----

----

| x | QUARTERLY 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 |
|--------|------------------------------------------------------------------------------------------|

| NEFFS BANCORP, INC.                                          |
|--------------------------------------------------------------|
|  (Exact name of registrant as specified in its charter) |

| Pennsylvania                                                         |   | 23-2400383                        |
|----------------------------------------------------------------------|--------|-----------------------------------|
|  (State or other jurisdiction of incorporation or organization) |   | (IRS Employer Identification No.) |

| 5629 PA Route 873, P.O. Box 10, Neffs, PA l8065-0010 |
|------------------------------------------------------|
| (Address of principal executive offices)             |

| (610) 767-3875                    |
|-----------------------------------|
|  (Issuer's telephone number) |

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

----

| PART 1.    | FINANCIAL INFORMATION                                                                                                                     |     |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------|----------|
|       |                                                                                                                                      |     |
| Item 1.    | Consolidated Financial Statements                                                                                                         |   3 |
|       |                                                                                                                                      |     |
|       | Consolidated Statements of Financial Condition (Unaudited)March 31, 2011 and December 31, 2010                                            | 3        |
|       |                                                                                                                                      |     |
|       | Consolidated Statements of Income (Unaudited)Three months ended March 31, 2011 and March 31, 2010                               | 4        |
|       |                                                                                                                                      |     |
|       | Consolidated Statements of Stockholders’ Equity (Unaudited)Three months ended March 31, 2011 and March 31, 2010 | 5        |
|       |                                                                                                                                      |     |
|       | Consolidated Statements of Cash Flows (Unaudited)Three months ended March 31, 2011 and March 31, 2010                      | 6        |
|       |                                                                                                                                      |     |
|       | Notes to the Interim Consolidated Financial Statements                                                                                    | 7        |
|       |                                                                                                                                      |     |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                               | 20       |
|       |                                                                                                                                      |     |
| Item 3.    | Quantitative and Qualitative Disclosures about Market Risk                                                                                | 28       |
|       |                                                                                                                                      |     |
| Item 4.    | Controls and Procedures                                                                                                                   | 28       |
|       |                                                                                                                                      |     |
| PART II.   | OTHER INFORMATION                                                                                                                         |     |
|       |                                                                                                                                      |     |
| Item 1.    | Legal Proceedings                                                                                                                         | 28       |
|       |                                                                                                                                      |     |
| Item 1A.   | Risk Factors                                                                                                                              | 28       |
|       |                                                                                                                                      |     |
| Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                                                                               | 29       |
|       |                                                                                                                                      |     |
| Item 3.    | Defaults Upon Senior Securities                                                                                                           | 29       |
|       |                                                                                                                                      |     |
| Item 4.    | [Removed and Reserved]                                                                                                                    | 29       |
|       |                                                                                                                                      |     |
| Item 5.    | Other Information                                                                                                                         | 29       |
|       |                                                                                                                                      |     |
| Item 6.    | Exhibits                                                                                                                                  | 29       |
|       |                                                                                                                                      |     |
| SIGNATURES |                                                                                                                                      | 30       |

----

Index

| PART 1. | FINANCIAL INFORMATION |
|---------|-----------------------|

| Item 1. | Consolidated Financial Statements |
|---------|-----------------------------------|

   

| NEFFS BANCORP, INC AND SUBSIDIARY              |
|------------------------------------------------|
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION |
| (Unaudited)                                    |

| Dollars in thousands, except share data                                        |   | March 31, |    |   | December 31, |   |
|--------------------------------------------------------------------------------|--------|-----------|---------|--------|--------------|--------|
|                                                                           |   | 2011      |    |   | 2010         |   |
| ASSETS                                                                         |   |      |    |   |         |   |
|                                                                           |   |      |    |   |         |   |
| Cash and due from banks                                                        |   | $         | 6,960   |   |         | $      | 7,448 |   |
| Interest bearing deposits with banks                                           |   |      | 180     |   |         |   | 141 |   |
| Securities available for sale                                                  |   |      | 41,639  |   |         |   | 41,828 |   |
| Securities held to maturity, fair value $100,850 in 2011;$98,617 in 2010       |   |      | 103,433 |   |         |   | 101,932 |   |
|                                                                           |   |      |    |   |         |   |   |   |
| Loans                                                                          |   |      | 122,882 |   |         |   | 121,886 |   |
| Less allowance for loan losses                                                 |   |      | (1,202  | )      |         |   | (1,114 | ) |
| Net loans                                                                      |   |      | 121,680 |   |         |   | 120,772 |   |
|                                                                           |   |      |    |   |         |   |   |   |
| Premises and equipment, net                                                    |   |      | 2,311   |   |         |   | 2,341 |   |
| Restricted investments in bank stock                                           |   |      | 770     |   |         |   | 809 |   |
| Other assets                                                                   |   |      | 3,189   |   |         |   | 3,192 |   |
| Total assets                                                                   |   | $         | 280,162 |   |         | $      | 278,463 |   |
|                                                                           |   |      |    |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                           |   |      |    |   |         |   |   |   |
|                                                                           |   |      |    |   |         |   |   |   |
| Liabilities:                                                                   |   |      |    |   |         |   |   |   |
| Deposits                                                                       |   |      |    |   |         |   |   |   |
| Non-interest bearing                                                           |   | $         | 18,992  |   |         | $      | 18,480 |   |
| Interest bearing                                                               |   |      | 212,990 |   |         |   | 212,207 |   |
| Total deposits                                                                 |   |      | 231,982 |   |         |   | 230,687 |   |
| Other liabilities                                                              |   |      | 1,332   |   |         |   | 1,079 |   |
| Total liabilities                                                              |   |      | 233,314 |   |         |   | 231,766 |   |
|                                                                           |   |      |    |   |         |   |   |   |
| Stockholders' Equity:                                                          |   |      |    |   |         |   |   |   |
|                                                                           |   |      |    |   |         |   |   |   |
| Common stock, $1 par value, authorized 2,500,000 shares;issued 200,000 shares; |   |      | 200     |   |         |   | 200 |   |
| Paid-in capital                                                                |   |      | 753     |   |         |   | 753 |   |
| Retained earnings                                                              |   |      | 51,285  |   |         |   | 50,818 |   |
| Accumulated other comprehensive income                                         |   |      | 83      |   |         |   | 138 |   |
| Treasury stock, at cost 2011 21,570 shares; 2010 20,540 shares                 |   |      | (5,473  | )      |         |   | (5,212 | ) |
| Total stockholders' equity                                                     |   |      | 46,848  |   |         |   | 46,697 |   |
|                                                                           |   |      |    |   |         |   |   |   |
| Total liabilities and stockholders' equity                                     |   | $         | 280,162 |   |         | $      | 278,463 |   |
|                                                                           |   |      |    |   |         |   |   |   |
| See Notes to Consolidated Financial Statements.                                |   |      |    |   |         |   |   |   |

----

Index

   

| NEFFS BANCORP, INC AND SUBSIDIARY |
|-----------------------------------|
| CONSOLIDATED STATEMENTS OF INCOME |
| (Unaudited)                       |

| Dollars in thousands, except per share data                                      |   | Three Months Ended |    |
|----------------------------------------------------------------------------------|--------|--------------------|---------|
|                                                                             |   | March 31,          |    |
|                                                                             |   | 2011               |    |   | 2010 |   |
| Interest income:                                                                 |   |               |    |   |   |   |
| Interest and fees on loans                                                       |   | $                  | 1,774   |   |   | $ | 1,682 |   |
| Interest and dividends on investments:                                           |   |               |    |   |   |   |   |   |
| Taxable                                                                          |   |               | 1,037   |   |   |   | 1,233 |   |
| Exempt from federal income taxes                                                 |   |               | 436     |   |   |   | 348 |   |
| Interest on federal funds sold and other                                         |   |               | 2       |   |   |   | - |   |
| Total interest income                                                            |   |               | 3,249   |   |   |   | 3,263 |   |
| Interest Expense                                                                 |   |               |    |   |   |   |   |   |
|  Deposits                                                                   |   |               | 1,125   |   |   |   | 1,244 |   |
| Total interest expense                                                           |   |               | 1,125   |   |   |   | 1,244 |   |
| Net interest income                                                              |   |               | 2,124   |   |   |   | 2,019 |   |
| Provision for loan losses                                                        |   |               | 87      |   |   |   | 30 |   |
| Net interest income after provision for loan losses                              |   |               | 2,037   |   |   |   | 1,989 |   |
| Other income:                                                                    |   |               |    |   |   |   |   |   |
| Impairment loss on securities                                                    |   |               | (38     | ) |   |   | (633 | ) |
| Portion of impairment loss recognized in other comprehensive income (before tax) |   |               | 7       |   |   |   | 519 |   |
| Net impairment loss                                                              |   |               | (31     | ) |   |   | (114 | ) |
| Service charges on deposit accounts                                              |   |               | 24      |   |   |   | 26 |   |
| Other service charges and fees                                                   |   |               | 25      |   |   |   | 25 |   |
| Gain on called securities                                                        |   |               | 3       |   |   |   | - |   |
| Other income                                                                     |   |               | 6       |   |   |   | 11 |   |
| Total other income (expense)                                                     |   |               | 27      |   |   |   | (52 | ) |
| Other expenses:                                                                  |   |               |    |   |   |   |   |   |
| Salaries and employee benefits                                                   |   |               | 420     |   |   |   | 400 |   |
| Occupancy                                                                        |   |               | 57      |   |   |   | 48 |   |
| Furniture and equipment                                                          |   |               | 69      |   |   |   | 66 |   |
| Pennsylvania shares tax                                                          |   |               | 124     |   |   |   | 118 |   |
| FDIC expense                                                                     |   |               | 75      |   |   |   | 49 |   |
| Other expenses                                                                   |   |               | 187     |   |   |   | 180 |   |
| Total other expenses                                                             |   |               | 932     |   |   |   | 861 |   |
| Income before income taxes                                                       |   |               | 1,132   |   |   |   | 1,076 |   |
| Income tax expense                                                               |   |               | 246     |   |   |   | 253 |   |
| Net income                                                                       |   | $                  | 886     |   |   | $ | 823 |   |
|                                                                             |   |               |    |   |   |   |   |   |
| Per share data:                                                                  |   |               |    |   |   |   |   |   |
| Earnings per share, basic                                                        |   | $                  | 4.96    |   |   | $ | 4.49 |   |
| Weighted average common shares outstanding                                       |   |               | 178,745 |   |   |   | 183,116 |   |
| Cash dividends declared per share                                                |   | $                  | 2.35    |   |   | $ | 2.00 |   |
|                                                                             |   |               |    |   |   |   |   |   |
| See Notes to Consolidated Financial Statements.                                  |   |               |    |   |   |   |   |   |

----

Index

   

| NEFFS BANCORP, INC AND SUBSIDIARY                         |
|-----------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY           |
| Three Months Ended March 31, 2011 and 2010 |
| (Unaudited)                                               |

| Dollars in thousands, except per share data                               |   | Common Stock |   |   | Paid-In Capital |   |   | Retained Earnings |   |   | Accumulated Other Comprehensive Income |   |   | Treasury Stock |   |   | Total Stockholders' Equity |   |
|---------------------------------------------------------------------------|--------|--------------|--------|--------|-----------------|--------|--------|-------------------|--------|--------|----------------------------------------|--------|--------|----------------|--------|--------|----------------------------|--------|
| Balance, December 31, 2009                                                |   | $            | 200    |   |            | $      | 753    |              |   | $      | 48,255                                 |   |   | $              | 556    |   |                       | $      | (4,136 | ) |   | $ | 45,628 |   |
| Comprehensive Income:                                                     |   |         |   |   |            |   |   |              |   |   |                                   |   |   |           |   |   |                       |   |   |   |   |   |   |   |
| Net income                                                                |   |         | -      |   |            |   | -      |              |   |   | 823                                    |   |   |           | -      |   |                       |   | - |   |   |   | 823 |   |
| Change in unrealized net gain on securities available for sale,net of tax |   |         | -      |   |            |   | -      |              |   |   | -                                      |   |   |           | 148    |   |                       |   | - |   |   |   | 148 |   |
| Unrealized losses on OTTI of securities held to maturity, net of tax      |   |         | -      |   |            |   | -      |              |   |   | -                                      |   |   |           | (342   | )      |                       |   | - |   |   |   | (342 | ) |
| Total comprehensive income                                                |   |         |   |   |            |   |   |              |   |   |                                   |   |   |           |   |   |                       |   |   |   |   |   | 629 |   |
|                                                                      |   |         |   |   |            |   |   |              |   |   |                                   |   |   |           |   |   |                       |   |   |   |   |   |   |   |
| Cash dividends declared on common stock, $2.00  per share       |   |         | -      |   |            |   | -      |              |   |   | (366                                   | )      |   |           | -      |   |                       |   | - |   |   |   | (366 | ) |
| Purchase of treasury stock  (617 shares)                        |   |         | -      |   |            |   | -      |              |   |   | -                                      |   |   |           | -      |   |                       |   | (158 | ) |   |   | (158 | ) |
|                                                                      |   |         |   |   |            |   |   |              |   |   |                                   |   |   |           |   |   |                       |   |   |   |   |   |   |   |
| Balance, March 31, 2010                                                   |   | $            | 200    |   |            | $      | 753    |              |   | $      | 48,712                                 |   |   | $              | 362    |   |                       | $      | (4,294 | ) |   | $ | 45,733 |   |

| Dollars in thousands, except per share data                                |   | Common Stock |   |   | Paid-In Capital |   |   | Retained Earnings |   |   | Accumulated Other Comprehensive Income |   |   | Treasury Stock |   |   | Total Stockholders' Equity |   |
|----------------------------------------------------------------------------|--------|--------------|--------|--------|-----------------|--------|--------|-------------------|--------|--------|----------------------------------------|--------|--------|----------------|--------|--------|----------------------------|--------|
| Balance, December 31, 2010                                                 |   | $            | 200    |   |            | $      | 753    |              |   | $      | 50,818                                 |   |   | $              | 138    |   |                       | $      | (5,212 | ) |   | $ | 46,697 |   |
| Comprehensive Income:                                                      |   |         |   |   |            |   |   |              |   |   |                                   |   |   |           |   |   |                       |   |   |   |   |   |   |   |
| Net income                                                                 |   |         | -      |   |            |   | -      |              |   |   | 886                                    |   |   |           | -      |   |                       |   | - |   |   |   | 886 |   |
| Change in unrealized net gain on securities available for sale, net of tax |   |         | -      |   |            |   | -      |              |   |   | -                                      |   |   |           | (51    | )      |                       |   | - |   |   |   | (51 | ) |
| Unrealized losses on OTTI of securities held to maturity, net of tax       |   |         | -      |   |            |   | -      |              |   |   | -                                      |   |   |           | (4     | )      |                       |   | - |   |   |   | (4 | ) |
| Total comprehensive income                                                 |   |         |   |   |            |   |   |              |   |   |                                   |   |   |           |   |   |                       |   |   |   |   |   | 831 |   |
|                                                                       |   |         |   |   |            |   |   |              |   |   |                                   |   |   |           |   |   |                       |   |   |   |   |   |   |   |
| Cash dividends declared on common stock, $2.35  per share        |   |         | -      |   |            |   | -      |              |   |   | (419                                   | )      |   |           | -      |   |                       |   | - |   |   |   | (419 | ) |
| Purchase of treasury stock  (1,030 shares)                       |   |         | -      |   |            |   | -      |              |   |   | -                                      |   |   |           | -      |   |                       |   | (261 | ) |   |   | (261 | ) |
|                                                                       |   |         |   |   |            |   |   |              |   |   |                                   |   |   |           |   |   |                       |   |   |   |   |   |   |   |
| Balance, March 31, 2011                                                    |   | $            | 200    |   |            | $      | 753    |              |   | $      | 51,285                                 |   |   | $              | 83     |   |                       | $      | (5,473 | ) |   | $ | 46,848 |   |

----

Index

   

| NEFFS BANCORP, INC AND SUBSIDIARY     |
|---------------------------------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Unaudited)                           |

| Dollars in thousands                                                              |   | Three Months Ended March 31, |    |
|-----------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                              |   | 2011                         |    |   | 2010 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                              |   |                         |    |   |   |   |
| Net income                                                                        |   | $                            | 886     |   |   | $ | 823 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                         |    |   |   |   |   |   |
| Provision for loan losses                                                         |   |                         | 87      |   |   |   | 30 |   |
| Depreciation                                                                      |   |                         | 61      |   |   |   | 55 |   |
| Net amortization (accretion) of securities premiums/discounts                     |   |                         | 176     |   |   |   | (35 | ) |
| Impairment loss on securities                                                     |   |                         | 31      |   |   |   | 114 |   |
| Gain on called securities                                                         |   |                         | (3      | ) |   |   | - |   |
| Change in assets and liabilities:                                                 |   |                         |    |   |   |   |   |   |
| (Increase) decrease  in:                                                |   |                         |    |   |   |   |   |   |
| Accrued interest receivable                                                       |   |                         | 87      |   |   |   | (183 | ) |
| PA shares tax                                                                     |   |                         | (372    | ) |   |   | (353 | ) |
| Other assets                                                                      |   |                         | 316     |   |   |   | 111 |   |
| Increase (decrease) in:                                                           |   |                         |    |   |   |   |   |   |
| Accrued interest payable                                                          |   |                         | (70     | ) |   |   | (72 | ) |
| Other liabilities                                                                 |   |                         | (96     | ) |   |   | 125 |   |
| Net cash provided by operating activities                                         |   |                         | 1,103   |   |   |   | 615 |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                              |   |                         |    |   |   |   |   |   |
| Net increase in interest bearing deposits with banks                              |   |                         | (39     | ) |   |   | - |   |
| Net decrease in federal funds sold                                                |   |                         | -       |   |   |   | 2,933 |   |
| Purchase of securities available for sale                                         |   |                         | (3,051  | ) |   |   | (488 | ) |
| Proceeds from maturities/calls of securities available  for sale        |   |                         | 3,101   |   |   |   | 2,926 |   |
| Purchase of securities held to maturity                                           |   |                         | (10,220 | ) |   |   | (14,832 | ) |
| Proceeds from maturities/calls of securities held to maturity                     |   |                         | 8,571   |   |   |   | 10,824 |   |
| Net decrease in restricted investments in bank stock                              |   |                         | 39      |   |   |   | - |   |
| Net increase in loans                                                             |   |                         | (995    | ) |   |   | (1,239 | ) |
| Purchases of premises and equipment                                               |   |                         | (31     | ) |   |   | (9 | ) |
| Net cash provided (used) by investing activities                                  |   |                         | (2,625  | ) |   |   | 115 |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                              |   |                         |    |   |   |   |   |   |
| Net increase in deposits                                                          |   |                         | 1,295   |   |   |   | 4,909 |   |
| Purchase of treasury stock                                                        |   |                         | (261    | ) |   |   | (158 | ) |
| Net cash provided by financing activities                                         |   |                         | 1,034   |   |   |   | 4,751 |   |
| Increase (decrease) in cash and cash equivalents                                  |   |                         | (488    | ) |   |   | 5,481 |   |
| Cash and cash equivalents:                                                        |   |                         |    |   |   |   |   |   |
| Beginning                                                                         |   |                         | 7,448   |   |   |   | 2,187 |   |
| Ending                                                                            |   | $                            | 6,960   |   |   | $ | 7,668 |   |
|                                                                              |   |                         |    |   |   |   |   |   |
| Supplementary Cash Flows Information                                              |   |                         |    |   |   |   |   |   |
| Interest Paid                                                                     |   | $                            | 1,195   |   |   | $ | 1,316 |   |
| Income Taxes Paid                                                                 |   | $                            | -       |   |   | $ | - |   |
|                                                                              |   |                         |    |   |   |   |   |   |
| See Notes to Consolidated Financial Statements.                                   |   |                         |    |   |   |   |   |   |

----

Index

NEFFS

|                                                            |   |  Three Months EndedMarch 31, |   |
|-----------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                            |   |  2011                        |   |   |  2010 |   |
|                                                            |   | (In Thousands)                    |   |
|                                                            |   |                              |   |   |   |   |
| Change in unrealized net gains on securities available for sale |   | $                                 | (77    | ) |   | $ | 224 |   |
| Change in unrealized losses on OTTI securities held to maturity |   |                              | (7     | ) |   |   | (519 | ) |
| Tax effect                                                      |   |                              | 29     |   |   |   | 101 |   |
| Other comprehensive income, net of tax                          |   | $                                 | (55    | ) |   | $ | (194 | ) |

----

Index

|                                                         |   | March 31, 2011 |    |
|--------------------------------------------------------------|--------|----------------|---------|
|                                                         |   | AmortizedCost  |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
| Securities Available for Sale:                               |   | (In Thousands) |    |
| U.S. Treasury note                                           |   | $              | 100     |   |   | $ | 5 |   |   | $ | - |   |   | $ | 105 |   |
| Mortgage-backed securities (Government agencies-residential) |   |           | 40,767  |   |   |   | 1,165 |   |   |   | (398 | ) |   |   | 41,534 |   |
|                                                         |   | $              | 40,867  |   |   | $ | 1,170 |   |   | $ | (398 | ) |   | $ | 41,639 |   |
| Securities Held to Maturity:                                 |   |           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government agencies                      |   | $              | 38,762  |   |   | $ | 253 |   |   | $ | (580 | ) |   | $ | 38,435 |   |
| Obligations of states and political subdivisions             |   |           | 59,675  |   |   |   | 734 |   |   |   | (1,199 | ) |   |   | 59,210 |   |
| Corporate securities                                         |   |           | 1,200   |   |   |   | 58 |   |   |   | - |   |   |   | 1,258 |   |
| Collateralized debt obligations                              |   |           | 2,120   |   |   |   | - |   |   |   | (1,916 | ) |   |   | 204 |   |
| Mortgage-backed securities (Government agencies-residential) |   |           | 1,676   |   |   |   | 71 |   |   |   | (4 | ) |   |   | 1,743 |   |
|                                                         |   | $              | 103,433 |   |   | $ | 1,116 |   |   | $ | (3,699 | ) |   | $ | 100,850 |   |

----

Index

|                                                         |   | December 31, 2010 |    |
|--------------------------------------------------------------|--------|-------------------|---------|
|                                                         |   | AmortizedCost     |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
| Securities Available for Sale:                               |   | (In Thousands)    |    |
| U.S. Treasury note                                           |   | $                 | 100     |   |   | $ | 6 |   |   | $ | - |   |   | $ | 106 |   |
| Mortgage-backed securities (Government agencies-residential) |   |              | 40,879  |   |   |   | 1,229 |   |   |   | (386 | ) |   |   | 41,722 |   |
|                                                         |   | $                 | 40,979  |   |   | $ | 1,235 |   |   | $ | (386 | ) |   | $ | 41,828 |   |
| Securities Held to Maturity:                                 |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government agencies                      |   | $                 | 36,738  |   |   | $ | 189 |   |   | $ | (590 | ) |   | $ | 36,337 |   |
| Obligations of states and political subdivisions             |   |              | 61,040  |   |   |   | 672 |   |   |   | (1,803 | ) |   |   | 59,909 |   |
| Corporate securities                                         |   |              | 1,350   |   |   |   | 41 |   |   |   | - |   |   |   | 1,391 |   |
| Collateralized debt obligations                              |   |              | 2,138   |   |   |   | - |   |   |   | (1,896 | ) |   |   | 242 |   |
| Mortgage-backed securities (Government agencies-residential) |   |              | 666     |   |   |   | 72 |   |   |   | - |   |   |   | 738 |   |
|                                                         |   | $                 | 101,932 |   |   | $ | 974 |   |   | $ | (4,289 | ) |   | $ | 98,617 |   |

|                                   |   | Available for Sale |   |   | Held to Maturity |   |
|----------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                   |   | AmortizedCost      |   |   | FairValue        |   |   | AmortizedCost |   |   | FairValue |   |
|                                   |   | (In Thousands)     |   |
| Due in one year or less                |   | $                  | -      |   |             | $      | - |   |   | $ | 1,255 |   |   | $ | 1,273 |   |
| Due after one year through five years  |   |               | 100    |   |             |   | 105 |   |   |   | 6,420 |   |   |   | 6,663 |   |
| Due after five years through ten years |   |               | -      |   |             |   | - |   |   |   | 12,130 |   |   |   | 12,409 |   |
| Due after ten years                    |   |               | -      |   |             |   | - |   |   |   | 81,952 |   |   |   | 78,763 |   |
|                                   |   |               | 100    |   |             |   | 105 |   |   |   | 101,757 |   |   |   | 99,108 |   |
| Mortgage-backed securities             |   |               | 40,767 |   |             |   | 41,534 |   |   |   | 1,676 |   |   |   | 1,742 |   |
|                                   |   | $                  | 40,867 |   |             | $      | 41,639 |   |   | $ | 103,433 |   |   | $ | 100,850 |   |

----

Index

|                                             |   | Less than 12 Months |   |   | 12 Months or More |   |   | Total     |   |
|--------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|-----------|--------|
|                                             |   | FairValue           |   |   | UnrealizedLosses  |   |   | FairValue |   |   | UnrealizedLosses |   |   | FairValue |   |   | UnrealizedLosses |   |
| March 31, 2011:                                  |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Available for Sale:                   |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                       |   | $                   | 18,411 |   |              | $      | 398    |      |   | $ | - |   |   | $ | - |   |   | $ | 18,411 |   |   | $ | 398 |   |
| Securities Held to Maturity:                     |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government agencies          |   |                | 18,474 |   |              |   | 567    |      |   |   | 2,541 |   |   |   | 13 |   |   |   | 21,015 |   |   |   | 580 |   |
| Obligations of states and political subdivisions |   |                | 20,658 |   |              |   | 931    |      |   |   | 5,524 |   |   |   | 268 |   |   |   | 26,182 |   |   |   | 1,199 |   |
| Mortgage-backed securities                       |   |                | 1,030  |   |              |   | 4      |      |   |   | - |   |   |   | - |   |   |   | 1,030 |   |   |   | 4 |   |
| Collateralized debt obligations                  |   |                | -      |   |              |   | -      |      |   |   | 204 |   |   |   | 1,916 |   |   |   | 204 |   |   |   | 1,916 |   |
| Total Temporarily Impaired Securities            |   | $                   | 58,573 |   |              | $      | 1,900  |      |   | $ | 8,269 |   |   | $ | 2,197 |   |   | $ | 66,842 |   |   | $ | 4,097 |   |

|                                             |   |  Less than 12 Months |   |   | 12 Months or More      |   |   | Total           |   |
|--------------------------------------------------|--------|---------------------------|--------|--------|------------------------|--------|--------|-----------------|--------|
|                                             |   |  FairValue           |   |   |  UnrealizedLosses |   |   |  FairValue |   |   | UnrealizedLosses |   |   |  FairValue |   |   | UnrealizedLosses |   |
| December 31, 2010:                               |   |                      |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Available for Sale:                   |   |                      |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                       |   | $                         | 16,990 |   |                   | $      | 386    |            |   | $ | - |   |   | $ | - |   |   | $ | 16,990 |   |   | $ | 386 |   |
| Securities Held to Maturity:                     |   |                      |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government agencies          |   |                      | 17,864 |   |                   |   | 482    |            |   |   | 7,668 |   |   |   | 108 |   |   |   | 25,532 |   |   |   | 590 |   |
| Obligations of states and political subdivisions |   |                      | 28,900 |   |                   |   | 1,665  |            |   |   | 3,857 |   |   |   | 138 |   |   |   | 32,757 |   |   |   | 1,803 |   |
| Collateralized debt obligations                  |   |                      | -      |   |                   |   | -      |            |   |   | 242 |   |   |   | 1,896 |   |   |   | 242 |   |   |   | 1,896 |   |
| Total Temporarily Impaired Securities            |   | $                         | 63,754 |   |                   | $      | 2,533  |            |   | $ | 11,767 |   |   | $ | 2,142 |   |   | $ | 75,521 |   |   | $ | 4,675 |   |

----

Index

|                       |   | March 31, 2011 |    |   | December 31, 2010 |   |
|----------------------------|--------|----------------|---------|--------|-------------------|--------|
|                       |   | (In Thousands) |    |
|                       |   |           |    |   |              |   |
| Commercial real estate     |   | $              | 39,284  |   |              | $      | 39,311 |   |
| Commercial non-real estate |   |           | 5,338   |   |              |   | 5,192 |   |
| Residential real estate    |   |           | 56,025  |   |              |   | 54,869 |   |
| Real estate construction   |   |           | 341     |   |              |   | 401 |   |
| Home equity                |   |           | 14,981  |   |              |   | 14,982 |   |
| Other consumer             |   |           | 6,913   |   |              |   | 7,131 |   |
|                       |   |           |    |   |              |   |   |   |
|                       |   |           | 122,882 |   |              |   | 121,886 |   |
| Allowance for loan losses  |   |           | (1,202  | )      |              |   | (1,114 | ) |
|                       |   |           |    |   |              |   |   |   |
|                       |   | $              | 121,680 |   |              | $      | 120,772 |   |

|                                                  |   | CommercialReal Estate |   |   | CommercialNon-Real Estate |   |   | ResidentialReal Estate |   |   | Real Estate Construction |   |   | Home Equity |   |   | OtherConsumer |   |   | Total  |   |
|-------------------------------------------------------|--------|-----------------------|--------|--------|---------------------------|--------|--------|------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|---------------|--------|--------|--------|--------|
|                                                  |   | (In Thousands)        |   |
| Allowance for loan loss at December 31, 2010          |   | $                     | 381    |   |                      | $      | 46     |                   |   | $      | 507                      |   |   | $           | 4      |   |          | $      | 122    |   |   | $ | 54 |   |   | $ | 1,114 |   |
| Losses charged to allowance                           |   |                  | -      |   |                      |   | -      |                   |   |   | -                        |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   |   | - |   |
| Recoveries credited to allowance                      |   |                  | -      |   |                      |   | -      |                   |   |   | -                        |   |   |        | -      |   |          |   | 1      |   |   |   | - |   |   |   | 1 |   |
| Provision                                             |   |                  | 43     |   |                      |   | 2      |                   |   |   | 39                       |   |   |        | (1     | )      |          |   | (1     | )      |   |   | 5 |   |   |   | 87 |   |
| Allowance ending balance                              |   | $                     | 424    |   |                      | $      | 48     |                   |   | $      | 546                      |   |   | $           | 3      |   |          | $      | 122    |   |   | $ | 59 |   |   | $ | 1,202 |   |
| Ending balance: individually evaluated for impairment |   | $                     | 68     |   |                      |   | -      |                   |   |   | -                        |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   | $ | 68 |   |
| Ending balance: collectively evaluated for impairment |   | $                     | 356    |   |                      | $      | 48     |                   |   | $      | 546                      |   |   | $           | 3      |   |          | $      | 122    |   |   | $ | 59 |   |   | $ | 1,134 |   |
|                                                  |   |                  |   |   |                      |   |   |                   |   |   |                     |   |   |        |   |   |          |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                 |   |                  |   |   |                      |   |   |                   |   |   |                     |   |   |        |   |   |          |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                     | 39,284 |   |                      | $      | 5,338  |                   |   | $      | 56,025                   |   |   | $           | 341    |   |          | $      | 14,981 |   |   | $ | 6,913 |   |   | $ | 122,882 |   |
| Ending balance: individually evaluated for impairment |   | $                     | 7,050  |   |                      | $      | 151    |                   |   |   | -                        |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   | $ | 7,201 |   |
| Ending balance: collectively evaluated for impairment |   | $                     | 32,234 |   |                      | $      | 5,187  |                   |   | $      | 56,025                   |   |   | $           | 341    |   |          | $      | 14,981 |   |   | $ | 6,913 |   |   | $ | 115,681 |   |

----

Index

|                                                  |   | CommercialReal Estate |   |   | CommercialNon-RealEstate |   |   | ResidentialReal Estate |   |   | Real Estate Construction |   |   | Home Equity |   |   | OtherConsumer |   |   | Total  |   |
|-------------------------------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|--------|------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|---------------|--------|--------|--------|--------|
|                                                  |   | (In Thousands)        |   |
|                                                  |   |                  |   |   |                     |   |   |                   |   |   |                     |   |   |        |   |   |          |   |   |   |   |
| Allowance ending balance                              |   | $                     | 381    |   |                     | $      | 46     |                   |   | $      | 507                      |   |   | $           | 4      |   |          | $      | 122    |   |   | $ | 54 |   |   | $ | 1,114 |   |
| Ending balance: individually evaluated for impairment |   | $                     | 24     |   |                     |   | -      |                   |   |   | -                        |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   | $ | 24 |   |
| Ending balance: collectively evaluated for impairment |   | $                     | 357    |   |                     | $      | 46     |                   |   | $      | 507                      |   |   | $           | 4      |   |          | $      | 122    |   |   | $ | 54 |   |   | $ | 1,090 |   |
|                                                  |   |                  |   |   |                     |   |   |                   |   |   |                     |   |   |        |   |   |          |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                 |   |                  |   |   |                     |   |   |                   |   |   |                     |   |   |        |   |   |          |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                     | 39,311 |   |                     | $      | 5,192  |                   |   | $      | 54,869                   |   |   | $           | 401    |   |          | $      | 14,982 |   |   | $ | 7,131 |   |   | $ | 121,886 |   |
| Ending balance: individually evaluated for impairment |   | $                     | 5,556  |   |                     | $      | 163    |                   |   |   | -                        |   |   |        | -      |   |          |   | -      |   |   |   | - |   |   | $ | 5,719 |   |
| Ending balance: collectively evaluated for impairment |   | $                     | 33,755 |   |                     | $      | 5,029  |                   |   | $      | 54,869                   |   |   | $           | 401    |   |          | $      | 14,982 |   |   | $ | 7,131 |   |   | $ | 116,167 |   |

|                 |   | CommercialReal Estate |   |   | CommercialNon-RealEstate |   |
|----------------------|--------|-----------------------|--------|--------|--------------------------|--------|
|                 |   | (In Thousands)        |   |
|                 |   |                  |   |   |                     |   |
| Pass/Unclassified    |   | $                     | 23,279 |   |                     | $      | 4,153 |   |
| Pass/Watch           |   |                  | 5,582  |   |                     |   | 633 |   |
| OAEM/Special Mention |   |                  | 3,232  |   |                     |   | 401 |   |
| Substandard          |   |                  | 4,772  |   |                     |   | 151 |   |
| Non-Accrual          |   |                  | 2,419  |   |                     |   | - |   |
| Total                |   | $                     | 39,284 |   |                     | $      | 5,338 |   |

|                 |   | CommercialReal Estate |   |   | CommercialNon-RealEstate |   |
|----------------------|--------|-----------------------|--------|--------|--------------------------|--------|
|                 |   | (In Thousands)        |   |
|                 |   |                  |   |   |                     |   |
| Pass/Unclassified    |   | $                     | 21,897 |   |                     | $      | 4,358 |   |
| Pass/Watch           |   |                  | 6,650  |   |                     |   | 653 |   |
| OAEM/Special Mention |   |                  | 3,557  |   |                     |   | 18 |   |
| Substandard          |   |                  | 4,779  |   |                     |   | 163 |   |
| Non-Accrual          |   |                  | 2,428  |   |                     |   | - |   |
| Total                |   | $                     | 39,311 |   |                     | $      | 5,192 |   |

----

Index

|           |   | ResidentialReal Estate |   |   | Real Estate Construction |   |   | Home Equity |   |   | OtherConsumer |   |
|----------------|--------|------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|---------------|--------|
|           |   | (In Thousands)         |   |
|           |   |                   |   |   |                     |   |   |        |   |   |          |   |
| Performing     |   | $                      | 56,002 |   |                     | $      | 341    |        |   | $      | 14,981        |   |   | $ | 6,908 |   |
| Nonperforming* |   |                   | 23     |   |                     |   | -      |        |   |   | -             |   |   |   | 5 |   |
| Total          |   | $                      | 56,025 |   |                     | $      | 341    |        |   | $      | 14,981        |   |   | $ | 6,913 |   |
|           |   |                   |   |   |                     |   |   |        |   |   |          |   |   |   |   |   |

|           |   | ResidentialReal Estate |   |   | Real Estate Construction |   |   | Home Equity |   |   | OtherConsumer |   |
|----------------|--------|------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|---------------|--------|
|           |   | (In Thousands)         |   |
|           |   |                   |   |   |                     |   |   |        |   |   |          |   |
| Performing     |   | $                      | 54,846 |   |                     | $      | 401    |        |   | $      | 14,899        |   |   | $ | 7,128 |   |
| Nonperforming* |   |                   | 23     |   |                     |   | -      |        |   |   | 83            |   |   |   | 3 |   |
| Total          |   | $                      | 54,869 |   |                     | $      | 401    |        |   | $      | 14,982        |   |   | $ | 7,131 |   |
|           |   |                   |   |   |                     |   |   |        |   |   |          |   |   |   |   |   |

|                               |   | RecordedInvestment |   |   | Unpaid Principal Balance |   |   | Related Allowance |   |   | Average Recorded Investment |   |   | Interest Income Recognized |   |
|------------------------------------|--------|--------------------|--------|--------|--------------------------|--------|--------|-------------------|--------|--------|-----------------------------|--------|--------|----------------------------|--------|
|                               |   | (In Thousands)     |   |
|                               |   |               |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |
| With no related allowance recorded |   |               |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |
| Commercial real estate             |   | $                  | 1,788  |   |                     | $      | 1,788  |              |   | $      | -                           |   |   | $                          | 1,792  |   |   | $ | 31 |   |
| With related allowance recorded    |   |               |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |
| Commercial real estate             |   |               | 563    |   |                     |   | 631    |              |   |   | 68                          |   |   |                       | 563    |   |   |   | 9 |   |
| Total                              |   |               |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |
| Commercial real estate             |   | $                  | 2,351  |   |                     | $      | 2,419  |              |   | $      | 68                          |   |   | $                          | 2,355  |   |   | $ | 40 |   |
|                               |   |               |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |

|                               |   | RecordedInvestment |   |   | Unpaid Principal Balance |   |   | Related Allowance |   |   | Average Recorded Investment |   |   | Interest Income Recognized |   |
|------------------------------------|--------|--------------------|--------|--------|--------------------------|--------|--------|-------------------|--------|--------|-----------------------------|--------|--------|----------------------------|--------|
|                               |   | (In Thousands)     |   |
|                               |   |               |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |
| With no related allowance recorded |   |               |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |
| Commercial real estate             |   | $                  | 2,186  |   |                     | $      | 2,186  |              |   | $      | -                           |   |   | $                          | 2,194  |   |   | $ | 108 |   |
| With related allowance recorded    |   |               |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |
| Commercial real estate             |   |               | 218    |   |                     |   | 242    |              |   |   | 24                          |   |   |                       | 264    |   |   |   | - |   |
| Total                              |   |               |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |
| Commercial real estate             |   | $                  | 2,404  |   |                     | $      | 2,428  |              |   | $      | 24                          |   |   | $                          | 2,458  |   |   | $ | 108 |   |

----

Index

|                       |   | 30-59 Days Past Due |   |   | 60-89 Days Past Due |   |   | 90 Days or Over Past Due |   |   | Total Past Due |   |   | Current |   |   | Total Loans Receivable |   |    | 90 Days or Over and Accruing |   |   | Non-Accrual |   |
|----------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|--------------------------|--------|--------|----------------|--------|--------|---------|--------|--------|------------------------|--------|---------|------------------------------|--------|--------|-------------|--------|
|                       |   | (In Thousands)      |   |
|                       |   |                |   |   |                |   |   |                     |   |   |           |   |   |    |   |   |                   |   |    |                         |   |   |        |   |
| Commercial real estate     |   | $                   | 1,393  |   |                | $      | 2,054  |                     |   | $      | 375            |   |   | $       | 3,822  |   |                   | $      | 35,462  |                         |   | $      | 39,284      |   |   | $ | - |   |   | $ | 2,419 |   |
| Commercial non-real estate |   |                | 89     |   |                |   | 151    |                     |   |   | -              |   |   |    | 240    |   |                   |   | 5,098   |                         |   |   | 5,338       |   |   |   | - |   |   |   | - |   |
| Residential real estate    |   |                | 1,428  |   |                |   | 107    |                     |   |   | 23             |   |   |    | 1,558  |   |                   |   | 54,467  |                         |   |   | 56,025      |   |   |   | - |   |   |   | 23 |   |
| Real estate construction   |   |                | -      |   |                |   | -      |                     |   |   | -              |   |   |    | -      |   |                   |   | 341     |                         |   |   | 341         |   |   |   | - |   |   |   | - |   |
| Home equity                |   |                | 476    |   |                |   | 67     |                     |   |   | -              |   |   |    | 543    |   |                   |   | 14,438  |                         |   |   | 14,981      |   |   |   | - |   |   |   | - |   |
| Other consumer             |   |                | 271    |   |                |   | 33     |                     |   |   | 5              |   |   |    | 309    |   |                   |   | 6,604   |                         |   |   | 6,913       |   |   |   | 5 |   |   |   | - |   |
| Total                      |   | $                   | 3,657  |   |                | $      | 2,412  |                     |   | $      | 403            |   |   | $       | 6,472  |   |                   | $      | 116,410 |                         |   | $      | 122,882     |   |   | $ | 5 |   |   | $ | 2,442 |   |

|                       |   | 30-59 Days Past Due |   |   | 60-89 Days Past Due |   |   | 90 Days or Over Past Due |   |   | Total Past Due |   |   | Current |   |   | Total Loans Receivable |   |    | 90 Days or Over and Accruing |   |   | Non-Accrual |   |
|----------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|--------------------------|--------|--------|----------------|--------|--------|---------|--------|--------|------------------------|--------|---------|------------------------------|--------|--------|-------------|--------|
|                       |   | (In Thousands)      |   |
|                       |   |                |   |   |                |   |   |                     |   |   |           |   |   |    |   |   |                   |   |    |                         |   |   |        |   |
| Commercial real estate     |   | $                   | 2,158  |   |                | $      | 637    |                     |   | $      | 1,645          |   |   | $       | 4,440  |   |                   | $      | 34,871  |                         |   | $      | 39,311      |   |   | $ | - |   |   | $ | 2,428 |   |
| Commercial non-real estate |   |                | 179    |   |                |   | 43     |                     |   |   | -              |   |   |    | 222    |   |                   |   | 4,970   |                         |   |   | 5,192       |   |   |   | - |   |   |   | - |   |
| Residential real estate    |   |                | 1,295  |   |                |   | 417    |                     |   |   | 23             |   |   |    | 1,735  |   |                   |   | 53,134  |                         |   |   | 54,869      |   |   |   | - |   |   |   | 23 |   |
| Real estate construction   |   |                | -      |   |                |   | -      |                     |   |   | -              |   |   |    | -      |   |                   |   | 401     |                         |   |   | 401         |   |   |   | - |   |   |   | - |   |
| Home equity                |   |                | 186    |   |                |   | 170    |                     |   |   | 83             |   |   |    | 439    |   |                   |   | 14,543  |                         |   |   | 14,982      |   |   |   | 83 |   |   |   | - |   |
| Other consumer             |   |                | 146    |   |                |   | 58     |                     |   |   | 3              |   |   |    | 207    |   |                   |   | 6,924   |                         |   |   | 7,131       |   |   |   | 3 |   |   |   | - |   |
| Total                      |   | $                   | 3,964  |   |                | $      | 1,325  |                     |   | $      | 1,754          |   |   | $       | 7,043  |   |                   | $      | 114,843 |                         |   | $      | 121,886     |   |   | $ | 86 |   |   | $ | 2,451 |   |

----

Index

| Description                                   |   | Total                |   |   | (Level 1)Quoted Prices in Active Markets for Identical Assets |   |   | (Level 2)Significant Other Observable Inputs |   |   | (Level 3)Significant Unobservable Inputs |   |
|-----------------------------------------------|--------|----------------------|--------|--------|---------------------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|------------------------------------------|--------|
|                                          |   |  (In Thousands) |   |
| March 31, 2011                                |   |                 |   |   |                                                          |   |   |                                         |   |   |                                     |   |
| U. S. Treasury note available for sale        |   | $                    | 105    |   |                                                          | $      | 105    |                                         |   |   | -                                        |   |   |   | - |   |
| Mortgage-backed securities available for sale |   | $                    | 41,534 |   |                                                          |   | -      |                                         |   | $      | 41,534                                   |   |   |   | - |   |
| December 31, 2010                             |   |                 |   |   |                                                          |   |   |                                         |   |   |                                     |   |   |   |   |   |
| U. S. Treasury note available for sale        |   | $                    | 106    |   |                                                          | $      | 106    |                                         |   |   | -                                        |   |   |   | - |   |
| Mortgage-backed securities available for sale |   | $                    | 41,722 |   |                                                          |   | -      |                                         |   | $      | 41,722                                   |   |   |   | - |   |

| Description                                        |   | Total                |   |   | (Level 1)Quoted Prices in Active Markets for Identical Assets |   |   | (Level 2)Significant Other Observable Inputs |   |   | (Level 3)Significant Unobservable Inputs |   |
|----------------------------------------------------|--------|----------------------|--------|--------|---------------------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|------------------------------------------|--------|
|                                               |   |  (In Thousands) |   |
| March 31, 2011                                     |   |                 |   |   |                                                          |   |   |                                         |   |   |                                     |   |
| Impaired trust preferred security held to maturity |   | $                    | 124    |   |                                                          |   | -      |                                         |   |   | -                                        |   |   | $ | 124 |   |
| Impaired loans                                     |   | $                    | 563    |   |                                                          |   | -      |                                         |   |   | -                                        |   |   | $ | 563 |   |
| December 31, 2010                                  |   |                 |   |   |                                                          |   |   |                                         |   |   |                                     |   |   |   |   |   |
| Impaired trust preferred security held to maturity |   | $                    | 162    |   |                                                          |   | -      |                                         |   |   | -                                        |   |   | $ | 162 |   |
| Impaired loans                                     |   | $                    | 218    |   |                                                          |   | -      |                                         |   |   | -                                        |   |   | $ | 218 |   |

----

Index

|                                                                       |   | Impaired trust preferred security held to maturity |   |
|----------------------------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                                       |   | (In Thousands)                                     |   |
| Book/fair value of impaired held to maturity security at December 31, 2010 |   | $                                                  | 162    |   |
| Credit related impairment                                                  |   |                                               | (31    | ) |
| Non-credit related impairment                                              |   |                                               | (7     | ) |
| Book/fair value of impaired security at March 31, 2011                     |   | $                                                  | 124    |   |

----

Index

|                                              |   | 2011           |    |   | 2010               |   |
|---------------------------------------------------|--------|----------------|---------|--------|--------------------|--------|
|                                              |   | CarryingAmount |    |   | EstimatedFairValue |   |   | CarryingAmount |   |   | EstimatedFairValue |   |
|                                              |   | (In Thousands) |    |
| Financial assets:                                 |   |           |    |   |               |   |   |   |   |   |   |   |
| Cash and short-term investments                   |   | $              | 7,140   |   |               | $      | 7,140 |   |   | $ | 7,589 |   |   | $ | 7,589 |   |
| Securities available for sale                     |   |           | 41,639  |   |               |   | 41,639 |   |   |   | 41,828 |   |   |   | 41,828 |   |
| Securities held to maturity                       |   |           | 103,433 |   |               |   | 100,850 |   |   |   | 101,932 |   |   |   | 98,617 |   |
| Loans, net                                        |   |           | 121,680 |   |               |   | 126,379 |   |   |   | 120,772 |   |   |   | 125,965 |   |
| Accrued interest receivable                       |   |           | 1,745   |   |               |   | 1,745 |   |   |   | 1,832 |   |   |   | 1,832 |   |
|                                              |   |           |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                            |   |           |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                          |   |           | 231,982 |   |               |   | 236,161 |   |   |   | 230,687 |   |   |   | 235,117 |   |
| Accrued interest payable                          |   |           | 905     |   |               |   | 905 |   |   |   | 975 |   |   |   | 975 |   |
|                                              |   |           |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance sheet financial instruments:          |   |           |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Commitments to extend creditand letters of credit |   |           | -       |   |               |   | - |   |   |   | - |   |   |   | - |   |

----

Index

|                                                                       |   | Other-Than-Temporary Impairment Credit Losses Recorded in Earnings |   |
|----------------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
|                                                                       |   | (In Thousands)                                                     |   |
| Beginning Balance January 1, 2011                                          |   | $                                                                  | 1,191  |   |
| Additions for OTTI not previously recognized                               |   |                                                               | 31     |   |
| Total other-than-temporary losses recognized ending balance March 31, 2011 |   | $                                                                  | 1,222  |   |

|   | § | the few observable transactions and market quotations that are available are not reliable for purposes of determining fair value at March 31, 2011, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | an income valuation approach technique (present value technique) that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs will be equally or more representative of fair value than the market approach valuation technique used at prior measurement dates and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | our TRUP CDOs are classified within Level 3 of the fair value hierarchy because we determined that significant adjustments are required to determine fair value at the measurement date. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

|   | 1. | There were a number of assumptions used and the results of the modeling were highly dependent upon the assumptions. |
|--------|----|---------------------------------------------------------------------------------------------------------------------|

|   | 2. | Credit and prepayment assumptions were used for each quarter. |
|--------|----|---------------------------------------------------------------|

|   | 3. | Forward interest rates were used to project future principal and interest payments.  This allowed the analysts to model the impact of over- or under-collateralization for each transaction.  (Higher interest rates generally increase the credit stress on under-collateralized transactions by reducing excess interest, which is the difference between the interest received from the underlying collateral and the interest paid on the rated bonds.) |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | Original face value, purchased value, current book value (as of March 31, 2011), purchase date, and purchase price were used to produce the calculations. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5. | The basic methodology of ASC 325 was to compare the present value of the cash flows from quarter to quarter.  A decline in the present value versus that for the previous quarter was considered to be an “adverse change.” |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6. | ASC 325 prescribes using a discount rate “equal to the current yield used to accrete the beneficial interest.”  Original discount margin calculated as of the purchase date based on purchase price was used to calculate the discount rate.  The original discount margin is then added to the appropriate forward 3-month LIBOR rate to determine the discount rate.  For fixed/floating securities, the original coupon is used as the discount rate for the remaining fixed-rate portion of the security’s estimated life. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7. | The discount rate was then used to calculate the present value for the current quarter’s projected cash flows. |
|--------|----|----------------------------------------------------------------------------------------------------------------------|

|   | 8. | The result calculated for the current quarter was then compared to the previous quarter’s book value to determine if the change is “adverse.” |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9. | The credit component of any impairment should be the difference between book value and the projected present value for the current quarter. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | A reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | In the reconciliation for fair value measurements using significant unobservable inputs, a reporting entity should present separately information about purchases, sales, issuances, and settlements. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

Item

|   | v | operating, legal and regulatory risks; |
|--------|---|----------------------------------------|

|   | v | economic, political, and competitive forces affecting banking, securities, asset management and credit services businesses; and |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------|

|   | v | the risk that management’s analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

|   | · | a continuing review of delinquent, classified and non-accrual loans, large loans and overall portfolio quality, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

----

Index

|   | · | analytical review of loan charge-off experience, delinquency rates and other relevant historical and peer statistical ratios, |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|

|   | · | management’s judgment with respect to the nature of the portfolio, concentrations of credit and current and projected economic and business conditions and their impact on the existing portfolio, and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | regular examinations and review of the portfolio by regulatory authorities. |
|--------|--------|-----------------------------------------------------------------------------|

----

Index

----

Index

----

Index

|   | · | historical loan loss experience, |
|--------|--------|----------------------------------|

|   | · | recent trends in losses, |
|--------|--------|--------------------------|

|   | · | changes in lending policies and procedures including underwriting standards and collection, charge-off, and recovery practices, |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes in national and local economic and business conditions including condition of various market segments, |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | changes in nature and volume of the portfolio, |
|--------|--------|------------------------------------------------|

|   | · | experience, ability, and depth of lending management and staff, |
|--------|--------|-----------------------------------------------------------------|

|   | · | trends in the volume and severity of past due and classified loans and volume of non-accrual loans, troubled debt restructuring, and other loan modifications, |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes in the quality of the Bank’s loan review system, |
|--------|--------|----------------------------------------------------------------|

|   | · | the existence and effect of any large credits and concentrations of credit and changes in the level of such concentrations, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | the effect of external factors, such as competition and legal and regulatory requirements, on the level of estimated credit losses in the portfolio, and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | trends in values of collateral and lending standards relating to various types of collateral. |
|--------|--------|-----------------------------------------------------------------------------------------------|

|                                      |   | March 31,2011 |   |   | December 31,2010 |   |
|-------------------------------------------|--------|---------------|--------|--------|------------------|--------|
| Non-accruing loans                        |   | $             | 2,442  |   |             | $      | 2,451 |   |
| Accruing loans past 90 days or more       |   |          | 5      |   |             |   | 86 |   |
| Total nonperforming loans                 |   |          | 2,447  |   |             |   | 2,537 |   |
| Foreclosed real estate/repossessed assets |   |          | -      |   |             |   | 7 |   |
| Total nonperforming assets                |   | $             | 2,447  |   |             | $      | 2,544 |   |
|                                      |   |          |   |   |             |   |   |   |
| Nonperforming loans to total loans        |   |          | 1.99   | %      |             |   | 2.08 | % |
| Nonperforming assets to total assets      |   |          | 0.87   | %      |             |   | 0.91 | % |

----

Index

|                                  |   | At March 31,           |    |
|---------------------------------------|--------|------------------------|---------|
|                                  |   | (Dollars in thousands) |    |
|                                  |   | 2011                   |    |   | 2010 |   |
|                                  |   | Balance                |    |   | AverageYield |   |   | Balance |   |   | AverageYield |   |
| Demand deposits:                      |   |                   |    |   |   |   |   |   |   |   |   |   |
|    Noninterest-bearing |   | $                      | 18,992  |   |   |   |   |   | $ | 16,034 |   |   |   |   |
|    Interest-bearing    |   |                   | 6,498   |   |   |   | 0.19 | % |   |   | 8,005 |   |   |   | 0.38 | % |
| Savings                               |   |                   | 69,191  |   |   |   | 0.76 | % |   |   | 64,196 |   |   |   | 1.18 | % |
| Time deposits:                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    <$100,000        |   |                   | 86,704  |   |   |   | 2.60 | % |   |   | 81,341 |   |   |   | 3.14 | % |
|    >$100,000        |   |                   | 50,597  |   |   |   | 3.41 | % |   |   | 46,724 |   |   |   | 3.64 | % |
| Total deposits                        |   | $                      | 231,982 |   |   |   |   |   |   | $ | 216,300 |   |   |   |   |   |
|                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Index

|                       |   | March 31,2011 |   |   | December 31,2010 |   |   | For CapitalAdequacyPurposes |   |   | To be WellCapitalizedUnder PromptCorrective ActionProvision |   |
|----------------------------|--------|---------------|--------|--------|------------------|--------|--------|-----------------------------|--------|--------|-------------------------------------------------------------|--------|
| Risk-based capital ratios: |   |          |   |   |             |   |   |                        |   |   |                                                        |   |
| Tier 1 Capital             |   |          | 31.0   | %      |             |   | 30.8   | %                           |   |   | 4.0                                                         | %      |   |   | 6.0 | % |
| Total Capital              |   |          | 31.8   | %      |             |   | 31.6   | %                           |   |   | 8.0                                                         | %      |   |   | 10.0 | % |
| Leveraged Capital          |   |          | 16.7   | %      |             |   | 16.6   | %                           |   |   | 4.0                                                         | %      |   |   | 5.0 | % |

----

Index

Item

Item

Part

Item

Item

----

Index

|                                 |   | Total Number ofShares Purchased |   |   | Average PricePaid per Share |   |  Total Numberof Shares Purchased asPart of PubliclyAnnounced Plansor Programs |   |  Maximum Numberof  Shares that mayyet be PurchasedUnder thePlans or Programs |   |
|--------------------------------------|--------|---------------------------------|--------|--------|-----------------------------|--------|------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|
| January 1 through January 31, 2011   |   |                            | 955    |   |                        | $      | 253                                                                                |   |                                                                                        | NA     |   |   | NA |   |
| February 1 through February 28, 2011 |   |                            | 75     |   |                        |   | 260                                                                                |   |                                                                                        | NA     |   |   | NA |   |
| March 1 through March 31, 2011       |   |                            | -      |   |                        |   | -                                                                                  |   |                                                                                        | NA     |   |   | NA |   |
| Total                                |   |                            | 1,030  |   |                        | $      | 254                                                                                |   |                                                                                        | NA     |   |   | NA |   |

   

| Item 3. | Defaults Upon Senior Securities |
|---------|---------------------------------|

   

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

   

| Item 5. | Other Information |
|---------|-------------------|

   

| Item 6. | Exhibits |
|---------|----------|

|   | 3(i)   | Amended and Restated Articles of Incorporation for Neffs Bancorp, Inc. (Incorporated by reference to Exhibit 3(i) to the Form 10 filed with the Commission on April 27, 2001, as amended on June 29, 2001 and July 20, 2001.) |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                               |
|   | 3(ii)  | Amendment to By-Laws of Neffs Bancorp, Inc. (Incorporated by Reference to Exhibit 3 to the Form 8-K Filed with the Commission on March 17, 2011).                                                                                  |
|   |   |                                                                                                                                                                                                                               |
|   | 3(iii) | Amendment to By-laws of Neffs Bancorp, Inc. (Incorporated by Reference to Exhibit 99.1 to the Form 8K filed with the Commission on February 27, 2002.)                                                                        |
|   |   |                                                                                                                                                                                                                               |
|   | 31.1   | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                |
|   |   |                                                                                                                                                                                                                               |
|   | 31.2   | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                            |
|   |   |                                                                                                                                                                                                                               |
|   | 32.1   | Certification of Chief Executive Officer pursuant to Section 1350 of the Sarbanes Oxley Act of 2002.                                                                                                                               |
|   |   |                                                                                                                                                                                                                               |
|   | 32.2   | Certification of Principal Financial Officer pursuant to Section 1350 of the Sarbanes Oxley Act of 2002.                                                                                                                           |

----

Index

SIGNATURES

|                           | NEFFS BANCORP, INC.              |   |
|--------------------------------|----------------------------------|--------|
|                           |                             |   |   |
| Date:  May 16, 2011  |  /s/ John J. Remaley   |   |
|                           |  John J. Remaley, President |   |
|                           |                             |
|                           |                             |   |

|                           |                                                |   |   |
|--------------------------------|-----------------------------------------------------|--------|--------|
| Date:  May 16, 2011  |  /s/ Kevin A. Schmidt                     |   |
|                           |  Kevin A. Schmidt, Principal Financial Officer |   |
|                           |                                                |
|                           |                                                |   |