| Delaware (State of incorporation) |   | 95-2962743 (I.R.S. Employer Identification No.) |
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| PART I     |   | FINANCIAL INFORMATION                                                                       | Page   |
|------------|--------|---------------------------------------------------------------------------------------------|--------|
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|       |   |                                                                                        |   |
| Item 1.    |   | Financial Statements (unaudited)                                                            | 1      |
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| Item 2.    |   | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 14     |
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| Item 3.    |   | Quantitative and Qualitative Disclosures About Market Risk                                  | 16     |
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| Item 4T.   |   | Controls and Procedures                                                                     | 17     |
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| PART II    |   | OTHER INFORMATION                                                                           |   |
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|       |   |                                                                                        |   |
| Item 1.    |   | Legal Proceedings                                                                           | 18     |
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| Item 1A.   |   | Risk Factors                                                                                | 18     |
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| Item 2.    |   | Unregistered Sales of Equity and Securities and Use of Proceeds                             | 18     |
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| Item 3.    |   | Defaults Upon Senior Securities                                                             | 18     |
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| Item 4.    |   | Submission of Matters to a Vote of Security Holders                                         | 18     |
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| Item 5.    |   | Other Information                                                                           | 18     |
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| Item 6.    |   | Exhibits                                                                                    | 18     |
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| Signatures |   |                                                                                        | 19     |

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| Assets:                                                                                              |   |    |  September 30,2010 |   |    |  December 31,2009 |   |
|------------------------------------------------------------------------------------------------------|--------|---------|------------------------------|--------|---------|------------------------|--------|
| Cash and cash equivalents                                                                            |   | $       | 1,239                        |   | $       | 1,715                  |   |
| Investment securities:                                                                               |   |    |                         |   |    |                   |   |
|   Held to maturity (market value $8,598 and $10,000, respectively)                         |   |    | 8,598                        |   |    | 9,996                  |   |
|   Total investment securities                                                              |   |    | 8,598                        |   |    | 9,996                  |   |
|                                                                                                 |   |    |                         |   |    |                   |   |
| Real estate owned:                                                                                   |   |    |                         |   |    |                   |   |
|   Land                                                                                     |   |    | 554                          |   |    | 554                    |   |
|   Buildings                                                                                |   |    | 1,900                        |   |    | 1,900                  |   |
|                                                                                                 |   |    | 2,454                        |   |    | 2,454                  |   |
|   Accumulated depreciation                                                                 |   |    | (473                         | )      |    | (436                   | )      |
|                                                                                                 |   |    |                         |   |    |                   |   |
| Real estate owned, net                                                                               |   |    | 1,981                        |   |    | 2,018                  |   |
|                                                                                                 |   |    |                         |   |    |                   |   |
| Other assets                                                                                         |   |    | 337                          |   |    | 72                     |   |
| Total assets                                                                                         |   |  $ |  12,155                 |   |  $ |  13,801           |   |
|                                                                                                 |   |    |                         |   |    |                   |   |
| Liabilities and Stockholders’ Equity:                                                          |   |    |                         |   |    |                   |   |
| Liabilities:                                                                                         |   |    |                         |   |    |                   |   |
| Accounts payable and accrued liabilities                                                             |   | $       | 160                          |   | $       | 289                    |   |
| Other liabilities                                                                                    |   |    | 4                            |   |    | 12                     |   |
|                                                                                                 |   |    |                         |   |    |                   |   |
| Total liabilities                                                                                    |   |    | 164                          |   |    | 301                    |   |
|                                                                                                 |   |    |                         |   |    |                   |   |
| 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) |   |    | 464                          |   |    | 464                    |   |
| Additional paid-in capital                                                                           |   |    | 548,044                      |   |    | 548,044                |   |
| Accumulated deficit                                                                                  |   |    | (534,408                     | )      |    | (532,899               | )      |
| Treasury stock, at cost - 3,334,597 shares                                                           |   |    | (2,109                       | )      |    | (2,109                 | )      |
| Total stockholders’ equity                                                                     |   |    | 11,991                       |   |    | 13,500                 |   |
|                                                                                                 |   |    |                         |   |    |                   |   |
| Total liabilities and stockholders’ equity                                                     |   |  $ |  12,155                 |   |  $ |  13,801           |   |

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|   (in thousands except per share data)                      |   | Third Quarter |   | Nine Months |   |
|------------------------------------------------------------------|--------|---------------|--------|-------------|--------|
|                                                             |   | 2010          |   | 2009        |   | 2010 |   | 2009 |   |
| Operating expenses:                                              |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Compensation and benefits                                        |   | $             | 304    |        | $      | 349 |   | $ | 1,080 |   | $ | 1,145 |   |
| Professional and outside services                                |   |          | 64     |        |   | 86 |   |   | 215 |   |   | 555 |   |
| Property operating and maintenance                               |   |          | 23     |        |   | 25 |   |   | 92 |   |   | 78 |   |
| Depreciation                                                     |   |          | 12     |        |   | 13 |   |   | 37 |   |   | 39 |   |
| Insurance                                                        |   |          | 7      |        |   | 7 |   |   | 31 |   |   | 46 |   |
| Other operating                                                  |   |          | 18     |        |   | 24 |   |   | 70 |   |   | 82 |   |
|                                                             |   |          | 428    |        |   | 504 |   |   | 1,525 |   |   | 1,945 |   |
| Operating loss                                                   |   |          | (428   | )           |   | (504 | ) |   | (1,525 | ) |   | (1,945 | ) |
|                                                             |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Interest income                                                  |   |          | 10     |        |   | 15 |   |   | 19 |   |   | 36 |   |
| Realized gains on sales of investment securities                 |   |          | 11     |        |   | - |   |   | 30 |   |   | - |   |
| Other income                                                     |   |          | -      |        |   | - |   |   | - |   |   | 50 |   |
| Loss before income taxes                                         |   |          | (407   | )           |   | (489 | ) |   | (1,476 | ) |   | (1,859 | ) |
|                                                             |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Income tax expense                                               |   |          | (11    | )           |   | (2 | ) |   | (33 | ) |   | (6 | ) |
| Net loss                                                         |   | $             | (418   | )           | $      | (491 | ) | $ | (1,509 | ) | $ | (1,865 | ) |
|                                                             |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Per share data:                                                  |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Net loss attributable to common stockholders - basic             |   | $             | (0.01  | )           | $      | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) |
| Net loss attributable to common stockholders - assuming dilution |   | $             | (0.01  | )           | $      | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) |
|                                                             |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding                       |   |          |   |        |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   |          | 43,075 |        |   | 43,131 |   |   | 43,075 |   |   | 43,172 |   |
| Assuming dilution                                                |   |          | 43,075 |        |   | 43,131 |   |   | 43,075 |   |   | 43,172 |   |
|                                                             |   |          |   |        |   |   |   |   |   |   |   |   |   |

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| (in thousands)                                                              |    |   | 2010    |   |   | 2009    |   |
|-----------------------------------------------------------------------------|---------|--------|---------|--------|--------|---------|--------|
|                                                                        |    |   |    |   |   |    |   |
| Cash flows from operating activities:                                       |    |   |    |   |   |    |   |
| Net loss                                                                    | $       |   | (1,509  | )      | $      | (1,865  | )      |
| Adjustments to reconcile net loss to net cash used by operating activities: |    |   |    |   |   |    |   |
| Depreciation and amortization                                               |    |   | 37      |   |   | 39      |   |
| Realized gains on sales of investment securities                            |    |   | (30     | )      |   | -       |   |
| Changes in other assets and liabilities:                                    |    |   |    |   |   |    |   |
| Accrued interest receivable on investment securities                        |    |   | 8       |   |   | (3      | )      |
| Other assets                                                                |    |   | 35      |   |   | (157    | )      |
| Accounts payable and accrued liabilities                                    |    |   | (129    | )      |   | (89     | )      |
| Other liabilities                                                           |    |   | (8      | )      |   | (7      | )      |
| Net cash used by operating activities                                       |    |   | (1,596  | )      |   | (2,082  | )      |
|                                                                        |    |   |    |   |   |    |   |
| Cash flows from investing activities:                                       |    |   |    |   |   |    |   |
| Maturities of investment securities - held to maturity                      |    |   | 28,380  |   |   | 32,786  |   |
| Purchases of investment securities - held to maturity                       |    |   | (26,990 | )      |   | (31,372 | )      |
| Sales of investment securities                                              |    |   | 976     |   |   | -       |   |
| Purchases of investments securities                                         |    |   | (946    | )      |   | -       |   |
| Investment in real estate limited partnership                               |    |   | (300    | )      |   | -       |   |
| Net cash provided by investing activities                                   |    |   | 1,120   |   |   | 1,414   |   |
|                                                                        |    |   |    |   |   |    |   |
| Cash flows from financing activities:                                       |    |   |    |   |   |    |   |
| Common stock repurchased                                                    |    |   | -       |   |   | (10     | )      |
| Net cash used by financing activities                                       |    |   | -       |   |   | (10     | )      |
|                                                                        |    |   |    |   |   |    |   |
| Net change in cash and cash equivalents                                     |    |   | (476    | )      |   | (678    | )      |
| Cash and cash equivalents at beginning of year                              |    |   | 1,715   |   |   | 2,667   |   |
| Cash and cash equivalents at end of period                                  |  $ |   | 1,239   |   | $      | 1,989   |   |
|                                                                        |    |   |    |   |   |    |   |
| Supplemental cash flow disclosure:                                          |    |   |    |   |   |    |   |
| Income taxes paid                                                           | $       |   | 102     |   | $      | 3       |   |
|                                                                        |    |   |    |   |   |    |   |

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|                            | September 30, 2010 |                             | December 31, 2009 |   |
|---------------------------------|--------------------|----------------------------------|-------------------|--------|
| (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 | $                  | 8,598                            |              | $      | 8,598 |   | $ | 8,598 |   | $ | 9,996 |   | $ | 9,996 |   | $ | 10,000 |   |
|                            |  $            |  8,598                      |              | $      | 8,598 |   | $ | 8,598 |   | $ | 9,996 |   | $ | 9,996 |   | $ | 10,000 |   |

| Held to Maturity:     |   |   | 2010   |   |   | 2009   |   |
|-----------------------|--------|--------|--------|--------|--------|--------|--------|
| Gross unrealized gain |   | $      | -      |   | $      | 4      |   |
|                  |   |   |   |   |   |   |   |

|              |   |  2010 |   |
|-------------------|--------|------------|--------|
| Net sale proceeds |   | $          | 976    |   |
| Cost basis        |   |       | (946   | ) |
| Realized gain     |   | $          | 30     |   |

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|                              |   | Number of Shares |    | Weighted AverageExercisePrice |   |   | Weighted Average Remaining Contractual Life (in years) |
|-----------------------------------|--------|------------------|---------|-------------------------------|--------|--------|--------------------------------------------------------|
| Outstanding at January 1, 2010    |   |             | 851,000 |                          | $      | 0.87   |                                                   |   |   |   |
| Expired                           |   |             | (15,000 | )                             |   | 0.95   |                                                   |   |   |   |
|                              |   |             |    |                          |   |   |                                                   |   |   |   |
| Outstanding at September 30, 2010 |   |             | 836,000 |                          | $      | 0.87   |                                                   |   |   |   |
|                              |   |             |    |                          |   |   |                                                   |   |   |   |
| Exercisable                       |   |             | 836,000 |                          | $      | 0.87   |                                                   | $ | 3.18 |   |

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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, 2010            |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| January 1, 2010 - January 31, 2010           |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| February 1, 2010 - February 28, 2010         |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| March 1, 2010 - March 31, 2010               |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| April 1, 2010 - April 30, 2010               |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| May 1, 2010 - May 31, 2010                   |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| June 1, 2010 - June 30, 2010                 |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| July 1, 2010 – July 31, 2010           |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| August 1, 2010 – August 31, 2010       |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| September 1, 2010 – September 30, 2010 |   |                             | -      |                                                        |   | -                                                                 |   |                                                           | 3,208,109 |   |   | 6,791,891 |   |
| Total                                        |   |                             | -      |                                                        |   |                                                              |   |                                                           |      |   |   |   |   |

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| (in thousands)   |   | Payments Due by Period |        |
|------------------|--------|------------------------|-------------|
|             |   |                   |  Total |   |   |  Less Than One Year |   |   |  One to Three Years |   |   |  Three to Five Years |   |   |  More than Five Years |   |
|             |   |                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating leases |   | $                      | 2           |   | $ | 2 |   | $ | - |   | $ | - |   | $ | - |   |
| Total            |   | $                      | 2           |   | $ | 2 |   | $ | - |   | $ | - |   | $ | - |   |

| ($ in thousands)               |   | September 30, 2010 |   | December 31, 2009 |   |
|--------------------------------|--------|-------------------------|--------|-------------------|--------|
|                           |   | Carrying Value          |   | Fair Value        |   | Carrying Value |   | Fair Value |   |
|                           |   |                    |   |              |   |   |   |   |   |   |   |   |   |
| U.S. Treasury Bills            |   | $                       | 8,598  |              | $      | 8,598 |   | $ | 9,996 |   | $ | 10,000 |   |
| Weighted average interest rate |   |                    | 0.16   | %                 |   |   |   |   | - |   |   |   |   |

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| 4. | Amendment to Shareholder Rights Plan between the Company and American Stock Transfer and Trust Company dated November 9, 2010. |
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