| CITIZENS COMMUNITY BANCORP, INC.                                                   |
|------------------------------------------------------------------------------------|
| (Exact name of registrant as specified in its charter)                             |
|                                                                               |   |   |
| Maryland                                                                           |   | 20-5120010 |
| (State or other jurisdiction of incorporation or organization)                     |   | (IRS Employer Identification Number) |
|                                                                               |   |   |
| 2174 EastRidge Center, Eau Claire, WI 54701                                        |
| (Address of principal executive offices)                                           |
|                                                                               |
| 715-836-9994                                                                       |
| (Registrant’s telephone number, including area code)                         |
|                                                                               |
| (Former name, former address and former fiscal year, if changed since last report) |
|                                                                               |
| Securities registered pursuant to Section 12(b) of the Act:                        |   |
|                                                                               |   |
| Title of Each Class                                                                |   | Name of Exchange on Which Registered |
| Common Stock, $.01 par value per share                                             |   | NASDAQ Global MarketSM |

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|                                   |                             |                                         |                          |
|----------------------------------------|----------------------------------|----------------------------------------------|-------------------------------|
| Large accelerated filer [  ] | Accelerated filer [  ] | Non-Accelerated filer [  ]         | Smaller reporting company [X] |
|                                   |                             | (do not check if a smallerreporting company) |                          |

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|                                          |   | (in thousands, except share data)  |
|-----------------------------------------------|--------|-----------------------------------------|
| Assets                                        |   | September 30, 2010                      |   |   | September 30, 2009 |   |
| Cash and cash equivalents                     |   | $                                       | 72,438 |   |   | $ | 43,191 |   |
| Other interest-bearing deposits               |   |                                    | - |   |   |   | 2,458 |   |
| Securities available-for-sale (at fair value) |   |                                    | 41,708 |   |   |   | 56,215 |   |
| Federal Home Loan Bank stock                  |   |                                    | 5,787 |   |   |   | 6,040 |   |
| Loans receivable                              |   |                                    | 456,232 |   |   |   | 442,470 |   |
| Allowance for loan losses                     |   |                                    | (4,145 | ) |   |   | (1,925 | ) |
| Loans receivable - net                        |   |                                    | 452,087 |   |   |   | 440,545 |   |
| Office properties and equipment - net         |   |                                    | 7,216 |   |   |   | 8,029 |   |
| Accrued interest receivable                   |   |                                    | 1,977 |   |   |   | 2,179 |   |
| Intangible assets                             |   |                                    | 816 |   |   |   | 1,148 |   |
| Goodwill                                      |   |                                    | - |   |   |   | 5,593 |   |
| Other assets                                  |   |                                    | 12,336 |   |   |   | 10,008 |   |
| TOTAL ASSETS                                  |   | $                                       | 594,365 |   |   | $ | 575,406 |   |

| Liabilities and Stockholders' Equity                         |   | September 30, 2010 |    |   | September 30, 2009 |   |
|--------------------------------------------------------------|--------|--------------------|---------|--------|--------------------|--------|
| Liabilities:                                                 |   |               |    |   |               |   |
| Deposits                                                     |   | $                  | 476,302 |   |               | $      | 409,311 |   |
| Federal Home Loan Bank advances                              |   |               | 64,200  |   |               |   | 106,805 |   |
| Other liabilities                                            |   |               | 3,986   |   |               |   | 3,925 |   |
| Total liabilities                                            |   |               | 544,488 |   |               |   | 520,041 |   |
|                                                         |   |               |    |   |               |   |   |   |
| Stockholders' equity:                                        |   |               |    |   |               |   |   |   |
| Common stock - 5,113,258 and 5,471,780 shares, respectively  |   |               | 51      |   |               |   | 55 |   |
| Additional paid-in capital                                   |   |               | 53,823  |   |               |   | 56,877 |   |
| Retained earnings                                            |   |               | 1,130   |   |               |   | 8,221 |   |
| Unearned ESOP shares                                         |   |               | -       |   |               |   | (3,070 | ) |
| Unearned deferred compensation                               |   |               | (1      | )      |               |   | (23 | ) |
| Accumulated other comprehensive loss                         |   |               | (5,126  | )      |               |   | (6,695 | ) |
| Total stockholders' equity                                   |   |               | 49,877  |   |               |   | 55,365 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   |   | $                  | 594,365 |   |               | $      | 575,406 |   |
|                                                         |   |               |    |   |               |   |   |   |
| See accompanying notes to consolidated financial statements. |   |               |    |   |               |   |   |   |

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|                                                                |   |   |   |   |   |   |    |   |   |
|---------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
|                                                                |   | 2010   |   |   | 2009   |   |    | 2008   |   |
| Interest and Dividend Income:                                       |   |   |   |   |   |   |    |   |   |
| Interest and fees on loans                                          |   | $      | 29,610 |   |   | $      | 27,007  |   |   | $ | 23,129 |   |
| Interest on investments                                             |   |   | 3,149  |   |   |   | 3,933   |   |   |   | 3,605 |   |
| Total interest and dividend income                                  |   |   | 32,759 |   |   |   | 30,940  |   |   |   | 26,734 |   |
| Interest expense:                                                   |   |   |   |   |   |   |    |   |   |   |   |   |
| Interest on deposits                                                |   |   | 8,384  |   |   |   | 10,158  |   |   |   | 9,138 |   |
| Interest on borrowed funds                                          |   |   | 3,195  |   |   |   | 4,530   |   |   |   | 5,001 |   |
| Total interest expense                                              |   |   | 11,579 |   |   |   | 14,688  |   |   |   | 14,139 |   |
| Net interest income                                                 |   |   | 21,180 |   |   |   | 16,252  |   |   |   | 12,595 |   |
| Provision for loan losses                                           |   |   | 6,901  |   |   |   | 1,369   |   |   |   | 721 |   |
| Net interest income after provision for loan losses                 |   |   | 14,279 |   |   |   | 14,883  |   |   |   | 11,874 |   |
| Noninterest income:                                                 |   |   |   |   |   |   |    |   |   |   |   |   |
| Total other-than-temporary impairment losses                        |   |   | (5,770 | )      |   |   | (12,502 | )      |   |   | - |   |
| Portion of loss recognized in other comprehensive loss (before tax) |   |   | 3,509  |   |   |   | 5,266   |   |   |   | - |   |
| Net impairment losses recognized in earnings                        |   |   | (2,261 | )      |   |   | (7,236  | )      |   |   | - |   |
| Goodwill impairment                                                 |   |   | (5,593 | )      |   |   | -       |   |   |   | - |   |
| Service charges on deposit accounts                                 |   |   | 1,514  |   |   |   | 1,361   |   |   |   | 1,069 |   |
| Insurance commissions                                               |   |   | 216    |   |   |   | 355     |   |   |   | 344 |   |
| Loan fees and service charges                                       |   |   | 362    |   |   |   | 279     |   |   |   | 283 |   |
| Other                                                               |   |   | 11     |   |   |   | 11      |   |   |   | 13 |   |
| Total noninterest income (loss)                                     |   |   | (5,751 | )      |   |   | (5,230  | )      |   |   | 1,709 |   |
| Noninterest expense:                                                |   |   |   |   |   |   |    |   |   |   |   |   |
| Salaries and related benefits                                       |   |   | 7,797  |   |   |   | 7,263   |   |   |   | 5,857 |   |
| Occupancy - net                                                     |   |   | 2,553  |   |   |   | 2,203   |   |   |   | 1,313 |   |
| Office                                                              |   |   | 1,413  |   |   |   | 1,515   |   |   |   | 1,133 |   |
| Data processing                                                     |   |   | 308    |   |   |   | 396     |   |   |   | 359 |   |
| Amortization of core deposit                                        |   |   | 332    |   |   |   | 333     |   |   |   | 307 |   |
| Advertising, marketing and public relations                         |   |   | 173    |   |   |   | 242     |   |   |   | 148 |   |
| FDIC premium assessment                                             |   |   | 944    |   |   |   | 962     |   |   |   | 176 |   |
| Professional services                                               |   |   | 1,160  |   |   |   | 728     |   |   |   | 589 |   |
| Other                                                               |   |   | 1,894  |   |   |   | 1,283   |   |   |   | 1,219 |   |
| Total noninterest expense                                           |   |   | 16,574 |   |   |   | 14,925  |   |   |   | 11,101 |   |
|                                                                |   |   |   |   |   |   |    |   |   |   |   |   |
| Income (loss) before provision for income tax                       |   |   | (8,046 | )      |   |   | (5,272  | )      |   |   | 2,482 |   |
| Provision (benefit) for income taxes                                |   |   | (955   | )      |   |   | (2,089  | )      |   |   | 1,008 |   |
| Net income (loss) attributable to common stockholders               |   | $      | (7,091 | )      |   | $      | (3,183  | )      |   | $ | 1,474 |   |
|                                                                |   |   |   |   |   |   |    |   |   |   |   |   |
| Per share information:                                              |   |   |   |   |   |   |    |   |   |   |   |   |
| Basic earnings (loss)                                               |   | $      | (1.39  | )      |   | $      | (0.59   | )      |   | $ | 0.24 |   |
| Diluted earnings (loss)                                             |   | $      | (1.39  | )      |   | $      | (0.59   | )      |   | $ | 0.24 |   |
| Dividends paid                                                      |   | $      | -      |   |   | $      | 0.20    |   |   | $ | 0.20 |   |
|                                                                |   |   |   |   |   |   |    |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.        |   |   |   |   |   |   |    |   |   |   |   |   |

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|                                                                                                                                                                                                                              |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|--------|--------------------------|--------|--------|------------------|--------|--------|--------------------|--------|--------|-----------------------|--------|
|                                                                                                                                                                                                                              |   | Common Stock Shares                        Amount |      |   | AdditionalPaid-inCapital |   |   | RetainedEarnings |   |   | UnearnedESOPShares |   |   | Unearned Compensation |   |   | AccumulatedOther Comprehensive Income (loss) |   |   | TotalEquity |   |
| Balance, October 1, 2007                                                                                                                                                                                                          |   |                                                                                                                                                                           | 7,118,205 |   |                     | $      | 71     |             |   | $      | 69,934             |   |   | $                     | 12,420 |   |   | $ | (3,877 | )    |   | $ | (207 | ) |   | $ | (192 | ) |   | $ | 78,149 |   |
|    Comprehensive loss:                                                                                                                                                                                                  |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Net income                                                                                                                                                                 |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  | 1,474  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,474 |   |
|           Amortization of unrecognized prior service costs              and net gains/losses, net of tax                 |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   | 102 |   |   |   | 102 |   |
|          Net unrealized gain on available for sale securities,              net of tax                                             |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   | (2,696 | ) |   |   | (2,696 | ) |
|          Change for realized losses on securities available              for sale for OTTI write-down, net of tax             |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|      Total comprehensive loss                                                                                                                                                                                 |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,120 | ) |
|    Common stock repurchased                                                                                                                                                                                             |   |                                                                                                                                                                           | (890,300  | )      |                     |   | (9     | )                |   |   | (7,846             | )      |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (7,855 | ) |
|    Stock option expense                                                                                                                                                                                                 |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   | 71                 |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 71 |   |
|    Committed ESOP shares                                                                                                                                                                                                |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   | 461 |   |   |   |   |   |   |   |   |   |   |   | 461 |   |
|    Appreciation in fair value of ESOP shares                                                                                                                                                                            |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   | 22                 |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 22 |   |
|    Cancellation of unvested restricted stock                                                                                                                                                                            |   |                                                                                                                                                                           | (910      | )      |                     |   |   |             |   |   | 11                 |   |   |                  |   |   |   |   |   |   |   |   | (11 | ) |   |   |   |   |   |   | - |   |
|    Amortization of restricted stock                                                                                                                                                                                     |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   | 92 |   |   |   |   |   |   |   | 92 |   |
|    Cash dividends ($0.20 per share)                                                                                                                                                                                     |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  | (1,344 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,344 | ) |
| Balance, September 30, 2008                                                                                                                                                                                                       |   |                                                                                                                                                                           | 6,226,995 |   |                     |   | 62     |             |   |   | 62,192             |   |   |                  | 12,550 |   |   |   | (3,416 | ) |   |   | (126 | ) |   |   | (2,786 | ) |   |   | 68,476 |   |
|    Comprehensive loss:                                                                                                                                                                                                  |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Net loss                                                                                                                                                                         |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  | (3,183 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (3,183 | ) |
|          Pension curtailment, net of tax                                                                                                                                                  |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   | 194 |   |   |   | 194 |   |
|          Amortization of unrecognized prior service costs               and net gains/losses, net of tax            |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   | (144 | ) |   |   | (144 | ) |
|          Net unrealized gain on available for sale securities,              net of tax                                   |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   | (8,662 | ) |   |   | (8,662 | ) |
|          Change for realized losses on securities available for               sale for OTTI write-down, net of tax       |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   | 4,703 |   |   |   | 4,703 |   |
|    Total comprehensive loss                                                                                                                                                                                             |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (7,092 | ) |
|    Common stock repurchased                                                                                                                                                                                        |   |                                                                                                                                                                           | (749,520  | )      |                     |   | (7     | )                |   |   | (5,253             | )      |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (5,260 | ) |
|    Stock option expense                                                                                                                                                                                            |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   | 48                 |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 48 |   |
|    Committed ESOP shares                                                                                                                                                                                                |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   | 346 |   |   |   |   |   |   |   |   |   |   |   | 346 |   |
|    Depreciation in fair value of ESOP shares                                                                                                                                                                            |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   | (70                | )      |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (70 | ) |
|    Cancellation of unvested restricted stock                                                                                                                                                                            |   |                                                                                                                                                                           | (5,695    | )      |                     |   |   |             |   |   | (40                | )      |   |                  |   |   |   |   |   |   |   |   | 40 |   |   |   |   |   |   |   | - |   |
|    Amortization of restricted stock                                                                                                                                                                                     |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   | 63 |   |   |   |   |   |   |   | 63 |   |
|    Cash dividends ($0.20 per share)                                                                                                                                                                                     |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  | (1,146 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,146 | ) |
| Balance, September 30, 2009                                                                                                                                                                                                       |   |                                                                                                                                                                           | 5,471,780 |   |                     |   | 55     |             |   |   | 56,877             |   |   |                  | 8,221  |   |   |   | (3,070 | ) |   |   | (23 | ) |   |   | (6,695 | ) |   |   | 55,365 |   |
|    Comprehensive loss:                                                                                                                                                                                                  |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Net loss                                                                                                                                                                         |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  | (7,091 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (7,091 | ) |
|         Amortization of unrecognized prior service costs              and net gains/losses, net of tax                        |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   | (12 | ) |   |   | (12 | ) |
|          Net unrealized gain on available for sale securities,               net of tax                                  |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   | 215 |   |   |   | 215 |   |
|          Change for realized losses on securities available for                sale for OTTI write-down, net of tax |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   | 1,366 |   |   |   | 1,366 |   |
|    Total comprehensive loss                                                                                                                                                                                             |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (5,522 | ) |
|    Stock option expense                                                                                                                                                                                                 |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   | 12                 |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 12 |   |
|    Termination of ESOP                                                                                                                                                                                                  |   |                                                                                                                                                                           | (358,502  | )      |                     |   | (4     | )                |   |   | (3,066             | )      |   |                  |   |   |   |   | 3,070 |   |   |   |   |   |   |   |   |   |   |   | - |   |
|    Forfeiture of unvested shares                                                                                                                                                                                        |   |                                                                                                                                                                           | (20       | )      |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|    Amortization of restricted stock                                                                                                                                                                                     |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   | 22 |   |   |   |   |   |   |   | 22 |   |
| Balance, September 30, 2010                                                                                                                                                                                                       |   |                                                                                                                                                                           | 5,113,258 |   |                     | $      | 51     |             |   | $      | 53,823             |   |   | $                     | 1,130  |   |   | $ | - $ |   |   |   | (1 | ) |   | $ | (5,126 | ) |   | $ | 49,877 |   |
| See Accompanying notes to consolidated financial statements.                                                                                                                                                                      |   |                                                                                                                                                                           |      |   |                     |   |   |             |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |

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| CITIZENS COMMUNITY BANCORP, INC.                                                         |   |   |    |   |   |   |    |   |   |
|------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Consolidated Statements of Cash Flows - Audited                                          |   |   |    |   |   |   |    |   |   |
| Years Ended September 30, 2010, 2009 and 2008(in thousands, except per share data)  |   |   |    |   |   |   |    |   |   |
|                                                                                     |   | 2010   |    |   | 2009   |   |    | 2008   |   |
| Cash flows from operating activities:                                                    |   |   |    |   |   |   |    |   |   |
| Net income (loss) attributable to common stockholders                                    |   | $      | (7,091  | )      |   | $      | (3,183  | )      |   | $ | 1,474 |   |
| Adjustments to reconcile net loss to net cash provided by operating activities:          |   |   |    |   |   |   |    |   |   |   |   |   |
| Net securities amortization                                                              |   |   | (379    | )      |   |   | (341    | )      |   |   | (274 | )  |
| Provision for depreciation                                                               |   |   | 1,122   |   |   |   | 959     |   |   |   | 533 |   |
| Provision for loan losses                                                                |   |   | 6,901   |   |   |   | 1,369   |   |   |   | 721 |   |
| Impairment on mortgage-backed securities                                                 |   |   | 2,261   |   |   |   | 7,236   |   |   |   | 0 |   |
| Impairment on goodwill                                                                   |   |   | 5,593   |   |   |   | 0       |   |   |   | 0 |   |
| Amortization of core deposit intangible                                                  |   |   | 332     |   |   |   | 333     |   |   |   | 307 |   |
| Amortization of restricted stock                                                         |   |   | 22      |   |   |   | 63      |   |   |   | 92 |   |
| Provision for stock options                                                              |   |   | 12      |   |   |   | 48      |   |   |   | 71 |   |
| Benefit for deferred income taxes                                                        |   |   | (1,054  | )      |   |   | (631    | )      |   |   | (184 | )  |
| ESOP contribution benefit in excess of shares released                                   |   |   | 0       |   |   |   | (70     | )      |   |   | 22 |   |
| Increase in accrued interest receivable and other assets                                 |   |   | (1,337  | )      |   |   | (1,908  | )      |   |   | (682 | )  |
| Decrease (increase) in other liabilities                                                 |   |   | 49      |   |   |   | (97     | )      |   |   | 288 |   |
| Total adjustments                                                                        |   |   | 13,522  |   |   |   | 6,961   |   |   |   | 894 |   |
| Net cash provided by operating activities                                                |   |   | 6,431   |   |   |   | 3,778   |   |   |   | 2,368 |   |
| Cash flows from investing activities:                                                    |   |   |    |   |   |   |    |   |   |   |   |   |
| Purchase of Federal Home Loan Bank stock                                                 |   |   | 0       |   |   |   | (253    | )      |   |   | (965 | )  |
| Purchase securities available for sale                                                   |   |   | 0       |   |   |   | (20,004 | )      |   |   | (31,839 | )  |
| Net (increase) decrease in interest-bearing deposits                                     |   |   | 2,458   |   |   |   | (2,087  | )      |   |   | 0 |   |
| Proceeds from principal repayments on securities available for sale                      |   |   | 14,418  |   |   |   | 12,580  |   |   |   | 5,780 |   |
| Proceeds from sale of FHLB stock                                                         |   |   | 253     |   |   |   | 0       |   |   |   | 0 |   |
| Net increase in loans                                                                    |   |   | (18,393 | )      |   |   | (73,987 | )      |   |   | (49,162 | )  |
| Net capital expenditures                                                                 |   |   | (306    | )      |   |   | (3,070  | )      |   |   | (2,555 | )  |
| Net cash received from branch acquisition                                                |   |   | 0       |   |   |   | 0       |   |   |   | 17,509 |   |
| Net cash used in investing activities                                                    |   |   | (1,570  | )      |   |   | (86,821 | )      |   |   | (61,232 | )  |
| Cash flows from financing activities:                                                    |   |   |    |   |   |   |    |   |   |   |   |   |
| Net increase (decrease) in borrowings                                                    |   |   | (42,605 | )      |   |   | (3,440  | )      |   |   | 13,799 |   |
| Net increase in deposits                                                                 |   |   | 66,991  |   |   |   | 112,068 |   |   |   | 71,115 |   |
| Repurchase shares of common stock                                                        |   |   | 0       |   |   |   | (5,260  | )      |   |   | (7,855 | )  |
| Reduction in unallocated shares held by ESOP                                             |   |   | 0       |   |   |   | 346     |   |   |   | 461 |   |
| Cash dividends paid                                                                      |   |   | 0       |   |   |   | (1,146  | )      |   |   | (1,344 | )  |
| Net cash provided by financing activities                                                |   |   | 24,386  |   |   |   | 102,568 |   |   |   | 76,176 |   |
| Net increase in cash and cash equivalents                                                |   |   | 29,247  |   |   |   | 19,525  |   |   |   | 17,312 |   |
| Cash and cash equivalents at beginning of year                                           |   |   | 43,191  |   |   |   | 23,666  |   |   |   | 6,354 |   |
| Cash and cash equivalents at end of year                                                 |   | $      | 72,438  |   |   | $      | 43,191  |   |   | $ | 23,666 |   |
|                                                                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Supplemental cash flow information:                                                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash paid during the year for:                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| Interest on deposits                                                                     |   | $      | 8,382   |   |   | $      | 10,155  |   |   | $ | 9,137 |   |
| Interest on borrowings                                                                   |   |   | 3,316   |   |   |   | 4,594   |   |   |   | 4,991 |   |
| Income taxes                                                                             |   |   | 851     |   |   |   | 925     |   |   |   | 1,312 |   |
|                                                                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Supplemental noncash disclosure:                                                         |   |   |    |   |   |   |    |   |   |   |   |   |
| Transfers from loans to foreclosed properties                                            |   | $      | 456     |   |   | $      | 641     |   |   | $ | 315 |   |
|                                                                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.                             |   |   |    |   |   |   |    |   |   |   |   |   |

----

----

----

----

----

----

----

|                                                                 |   | Fair value |   |   | Quoted Prices in Active Markets for IdenticalInstruments(Level 1) |   |   | Significant Other ObservableInputs (Level 2) |   |   | Significant UnobservableInputs (Level 3) |   |
|----------------------------------------------------------------------|--------|------------|--------|--------|-------------------------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|-----------------------------------------------|--------|
| September 30, 2010:                                                  |   |       |   |   |                                                              |   |   |                                         |   |   |                                          |   |
| Securities available for sale:                                       |   |       |   |   |                                                              |   |   |                                         |   |   |                                          |   |
|       U.S. Agency securities                |   | $          | 16,709 |   |                                                              | $      | -      |                                         |   | $      | 16,709                                        |   |   | $ | - |   |
|       Non-agency mortgage-backed securities |   |       | 24,999 |   |                                                              |   | -      |                                         |   |   | -                                             |   |   |   | 24,999 |   |
| Total                                                                |   | $          | 41,708 |   |                                                              | $      | -      |                                         |   | $      | 16,709                                        |   |   | $ | 24,999 |   |
| September 30, 2009:                                                  |   |       |   |   |                                                              |   |   |                                         |   |   |                                          |   |   |   |   |   |
|       U.S. Agency securities                |   | $          | 19,698 |   |                                                              | $      | -      |                                         |   | $      | 19,698                                        |   |   | $ | - |   |
|       Non-agency mortgage-backed securities |   |       | 36,517 |   |                                                              |   | -      |                                         |   |   | -                                             |   |   |   | 36,517 |   |
| Total                                                                |   | $          | 56,215 |   |                                                              | $      | -      |                                         |   | $      | 19,698                                        |   |   | $ | 36,517 |   |

|                                                                               |   | Fair Value |   |   | Quoted Prices inActive Marketsfor IdenticalInstruments(Level 1) |   |   | SignificantOtherObservableInputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
|------------------------------------------------------------------------------------|--------|------------|--------|--------|-----------------------------------------------------------------|--------|--------|-------------------------------------------|--------|--------|------------------------------------------|--------|
| September 30, 2010:                                                                |   |       |   |   |                                                            |   |   |                                      |   |   |                                     |   |
|       Foreclosed assets                                   |   | $          | 448    |   |                                                            | $      | -      |                                      |   | $      | -                                        |   |   | $ | 448 |   |
|       Loans restructured in a troubled debt restructuring |   |       | 3,178  |   |                                                            |   | -      |                                      |   |   | -                                        |   |   |   | 3,178 |   |
| Total                                                                              |   | $          | 3,626  |   |                                                            | $      | -      |                                      |   | $      | -                                        |   |   | $ | 3,626 |   |
|                                                                               |   |       |   |   |                                                            |   |   |                                      |   |   |                                     |   |   |   |   |   |
| September 30, 2009:                                                                |   |       |   |   |                                                            |   |   |                                      |   |   |                                     |   |   |   |   |   |
|       Foreclosed assets                                   |   | $          | 636    |   |                                                            | $      | -      |                                      |   | $      | -                                        |   |   | $ | 636 |   |
|       Loans restructured in a troubles debt restructuring |   |       | 1,020  |   |                                                            |   | -      |                                      |   |   | -                                        |   |   |   | 1,020 |   |
| Total                                                                              |   | $          | 1,656  |   |                                                            | $      | -      |                                      |   | $      | -                                        |   |   | $ | 1,656 |   |

----

|                                              |   | 2010   |    |   | 2009   |   |
|---------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Balance beginning of year                         |   | $      | 36,517  |   |   | $      | 61,233 |   |
| Total gains or losses (realized/unrealized):      |   |   |    |   |   |   |   |   |
| Included in earnings                              |   |   | (2,261  | )      |   |   | (7,236 | ) |
| Included in other comprehensive loss              |   |   | 1,487   |   |   |   | (6,251 | ) |
| Purchases, sales, issuances, and settlements, net |   |   | (10,744 | )      |   |   | (11,229 | ) |
| Balance end of year                               |   | $      | 24,999  |   |   | $      | 36,517 |   |

----

|                          |   | 2010           |    |   | 2009               |   |
|-------------------------------|--------|----------------|---------|--------|--------------------|--------|
|                          |   | CarryingAmount |    |   | EstimatedFairValue |   |   | CarryingAmount |   |   | EstimatedFairValue |   |
| Financial assets:             |   |           |    |   |               |   |   |   |   |   |   |   |
| Cash and cash equivalents     |   | $              | 72,438  |   |               | $      | 72,438 |   |   | $ | 43,191 |   |   | $ | 43,191 |   |
| Interest-bearing deposits     |   |           | -       |   |               |   | - |   |   |   | 2,458 |   |   |   | 2,458 |   |
| Securities available for sale |   |           | 41,708  |   |               |   | 41,708 |   |   |   | 56,215 |   |   |   | 56,215 |   |
| Loans receivable              |   |           | 452,087 |   |               |   | 477,039 |   |   |   | 440,545 |   |   |   | 449,666 |   |
| FHLB stock                    |   |           | 5,787   |   |               |   | 5,787 |   |   |   | 6,040 |   |   |   | 6,040 |   |
| Accrued interest receivable   |   |           | 1,977   |   |               |   | 1,977 |   |   |   | 2,179 |   |   |   | 2,179 |   |
|                          |   |           |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:        |   |           |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                      |   |           | 476,302 |   |               |   | 482,337 |   |   |   | 409,311 |   |   |   | 413,511 |   |
| Borrowed funds                |   |           | 64,200  |   |               |   | 68,290 |   |   |   | 106,805 |   |   |   | 112,009 |   |
| Accrued interest payable      |   | $              | 232     |   |               | $      | 232 |   |   | $ | 351 |   |   | $ | 351 |   |

----

| Description of Securities                                      |   | AmortizedCost |   |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | EstimatedFair Value |   |
|----------------------------------------------------------------|--------|---------------|--------|--------|----------------------|--------|--------|-----------------------|--------|--------|---------------------|--------|
| 2010                                                           |   |          |   |   |                 |   |   |                  |   |   |                |   |
|      U.S. Agency securities                |   | $             | 16,240 |   |                 | $      | 469    |                  |   | $      | -                   |   |   | $ | 16,709 |   |
|      Non-agency mortgage-backed securities |   |          | 33,772 |   |                 |   | -      |                  |   |   | 8,773               |   |   |   | 24,999 |   |
| Total temporarily impaired                                     |   | $             | 50,012 |   |                 | $      | 469    |                  |   | $      | 8,773               |   |   | $ | 41,708 |   |
|                                                           |   |          |   |   |                 |   |   |                  |   |   |                |   |   |   |   |   |
| 2009                                                           |   |          |   |   |                 |   |   |                  |   |   |                |   |   |   |   |   |
|      U.S. Agency securities                |   | $             | 19,535 |   |                 | $      | 163    |                  |   | $      | -                   |   |   | $ | 19,698 |   |
|      Non-agency mortgage-backed securities |   |          | 46,777 |   |                 |   | -      |                  |   |   | 10,260              |   |   |   | 36,517 |   |
| Total temporarily impaired                                     |   | $             | 66,312 |   |                 | $      | 163    |                  |   | $      | 10,260              |   |   | $ | 56,215 |   |

|                                   |   | AmortizedCost |   |   | EstimatedFair Value |   |
|----------------------------------------|--------|---------------|--------|--------|---------------------|--------|
| Due after one year through five years  |   | $             | 69     |   |                | $      | 69 |   |
| Due after five years through ten years |   |          | 141    |   |                |   | 151 |   |
| Due after ten years                    |   |          | 16,030 |   |                |   | 16,489 |   |
| Subtotals                              |   |          | 16,240 |   |                |   | 16,709 |   |
| Mortgage-backed securities             |   |          | 33,772 |   |                |   | 24,999 |   |
| Total securities available for sale    |   | $             | 50,012 |   |                | $      | 41,708 |   |

----

|                                                                                                                    |   | Less than 12 Months |   |   | 12 Months or More |   |   | Total     |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|-----------|--------|
|                                                                                                                    |   | FairValue           |   |   | UnrealizedLosses  |   |   | FairValue |   |   | UnrealizedLosses |   |   | FairValue |   |   | UnrealizedLosses |   |
| September 30, 2010:                                                                                                     |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |
|      U.S. agency securities                                                                         |   | $                   | -      |   |              | $      | -      |      |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|      Residential mortgage-backed securities         (non-agency) |   |                | -      |   |              |   | -      |      |   |   | 24,999 |   |   |   | 8,773 |   |   |   | 24,999 |   |   |   | 8,773 |   |
| Total Securities                                                                                                        |   | $                   | -      |   |              | $      | -      |      |   | $ | 24,999 |   |   | $ | 8,773 |   |   | $ | 24,999 |   |   | $ | 8,773 |   |
|                                                                                                                    |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| September 30, 2009:                                                                                                     |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      U.S. agency securities                                                                         |   | $                   | -      |   |              | $      | -      |      |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|      Residential mortgage-backed securities         (non-agency) |   |                | 5,852  |   |              |   | 965    |      |   |   | 30,665 |   |   |   | 9,295 |   |   |   | 36,517 |   |   |   | 10,260 |   |
| Total Securities                                                                                                        |   | $                   | 5,852  |   |              | $      | 965    |      |   | $ | 30,665 |   |   | $ | 9,295 |   |   | $ | 36,517 |   |   | $ | 10,260 |   |

|                                |   | September 30, 2010 |   |   | September 30, 2009       |   |
|-------------------------------------|--------|--------------------|--------|--------|--------------------------|--------|
|                                |   | AmortizedCost      |   |   | EstimatedFair Value |   |   | AmortizedCost |   |   | EstimatedFair Value |   |
| JP Morgan Trust                     |   | $                  | 7,885  |   |                     | $      | 5,705 |   |   | $ | 10,232 |   |   | $ | 8,242 |   |
| Wells Fargo MBS                     |   |               | 11,718 |   |                     |   | 8,790 |   |   |   | 15,736 |   |   |   | 13,155 |   |
| Total securities available for sale |   | $                  | 19,603 |   |                     | $      | 14,495 |   |   | $ | 25,968 |   |   | $ | 21,397 |   |

----

|                                                                                                                                                          |   | Year ended September 30, |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|
|                                                                                                                                                          |   | 2010                     |   |   | 2009 |   |
| Beginning balance of the amount of OTTI related to credit losses                                                                                              |   | $                        | 7,236 |   |   | $ | - |   |
| Credit portion of OTTI on securities for which OTTI was not previously recognized                                                                             |   |                     | 2,276 |   |   |   | 7,236 |   |
| Cash payments received on a security in excess of the security's book value adjusted for previously recognized     credit portion of OTTI |   |                     | (15 | ) |   |   | - |   |
| Ending balance of the amount of OTTI related to credit losses                                                                                                 |   | $                        | 9,497 |   |   | $ | 7,236 |   |

|                  |                                         |   | 2010    |    |   | 2009   |    |
|-----------------------|----------------------------------------------|--------|---------|---------|--------|--------|---------|
| Real estate loans:    |                                         |   |    |    |   |   |    |
|                  | First mortgages - 1 to 4-family              |   | $       | 254,821 |   |   | $       | 230,412 |   |
|                  | Multifamily and commercial                   |   |    | 196     |   |   |    | 174 |   |
|                  | Second mortgages                             |   |    | 7,674   |   |   |    | 9,639 |   |
|                  | Total real estate loans                      |   |    | 262,691 |   |   |    | 240,225 |   |
| Consumer loans:       |                                         |   |    |    |   |   |    |   |   |
|                  | Automobile                                   |   |    | 18,542  |   |   |    | 24,875 |   |
|                  | Secured personnal                            |   |    | 171,135 |   |   |    | 172,040 |   |
|                  | Unsecured personal                           |   |    | 4,636   |   |   |    | 5,655 |   |
|                  | Total consumer loans                         |   |    | 194,313 |   |   |    | 202,570 |   |
| Gross loans           |                                         |   |    | 457,004 |   |   |    | 442,795 |   |
| Less:                 |                                         |   |    |    |   |   |    |   |   |
|                  | Deferred loan origination fees, net of costs |   |    | (772    | )      |   |    | (325 | ) |
|                  | Allowance for loan losses                    |   |    | (4,145  | )      |   |    | (1,925 | ) |
| Loans receivable, net |                                         | $      | 452,087 |    |   | $      | 440,545 |   |

----

|                        |   | September 30, |   |
|-----------------------------|--------|---------------|--------|
|                        |   |          | 2010   |   |   |   | 2009 |   |
| Balance - beginning of year |   | $             | 48     |   |   | $ | 36 |   |
| New loan originations       |   |          | -      |   |   |   | 27 |   |
| Repayments                  |   |          | (15    | ) |   |   | (15 | ) |
| Balance - end of year       |   | $             | 33     |   |   | $ | 48 |   |

|                                                     |   | September 30, |   |
|----------------------------------------------------------|--------|---------------|--------|
|                                                     |   | 2010          |   |   | 2009 |   |
| Impaired loans with no allocated allowance for loan loss |   | $             | 5,876  |   |   | $ | 3,436 |   |
| Impaired loans with allocated allowance for loan loss    |   |          | 2,581  |   |   |   | 3,373 |   |
| Allowance allocated to impaired loans                    |   |          | 734    |   |   | $ | 918 |   |

|                                         |   | For the year ended September 30, |     |
|----------------------------------------------|--------|----------------------------------|----------|
|                                         |   |                             | 2010     |   | 2009 |   |   | 2008 |   |
| Average impaired loans during the year       |   | $                                | 2,197    |   | 510 |   |   | $ | - |   |
| Interest income recognized during impairment |   |                             |  30 |   | - |   |   |   | - |   |
| Cash-basis interest recognized               |   |                             | 26       |   | - |   |   | $ | - |   |

|                           |   | 2010 |   |   | 2009   |   |
|--------------------------------|--------|------|--------|--------|--------|--------|
| Nonaccrual loans (1)           |   | $    | 5,084  |   |   | $      | 5,789 |   |
| Total non performing loans (2) |   | $    | 5,084  |   |   | $      | 5,789 |   |

----

|                            |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Balance at beginning of year    |   | $      | 1,925  |   |   | $      | 1,192  |   |   | $ | 926 |   |
| Provision charged to operations |   |   | 6,901  |   |   |   | 1,369  |   |   |   | 721 |   |
| Loans charged off               |   |   | (4,776 | )      |   |   | (673   | )      |   |   | (492 | ) |
| Recoveries                      |   |   | 95     |   |   |   | 37     |   |   |   | 37 |   |
| Balance at end of year          |   | $      | 4,145  |   |   | $      | 1,925  |   |   | $ | 1,192 |   |

----

|                                  |   | 2010   |   |   | 2009   |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|
| Land                                  |   | $      | 653    |   |   | $      | 695 |   |
| Buildings                             |   | $      | 2,833  |   |   | $      | 2,825 |   |
| Furniture, equipment, and vehicles    |   |   | 9,671  |   |   |   | 9,466 |   |
| Subtotals                             |   |   | 13,157 |   |   |   | 12,986 |   |
| Less - Accumulated depreciation       |   |   | (5,941 | )      |   |   | (4,957 | ) |
| Office properties and equipment - net |   | $      | 7,216  |   |   | $      | 8,029 |   |

|                                               |   | 2010   |   |   | 2009   |   |
|----------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Balance at beginning of year                       |   | $      | 5,593  |   |   | $      | 5,593 |   |
| Accumulated impairment losses at beginning of year |   | $      | -      |   |   | $      | - |   |
| Impairment losses recognized during the year       |   |   | (5,593 | )      |   |   | - |   |
| Balance at end of year                             |   | $      | -      |   |   | $      | 5,593 |   |

|                         |   | 2010   |   |   | 2009   |   |
|------------------------------|--------|--------|--------|--------|--------|--------|
| Balance at beginning of year |   | $      | 1,148  |   |   | $      | 1,481 |   |
| Capitalized                  |   |   | -      |   |   |   | - |   |
| Amortization                 |   |   | (332   | )      |   |   | (333 | ) |
| Balance at end of year       |   | $      | 816    |   |   | $      | 1,148 |   |

----

| 2011       |   | $      | 333 |   |
|------------|--------|--------|-----|--------|
| 2012       |   |   | 209 |   |
| 2013       |   |   | 57  |   |
| 2014       |   |   | 57  |   |
| 2015       |   |   | 57  |   |
| After 2015 |   |   | 103 |   |
| Total      |   | $      | 816 |   |

|                                             |   | 2010   |    |   | 2009   |   |
|--------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Non-interest-bearing demand deposits             |   | $      | 15,925  |   |   | $      | 14,943 |   |
| Interest-bearing demand deposits                 |   |   | 5,279   |   |   |   | 4,788 |   |
| Savings accounts                                 |   |   | 31,269  |   |   |   | 26,387 |   |
| Money market accounts                            |   |   | 155,315 |   |   |   | 146,709 |   |
| Certificate accounts                             |   |   | 268,514 |   |   |   | 216,484 |   |
| Total deposits                                   |   | $      | 476,302 |   |   | $      | 409,311 |   |
| Brokered certificates of deposit included above: |   | $      | 297     |   |   | $      | 9,845 |   |

| 2011       |   | $      | 154,989 |   |
|------------|--------|--------|---------|--------|
| 2012       |   |   | 40,704  |   |
| 2013       |   |   | 55,455  |   |
| 2014       |   |   | 17,276  |   |
| 2015       |   |   | 90      |   |
| After 2015 |   |   | -       |   |
| Total      |   | $      | 268,514 |   |

----

| Year of Maturity                              |   | 2010   |   |   | WeightedAverageRate |   |   | 2009          |   |   | WeightedAverageRate |   |
|-----------------------------------------------|--------|--------|--------|--------|---------------------|--------|--------|---------------|--------|--------|---------------------|--------|
| 2010                                          |   | $      | -      |   |                |   | -      |          |   | $      | 35,400              |   |   |   | 4.01 | % |
| 2011                                          |   |   | 33,800 |   |                |   | 4.12   | %        |   |   | 33,800              |   |   |   | 4.12 | % |
| 2012                                          |   |   | 16,000 |   |                |   | 4.46   | %   |   |   | 16,000              |   |   |   | 4.46 | % |
| 2013                                          |   |   | 6,750  |   |                |   | 3.99   | %   |   |   | 6,750               |   |   |   | 3.99 | % |
| 2014                                          |   |   | 6,150  |   |                |   | 4.45   | %        |   |   | 6,150               |   |   |   | 4.45 | % |
| After 2014                                    |   |   | 1,500  |   |                |   | 4.05   | %   |   |   | 1,500               |   |   |   | 4.05 | % |
|      Total fixed maturity |   | $      | 64,200 |   |                |   |   |          |   | $      | 99,600              |   |   |   |   |   |
| Advances with amortizing principal            |   |   | -      |   |                |   |   |          |   |   | 7,205               |   |   |   | 0.36 | % |
|      Total                |   | $      | 64,200 |   |                |   |   |          |   | $      | 106,805             |   |   |   |   |   |

----

|                                                                                                                                                                                                   |   | Fiscal Year Ended September 30, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|
|                                                                                                                                                                                                   |   | 2010                            |   |   | 2009 |   | 2008 |   |
|                                                                                                                                                                                                   |   |                            |   |   |   |   |   |   |
|                                                                                                                                                                                                   |   |                            |   |   |   |   |   |   |
| Net unrealized gain (loss) on securities available for sale,     net of tax expense (benefit) of $116 in 2010, ($4,664) in     2009, and ($1,453) in 2008.          |   | $                               | 215    |   |   | $ | (8,662 | ) | $ | (2,696 | ) |
|                                                                                                                                                                                                   |   |                            |   |   |   |   |   |   |   |   |   |
| Reclassification adjustment for losses realized in income,     net of tax expense of $736 in 2010, $2,533 in 2009, and     $-0- in 2008                        |   |                            | 1,366  |   |   |   | 4,703 |   |   | - |   |
|                                                                                                                                                                                                   |   |                            |   |   |   |   |   |   |   |   |   |
| Pension liability adjustments, net of tax expense (benefit)     of ($4) in 2010, $33 in 2009, and $68 in 2008                                                                      |   |                            | (12    | ) |   |   | 50 |   |   | 102 |   |
|                                                                                                                                                                                                   |   |                            |   |   |   |   |   |   |   |   |   |
| Other Comprehensive loss                                                                                                                                                                               |   | $                               | 1,569  |   |   | $ | (3,909 | ) | $ | (2,594 | ) |
|                                                                                                                                                                                                   |   |                            |   |   |   |   |   |   |   |   |   |
| The components of accumulated other comprehensive loss,     net of income taxes:                                                                                                   |   |                            |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                   |   |                            |   |   |   |   |   |   |   |   |   |
| Net unrealized gain (loss) on securities available for sale,     net of tax expense (benefit) of ($3,322) in 2010, ($3,534)     in 2009, and ($1,402) in 2008. |   | $                               | (4,982 | ) |   |   | (6,563 | ) | $  | (2,605 | ) |
|                                                                                                                                                                                                   |   |                            |   |   |   |   |   |   |   |   |   |
| Pension liability adjustments, net of tax expense (benefit) of     ($96) in 2010, ($88) in 2009, and ($121) in 2008                                                                |   |                            | (144   | ) |   | $ | (132 | ) |   | (181 | ) |
| Accumulated other comprehensive loss                                                                                                                                                                   |   | $                               | (5,126 | ) |   | $ | (6,695 | ) | $ | (2,786 | ) |

----

|                                                   |   | Actual |       |   | For Capital AdequacyPurposes |   |   | To Be Well CapitalizedUnder Prompt CorrectiveAction Provisions |   |
|--------------------------------------------------------|--------|--------|------------|--------|------------------------------|--------|--------|----------------------------------------------------------------|--------|
|                                                   |   | Amount |       |   | Ratio                        |   |   | Amount                                                         |   |   |   | Ratio |   |   | Amount |   |   |   | Ratio |   |
| As of September 30, 2010                               |   |   |       |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|    Total capital (to risk weighted assets )  |   | $      | 56,858,000 |   |                         |   | 11.0   | %                                                              |   | $ | 41,386,000 |   | >= |   |   | 8.0 | % |   | $ | 51,732,000 |   | >= |   |   | 10.0 | % |
|    Tier 1 capital (to risk weighted assets)  |   |   | 53,447,000 |   |                         |   | 10.3   | %                                                              |   |   | 20,693,000 |   | >= |   |   | 4.0 | % |   |   | 31,039,000 |   | >= |   |   | 6.0 | % |
|    Tier 1 capital (to adjusted total assets) |   |   | 53,447,000 |   |                         |   | 8.9    | %                                                              |   |   | 23,941,000 |   | >= |   |   | 4.0 | % |   |   | 29,927,000 |   | >= |   |   | 5.0 | % |
|    Tangible capital (to tangible assets)     |   |   | 53,447,000 |   |                         |   | 8.9    | %                                                              |   |   | 8,978,000 |   | >= |   |   | 1.5 | % |   | NA |   |   |   | NA |   |
| As of September 30, 2009                               |   |   |       |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Total capital (to risk weighted assets )  |   | $      | 52,081,000 |   |                         |   | 9.6    | %                                                              |   | $ | 43,630,000 |   | >= |   |   | 8.0 | % |   | $ | 54,537,000 |   | >= |   |   | 10.0 | % |
|    Tier 1 capital (to risk weighted assets)  |   |   | 51,074,000 |   |                         |   | 9.4    | %                                                              |   |   | 21,815,000 |   | >= |   |   | 4.0 | % |   |   | 32,722,000 |   | >= |   |   | 6.0 | % |
|    Tier 1 capital (to adjusted total assets) |   |   | 51,074,000 |   |                         |   | 8.9    | %                                                              |   |   | 23,009,000 |   | >= |   |   | 4.0 | % |   |   | 28,762,000 |   | >= |   |   | 5.0 | % |
|    Tangible capital (to tangible assets)     |   |   | 51,074,000 |   |                         |   | 8.9    | %                                                              |   |   | 8,628,000 |   | >= |   |   | 1.5 | % |   | NA |   |   |   | NA |   |

----

|                                                                                                                 |   | Contract or NotionalAmount at September 30, |   |
|----------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                                                                                 |   | 2010                                        |   |   | 2009 |   |
| Commitments to extend credit - Fixed rate 4.00% - 8.90% in 2010,      and 4.25% - 10.25% in 2009 |   | $                                           | 1,655  |   |   | $ | 2,569 |   |
| Unused lines of credit:                                                                                              |   |                                        |   |   |   |   |   |   |
|      Real estate equity advance plan (REAP)                                                      |   |                                        | 734    |   |   |   | 615 |   |
|      Kwik cash and lines of credit                                                               |   |                                        | 1,423  |   |   |   | 2,299 |   |
|      MasterCard and VISA credit cards                                                            |   |                                        | 4,969  |   |   |   | 5,210 |   |
| Totals                                                                                                               |   | $                                           | 8,781  |   |   | $ | 10,693 |   |

| 2011       |   | $      | 1,079 |   |
|------------|--------|--------|-------|--------|
| 2012       |   |   | 990   |   |
| 2013       |   |   | 843   |   |
| 2014       |   |   | 431   |   |
| 2015       |   |   | 112   |   |
| After 2015 |   |   | 35    |   |
| Total      |   | $      | 3,490 |   |

----

|                                |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Beginning accrued benefit cost      |   | $      | 2,431  |   |   | $      | 2,444  |   |   | $ | 2,149 |   |
| Service cost                        |   |   | 3      |   |   |   | 19     |   |   |   | 54 |   |
| Interest cost                       |   |   | 132    |   |   |   | 166    |   |   |   | 158 |   |
| Amortization of prior service costs |   |   | 1      |   |   |   | 49     |   |   |   | 91 |   |
| Net periodic benefit cost           |   |   | 136    |   |   |   | 234    |   |   |   | 303 |   |
| Benefits paid                       |   |   | (19    | )      |   |   | (15    | )      |   |   | (8 | ) |
| Curtailment and settlement          |   |   | -      |   |   |   | (232   | )      |   |   | - |   |
| Ending accrued benefit cost         |   | $      | 2,548  |   |   | $      | 2,431  |   |   | $ | 2,444 |   |

|                                            |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Change in benefit obligation:                   |   |   |   |   |   |   |   |   |   |
| Projected benefit obligation, beginning of year |   | $      | 2,654  |   |   | $      | 2,751  |   |   | $ | 2,627 |   |
| Service cost                                    |   |   | 3      |   |   |   | 19     |   |   |   | 54 |   |
| Interest cost                                   |   |   | 132    |   |   |   | 166    |   |   |   | 158 |   |
| Curtailment and settlement                      |   |   | -      |   |   |   | (585   | )      |   |   | - |   |
| Actuarial loss (gain)                           |   |   | 17     |   |   |   | 318    |   |   |   | (80 | ) |
| Benefits paid                                   |   |   | (19    | )      |   |   | (15    | )      |   |   | (8 | ) |
| Projected benefit obligation, end of year       |   | $      | 2,787  |   |   | $      | 2,654  |   |   | $ | 2,751 |   |
| Change in plan assets:                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Plan assets at fair value, beginning of year    |   | $      | -      |   |   | $      | -      |   |   | $ |   |   |
| Actual return on plan assets                    |   |   | -      |   |   |   | -      |   |   |   |   |   |
| Company contributions                           |   |   | 19     |   |   |   | 15     |   |   |   | 8 |   |
| Benefits paid                                   |   |   | (19    | )      |   |   | (15    | )      |   |   | (8 | ) |
| Plan assets at fair value, end of year          |   | $      | -      |   |   | $      | -      |   |   | $ | - |   |

----

|                                                                      |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|---------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Benefit obligation actuarial assumptions:                                 |   |   |   |   |   |   |   |   |   |
|      Discount Rate                                    |   |   | 4.75   | %      |   |   | 5.00   | %      |   |   | 6.25 | % |
|      Rate of compensation increase                    |   |   | N/A    |   |   |   | N/A    |   |   |   | 5.00 | % |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Net pension cost actuarial assumption                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|      Discount rate                                    |   |   | 5.00   | %      |   |   | 6.25   | %      |   |   | 6.00 | % |
|      Expected long-term rate of return on plan assets |   |   | N/A    |   |   |   | N/A    |   |   |   | N/A |   |
|      Rate of compensation increase                    |   |   | N/A    |   |   |   | 5.00   | %      |   |   | 5.00 | % |

|      |   |
|-----------|--------|
| 2011      |   | $ | 22 |   |
| 2012      |   |   | 119 |   |
| 2013      |   |   | 269 |   |
| 2014      |   |   | 270 |   |
| 2015      |   |   | 273 |   |
| 2016-2020 |   |   | 1,389 |   |

----

|                                                                   |   | Shares |    |   | WeightedAverageExercisePrice |   |   | WeightedAverageRemainingContractualTerm |   |   | AggregateIntrinsicValue |   |
|------------------------------------------------------------------------|--------|--------|---------|--------|------------------------------|--------|--------|-----------------------------------------|--------|--------|-------------------------|--------|
| 2010                                                                   |   |   |    |   |                         |   |   |                                    |   |   |                    |   |
|    Outstanding at beginning of year                          |   |   | 113,915 |   |                         | $      | 7.04   |                                    |   |   |                    |   |   |   |
|    Granted                                                   |   |   | -       |   |                         |   |   |                                    |   |   |                    |   |   |   |
|    Exercised                                                 |   |   | -       |   |                         |   |   |                                    |   |   |                    |   |   |   |
|    Forfeited or expired                                      |   |   |    |   |                         |   |   |                                    |   |   |                    |   |   |     |
|    Outstanding at end of year                                |   |   | 113,915 |   |                         | $      | 7.04   |                                    |   |   | 7.21                    |   |   | $ | - |   |
|    Exercisable at end of year                                |   |   | 113,915 |   |                         | $      | 4.43   |                                    |   |   | 7.21                    |   |   |   |   |    |
|    Fully vested and expected to vest                         |   |   | 113,915 |   |                         | $      | 4.43   |                                    |   |   | 7.21                    |   |   |   |   |   |
|                                                                   |   |   |    |   |                         |   |   |                                    |   |   |                    |   |   |   |   |   |
| 2009                                                                   |   |   |    |   |                         |   |   |                                    |   |   |                    |   |   |   |   |     |
|    Outstanding at beginning of year                          |   |   | 185,110 |   |                         | $      | 7.04   |                                    |   |   |                    |   |   |   |   |   |
|    Granted                                                   |   |   | -       |   |                         |   |   |                                    |   |   |                    |   |   |   |   |   |
|    Exercised                                                 |   |   | -       |   |                         |   |   |                                    |   |   |                    |   |   |   |   |    |
|    Forfeited or expired                                      |   |   | (71,195 | )      |                         |   |   |                                    |   |   |                    |   |   |   |   |   |
|    Outstanding at end of year                                |   |   | 113,915 |   |                         | $      | 7.04   |                                    |   |   | 8.21                    |   |   | $ | - |   |
|    Exercisable at end of year                                |   |   | 92,836  |   |                         | $      | 3.66   |                                    |   |   | 8.25                    |   |   |   |   |   |
|    Fully vested and expected to vest                         |   |   | 113,915 |   |                         | $      | 3.66   |                                    |   |   | 8.21                    |   |   |   |   |   |
|                                                                   |   |   |    |   |                         |   |   |                                    |   |   |                    |   |   |   |   |   |
| 2008                                                                   |   |   |    |   |                         |   |   |                                    |   |   |                    |   |   |   |   |   |
|    Outstanding at beginning of year                          |   |   | 190,806 |   |                         | $      | 7.04   |                                    |   |   |                    |   |   |   |   |   |
|    Granted                                                   |   |   | -       |   |                         |   |   |                                    |   |   |                    |   |   |   |   |   |
|    Exercised                                                 |   |   | -       |   |                         |   |   |                                    |   |   |                    |   |   |   |   |   |
|    Forfeited or expired                                      |   |   | (5,696  | )      |                         |   |   |                                    |   |   |                    |   |   |   |   |   |
|    Outstanding at end of year                                |   |   | 185,110 |   |                         | $      | 7.04   |                                    |   |   | 9.03                    |   |   | $ | - |   |
|    Exercisable at end of year                                |   |   | 114,480 |   |                         | $      | 6.76   |                                    |   |   | 10.06                   |   |   |   |   |   |
|    Fully vested and expected to vest                         |   |   | 185,110 |   |                         | $      | 6.76   |                                    |   |   | 9.03                    |   |   |   |   |   |
|                                                                   |   |   |    |   |                         |   |   |                                    |   |   |                    |   |   |   |   |   |
| Information related to the stock option plan during each year follows: |   |
|                                                                   |   |   |    |   |                         |   | 2010   |                                    |   |   | 2009                    |   |   |   | 2008 |   |
|    Intrinsic value of options exercised                      |   |   | $       | -      |                         |   | $      | -                                       |   |   | $                       | -      |   |
|    Cash received from options exercised                      |   |   | $       | -      |                         |   | $      | -                                       |   |   | $                       | -      |   |
|    Tax benefit realized from options exercised               |   |   | $       | -      |                         |   | $      | -                                       |   |   | $                       | -      |   |

----

|                                   |   | 2005   |   |
|----------------------------------------|--------|--------|--------|
| Dividend yield                         |   |   | 1      | % |
| Risk-free interest rate                |   |   | 4      | % |
| Weighted average expected life (years) |   |   | 10     |   |
| Expected volatility                    |   |   | 16     | % |

|                             |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Current tax provision/(benefit)  |   |   |   |   |   |   |   |   |   |
|      Federal |   | $      | 694    |   |   | $      | (1,145 | )      |   |   | 894 |   |
|      State   |   |   | 8      |   |   |   | (313   | )      |   |   | 298 |   |
|                             |   |   | 702    |   |   |   | (1,458 | )      |   |   | 1,192 |   |
| Deferred tax benefit             |   |   |   |   |   |   |   |   |   |   |   |   |
|      Federal |   |   | (1,341 | )      |   |   | (505   | )      |   |   | (140 | ) |
|      State   |   |   | (316   | )      |   |   | (126   | )      |   |   | (44 | ) |
|                             |   |   | (1,657 | )      |   |   | (631   | )      |   |   | (184 | ) |
|      Total   |   | $      | (955   | )      |   | $      | (2,089 | )      |   | $ | 1,008 |   |

|                                |   | 2010   |   | 2009   |   | 2008   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|
| Tax expense at statutory Rate       |   | $      | (2,735 | )      |   |   | 34.00 | % |   | $ | (1,794 | ) |   |   | 34.00 | % |   | $ | 844 |   |   |   | 34.00 | % |
| State income taxes net of exception |   |   | (131   | )      |   |   | 5.37 | % |   |   | (295 | ) |   |   | 5.60 | % |   |   | 164 |   |   |   | 6.60 | % |
| Goodwill impairment                 |   |   | 1,901  |   |   |   | (27.37 | %) |   |   | - |   |   |   |   |   |   |   | - |   |   |   |   |   |
| Other permanent differences         |   |   | 10     |   |   |   | 0.13 | % |   |   | - |   |   |   |   |   |   |   | - |   |   |   |   |   |
|      Total      |   | $      | (955   | )      |   |   | 11.87 | % |   | $ | (2,089 | ) |   |   | 39.60 | % |   | $ | 1,008 |   |   |   | 40.60 | % |

----

|                                                                             |   | 2010   |   |   | 2009   |   |
|----------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Deferred tax assets:                                                             |   |   |   |   |   |   |
|      Allowance for loan losses                               |   | $      | 1,632  |   |   | $      | 530 |   |
|      Deferred loan costs/fees                                |   |   | 250    |   |   |   | 54 |   |
|      Director/officer compensation plans                     |   |   | 1,206  |   |   |   | 1,178 |   |
|      Net unrealized loss on securities available for sale    |   |   | 3,321  |   |   |   | 3,534 |   |
|      Impairment loss                                         |   |   | 1,338  |   |   |   | - |   |
|      Other                                                   |   |   | 173    |   |   |   | 74 |   |
|            Deferred tax assets |   | $      | 7,920  |   |   | $      | 5,370 |   |
| Deferred tax liabilities:                                                        |   |   |   |   |   |   |   |   |
|      Office properties and equipment                         |   |   | (1,085 | )      |   |   | (37 | ) |
|      Federal Home Loan Bank stock                            |   |   | (67    | )      |   |   | (67 | ) |
|      Core deposit intangible                                 |   |   | (157   | )      |   |   | (365 | ) |
|      481a adjustment                                         |   |   | (144   | )      |   |   | - |   |
|      Other                                                   |   |   | (140   | )      |   |   | (14 | ) |
|           Deferred tax liabilities  |   |   | (1,593 | )      |   |   | (483 | ) |
|      Net deferred tax assets                                 |   | $      | 6,327  |   |   | $      | 4,887 |   |

----

|                                                                                                                             |   | 2010   |      |   | 2009   |   |      | 2008   |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Basic                                                                                                                            |   |   |      |   |   |   |      |   |   |
| Net income (loss)                                                                                                                |   | $      | (7,091    | )      |   | $      | (3,183    | )      |   | $ | 1,474 |   |
| Weighted average common shares outstanding                                                                                       |   |   | 5,119,807 |   |   |   | 5,365,122 |   |   |   | 6,225,270 |   |
| Basic earnings (loss) per share                                                                                                  |   | $      | (1.39     | )      |   | $      | (0.59     | )      |   | $ | 0.24 |   |
|                                                                                                                             |   |   |      |   |   |   |      |   |   |   |   |   |
| Diluted                                                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| Net income (loss)                                                                                                                |   | $      | (7,091    | )      |   | $      | (3,183    | )      |   | $ | 1,474 |   |
| Weighted average common shares outstanding for basic earnings per share                                                          |   |   | 5,119,807 |   |   |   | 5,365,122 |   |   |   | 6,225, 270 |   |
| Add: Dilutive stock options outstanding                                                                                          |   | $      | -         |   |   | $      | -         |   |   | $ | 17,370 |   |
| Average shares and dilutive potential common shares                                                                              |   |   | 5,119,807 |   |   |   | 5,365,122 |   |   |   | 6,242,640 |   |
| Diluted earnings (loss) per share                                                                                                |   | $      | (1.39     | )      |   | $      | (0.59     | )      |   | $ | 0.24 |   |
|                                                                                                                             |   |   |      |   |   |   |      |   |   |   |   |   |
| Additional common stock option shares that have      not been included due to their antidilutive effect |   |   | 113,915   |   |   |   | 113,915   |   |   |   | 185,110 |   |

|                       |   | 2010   |     |   | 2009   |   |
|----------------------------|--------|--------|----------|--------|--------|--------|
| ASSETS                     |   |   |     |   |   |   |
| Cash and cash equivalents  |   | $      | 740 $    |   |   |   | 943 |   |
| Investment in subsidiary   |   | $      | 49,137 $ |   |   |   | 51,120 |   |
| Note receivable - ESOP     |   |   | -        |   |   |   | 3,302 |   |
| Total assets               |   | $      | 49,877 $ |   |   |   | 55,365 |   |
| STOCKHOLDERS' EQUITY       |   |   |     |   |   |   |   |   |
| Total stockholders' equity |   | $      | 49,877 $ |   |   |   | 55,365 |   |

----

| STATEMENT OF OPERATIONS                                                                                                    |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                       |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Income - interest and dividends                                                                                            |   | $ | - |   |   | $ | 128 |   |   | $ | 189 |   |
| Expenses - other                                                                                                           |   |   | 325 |   |   |   | 459 |   |   |   | 454 |   |
| Loss before provision for income taxes and equity in undistributed net income     (loss) of subsidiary |   |   | (325 | ) |   |   | (331 | ) |   |   | (265 | ) |
| Benefit for income taxes                                                                                                   |   |   | (110 | ) |   |   | (140 | ) |   |   | (121 | ) |
| Loss before equity in undistributed net income (loss) of subsidiary                                                        |   |   | (215 | ) |   |   | (191 | ) |   |   | (144 | ) |
| Equity in undistributed net income (loss) of subsidiary                                                                    |   |   | (6,876 | ) |   |   | (2,992 | ) |   |   | 1,618 |   |
| Net income (loss)                                                                                                          |   | $ | (7,091 | ) |   | $ | (3,183 | ) |   | $ | 1,474 |   |

| STATEMENT OF CASH FLOWS                                                                                                                                                                                                                                                     |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                        |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Increase (decrease) in cash and cash equivalents:                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |   |
|    Cash flows from operating activities:                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
|      Net income (loss)                                                                                                                                                                                                                                  |   | $ | (7,091 | ) |   | $ | (3,183 | ) |   | $ | 1,474 |   |
|      Provision for stock options                                                                                                                                                                                                                        |   | $ | 12 |   |   | $ | 48 |   |   | $ | 71 |   |
|      Adjustments to reconcile net income to net cash          provided by operating activities - Equity in          undistributed (income) loss of subsidiary |   |   | 6,876 |   |   |   | 2,992 |   |   |   | (1,618 | ) |
|    Net cash provided by (used in) operating activities                                                                                                                                                                                                       |   |   | (203 | ) |   |   | (143 | ) |   |   | (73 | ) |
|    Cash flows from investing activities:                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|      Investment in subsidiary                                                                                                                                                                                                                      |   |   | - |   |   |   | (7,573 | ) |   |   | - |   |
|      Loan to ESOP                                                                                                                                                                                                                                       |   |   | - |   |   |   | - |   |   |   | - |   |
|      Principal received on ESOP loan                                                                                                                                                                                                                    |   |   | - |   |   |   | 311 |   |   |   | 396 |   |
|    Net cash provided by (used in) investing activities                                                                                                                                                                                                       |   |   | - |   |   |   | (7,262 | ) |   |   | 396 |   |
|    Cash flows from financing activities:                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|      Sale of common stock                                                                                                                                                                                                                               |   |   | - |   |   |   | - |   |   |   | - |   |
|      Repurchase shares of common stock                                                                                                                                                                                                                  |   |   | - |   |   |   | (5,260 | ) |   |   | (7,855 | ) |
|      Stock options exercised                                                                                                                                                                                                                            |   |   | - |   |   |   | - |   |   |   | - |   |
|      Cash dividends paid                                                                                                                                                                                                                                |   |   | - |   |   |   | (1,146 | ) |   |   | (1,344 | ) |
|    Net cash provided by (used in) financing activities                                                                                                                                                                                                            |   |   | - |   |   |   | (6,406 | ) |   |   | (9,199 | ) |
|    Net increase (decrease) in cash and cash equivalents                                                                                                                                                                                                           |   |   | (203 | ) |   |   | (13,811 | ) |   |   | (8,876 | ) |
|    Cash and cash equivalents at beginning of year                                                                                                                                                                                                                 |   |   | 943 |   |   |   | 14,754 |   |   |   | 23,630 |   |
| Cash and cash equivalents at end of year                                                                                                                                                                                                                                    |   | $ | 740 |   |   | $ |   943 |   |   | $ |   14,754 |   |

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| Consolidated Balance Sheets as of September 30, 2010, and 2009                                                         |
|------------------------------------------------------------------------------------------------------------------------|
| Consolidated Statements of Operations for the Years Ended September 30, 2010, 2009 and 2008                            |
| Consolidated Statements of Changes in Stockholders’ Equity For the Years Ended September 30, 2010, 2009 and 2008 |
| Consolidated Statements of Cash Flows For the Years Ended September 30, 2010, 2009 and 2008                            |
| Notes to Consolidated Financial Statements                                                                             |

| 3.1   | Articles of Incorporation of the Registrant. (Filed as an exhibit to the Company’s registration statement filed on June 30, 2006 (File No. 333-135527) pursuant to Section 5 of the Securities Act of 1933 and incorporated herein by reference.)                                                                        |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2   | Bylaws of the Registrant.  (Filed as an exhibit to the Company’s registration statement filed on June 30, 2006 (File No. 333-135527) pursuant to Section 5 of the Securities Act of 1933 and incorporated herein by reference.)                                                                                |
| 10.1+ | Citizens Community Bancorp, Inc. 2004 Stock Option and Incentive Plan.  (Filed as an exhibit to the Company’s registration statement filed on June 30, 2006 (File No. 333-135527) pursuant to Section 5 of the Securities Act of 1933 and incorporated herein by reference.)                                   |
| 10.2+ | Citizens Community Bancorp, Inc. 2004 Recognition and Retention Plan.  (Filed as an exhibit to the Company’s registration statement filed on June 30, 2006 (File No. 333-135527) pursuant to Section 5 of the Securities Act of 1933 and incorporated herein by reference.)                                    |
| 10.3+ | Citizens Community Bancorp, Inc. Supplemental Executive Retirement Plan.  (Filed as an exhibit to the Company’s registration statement filed on June 30, 2006 (File No. 333-135527) pursuant to Section 5 of the Securities Act of 1933 and incorporated herein by reference.)                                 |
| 10.4  | Citizens Community Bancorp, Inc. Tax Allocation Agreement.  (Filed as an exhibit to the Company’s annual report on Form 10-KSB for the fiscal year ended September 30, 2004 and incorporated herein by reference.)                                                                                             |
| 10.5+ | Citizens Community Bancorp, Inc. 2008 Equity Incentive Plan.  (Filed as an exhibit to the Company’s Proxy Statement on Schedule 14A for its 2008 Annual Meeting of Stockholders and incorporated herein by reference.)                                                                                         |
| 10.6+ | Employment Agreement by and between Edward H. Schaefer and Citizens Community Federal dated effective as of July 1, 2010.  (Filed as Exhibit 99.1 to the Company’s current report on Form 8-K dated as of June 25, 2010 and incorporated herein by reference.)                                            |
| 10.7+ | Form of Restricted Stock Grant Agreement under the Citizens Community Bancorp, Inc. 2004 Recognition and Retention Plan.  (Filed as Exhibit 10.7 to the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2010 filed with the Securities and Exchange Commission on December 23, 2010.)  |
| 10.8+ | Form of Incentive Stock Option Agreement under the Citizens Community Bancorp, Inc. 2004 Stock Option and Incentive Plan.  (Filed as Exhibit 10.8 to the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2010 filed with the Securities and Exchange Commission on December 23, 2010.) |
| 14    | Citizens Community Bancorp, Inc. Code of Conduct and Ethics.  (Filed as Exhibit 14 to the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2010 filed with the Securities and Exchange Commission on December 23, 2010.)                                                                |
| 16    | Letter Regarding Change in Auditors (filed as Exhibit 99.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on March 31, 2010).                                                                                                                                                   |
| 21    | Subsidiaries of the Company as of September 30, 2010.  (Filed as Exhibit 21 to the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2010 filed with the Securities and Exchange Commission on December 23, 2010.)                                                                       |
| 23.1  | Consent of Independent Registered Public Accounting Firm (Baker Tilly Virchow Krause, LLP).                                                                                                                                                                                                                                    |
| 23.2  | Consent of Independent Registered Public Accounting Firm (Wipfli, LLP).                                                                                                                                                                                                                                                        |
| 31.1  | Rule 13a-15(e) Certification of the Company’s Chief Executive Officer.                                                                                                                                                                                                                                                   |
| 31.2  | Rule 13a-15(e) Certification of the Company’s Principal Financial and Accounting Officer.                                                                                                                                                                                                                                |
| 32.1* | Certification of Chief Executive Officer and Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).                                                                                                                                                    |

| * | This certification is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   |             |   | CITIZENS COMMUNITY BANCORP, INC.                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Date:  | January 11, 2011 |   | By: /s/ Edward H. Schaefer                                                                   |
|   |             |   |        Edward H. Schaefer       Chief Executive Officer                                                                                                                                                                                                                                                                                                               |
|   |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Date:  | January 11, 2011 |   | By: /s/ Rebecca L. Johnson                                                                   |
|   |             |   |       Rebecca L. Johnson      Principal Financial and Accounting Officer                                                                                                                                                                                                                                                                                                        |

| By:    |  /s/ Richard McHugh                                                                   |   | January 10, 2011 |
|--------|--------------------------------------------------------------------------------------------|--------|------------------|
|   | Richard McHughChairman of the Board                                                        |   |             |
|   |                                                                                       |   |             |
| By:    | /s/ Edward H. Schaefer                                                                     |   | January 10, 2011 |
|   | Edward H. SchaeferChief Executive Officer(Principal Executive Officer)                     |   |             |
|   |                                                                                       |   |             |
| By:    | /s/ Thomas C. Kempen                                                                       |   | January 10, 2011 |
|   | Thomas C. KempenVice Chairman of the Board                                                 |   |             |
|   |                                                                                       |   |             |
| By:    | /s/ Brian R. Schilling                                                                     |   | January 10, 2011 |
|   | Brian R. SchillingDirector and Treasurer                                                   |   |             |
|   |                                                                                       |   |             |
| By:    | /s/ David B. Westrate                                                                      |   | January 10, 2011 |
|   | David B. WestrateDirector                                                                  |   |             |
|   |                                                                                       |   |             |
| By:    | /s/ Timothy A. Nettesheim                                                                  |   | January 10, 2011 |
|   | Timothy A. NettesheimDirector                                                              |   |             |
|   |                                                                                       |   |             |
| By:    | /s/ Rebecca L. Johnson                                                                     |   | January 10, 2011 |
|   | Rebecca L. JohnsonController(Principal Financial Officer and Principal Accounting Officer) |   |             |

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