| Delaware (State of incorporation) |   | 95-2962743 (I.R.S. Employer Identification No.) |
|----------------------------------------|--------|------------------------------------------------------|
|                                   |   |                                                 |

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| PART I     |   | FINANCIAL INFORMATION                                                                       | Page   |
|------------|--------|---------------------------------------------------------------------------------------------|--------|
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| Item 1.    |   | Financial Statements (unaudited)                                                            | 1      |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| Item 2.    |   | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 14     |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| Item 4T.   |   | Controls and Procedures                                                                     | 16     |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| PART II    |   | OTHER INFORMATION                                                                           |   |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| Item 1.    |   | Legal Proceedings                                                                           | 17     |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| Item 1A.   |   | Risk Factors                                                                                | 17     |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| Item 2.    |   | Unregistered Sales of Equity and Securities and Use of Proceeds                             | 17     |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| Item 3.    |   | Defaults Upon Senior Securities                                                             | 17     |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| Item 5.    |   | Other Information                                                                           | 17     |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| Item 6.    |   | Exhibits                                                                                    | 17     |
|       |   |                                                                                        |   |
|       |   |                                                                                        |   |
| Signatures |   |                                                                                        | 18     |

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| Assets:                                                                                                               |   |    |  September 30,2011 |   |    |  December 31,2010 |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|---------|-------------------------|--------|---------|------------------------|--------|
| Cash and cash equivalents                                                                                             |   | $       | 439                     |   | $       | 1,334                  |   |
| Held to maturity investments (market value $7,100 and $8,199, respectively)                                           |   |    | 7,100                   |   |    | 8,200                  |   |
| Trading securities carried at fair value                                                                              |   |    | 194                     |   |    | -                      |   |
| Total investment securities                                                                                           |   |    | 7,294                   |   |    | 8,200                  |   |
| Real estate owned:                                                                                                    |   |    |                    |   |    |                   |   |
|   Land                                                                                                      |   |    | 554                     |   |    | 554                    |   |
|   Buildings                                                                                                 |   |    | 1,900                   |   |    | 1,900                  |   |
| Real estate owned, gross                                                                                              |   |    | 2,454                   |   |    | 2,454                  |   |
|   Less:  accumulated depreciation                                                                 |   |    | 521                     |   |    | 485                    |   |
|                                                                                                                  |   |    |                    |   |    |                   |   |
| Real estate owned, net                                                                                                |   |    | 1,933                   |   |    | 1,969                  |   |
|                                                                                                                  |   |    |                    |   |    |                   |   |
| Other assets                                                                                                          |   |    | 760                     |   |    | 259                    |   |
| Total assets                                                                                                          |   |  $ |  10,426            |   |  $ |  11,762           |   |
|                                                                                                                  |   |    |                    |   |    |                   |   |
| Liabilities and Stockholders’ Equity:                                                                           |   |    |                    |   |    |                   |   |
| Liabilities:                                                                                                          |   |    |                    |   |    |                   |   |
| Accounts payable and accrued liabilities                                                                              |   | $       | 193                     |   | $       | 220                    |   |
| Other liabilities                                                                                                     |   |    | -                       |   |    | 2                      |   |
|                                                                                                                  |   |    |                    |   |    |                   |   |
| Total liabilities                                                                                                     |   |    | 193                     |   |    | 222                    |   |
|                                                                                                                  |   |    |                    |   |    |                   |   |
| Commitments and contingencies (Note 3)                                                                                |   |    |                    |   |    |                   |   |
|                                                                                                                  |   |    |                    |   |    |                   |   |
| Stockholders’ equity:                                                                                           |   |    |                    |   |    |                   |   |
| Common stock ($0.01 par value, 200,000,000 authorized, 46,410,007 issued and 43,075,410 outstanding in 2011 and 2010) |   |    | 464                     |   |    | 464                    |   |
| Additional paid-in capital                                                                                            |   |    | 548,044                 |   |    | 548,044                |   |
| Accumulated deficit                                                                                                   |   |    | (536,166                | )      |    | (534,859               | )      |
| Treasury stock, at cost - 3,334,597 shares                                                                            |   |    | (2,109                  | )      |    | (2,109                 | )      |
| Total stockholders’ equity                                                                                      |   |    | 10,233                  |   |    | 11,540                 |   |
|                                                                                                                  |   |    |                    |   |    |                   |   |
| Total liabilities and stockholders’ equity                                                                      |   |  $ |  10,426            |   |  $ |  11,762           |   |

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|                                                                       |   | Third Quarter |   | Nine Months |   |
|----------------------------------------------------------------------------|--------|---------------|--------|-------------|--------|
|                                                                       |   | 2011          |   | 2010        |   | 2011 |   | 2010 |   |
| Operating expenses:                                                        |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Compensation and benefits                                                  |   | $             | 314    |        | $      | 304 |   | $ | 982 |   | $ | 1,080 |   |
| Professional and outside services                                          |   |          | 58     |        |   |  64 |   |   | 195 |   |   | 215 |   |
| Property operating and maintenance                                         |   |          | 17     |        |   | 23 |   |   | 67 |   |   | 92 |   |
| Depreciation                                                               |   |          | 12     |        |   | 12 |   |   | 36 |   |   | 37 |   |
| Insurance                                                                  |   |          | 6      |        |   | 7 |   |   | 25 |   |   | 31 |   |
| Other operating                                                            |   |          | 29     |        |   | 18 |   |   | 76 |   |   | 70 |   |
| Total operating expenses                                                   |   |          | 436    |        |   | 428 |   |   | 1,381 |   |   | 1,525 |   |
|                                                                       |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Operating loss                                                             |   |          | (436   | )           |   | (428 | ) |   | (1,381 | ) |   | (1,525 | ) |
|                                                                       |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Interest income                                                            |   |          | 1      |        |   | 10 |   |   | 6 |   |   | 19 |   |
| Realized gains on sales of investment securities                           |   |          | 3      |        |   | 11 |   |   | 18 |   |   | 30 |   |
| Unrealized losses on trading securities                                    |   |          | (30    | )           |   | - |   |   | (30 | ) |   | - |   |
| Other income                                                               |   |          | 14     |        |   | - |   |   | 119 |   |   | - |   |
| Loss before income taxes                                                   |   |          | (448   | )           |   | (407 | ) |   | (1,268 | ) |   | (1,476 | ) |
|                                                                       |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Income tax expense                                                         |   |          | 9      |        |   | 11 |   |   | 39 |   |   | 33 |   |
| Net loss                                                                   |   | $             | (457   | )           | $      | (418 | ) | $ | (1,307 | ) | $ | (1,509 | ) |
|                                                                       |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Net loss per share attributable to common stockholders - basic             |   | $             | (0.01  | )           | $      | (0.01 | ) | $ | (0.03 | ) | $ | (0.04 | ) |
| Net loss per share attributable to common stockholders - assuming dilution |   | $             | (0.01  | )           | $      | (0.01 | ) | $ | (0.03 | ) | $ | (0.04 | ) |
|                                                                       |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding - Basic                         |   |          | 43,075 |        |   | 43,075 |   |   | 43,075 |   |   | 43,075 |   |
| Weighted average common shares outstanding - Assuming dilution             |   |          | 43,075 |        |   | 43,075 |   |   | 43,075 |   |   | 43,075 |   |
|                                                                       |   |          |   |        |   |   |   |   |   |   |   |   |   |

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| (in thousands)                                                              |    |   | 2011    |   |   | 2010    |   |
|-----------------------------------------------------------------------------|---------|--------|---------|--------|--------|---------|--------|
|                                                                        |    |   |    |   |   |    |   |
| Cash flows from operating activities:                                       |    |   |    |   |   |    |   |
| Net loss                                                                    | $       |   | (1,307  | )      | $      | (1,509  | )      |
| Adjustments to reconcile net loss to net cash used by operating activities: |    |   |    |   |   |    |   |
| Depreciation and amortization                                               |    |   | 36      |   |   | 37      |   |
| Realized gains on sales of investment securities                            |    |   | (18     | )      |   | (30     | )      |
| Unrealized losses on trading securities                                     |    |   | 30      |   |   | -       |   |
| Changes in other assets and liabilities:                                    |    |   |    |   |   |    |   |
| Accrued interest receivable on investment securities                        |    |   | -       |   |   | 8       |   |
| Other assets                                                                |    |   | (522    | )      |   | 35      |   |
| Accounts payable and accrued liabilities                                    |    |   | (27     | )      |   | (129    | )      |
| Other liabilities                                                           |    |   | (2      | )      |   | (8      | )      |
| Net cash used by operating activities                                       |    |   | (1,810  | )      |   | (1,596  | )      |
|                                                                        |    |   |    |   |   |    |   |
| Cash flows from investing activities:                                       |    |   |    |   |   |    |   |
| Maturities of investment securities - held to maturity                      |    |   | 23,795  |   |   | 28,380  |   |
| Purchases of investment securities - held to maturity                       |    |   | (22,695 | )      |   | (26,990 | )      |
| Sales of investment securities                                              |    |   | 555     |   |   | 976     |   |
| Purchases of investment securities                                          |    |   | (761    | )      |   | (946    | )      |
| Proceeds from (investment in) real estate limited partnership               |    |   | 21      |   |   | (300    | )      |
| Net cash provided by investing activities                                   |    |   | 915     |   |   | 1,120   |   |
|                                                                        |    |   |    |   |   |    |   |
| Net change in cash and cash equivalents                                     |    |   | (895    | )      |   | (476    | )      |
| Cash and cash equivalents at beginning of year                              |    |   | 1,334   |   |   | 1,715   |   |
| Cash and cash equivalents at end of period                                  |  $ |   | 439     |   | $      | 1,239   |   |
|                                                                        |    |   |    |   |   |    |   |
| Supplemental cash flow disclosure:                                          |    |   |    |   |   |    |   |
| Income taxes paid                                                           | $       |   | 41      |   | $      | 102     |   |
|                                                                        |    |   |    |   |   |    |   |

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|                            | September 30, 2011 |                             | December 31, 2010 |   |
|---------------------------------|--------------------|----------------------------------|-------------------|--------|
| (in thousands)                  |               |    Carrying Value |              |   | Cost or Amortized Cost |   |   |  Fair Value |   |   |  Carrying Value |   |   |  Cost or Amortized Cost |   |   |  Fair Value |   |
| Held to Maturity:               |               |                             |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   U.S. Treasury Bills | $                  | 7,100                            |              | $      | 7,100 |   | $ | 7,100 |   | $ | 8,200 |   | $ | 8,200 |   | $ | 8,199 |   |
| Trading:                        |               |                             |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity Securities               |               | 194                              |              |   | 224 |   |   | 194 |   |   | - |   |   | - |   |   | - |   |
|                            | $                  | 7,294                            |              | $      | 7,324 |   | $ | 7,294 |   | $ | 8,200 |   | $ | 8,200 |   | $ | 8,199 |   |

| Held to Maturity:               |   |   | September 30, 2011 |   |   | December 31, 2010 |   |
|---------------------------------|--------|--------|--------------------|--------|--------|-------------------|--------|
| Gross unrealized gains (losses) |   | $      | -                  |   | $      | (1                | )      |
|                            |   |   |               |   |   |              |   |

|  ($ in thousands) |   | Third Quarter Ended September 30 |   | Nine Months Ended  September 30 |   |
|------------------------|--------|----------------------------------|--------|-------------------------------------------|--------|
|                   |   | 2011                             |   | 2010                                      |   | 2011 |   | 2010 |   |
| Net sale proceeds      |   | $                                | 3      |                                      | $      | 327 |   | $ | 555 |   | $ | 976 |   |
| Cost basis             |   |                             | -      |                                      |   | (316 | ) |   | (537 | ) |   | (946 | ) |
| Realized gains         |   | $                                | 3      |                                      | $      | 11 |   | $ | 18 |   | $ | 30 |   |

|              |   | Third Quarter Ended September 30 |   | Nine Months Ended  September 30 |   |
|-------------------|--------|----------------------------------|--------|-------------------------------------------|--------|
|              |   | 2011                             |   | 2010                                      |   | 2011 |   | 2010 |   |
| Cost basis        |   | $                                | 224    |                                      | $      | - |   | $ | 224 |   | $ | - |   |
| Current value     |   |                             | 194    |                                      |   | - |   |   | 194 |   |   | - |   |
| Unrealized losses |   | $                                | (30    | )                                         | $      | - |   | $ | (30 | ) | $ | - |   |

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| TaxYear Expiring |   |   |   Amount |   |
|------------------|--------|--------|--------------------|--------|
| 2012             |   | $      | 1,100,000          |   |
| 2018             |   |   | 5,400,000          |   |
| 2019             |   |   | 4,000,000          |   |
| 2020             |   |   | 2,600,000          |   |
| 2021             |   |   | 4,000,000          |   |
| 2022             |   |   | 3,200,000          |   |
| 2023             |   |   | 1,800,000          |   |
| 2024             |   |   | 700,000            |   |
| 2026             |   |   | 2,800,000          |   |
| 2027             |   |   | 12,700,000         |   |
| 2028             |   |   | 4,600,000          |   |
| 2029             |   |   | 2,400,000          |   |
| 2030             |   |   | 1,900,000          |   |
| Total            |   | $      | 47,200,000         |   |

| Tax Year Originating |   |   |  Tax Year Expired |   |    |  Amount    |   |
|----------------------|--------|--------|------------------------|--------|---------|-----------------|--------|
| 1994                 |   |   | 2009                   |   | $       | 2,200,000       |   |
| 1995                 |   |   | 2010                   |   |    |  5,300,000 |   |
|                 |   |   |                   |   |  $ |  7,500,000 |   |

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|                              |   | Number of Shares Under Option |    | Weighted Average Exercise Price |   | Weighted Average Remaining Contractual Life (in years) |   | Intrinsic Value |   |
|-----------------------------------|--------|-------------------------------|---------|---------------------------------|--------|--------------------------------------------------------|--------|-----------------|--------|
| Outstanding at January 1, 2011    |   |                          | 836,000 |                            | $      | 0.87                                                   |   |            |   |   |   |   |   |
| Expired                           |   |                          | (20,000 | )                               |   | 0.60                                                   |   |            |   |   |   |   |   |
| Outstanding at September 30, 2011 |   |                          | 816,000 |                            | $      | 0.87                                                   |   |            | 1.73   |   | $ | 224,000 |   |
| Exercisable at September 30, 2011 |   |                          | 816,000 |                            | $      | 0.87                                                   |   |            | 1.73   |   | $ | 224,000 |   |

|                                                                                                                                                                                             |   |   |  September 30,2011 |   |   |  September 30,2010 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------|--------|--------|-------------------------|--------|
| Unamortized compensation cost relating to non-vested stock  options                                                                                                                    |   | $      | -                       |   | $      | -                       |   |
| Stock based compensation expense recorded for the year-to-date  period                                                                                                                 |   | $      | -                       |   | $      | -                       |   |
| Options to purchase shares of common stock which were excluded from computation of diluted earnings per share due to the effect of being anti-dilutive in the computation of earnings per share. |   |   | 816,000                 |   |   | 836,000                 |   |
|                                                                                                                                                                                             |   |   |                    |   |   |                    |   |
| Shares available for future stock option grants                                                                                                                                                  |   |   | 4,184,000               |   |   |                    |   |

|                           |   | Third Quarter Ended September 30 |   | Nine Months EndedSeptember 30 |   |
|--------------------------------|--------|----------------------------------|--------|-------------------------------|--------|
|                           |   | 2011                             |   | 2010                          |   | 2011 |   | 2010 |   |
| Company matching contributions |   | $                                | 4,000  |                          | $      | 6,000 |   | $ | 16,000 |   | $ | 41,000 |   |

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|                                         |   | Total Number of Shares Purchased |   | Average Price Paid per Share (including Broker Commissions) |   | Total Number Shares Purchased as Part of Publicly Announced Plans |   | Maximum Number Shares that may yet be Purchased under the Plan |      |
|----------------------------------------------|--------|----------------------------------|--------|-------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|----------------------------------------------------------------|-----------|
|                                         |   |                             |   |                                                        |   |                                                              |   |                                                           |      |   |   |   |   |
| Beginning balance January 1, 2011            |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| January 1, 2011 - January 31, 2011           |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| February 1, 2011 - February 28, 2011         |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| March 1, 2011 - March 31, 2011               |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| April 1, 2011 – April 30, 2011         |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| May 1, 2011 – May 31, 2011             |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 | 6 |   | 6,791,891 |   |
| June 1, 2011 – June 30, 2011           |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| July 1, 2011 – July 31, 2011           |   |                             | -      |                                                        |   |                                                              |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| August 1, 2011 – August 31, 2011       |   |                             | -      |                                                        |   |                                                              |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| September 1, 2011 – September 30, 2011 |   |                             | -      |                                                        |   |                                                              |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| Total                                        |   |                             | -      |                                                        |   |                                                              |   |                                                           |      |   |   |   |   |

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