentley, Jr.                                  |   |                                                               |   |                     |
|  /S/   JITENDRA K. SINHA        |   |  Director                                                     |   |  September 24, 2010 |
| Jitendra K. Sinha                                        |   |                                                               |   |                     |
|  /S/    PAUL M. KELLY           |   |  Director                                                     |   |  September 24, 2010 |
| Paul M. Kelly                                            |   |                                                               |   |                     |
|  /S/    RICHARD A. LOOMIS       |   |  Director                                                     |   |  September 24, 2010 |
| Richard A. Loomis                                        |   |                                                               |   |                     |
|  /S     JOHN P. MILLER          |   |  Director                                                     |   |  September 24, 2010 |
| John P. Miller                                           |   |                                                               |   |                     |
|  /S/    MARY E. PATENAUDE       |   |  Director                                                     |   |  September 24, 2010 |
| Mary E. Patenaude                                        |   |                                                               |   |                     |
|  /S/    CHARLES H. PUFFER       |   |  Director                                                     |   |  September 24, 2010 |
| Charles H. Puffer                                        |   |                                                               |   |                     |