| United States                            |   | 41-2224099                           |
|------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of          |   | (I.R.S. Employer Identification No.) |
| incorporation or organization)           |   |                                 |
|                                     |   |                                 |
| 3993 Huntingdon Pike, 3rd Floor,         |   |                                 |
| Huntingdon Valley, Pennsylvania          |   | 19006                                |
| (Address of principal executive offices) |   | (Zip Code)                           |

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|        |                                                                                          | Page   |
|-------------|-----------------------------------------------------------------------------------------------|--------|
|        |                                                                                          |   |
| PART I      |                                                                                          |   |
|        |                                                                                          |   |
| Item 1.     | Business                                                                                      | 1      |
| Item 1A.    | Risk Factors                                                                                  | 6      |
| Item 1B.    | Unresolved Staff Comments                                                                     | 17     |
| Item 2.     | Properties                                                                                    | 18     |
| Item 3.     | Legal Proceedings                                                                             | 18     |
| Item 4.     | [Removed and Reserved]                                                                        | 18     |
|        |                                                                                          |   |
| PART II     |                                                                                          |   |
|        |                                                                                          |   |
| Item 5.     | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases |   |
|        | of Equity Securities                                                                          | 19     |
| Item 6.     | Selected Financial Data                                                                       | 20     |
| Item 7.     | Management’s Discussion and Analysis of Financial Condition and Results of Operations   | 21     |
| Item 7A.    | Quantitative and Qualitative Disclosures About Market Risk                                    | 41     |
| Item 8.     | Financial Statements and Supplementary Data                                                   | 41     |
| Item 9.     | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure          | 41     |
| Item 9A.    | Controls and Procedures                                                                       | 41     |
| Item 9B.    | Other Information                                                                             | 41     |
|        |                                                                                          |   |
| PART III    |                                                                                          |   |
|        |                                                                                          |   |
| Item 10.    | Directors, Executive Officers and Corporate Governance                                        | 42     |
| Item 11.    | Executive Compensation                                                                        | 42     |
| Item 12.    | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder        |   |
|        | Matters                                                                                       | 42     |
| Item 13.    | Certain Relationships and Related Transactions, and Director Independence                     | 43     |
| Item 14.    | Principal Accountant Fees and Services                                                        | 43     |
|        |                                                                                          |   |
| PART IV     |                                                                                          |   |
|        |                                                                                          |   |
| Item 15.    | Exhibits and Financial Statement Schedules                                                    | 44     |
|        |                                                                                          |   |
| Signatures. |                                                                      |

----

| ITEM 1. | BUSINESS |
|---------|----------|

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----

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| ITEM 1A. | RISK FACTORS |
|----------|--------------|

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----

|   | · | Our ability to integrate the branches and operations we acquired into our current operations; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Our ability to limit the outflow of deposits held by our new customers in the acquired branches and to successfully retain and manage the loans we acquired; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our ability to retain and attract the appropriate personnel to staff the acquired branches and conduct any acquired operations; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our ability to earn acceptable levels of interest and non-interest income from the acquired branches; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | The diversion of management’s attention from existing operations; and |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | Our ability to address an increase in working capital requirements. |
|--------|--------|---------------------------------------------------------------------|

----

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|                |   | Capital                          |   |   |     |   |
|---------------------|--------|----------------------------------|--------|--------|----------|--------|
|                |   | Actual                           |   |   | Required |   |   | Excess |   |
|                |   | (Dollars in thousands) |   |
|                |   |                             |   |   |     |   |   |   |   |
| Tangible            |   | $                                | 26,597 |   |     | $      | 5,962 |   |   | $ | 20,635 |   |
| Tier 1 / Leverage   |   |                             | 26,597 |   |     |   | 11,925 |   |   |   | 14,672 |   |
| Tier 1 / Risk-based |   |                             | 26,597 |   |     |   | 6,037 |   |   |   | 20,560 |   |
| Total / Risk-based  |   |                             | 27,431 |   |     |   | 12,074 |   |   |   | 15,357 |   |

----

----

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| ITEM 1B. | UNRESOLVED STAFF COMMENTS |
|----------|---------------------------|

----

| ITEM 2. | PROPERTIES |
|---------|------------|

| ITEM 3. | LEGAL PROCEEDINGS |
|---------|-------------------|

| ITEM 4. | [REMOVED AND RESERVED] |
|---------|------------------------|

----

| ITEM 5. | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
|---------|-------------------------------------------------------------------------------------------------|

|           |   | High   |   |   | Low    |   |   |   | High           |   |   | Low    |   |
|----------------|--------|--------|--------|--------|--------|--------|--------|--------|----------------|--------|--------|--------|--------|
| 2010           |   |   |   |   |   |   | 2009   |   |           |   |   |   |   |
|           |   |   |   |   |   |   |   |   |           |   |   |   |   |
| First Quarter  |   | $      | 7.00   |   |   | $      | 4.80   |   | First Quarter  |   | $      | 8.75   |   |   | $ | 7.50 |   |
| Second Quarter |   |   | 6.49   |   |   |   | 5.30   |   | Second Quarter |   |   | 7.95   |   |   |   | 7.50 |   |
| Third Quarter  |   |   | 6.12   |   |   |   | 5.00   |   | Third Quarter  |   |   | 7.50   |   |   |   | 6.10 |   |
| Fourth Quarter |   |   | 6.12   |   |   |   | 5.00   |   | Fourth Quarter |   |   | 7.75   |   |   |   | 3.20 |   |

----

| ITEM 6. | SELECTED FINANCIAL DATA |
|---------|-------------------------|

|                                                                    |   | 2010                                          |    |    | 2009   |   |    | 2008    |   |
|-------------------------------------------------------------------------|--------|-----------------------------------------------|---------|---------|--------|--------|---------|---------|--------|
|                                                                    |   | (Dollars in thousands, except per share data) |    |
| Financial Condition Data:                                               |   |                                          |    |    |   |   |    |    |   |
| Total assets                                                            |   | $                                             | 298,829 |    |   | $      | 218,071 |    |   | $ | 220,236 |   |
| Securities available-for-sale                                           |   |                                          | 27,350  |    |   |   | 30,602  |    |   |   | 37,789 |   |
| Securities held-to-maturity                                             |   |                                          | 26,128  |    |   |   | 13,780  |    |   |   | - |   |
| Loans receivable, net                                                   |   |                                          | 137,665 |    |   |   | 150,177 |    |   |   | 163,759 |   |
| Covered loans                                                           |   |                                          | 32,808  |    |   |   | -       |    |   |   | - |   |
| Cash and cash equivalents                                               |   |                                          | 54,005  |    |   |   | 8,427   |    |   |   | 4,671 |   |
| Deposits                                                                |   |                                          | 239,706 |    |   |   | 164,207 |    |   |   | 164,586 |   |
| FHLB Advances – short-term                                        |   |                                          | -       |    |   |   | -       |    |   |   | 4,000 |   |
| FHLB Advances – long-term                                         |   |                                          | 28,426  |    |   |   | 26,474  |    |   |   | 24,553 |   |
| Stockholders’ equity                                              |   |                                          | 27,260  |    |   |   | 23,845  |    |   |   | 23,604 |   |
| Book value per common share                                             |   |                                          | 8.63    |    |   |   | 7.55    |    |   |   | 7.40 |   |
|                                                                    |   |                                          |    |    |   |   |    |    |   |   |   |   |
| Operating Data:                                                         |   |                                          |    |    |   |   |    |    |   |   |   |   |
| Interest income                                                         |   | $                                             | 9,845   |    |   | $      | 10,707  |    |   | $ | 11,069 |   |
| Interest expense                                                        |   |                                          | 3,675   |    |   |   | 5,000   |    |   |   | 5,312 |   |
| Net interest income                                                     |   |                                          | 6,169   |    |   |   | 5,707   |    |   |   | 5,757 |   |
| Provision for loan losses                                               |   |                                          | (115    | )       |   |   | 252     |    |   |   | 85 |   |
| Net interest income after provision for loan losses                     |   |                                          | 6,285   |    |   |   | 5,455   |    |   |   | 5,672 |   |
| Non-interest income                                                     |   |                                          | 6,110   |    |   |   | 1,444   |    |   |   | 85 |   |
| Non-interest expense                                                    |   |                                          | 7,645   |    |   |   | 6,559   |    |   |   | 6,101 |   |
| Income (Loss) before income taxes                                       |   |                                          | 4,750   |    |   |   | 340     |    |   |   | (344 | ) |
| Provision for income taxes                                              |   |                                          | 1,586   |    |   |   | 9       |    |   |   | (98 | ) |
| Net income (loss)                                                       |   | $                                             | 3,164   |    |   | $      | 331     |    |   | $ | (246 | ) |
| Basic and diluted earnings per share                                    |   |                                          | 1.04    |    |   |   | 0.11    |    |   |   | (0.08 | ) |
|                                                                    |   |                                          |    |    |   |   |    |    |   |   |   |   |
| Performance Ratios:                                                     |   |                                          |    |    |   |   |    |    |   |   |   |   |
| Return on average assets                                                |   |                                          | 1.44    | %  |   |   | 0.15    | %  |   |   | (0.12 | )% |
| Return on average equity                                                |   |                                          | 13.00   |    |   |   | 1.60    |    |   |   | (1.04 | ) |
| Interest rate spread (1)                                                |   |                                          | 2.84    |    |   |   | 2.55    |    |   |   | 2.63 |   |
| Net interest margin (2)                                                 |   |                                          | 3.01    |    |   |   | 2.74    |    |   |   | 2.89 |   |
| Non-interest expense to average assets                                  |   |                                          | 3.48    |    |   |   | 2.96    |    |   |   | 2.89 |   |
| Efficiency ratio (3)                                                    |   |                                          | 62.26   |    |   |   | 91.72   |    |   |   | 104.43 |   |
| Average interest-earning assets to average interest-bearing liabilities |   |                                          | 109.42  |    |   |   | 107.95  |    |   |   | 109.76 |   |
| Average equity to average assets                                        |   |                                          | 11.07   |    |   |   | 9.36    |    |   |   | 11.15 |   |
|                                                                    |   |                                          |    |    |   |   |    |    |   |   |   |   |
| Capital Ratios (4):                                                     |   |                                          |    |    |   |   |    |    |   |   |   |   |
| Tangible capital                                                        |   |                                          | 8.92    |    |   |   | 9.34    |    |   |   | 9.06 |   |
| Core capital                                                            |   |                                          | 8.92    |    |   |   | 9.34    |    |   |   | 9.06 |   |
| Total risk-based capital                                                |   |                                          | 18.18   |    |   |   | 19.78   |    |   |   | 18.73 |   |

----

|                                                                        |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                        |   |   |   |   |   |   |   |   |   |
| Asset Quality Ratios (5):                                                   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses as a percent of total loans                       |   |   | 0.60   | %      |   |   | 0.74   | %      |   |   | 0.52 | % |
| Allowance for loan losses as a percent of non-performing loans              |   |   | 81.56  |   |   |   | 40.66  |   |   |   | 117.70 |   |
| Net charge-offs (recoveries) to average outstanding loans during the period |   |   | 0.11   |   |   |   | (0.01  | )      |   |   | (0.03 | ) |
| Non-performing loans as a percent of total loans                            |   |   | 0.74   |   |   |   | 1.81   |   |   |   | 0.44 |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Data:                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Number of:                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans outstanding                                               |   |   | 1,368  |   |   |   | 968    |   |   |   | 1,082 |   |
| Deposit accounts                                                            |   |   | 12,131 |   |   |   | 8,729  |   |   |   | 9,468 |   |
| Full-service offices                                                        |   |   | 9      |   |   |   | 5      |   |   |   | 5 |   |

----

| (1) | Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of interest-bearing liabilities. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Represents net interest income as a percent of average interest-earning assets. |
|-----|---------------------------------------------------------------------------------|

| (3) | Represents non-interest expense divided by the sum of net interest income and non-interest income. |
|-----|----------------------------------------------------------------------------------------------------|

| (4) | Ratios are for Polonia Bank. |
|-----|------------------------------|

| (5) | Ratios exclude covered loans. |
|-----|-------------------------------|

| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------------------------------------|

----

----

----

|                                    |   | At December 31,        |    |
|-----------------------------------------|--------|------------------------|---------|
|                                    |   | 2010                   |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                    |   | Amount                 |    |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                                    |   | (Dollars in thousands) |    |
| Real estate loans:                      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-four-family                      |   | $                      | 119,085 |   |   |   | 69.40 | % |   | $ | 131,571 |   |   |   | 86.84 | % |   | $ | 144,508 |   |   |   | 87.68 | % |   | $ | 120,774 |   |   |   | 87.42 | % |   | $ | 100,152 |   |   |   | 88.84 | % |
| Multi-family and commercial real estate |   |                   | 10,272  |   |   |   | 5.99 |   |   |   | 10,214 |   |   |   | 6.74 |   |   |   | 12,020 |   |   |   | 7.29 |   |   |   | 9,803 |   |   |   | 7.09 |   |   |   | 5,212 |   |   |   | 4.62 |   |
| Home equity loans                       |   |                   | 2,918   |   |   |   | 1.70 |   |   |   | 3,372 |   |   |   | 2.23 |   |   |   | 4,172 |   |   |   | 2.53 |   |   |   | 4,343 |   |   |   | 3.14 |   |   |   | 4,229 |   |   |   | 3.75 |   |
| Home equity lines of credit             |   |                   | 2,023   |   |   |   | 1.18 |   |   |   | 3,036 |   |   |   | 2.00 |   |   |   | 1,361 |   |   |   | 0.83 |   |   |   | 980 |   |   |   | 0.71 |   |   |   | 980 |   |   |   | 0.87 |   |
| Total real estate loans:                |   | $                      | 134,298 |   |   |   | 78.27 |   |   | $ | 148,193 |   |   |   | 97.81 |   |   | $ | 162,061 |   |   |   | 98.33 |   |   | $ | 135,900 |   |   |   | 98.36 |   |   | $ | 110,573 |   |   |   | 98.08 |   |
|                                    |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consumer:                               |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Education                               |   | $                      | 3,179   |   |   |   | 1.85 |   |   | $ | 3,281 |   |   |   | 2.17 |   |   | $ | 2,690 |   |   |   | 1.63 |   |   | $ | 2,170 |   |   |   | 1.57 |   |   | $ | 2,137 |   |   |   | 1.90 |   |
| Other consumer                          |   |                   | 1,300   |   |   |   | 0.76 |   |   |   | 33 |   |   |   | 0.02 |   |   |   | 60 |   |   |   | 0.04 |   |   |   | 90 |   |   |   | 0.07 |   |   |   | 28 |   |   |   | 0.02 |   |
| Total consumer loans                    |   |                   | 4,479   |   |   |   | 2.61 |   |   |   | 3,314 |   |   |   | 2.19 |   |   |   | 2,750 |   |   |   | 1.67 |   |   |   | 2,260 |   |   |   | 1.64 |   |   |   | 2,165 |   |   |   | 1.92 |   |
| Total loans excluding covered loans     |   |                   | 138,777 |   |   |   | 80.88 |   |   |   | 151,507 |   |   |   | 100.00 |   |   |   | 164,811 |   |   |   | 100.00 |   |   |   | 138,160 |   |   |   | 100.00 |   |   |   | 112,738 |   |   |   | 100.00 |   |
| Covered loans                           |   |                   | 32,808  |   |   |   | 19.12 |   |   |   | - |   |   |   | 0.00 |   |   |   | - |   |   |   | 0.00 |   |   |   | - |   |   |   | 0.00 |   |   |   | - |   |   |   | 0.00 |   |
| Total loans                             |   |                   | 171,585 |   |   |   | 100.00 | % |   |   | 151,507 |   |   |   | 100.00 | % |   |   | 164,811 |   |   |   | 100.00 | % |   |   | 138,160 |   |   |   | 100.00 | % |   |   | 112,738 |   |   |   | 100.00 | % |
| Net deferred loan fees                  |   |                   | 278     |   |   |   |   |   |   |   | 215 |   |   |   |   |   |   |   | 195 |   |   |   |   |   |   |   | 149 |   |   |   |   |   |   |   | 120 |   |   |   |   |   |
| Allowance for loan losses               |   |                   | 834     |   |   |   |   |   |   |   | 1,115 |   |   |   |   |   |   |   | 857 |   |   |   |   |   |   |   | 731 |   |   |   |   |   |   |   | 695 |   |   |   |   |   |
| Loans, net                              |   | $                      | 170,473 |   |   |   |   |   |   | $ | 150,177 |   |   |   |   |   |   | $ | 163,759 |   |   |   |   |   |   | $ | 137,280 |   |   |   |   |   |   | $ | 111,923 |   |   |   |   |   |

----

|                        |   | One-to-Four-FamilyReal EstateLoans |    |   | Multi-FamilyandCommercialReal EstateLoans |   |   | Home EquityLoans andLines ofCredit |   |   | ConsumerLoans |   |   | Total Loans |   |
|-----------------------------|--------|-----------------------------------------|---------|--------|------------------------------------------------|--------|--------|---------------------------------------------------|--------|--------|---------------|--------|--------|------------------|--------|
|                        |   | (Dollars in thousands)                  |    |
| Amounts due in:             |   |                                    |    |   |                                           |   |   |                                              |   |   |          |   |   |             |   |
| One year or less            |   | $                                       | 38      |   |                                           | $      | 194    |                                              |   | $      | 1,266         |   |   | $                | 1,217  |   |   | $ | 2,715 |   |
| More than one to five years |   |                                    | 2,436   |   |                                           |   | 963    |                                              |   |   | 197           |   |   |             | 953    |   |   |   | 4,549 |   |
| More than five years        |   |                                    | 116,611 |   |                                           |   | 9,115  |                                              |   |   | 3,478         |   |   |             | 2,309  |   |   |   | 131,513 |   |
| Total                       |   | $                                       | 119,085 |   |                                           | $      | 10,272 |                                              |   | $      | 4,941         |   |   | $                | 4,479  |   |   | $ | 138,777 |   |

|                                    |   | Fixed Rate        |    |   | AdjustableRate |   |
|-----------------------------------------|--------|------------------------|---------|--------|----------------|--------|
|                                    |   | (Dollars in thousands) |    |
| Real Estate Loans:                      |   |                   |    |   |           |   |
| One-to-four-family                      |   | $                      | 119,047 |   |           | $      | - |   |
| Multi-family and commercial real estate |   |                   | 10,078  |   |           |   | - |   |
| Home equity loans and lines of credit   |   |                   | 1,651   |   |           |   | 2,024 |   |
| Consumer Loans                          |   |                   | 3,262   |   |           |   | - |   |
| Total                                   |   | $                      | 134,038 |   |           | $      | 2,024 |   |

|                                    |   | December 31,2010            |    |   | December 31,2009 |   |    | December 31,2008 |   |
|-----------------------------------------|--------|----------------------------------|---------|--------|-----------------------|--------|---------|-----------------------|--------|
|                                    |   | (Dollars in thousands) |    |
| Total loans at beginning of period      |   | $                                | 151,507 |   |                  | $      | 164,811 |                  |   | $ | 138,160 |   |
| Loans originated:                       |   |                             |    |   |                  |   |    |                  |   |   |   |   |
| Real estate loans:                      |   |                             |    |   |                  |   |    |                  |   |   |   |   |
| One-to-four-family                      |   |                             | 29,500  |   |                  |   | 32,424  |                  |   |   | 40,121 |   |
| Multi-family and commercial real estate |   |                             | 1,992   |   |                  |   | 840     |                  |   |   | 710 |   |
| Home equity loans and lines of credit   |   |                             | 1,162   |   |                  |   | 2,173   |                  |   |   | 1,531 |   |
| Consumer                                |   |                             | 185     |   |                  |   | 830     |                  |   |   | 903 |   |
| Total loans originated                  |   |                             | 32,839  |   |                  |   | 36,267  |                  |   |   | 43,265 |   |
| Loans purchased                         |   |                             | 34,493  |   |                  |   | 3,980   |                  |   |   | 2,966 |   |
| Deduct:                                 |   |                             |    |   |                  |   |    |                  |   |   |   |   |
| Real estate loan principal repayments   |   |                             | (30,019 | )      |                  |   | (28,679 | )                     |   |   | (13,742 | ) |
| Loans sold                              |   |                             | (16,752 | )      |                  |   | (24,872 | )                     |   |   | (5,838 | ) |
| Loans transferred to REO                |   |                             | (483    | )      |                  |   | -       |                  |   |   | - |   |
| Total deductions                        |   |                             | (47,254 | )      |                  |   | (53,551 | )                     |   |   | (19,580 | ) |
| Net loan activity                       |   |                             | 20,078  |   |                  |   | (13,304 | )                     |   |   | 26,651 |   |
| Total loans at end of period            |   | $                                | 171,585 |   |                  | $      | 151,507 |                  |   | $ | 164,811 |   |

----

|                                                                |   | At December 31,        |   |
|---------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                |   | 2010                             |   |   | 2009 |   |   | 2008 |   |
|                                                                |   | AmortizedCost                    |   |   | FairValue |   |   | AmortizedCost |   |   | FairValue |   |   | AmortizedCost |   |   | FairValue |   |
|                                                                |   | (Dollars in thousands) |   |
| Securities available-for-sale:                                      |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                                                          |   | $                                | 7,558  |   |   | $ | 7,999 |   |   | $ | 13,163 |   |   | $ | 13,719 |   |   | $ | 23,870 |   |   | $ | 24,628 |   |
| Freddie Mac                                                         |   |                             | 1,062  |   |   |   | 1,116 |   |   |   | 2,763 |   |   |   | 2,906 |   |   |   | 6,835 |   |   |   | 7,000 |   |
| Government National Mortgage Association                            |   |                             | 1,054  |   |   |   | 1,179 |   |   |   | 1,339 |   |   |   | 1,447 |   |   |   | 1,628 |   |   |   | 1,688 |   |
| Collateralized mortgage obligations - Government-sponsored entities |   |                             | 6,237  |   |   |   | 6,245 |   |   |   | 86 |   |   |   | 87 |   |   |   | 98 |   |   |   | 94 |   |
| Total mortgage-backed securities                                    |   |                             | 15,911 |   |   |   | 16,539 |   |   |   | 17,351 |   |   |   | 18,159 |   |   |   | 32,431 |   |   |   | 33,410 |   |
| Corporate securities                                                |   |                             | 10,551 |   |   |   | 10,802 |   |   |   | 12,370 |   |   |   | 12,425 |   |   |   | 4,346 |   |   |   | 4,374 |   |
| Total debt securities                                               |   |                             | 26,462 |   |   |   | 27,341 |   |   |   | 29,721 |   |   |   | 30,584 |   |   |   | 36,777 |   |   |   | 37,784 |   |
| Equity securities - financial services                              |   |                             | 19     |   |   |   | 9 |   |   |   | 19 |   |   |   | 18 |   |   |   | 19 |   |   |   | 5 |   |
| Total                                                               |   | $                                | 26,481 |   |   | $ | 27,350 |   |   | $ | 29,740 |   |   | $ | 30,602 |   |   | $ | 36,796 |   |   | $ | 37,789 |   |

|                             | At December 31,        |   |
|----------------------------------|----------------------------------|--------|
|                             | 2010                             |   | 2009 |   | 2008 |   |
|                             | AmortizedCost                    |   | FairValue |   | AmortizedCost |   | FairValue |   | AmortizedCost |   | FairValue |   |
|                             | (Dollars in thousands) |   |
| Securities held-to-maturity:     |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                       |                             | $      | 22,611 |   |   | $ | 22,563 |   |   | $ | 13,780 |   |   | $ | 13,641 |   |   | $ | - |   |   | $ | - |   |
| Freddie Mac                      |                             |   | 3,516 |   |   |   | 3,512 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total mortgage-backed securities |                             | $      | 26,127 |   |   | $ | 26,075 |   |   | $ | 13,780 |   |   | $ | 13,641 |   |   | $ | - |   |   | $ | - |   |

----

|                                                                |   | One Year or Less |   |   | More than OneYear to Five Years |   |   | More than FiveYears to Ten Years |   |   | More thanTen Years |   |   | Total         |   |
|---------------------------------------------------------------------|--------|---------------------------------|--------|--------|----------------------------------------------------------|--------|--------|-----------------------------------------------------------|--------|--------|------------------------------|--------|--------|---------------|--------|
|                                                                |   | AmortizedCost                   |   |   | WeightedAverageYield                                     |   |   | AmortizedCost                                             |   |   | WeightedAverageYield         |   |   | AmortizedCost |   |   | WeightedAverageYield |   |   | AmortizedCost |   |   | WeightedAverageYield |   |   | AmortizedCost |   |   | WeightedAverageYield |   |
|                                                                |   | (Dollars in thousands)          |   |
| Securities available-for-sale:                                      |   |                            |   |   |                                                     |   |   |                                                      |   |   |                         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                                                          |   | $                               | -      |   |                                                     |   | -      | %                                                         |   | $      | 960                          |   |   |          | 4.82   | % |   | $ | 3,035 |   |   |   | 5.18 | % |   | $ | 3,563 |   |   |   | 4.18 | % |   | $ | 7,558 |   |   |   | 4.66 | % |
| Freddie Mac                                                         |   |                            | -      |   |                                                     |   | -      |                                                      |   |   | -                            |   |   |          | -      |   |   |   | 328 |   |   |   | 4.97 |   |   |   | 734 |   |   |   | 3.94 |   |   |   | 1,062 |   |   |   | 4.26 |   |
| Government National Mortgage Association                            |   |                            | -      |   |                                                     |   | -      |                                                      |   |   | -                            |   |   |          | -      |   |   |   | 29 |   |   |   | 7.57 |   |   |   | 1,025 |   |   |   | 6.43 |   |   |   | 1,054 |   |   |   | 6.47 |   |
| Collateralized mortgage obligations - Government-sponsored entities |   |                            | -      |   |                                                     |   | -      |                                                      |   |   | 573                          |   |   |          | 1.96   |   |   |   | 622 |   |   |   | 4.69 |   |   |   | 5,042 |   |   |   | 3.36 |   |   |   | 6,237 |   |   |   | 3.35 |   |
| Corporate securities                                                |   |                            | -      |   |                                                     |   | -      |                                                      |   |   | 8,798                        |   |   |          | 3.61   |   |   |   | 1,753 |   |   |   | 2.90 |   |   |   | - |   |   |   | - |   |   |   | 10,551 |   |   |   | 3.49 |   |
| Equity securities - financial services                              |   |                            | -      |   |                                                     |   | -      |                                                      |   |   | -                            |   |   |          | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                                               |   | $                               | -      |   |                                                     |   | -      | %                                                         |   | $      | 10,331                       |   |   |          | 3.63   | % |   | $ | 5,767 |   |   |   | 4.42 | % |   | $ | 10,364 |   |   |   | 3.97 | % |   | $ | 26,462 |   |   |   | 3.94 | % |

|                         |   | One Year or Less |   |   | More than OneYear to Five Years |   |   | More than FiveYears to Ten Years |   |   | More thanTen Years |   |   | Total         |   |
|------------------------------|--------|---------------------------------|--------|--------|----------------------------------------------------------|--------|--------|-----------------------------------------------------------|--------|--------|------------------------------|--------|--------|---------------|--------|
|                         |   | AmortizedCost                   |   |   | WeightedAverageYield                                     |   |   | AmortizedCost                                             |   |   | WeightedAverageYield         |   |   | AmortizedCost |   |   | WeightedAverageYield |   |   | AmortizedCost |   |   | WeightedAverageYield |   |   | AmortizedCost |   |   | WeightedAverageYield |   |
|                         |   | (Dollars in thousands)          |   |
| Securities held-to-maturity: |   |                            |   |   |                                                     |   |   |                                                      |   |   |                         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                   |   | $                               | -      |   |                                                     |   | -      | %                                                         |   | $      | -                            |   |   |          | -      | % |   | $ | 9,282 |   |   |   | 2.65 | % |   | $ | 13,329 |   |   |   | 2.92 | % |   | $ | 22,611 |   |   |   | 2.81 | % |
| Freddie Mac                  |   |                            | -      |   |                                                     |   | -      | %                                                         |   |   | -                            |   |   |          | -      | % |   |   | 3,516 |   |   |   | 2.79 | % |   |   | - |   |   |   | - | % |   |   | 3,516 |   |   |   | 2.79 | % |
| Total                        |   | $                               | -      |   |                                                     |   | -      | %                                                         |   | $      | -                            |   |   |          | -      | % |   | $ | 12,798 |   |   |   | 2.68 | % |   | $ | 13,329 |   |   |   | 2.92 | % |   | $ | 26,127 |   |   |   | 2.81 | % |

----

|                         |                             | At December 31, |    |
|------------------------------|----------------------------------|---------------------------|---------|
|                         |                             | 2010                      |    |   | 2009 |   |   | 2008 |   |
|                         |                             | Amount                    |    |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                         | (Dollars in thousands) |                      |
|                         |                             |                      |
| Noninterest-bearing accounts |                             | $                         | 8,806   |   |   |   | 3.68 | % |   | $ | 5,650 |   |   |   | 3.44 | % |   | $ | 3,986 |   |   |   | 2.42 | % |
| Interest-bearing accounts    |                             |                      | 14,767  |   |   |   | 6.16 |   |   |   | 11,118 |   |   |   | 6.77 |   |   |   | 10,301 |   |   |   | 6.26 |   |
| Money market                 |                             |                      | 56,769  |   |   |   | 23.70 |   |   |   | 32,859 |   |   |   | 20.01 |   |   |   | 25,603 |   |   |   | 15.56 |   |
| Savings accounts             |                             |                      | 29,523  |   |   |   | 12.32 |   |   |   | 29,088 |   |   |   | 17.71 |   |   |   | 34,346 |   |   |   | 20.87 |   |
| Time deposits                |                             |                      | 129,840 |   |   |   | 54.14 |   |   |   | 85,492 |   |   |   | 52.07 |   |   |   | 90,350 |   |   |   | 54.89 |   |
| Total                        |                             | $                         | 239,706 |   |   |   | 100.00 | % |   | $ | 164,207 |   |   |   | 100.00 | % |   | $ | 164,586 |   |   |   | 100.00 | % |

| Maturity Period     |   | Time Deposits               |   |
|--------------------------|--------|----------------------------------|--------|
|                     |   | (Dollars in thousands) |   |
| 3 Months or less         |   | $                                | 12,358 |   |
| Over 3 Through 6 Months  |   |                             | 5,848  |   |
| Over 6 Through 12 Months |   |                             | 12,055 |   |
| Over 12 Months           |   |                             | 10,127 |   |
| Total                    |   | $                                | 40,388 |   |

|         |   | At December 31,        |    |
|--------------|--------|----------------------------------|---------|
|         |   | 2010                             |    |   | 2009 |   |   | 2008 |   |
|         |   | (Dollars in thousands) |    |
| 0.01 - 0.99% |   | $                                | 15,471  |   |   | $ | - |   |   | $ | - |   |
| 1.00 - 1.99% |   |                             | 71,934  |   |   |   | 32,383 |   |   |   | - |   |
| 2.00 - 3.99% |   |                             | 21,859  |   |   |   | 26,129 |   |   |   | 56,181 |   |
| 4.00 - 5.99% |   |                             | 20,576  |   |   |   | 26,980 |   |   |   | 34,095 |   |
| 6.00 - 7.99% |   |                             | -       |   |   |   | - |   |   |   | 74 |   |
| Total        |   | $                                | 129,840 |   |   | $ | 85,492 |   |   | $ | 90,350 |   |

----

|         | Amount Due                  |   |                                        |   |                                           |
|--------------|----------------------------------|--------|---------------------------------------------|--------|------------------------------------------------|
|         | Less ThanOne Year      |   | More ThanOne Yearto TwoYears |   | More ThanTwo Yearsto ThreeYears |   | More ThanThreeYears toFour Years |   | More ThanFour Years |   | Total |   |   | Percent ofTotal TimeDeposits |   |
|         | (Dollars in thousands) |   |                                        |   |                                           |
| 0.01 - 0.99% |                             | $      | 14,841                                      |   |                                           | $ | 158 |   |   | $ | 8 |   |   | $ | - |   |   | $ | 464 |   |   | $ | 15,471 |   |   |   | 11.92 | % |
| 1.00 - 1.99% |                             |   | 53,363                                      |   |                                           |   | 5,891 |   |   |   | 243 |   |   |   | 121 |   |   |   | 12,316 |   |   |   | 71,934 |   |   |   | 55.40 |   |
| 2.00 - 3.99% |                             |   | 10,398                                      |   |                                           |   | 2,376 |   |   |   | 3,697 |   |   |   | 1,476 |   |   |   | 3,912 |   |   |   | 21,859 |   |   |   | 16.84 |   |
| 4.00 - 5.99% |                             |   | 13,249                                      |   |                                           |   | 5,123 |   |   |   | 2,204 |   |   |   | - |   |   |   | - |   |   |   | 20,576 |   |   |   | 15.84 |   |
| Total        |                             | $      | 91,851                                      |   |                                           | $ | 13,548 |   |   | $ | 6,152 |   |   | $ | 1,597 |   |   | $ | 16,692 |   |   | $ | 129,840 |   |   |   | 100.00 | % |

|                                         |   | Year Ended December 31, |    |
|----------------------------------------------|--------|----------------------------------------|---------|
|                                         |   | 2010                                   |    |   | 2009 |   |   | 2008 |   |
|                                         |   | (Dollars in thousands)       |    |
| Beginning balance                            |   | $                                      | 164,207 |   |   | $ | 164,586 |   |   | $ | 163,217 |   |
| Increase (decrease) before interest credited |   |                                   | (17,911 | ) |   |   | (5,379 | ) |   |   | (3,943 | ) |
| Deposits acquired                            |   |                                   | (90,577 | ) |   |   | - |   |   |   | - |   |
| Interest credited                            |   |                                   | 2,833   |   |   |   | 5,000 |   |   |   | 5,312 |   |
| Net increase (decrease) in deposits          |   |                                   | 75,499  |   |   |   | (379 | ) |   |   | 1,369 |   |
| Ending balance                               |   | $                                      | 239,706 |   |   | $ | 164,207 |   |   | $ | 164,586 |   |

|                                                                       |   | Year Ended December 31, |
|----------------------------------------------------------------------------|--------|----------------------------------------|
|                                                                       |   | 2010                                   |   | 2009 |   | 2008 |
|                                                                       |   | (Dollars in thousands)       |
| Maximum amount of advances outstanding at any month end during the period: |   |                                   |   |   |   |   |   |   |   |   |   |   |
| FHLB Advances                                                              |   | $                                      | 30,429 |   |   | $ | 26,474 |   |   | $ | 28,553 |   |
| Average advances outstanding during the period:                            |   |                                   |   |   |   |   |   |   |   |   |   |   |
| FHLB Advances                                                              |   | $                                      | 28,757 |   |   | $ | 24,040 |   |   | $ | 20,084 |   |
| Weighted average interest rate during the period:                          |   |                                   |   |   |   |   |   |   |   |   |   |   |
| FHLB Advances                                                              |   |                                   | 2.85 | % |   |   | 3.17 | % |   |   | 3.02 | % |
| Balance outstanding at end of period:                                      |   |                                   |   |   |   |   |   |   |   |   |   |   |
| FHLB Advances                                                              |   | $                                      | 28,426 |   |   | $ | 26,474 |   |   | $ | 28,553 |   |
| Weighted average interest rate at end of period:                           |   |                                   |   |   |   |   |   |   |   |   |   |   |
| FHLB Advances                                                              |   |                                   | 2.80 | % |   |   | 2.97 | % |   |   | 2.81 | % |

----

|                               |   | Year Ended December 31, |   |
|------------------------------------|--------|----------------------------------------|--------|
|                               |   | 2010                                   |   |   | 2009 |   |   | % Change 2010 / 2009 |   |
|                               |   | (Dollars in thousands)       |   |   |   |   |
|                               |   |                                   |   |   |   |   |
| Net income                         |   | $                                      | 3,164  |   |   | $ | 331 |   |   |   | 855.9 | % |
| Return on average assets (1)       |   |                                   | 1.44   | % |   |   | 0.15 |  % |   |   | 860.0 |   |
| Return on average equity (2)       |   |                                   | 13.00  |   |   |   | 1.60 |   |   |   | 712.5 |   |
| Average equity-to-assets ratio (3) |   |                                   | 11.07  |   |   |   | 9.36 |   |   |   | 18.3 |   |

----

----

|                                                                             |   | Year Ended December 31, |    |
|----------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                             |   | 2010                    |    |   | 2009 |   |   | 2008 |   |
|                                                                             |   | AverageBalance          |    |   | InterestandDividends |   |   | Yield/Cost |   |   | AverageBalance |   |   | InterestandDividends |   |   | Yield/Cost |   |   | AverageBalance |   |   | InterestandDividends |   |   | Yield/Cost |   |
|                                                                             |   | (Dollars in thousands)  |    |
| Assets:                                                                          |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                         |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                            |   | $                       | 146,779 |   |   | $ | 8,251 |   |   |   | 5.62 | % |   | $ | 154,555 |   |   | $ | 8,772 |   |   |   | 5.68 | % |   | $ | 153,077 |   |   | $ | 8,908 |   |   |   | 5.82 | % |
| Investment securities                                                            |   |                    | 43,357  |   |   |   | 1,584 |   |   |   | 3.65 |   |   |   | 40,535 |   |   |   | 1,926 |   |   |   | 4.75 |   |   |   | 39,310 |   |   |   | 2,014 |   |   |   | 5.12 |   |
| Other interest-earning assets                                                    |   |                    | 14,746  |   |   |   | 9 |   |   |   | 0.06 |   |   |   | 13,482 |   |   |   | 9 |   |   |   | 0.07 |   |   |   | 6,624 |   |   |   | 147 |   |   |   | 2.22 |   |
| Total interest-earning assets                                                    |   |                    | 204,882 |   |   |   | 9,844 |   |   |   | 4.80 | % |   |   | 208,572 |   |   |   | 10,707 |   |   |   | 5.13 | % |   |   | 199,011 |   |   |   | 11,069 |   |   |   | 5.56 | % |
| Noninterest-earning assets:                                                      |   |                    | 15,950  |   |   |   |   |   |   |   |   |   |   |   | 14,002 |   |   |   |   |   |   |   |   |   |   |   | 13,122 |   |   |   |   |   |   |   |   |   |
| Allowance for Loan Losses                                                        |   |                    | (936    | ) |   |   |   |   |   |   |   |   |   |   | (1,035 | ) |   |   |   |   |   |   |   |   |   |   | (787 | ) |   |   |   |   |   |   |   |   |
| Total assets                                                                     |   | $                       | 219,896 |   |   |   |   |   |   |   |   |   |   | $ | 221,539 |   |   |   |   |   |   |   |   |   |   | $ | 211,346 |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and equity:                                                          |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                    |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                                                 |   | $                       | 11,189  |   |   |   | 74 |   |   |   | 0.67 | % |   | $ | 10,776 |   |   |   | 77 |   |   |   | 0.71 | % |   | $ | 11,667 |   |   |   | 96 |   |   |   | 0.82 | % |
| Money market deposits                                                            |   |                    | 34,233  |   |   |   | 353 |   |   |   | 1.03 |   |   |   | 34,173 |   |   |   | 582 |   |   |   | 1.70 |   |   |   | 26,949 |   |   |   | 818 |   |   |   | 3.04 |   |
| Savings accounts                                                                 |   |                    | 29,497  |   |   |   | 149 |   |   |   | 0.51 |   |   |   | 31,809 |   |   |   | 237 |   |   |   | 0.75 |   |   |   | 35,647 |   |   |   | 310 |   |   |   | 0.87 |   |
| Time deposits                                                                    |   |                    | 82,549  |   |   |   | 2,257 |   |   |   | 2.73 |   |   |   | 91,166 |   |   |   | 3,313 |   |   |   | 3.63 |   |   |   | 85,740 |   |   |   | 3,456 |   |   |   | 4.03 |   |
| Total interest-bearing deposits                                                  |   |                    | 157,468 |   |   |   | 2,833 |   |   |   | 1.80 | % |   |   | 167,924 |   |   |   | 4,209 |   |   |   | 2.51 | % |   |   | 160,003 |   |   |   | 4,680 |   |   |   | 2.93 | % |
| FHLB advances - short-term                                                       |   |                    | -       |   |   |   | - |   |   |   | - |   |   |   | 77 |   |   |   | 1 |   |   |   | 1.30 |   |   |   | 2,074 |   |   |   | 51 |   |   |   | 2.46 |   |
| FHLB advances - long-term                                                        |   |                    | 28,757  |   |   |   | 819 |   |   |   | 2.85 |   |   |   | 23,963 |   |   |   | 763 |   |   |   | 3.18 |   |   |   | 18,010 |   |   |   | 556 |   |   |   | 3.09 |   |
| Advances by borrowers for taxes and insurance                               |   |                    | 1,022   |   |   |   | 23 |   |   |   | 2.25 |   |   |   | 1,254 |   |   |   | 27 |   |   |   | 2.15 |   |   |   | 1,230 |   |   |   | 25 |   |   |   | 2.03 |   |
| Total interest-bearing liabilities                                               |   |                    | 187,247 |   |   |   | 3,675 |   |   |   | 1.96 | % |   |   | 193,218 |   |   |   | 5,000 |   |   |   | 2.59 | % |   |   | 181,317 |   |   |   | 5,312 |   |   |   | 2.93 | % |
| Noninterest-bearing liabilities:                                                 |   |                    | 8,308   |   |   |   |   |   |   |   |   |   |   |   | 7,583 |   |   |   |   |   |   |   |   |   |   |   | 6,457 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                |   |                    | 195,555 |   |   |   |   |   |   |   |   |   |   |   | 200,801 |   |   |   |   |   |   |   |   |   |   |   | 187,774 |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                                                       |   |                    | 24,341  |   |   |   |   |   |   |   |   |   |   |   | 20,738 |   |   |   |   |   |   |   |   |   |   |   | 23,572 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders’ equity                                 |   | $                       | 219,896 |   |   |   |   |   |   |   |   |   |   | $ | 221,539 |   |   |   |   |   |   |   |   |   |   | $ | 211,346 |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                              |   |                    |    |   |   | $ | 6,169 |   |   |   |   |   |   |   |   |   |   | $ | 5,707 |   |   |   |   |   |   |   |   |   |   | $ | 5,757 |   |   |   |   |   |
| Interest rate spread                                                             |   |                    |    |   |   |   |   |   |   |   | 2.84 | % |   |   |   |   |   |   |   |   |   |   | 2.55 | % |   |   |   |   |   |   |   |   |   |   | 2.63 | % |
| Net yield on interest-bearing assets                                             |   |                    |    |   |   |   |   |   |   |   | 3.01 | % |   |   |   |   |   |   |   |   |   |   | 2.74 | % |   |   |   |   |   |   |   |   |   |   | 2.89 | % |
| Ratio of average interest-earning assets to average interest-bearing liabilities |   |                    |    |   |   |   |   |   |   |   | 109.42 | % |   |   |   |   |   |   |   |   |   |   | 107.95 | % |   |   |   |   |   |   |   |   |   |   | 109.76 | % |

----

|                                          |   | For the Year EndedDecember 31, 2010Compared to Year EndedDecember 31, 2009 |   |   | For the Year EndedDecember 31, 2009Compared to Year EndedDecember 31, 2008 |   |
|-----------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|
|                                          |   | Increase (Decrease)Due to                                                                                          |   |   |                                                                                                                         |   |   | Increase (Decrease)Due to |   |   |   |   |
|                                          |   | Volume                                                                                                                       |   |   | Rate                                                                                                                         |   |   | Net |   |   | Volume |   |   | Rate |   |   | Net |   |
|                                          |   | (Dollars in thousands)                                                                                             |   |
| Interest and dividend income:                 |   |                                                                                                                         |   |   |                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivable                              |   | $                                                                                                                            | (438   | )      |                                                                                                                         | $      | (83 | ) |   | $ | (521 | ) |   | $ | 87 |   |   | $ | (223 | ) |   | $ | (136 | ) |
| Investment securities                         |   |                                                                                                                         | 147    |   |                                                                                                                         |   | (489 | ) |   |   | (342 | ) |   |   | 66 |   |   |   | (154 | ) |   |   | (88 | ) |
| Other                                         |   |                                                                                                                         | -      |   |                                                                                                                         |   | - |   |   |   | - |   |   |   | (2,183 | ) |   |   | 2,045 |   |   |   | (138 | ) |
| Total interest-earning assets                 |   | $                                                                                                                            | (290   | )      |                                                                                                                         | $      | (573 | ) |   | $ | (863 | ) |   | $ | (2,031 | ) |   | $ | 1,669 |   |   | $ | (362 | ) |
|                                          |   |                                                                                                                         |   |   |                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                             |   |                                                                                                                         |   |   |                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits              |   | $                                                                                                                            | 3      |   |                                                                                                                         | $      | (6 | ) |   | $ | (3 | ) |   | $ | (7 | ) |   | $ | (12 | ) |   | $ | (19 | ) |
| Money market accounts                         |   |                                                                                                                         | 1      |   |                                                                                                                         |   | (230 | ) |   |   | (229 | ) |   |   | 370 |   |   |   | (606 | ) |   |   | (236 | ) |
| Savings accounts                              |   |                                                                                                                         | (16    | )      |                                                                                                                         |   | (72 | ) |   |   | (88 | ) |   |   | (31 | ) |   |   | (42 | ) |   |   | (73 | ) |
| Certificates of deposit                       |   |                                                                                                                         | (292   | )      |                                                                                                                         |   | (764 | ) |   |   | (1,056 | ) |   |   | 258 |   |   |   | (401 | ) |   |   | (143 | ) |
| Total deposits                                |   |                                                                                                                         | (304   | )      |                                                                                                                         |   | (1,072 | ) |   |   | (1,376 | ) |   |   | 590 |   |   |   | (1,061 | ) |   |   | (471 | ) |
| FHLB Advances - short-term                    |   |                                                                                                                         | (1     | )      |                                                                                                                         |   | (1 | ) |   |   | (1 | ) |   |   | (34 | ) |   |   | (16 | ) |   |   | (50 | ) |
| FHLB Advances - long-term                     |   |                                                                                                                         | 119    |   |                                                                                                                         |   | (63 | ) |   |   | 56 |   |   |   | 189 |   |   |   | 18 |   |   |   | 207 |   |
| Advances by borrowers for taxes and insurance |   |                                                                                                                         | (5     | )      |                                                                                                                         |   | 1 |   |   |   | (4 | ) |   |   | - |   |   |   | 2 |   |   |   | 2 |   |
| Total interest-bearing liabilities            |   | $                                                                                                                            | (191   | )      |                                                                                                                         | $      | (1,134 | ) |   | $ | (1,325 | ) |   | $ | 745 |   |   | $ | (1,057 | ) |   | $ | (312 | ) |
| Change in net interest income                 |   | $                                                                                                                            | (99    | )      |                                                                                                                         | $      | 561 |   |   | $ | 462 |   |   | $ | (2,776 | ) |   | $ | 2,726 |   |   | $ | (50 | ) |

----

|                                  |   | Year Ended December 31, |   |
|---------------------------------------|--------|----------------------------------------|--------|
|                                  |   | 2010                                   |   |   | 2009 |   |
|                                  |   | (Dollars in thousands)       |   |
| Service fees on deposit accounts      |   | $                                      | 86     |   |   | $ | 92 |   |
| Earnings on bank-owned life insurance |   |                                   | 87     |   |   |   | 117 |   |
| Investment securities gains, net      |   |                                   | 294    |   |   |   | 486 |   |
| Gain on sale of loans                 |   |                                   | 366    |   |   |   | 288 |   |
| Rental income                         |   |                                   | 288    |   |   |   | 290 |   |
| Acquisition related gains             |   |                                   | 4,600  |   |   |   | - |   |
| Other                                 |   |                                   | 389    |   |   |   | 171 |   |
| Total                                 |   | $                                      | 6,110  |   |   | $ | 1,444 |   |

|                               |   | Year Ended December 31, |   |
|------------------------------------|--------|----------------------------------------|--------|
|                               |   | 2010                                   |   |   | 2009 |   |
|                               |   | (Dollars in thousands)       |   |
| Compensation and employee benefits |   | $                                      | 3,656  |   |   | $ | 3,503 |   |
| Occupancy and equipment            |   |                                   | 1,030  |   |   |   | 1,013 |   |
| Federal deposit insurance premiums |   |                                   | 376    |   |   |   | 409 |   |
| Data processing expense            |   |                                   | 287    |   |   |   | 269 |   |
| Professional fees                  |   |                                   | 354    |   |   |   | 331 |   |
| Other                              |   |                                   | 1,942  |   |   |   | 1,034 |   |
| Total non-interest expense         |   | $                                      | 7,645  |   |   | $ | 6,559 |   |
| Efficiency ratio                   |   |                                   | 62.26  | % |   |   | 91.72 | % |

----

----

|                                                                         |   | At December 31,        |   |
|------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                         |   | 2010                             |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                         |   | (Dollars in thousands) |   |
| Nonaccrual loans:                                                            |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                                           |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-four-family                                                           |   | $                                | 749    |   |   | $ | 1,169 |   |   | $ | 705 |   |   | $ | 179 |   |   | $ | 181 |   |
| Multi-family and commercial real estate                                      |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Home equity loans and lines of credit                                        |   |                             | 47     |   |   |   | 1,532 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer                                                                     |   |                             | 226    |   |   |   | 41 |   |   |   | 24 |   |   |   | 37 |   |   |   | 93 |   |
| Total                                                                        |   |                             | 1,022  |   |   |   | 2,742 |   |   |   | 729 |   |   |   | 216 |   |   |   | 274 |   |
| Real estate owned                                                            |   |                             | 314    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total non-performing assets                                                  |   | $                                | 1,336  |   |   | $ | 2,742 |   |   | $ | 729 |   |   | $ | 216 |   |   | $ | 274 |   |
|                                                                         |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing loans to total loans                                    |   |                             | 0.74   | % |   |   | 1.81 | % |   |   | 0.44 | % |   |   | 0.16 | % |   |   | 0.24 | % |
| Total non-performing loans to total assets                                   |   |                             | 0.34   | % |   |   | 1.26 | % |   |   | 0.33 | % |   |   | 0.11 | % |   |   | 0.13 | % |
| Total non-performing assets and troubled debt restructurings to total assets |   |                             | 0.34   | % |   |   | 1.26 | % |   |   | 0.33 | % |   |   | 0.11 | % |   |   | 0.13 | % |

|                    |   | At December 31,        |   |
|-------------------------|--------|----------------------------------|--------|
|                    |   | 2010                             |   |   | 2009 |   |   | 2008 |   |
|                    |   | (Dollars in thousands) |   |
| Special mention assets  |   | $                                | 2,775  |   |   | $ | 2,933 |   |   | $ | - |   |
| Substandard assets      |   |                             | 1,623  |   |   |   | 2,742 |   |   |   | 729 |   |
| Doubtful assets         |   |                             | -      |   |   |   | - |   |   |   | - |   |
| Loss assets             |   |                             | -      |   |   |   | - |   |   |   | - |   |
| Total classified assets |   | $                                | 4,398  |   |   | $ | 5,675 |   |   | $ | 729 |   |

----

|                                    |   | At December 31, |   |
|-----------------------------------------|--------|---------------------------|--------|
|                                    |   | 2010                      |   |   | 2009 |   |   | 2008 |   |
|                                    |   | 30-59DaysPastDue          |   |   | 60-89DaysPastDue |   |   | 30-59DaysPastDue |   |   | 60-89DaysPastDue |   |   | 30-59DaysPastDue |   |   | 60-89DaysPastDue |   |
|                                    |   | (Dollars in thousands)    |   |
| Real estate loans:                      |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-four-family                      |   | $                         | 390    |   |   | $ | 742 |   |   | $ | 348 |   |   | $ | 31 |   |   | $ | 164 |   |   | $ | - |   |
| Multi-family and commercial real estate |   |                      | 21     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Home equity loans and lines of credit   |   |                      | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer                                |   |                      | 70     |   |   |   | 26 |   |   |   | 75 |   |   |   | 7 |   |   |   | 59 |   |   |   | 4 |   |
| Total                                   |   | $                         | 481    |   |   | $ | 768 |   |   | $ | 423 |   |   | $ | 38 |   |   | $ | 223 |   |   | $ | 4 |   |

----

|                                    |   | At December 31,        |   |
|-----------------------------------------|--------|----------------------------------|--------|
|                                    |   | 2010                             |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                    |   | Amount                           |   |   | % ofAllowanceto TotalAllowance |   |   | % ofLoans inCategoryto TotalLoans |   |   | Amount |   |   | % ofAllowanceto TotalAllowance |   |   | % ofLoans inCategoryto TotalLoans |   |   | Amount |   |   | % ofAllowanceto TotalAllowance |   |   | % ofLoans inCategoryto TotalLoans |   |   | Amount |   |   | % ofAllowanceto TotalAllowance |   |   | % ofLoans inCategoryto TotalLoans |   |   | Amount |   |   | % ofAllowanceto TotalAllowance |   |   | % ofLoans inCategoryto TotalLoans |   |
|                                    |   | (Dollars in thousands) |   |
| Real estate loans:                      |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-four-family                      |   | $                                | 520    |   |   |   | 62.00 | % |   |   | 87.00 | % |   | $ | 516 |   |   |   | 46.00 | % |   |   | 87.00 | % |   | $ | 501 |   |   |   | 58.00 | % |   |   | 88.00 | % |   | $ | 443 |   |   |   | 60.00 | % |   |   | 87.00 | % |   | $ | 314 |   |   |   | 45.00 | % |   |   | 89.00 | % |
| Multi-family and commercial real estate |   |                             | 274    |   |   |   | 33.00 |   |   |   | 7.00 |   |   |   | 283 |   |   |   | 25.00 |   |   |   | 7.00 |   |   |   | 316 |   |   |   | 37.00 |   |   |   | 7.00 |   |   |   | 250 |   |   |   | 34.00 |   |   |   | 7.00 |   |   |   | 344 |   |   |   | 50.00 |   |   |   | 5.00 |   |
| Home equity loans and lines of credit   |   |                             | 24     |   |   |   | 3.00 |   |   |   | 4.00 |   |   |   | 299 |   |   |   | 27.00 |   |   |   | 4.00 |   |   |   | 28 |   |   |   | 3.00 |   |   |   | 3.00 |   |   |   | 27 |   |   |   | 4.00 |   |   |   | 4.00 |   |   |   | 26 |   |   |   | 4.00 |   |   |   | 5.00 |   |
| Consumer                                |   |                             | 16     |   |   |   | 2.00 |   |   |   | 2.00 |   |   |   | 17 |   |   |   | 2.00 |   |   |   | 2.00 |   |   |   | 13 |   |   |   | 2.00 |   |   |   | 2.00 |   |   |   | 11 |   |   |   | 2.00 |   |   |   | 2.00 |   |   |   | 11 |   |   |   | 1.00 |   |   |   | 1.00 |   |
| Total allowance for loan losses         |   | $                                | 834    |   |   |   | 100.00 | % |   |   | 100.00 | % |   | $ | 1,115 |   |   |   | 100.00 | % |   |   | 100.00 | % |   | $ | 858 |   |   |   | 100.00 | % |   |   | 100.00 | % |   | $ | 731 |   |   |   | 100.00 | % |   |   | 100.00 | % |   | $ | 695 |   |   |   | 100.00 | % |   |   | 100.00 | % |

----

|                                                                            |   | December 31,                |   |
|---------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                            |   | 2010                             |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                            |   | (Dollars in thousands) |   |
|                                                                            |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance at beginning of period                                                |   | $                                | 1,115  |   |   | $ | 858 |   |   | $ | 731 |   |   | $ | 695 |   |   | $ | 651 |   |
| Provision for loan losses                                                       |   |                             | (115   | ) |   |   | 252 |   |   |   | 85 |   |   |   | 31 |   |   |   | 58 |   |
| Charge-offs:                                                                    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-four-family                                                              |   |                             | (170   | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (19 | ) |
| Multi-family and commercial real estate                                         |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Home equity loans and lines of credit                                           |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer                                                                        |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                                                           |   |                             | (170   | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (19 | ) |
|                                                                            |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries:                                                                     |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-four-family                                                              |   |                             | 4      |   |   |   | 5 |   |   |   | 42 |   |   |   | 5 |   |   |   | 5 |   |
| Multi-family and commercial real estate                                         |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Home equity loans and lines of credit                                           |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer                                                                        |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                                                           |   |                             | 4      |   |   |   | 5 |   |   |   | 42 |   |   |   | 5 |   |   |   | 5 |   |
| Net recoveries (charge-offs)                                                    |   |                             | (166   | ) |   |   | 5 |   |   |   | 42 |   |   |   | 5 |   |   |   | (14 | ) |
|                                                                            |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance at end of period                                                      |   | $                                | 834    |   |   | $ | 1,115 |   |   | $ | 858 |   |   | $ | 731 |   |   | $ | 695 |   |
|                                                                            |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance to non-performing loans (1)                                           |   |                             | 82     | % |   |   | 41 | % |   |   | 118 | % |   |   | 338 | % |   |   | 254 | % |
| Allowance to total loans outstanding at the end of the period (1)               |   |                             | 0.60   | % |   |   | 0.74 | % |   |   | 0.52 | % |   |   | 0.53 | % |   |   | 0.62 | % |
| Net charge-offs (recoveries) to average loans outstanding during the period (1) |   |                             | 0.11   | % |   |   | (0.01 | )% |   |   | (0.01 | )% |   |   | (0.01 | )% |   |   | 0.01 | % |

----

|                                                              |   | Estimated Net Portfolio Value |   |   | Net Portfolio Value as % ofPortfolio Value of Assets |   |
|-------------------------------------------------------------------|--------|----------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------|--------|
| Basis Point (“bp”)Change in Rates |   | $ Amount                                |   |   | $ Change                                                                                |   |   | % Change |   |   | NPV Ratio |   |   | Change (bp) |   |
| (Dollars in thousands)                                            |   |                                         |   |   |                                                                                         |   |   |
|                                                              |   |                                         |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |
| 300                                                               |   | $                                            | 27,710 |   |                                                                                         | $      | (17,172 | ) |   |   | (38.00 | ) % |   |   | 9.32 | % |   |   | (469 | ) % |
| 200                                                               |   |                                         | 34,207 |   |                                                                                         |   | (10,675 | ) |   |   | (24.00 | ) |   |   | 11.20 |   |   |   | (282 | ) |
| 100                                                               |   |                                         | 40,313 |   |                                                                                         |   | (4,569 | ) |   |   | (10.00 | ) |   |   | 12.86 |   |   |   | (116 | ) |
| (50)                                                              |   |                                         | 42,869 |   |                                                                                         |   | (2,013 | ) |   |   | (4.00 | ) |   |   | 13.52 |   |   |   | (50 | ) |
| 0                                                                 |   |                                         | 44,882 |   |                                                                                         |   | - |   |   |   | - |   |   |   | 14.02 |   |   |   | - |   |
| (100)                                                             |   |                                         | 48,156 |   |                                                                                         |   | 3,274 |   |   |   | 7.00 |   |   |   | 14.81 |   |   |   | 79 |   |
|  (50)                                                        |   |                                         | 46,348 |   |                                                                                         |   | 1,466 |   |   |   | 3.00 |   |   |   | 14.37 |   |   |   | 35 |   |

----

----

| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|----------|------------------------------------------------------------|

| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
|---------|---------------------------------------------|

| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
|---------|--------------------------------------------------------------------------------------|

| ITEM 9A. | CONTROLS AND PROCEDURES |
|----------|-------------------------|

| ITEM 9B. | OTHER INFORMATION |
|----------|-------------------|

----

| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
|----------|--------------------------------------------------------|

| ITEM 11. | EXECUTIVE COMPENSATION |
|----------|------------------------|

| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
|----------|------------------------------------------------------------------------------------------------|

----

| Plan category                                                          |   | Number ofsecuritiesto be issueduponthe exercise ofoutstandingoptions,warrants andrights |    |   | Weighted-averageexercise price ofoutstandingoptions,warrants andrights |   |   | Number ofsecuritiesremainingavailablefor futureissuance underequitycompensationplans (excludingsecuritiesreflected in thefirstcolumn) |   |
|-----------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------|---------|--------|---------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                        |   |                                                                                                                  |    |   |                                                                                  |   |   |                                                                                                                                                                |   |
| Equity compensation plans approved by security holders                      |   |                                                                                                                  | 153,903 |   |                                                                                  | $      | 9.40   |                                                                                                                                                                |   |   | - |   |
| Equity compensation plans not approved by security   holders |   |                                                                                                                  | -       |   |                                                                                  |   | -      |                                                                                                                                                                |   |   | - |   |
|                                                                        |   |                                                                                                                  |    |   |                                                                                  |   |   |                                                                                                                                                                |   |   |   |   |
| Total                                                                       |   |                                                                                                                  | 153,903 |   |                                                                                  | $      | 9.40   |                                                                                                                                                                |   |   | - |   |

| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
|----------|---------------------------------------------------------------------------|

| ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
|----------|----------------------------------------|

----

| ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
|----------|--------------------------------------------|

| 2.1    | Purchase and Assumption Agreement - Whole Bank; All Deposits, dated December 10, 2010, by and among the FDIC, as receiver, Polonia Bank and the FDIC |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1    | Charter of Polonia Bancorp (1)                                                                                                                       |
| 3.2    | Bylaws of Polonia Bancorp (4)                                                                                                                        |
| 4.0    | Stock Certificate of Polonia Bancorp (1)                                                                                                             |
| 10.1   | Amended and Restated Polonia Bancorp Employment Agreement with Anthony J. Szuszczewicz (5)                                                           |
| 10.2   | Amended and Restated Polonia Bank Employment Agreement with Anthony J. Szuszczewicz (5)                                                              |
| 10.3   | Amended and Restated Polonia Bancorp Employment Agreement with Paul D. Rutkowski (5)                                                                 |
| 10.4   | Amended and Restated Polonia Bank Employment Agreement with Paul D. Rutkowski (5)                                                                    |
| 10.5   | Amended and Restated Polonia Bancorp Employment Agreement with Kenneth J. Maliszewski (5)                                                            |
| 10.6   | Amended and Restated Polonia Bank Employment Agreement with Kenneth J. Maliszewski (5)                                                               |
| 10.7   | Amended and Restated Polonia Bank Employee Severance Compensation Plan (5)                                                                           |
| 10.8   | Amended and Restated Supplemental Executive Retirement Plan (5)                                                                                      |
| 10.9   | Supplemental Executive Retirement Plan for Anthony J. Szuszczewicz (1)                                                                               |
| 10.10  | Supplemental Executive Retirement Plan for Edward W. Lukiewski (1)                                                                                   |
| 10.11  | Non-Qualified Deferred Compensation Plan (1)                                                                                                         |
| 10.12  | Supplemental Executive Retirement Plan for Paul D. Rutkowski (1)                                                                                     |
| 10.13  | Supplemental Executive Retirement Plan for Kenneth J. Maliszewski (1)                                                                                |
| 10.14  | Split Dollar Life Insurance Agreement with Paul D. Rutkowski (2)                                                                                     |
| 10.15  | Split Dollar Life Insurance Agreement with Kenneth J. Maliszewski (2)                                                                                |
| 10.16  | Polonia Bancorp 2007 Equity Incentive Plan (3)                                                                                                       |
| 10.17  | Form of Amendment to the Supplemental Executive Retirement Plan Participation Agreement (5)                                                          |
| 10.18  | Amendment to the Supplemental Executive Retirement Plan for Anthony J. Szuszczewicz (5)                                                              |
| 10.19  | Amendment to Polonia Bank Non-Qualified Deferred Compensation Plan (5)                                                                               |
| 21.0   | Subsidiaries of the Registrant                                                                                                                       |
| 23.1   | Consent of S.R. Snodgrass, A.C.                                                                                                                      |
| 31.1   | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                    |
| 31.2   | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                    |
| 32.0   | Section 1350 Certification                                                                                                                           |
|   |                                                                                                                                                 |

| (1) | Incorporated by reference into this document from the Exhibits filed with the Securities and Exchange Commission on the Registration Statement on Form SB-2, (File No. 333-135643) and any amendments thereto. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Incorporated by reference into this document from the Exhibits filed with the Securities and Exchange Commission on the Current Report on Form 8-K, filed on January 25, 2007 (File No. 000-52267). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Incorporated herein by reference to Appendix D in the definitive proxy statement filed with the SEC on June 12, 2007 (File No. 000-52267). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Incorporated herein by reference to Exhibit 3.1 filed with the Securities and Exchange Commission on the Current Report on Form 8-K, filed on January 22, 2009 (File No. 000-52267). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Incorporated herein by reference to the Exhibits on Form 10-K filed with the SEC on March 31, 2009 (File No. 000-52267). |
|-----|--------------------------------------------------------------------------------------------------------------------------|

----

|                 |   | POLONIA BANCORP                                 |
|----------------------|--------|-------------------------------------------------|
|                 |   |                                            |
| Date: April 15, 2011 | By:    | /s/ Anthony J. Szuszczewicz                     |
|                 |   | Anthony J. Szuszczewicz                         |
|                 |   | Chairman, President and Chief Executive Officer |

| Name                            |   | Title                                        |   | Date           |
|---------------------------------|--------|----------------------------------------------|--------|----------------|
|                            |   |                                         |   |           |
| /s/ Anthony J. Szuszczewicz     |   | Chairman, President and Chief Executive      |   | April 15, 2011 |
| Anthony J. Szuszczewicz         |   | Officer (principal executive officer)        |   |           |
|                            |   |                                         |   |           |
| /s/ Paul D. Rutkowski           |   | Chief Financial Officer and Treasurer        |   | April 15, 2011 |
| Paul D. Rutkowski               |   | (principal accounting and financial officer) |   |           |
|                            |   |                                         |   |           |
| /s/ Dr. Eugene Andruczyk        |   | Director                                     |   | April 15, 2011 |
| Dr. Eugene Andruczyk            |   |                                         |   |           |
|                            |   |                                         |   |           |
| /s/ Frank J. Byrne              |   | Director                                     |   | April 15, 2011 |
| Frank J. Byrne                  |   |                                         |   |           |
|                            |   |                                         |   |           |
| /s/ Edward W. Lukiewski         |   | Director                                     |   | April 15, 2011 |
| Edward W. Lukiewski             |   |                                         |   |           |
|                            |   |                                         |   |           |
| /s/ Timothy O’Shaughnessy |   | Director                                     |   | April 15, 2011 |
| Timothy O’Shaughnessy     |   |                                         |   |           |
|                            |   |                                         |   |           |
| /s/ Robert J. Woltjen           |   | Director                                     |   | April 15, 2011 |
| Robert J. Woltjen               |   |                                         |   |           |

----

----

----

|                                                            |   | Page       |
|-----------------------------------------------------------------|--------|------------|
|                                                            |   | Number     |
|                                                            |   |       |
| Report of Independent Registered Public Accounting Firm         |   | F-1        |
|                                                            |   |       |
| Financial Statements                                            |   |       |
|                                                            |   |       |
| Consolidated Balance Sheet                                      |   | F-2        |
|                                                            |   |       |
| Consolidated Statement of Income                                |   | F-3        |
|                                                            |   |       |
| Consolidated Statement of Changes in Stockholders’ Equity |   | F-4        |
|                                                            |   |       |
| Consolidated Statement of Cash Flows                            |   | F-5        |
|                                                            |   |       |
| Notes to the Consolidated Financial Statements                  |   | F-6 - F-38 |

----

| /s/ S.R. Snodgrass, A.C. |   |
|--------------------------|--------|
|                |   |
| Wexford, Pennsylvania    |   |
| April 15, 2011           |   |

----

|                                                                                          |   | December 31, |        |
|-----------------------------------------------------------------------------------------------|--------|-------------------|-------------|
|                                                                                          |   | 2010              |        |   | 2009 |   |
| ASSETS                                                                                        |   |              |        |   |   |   |
| Cash and due from banks                                                                       |   | $                 | 2,426,126   |   |   | $ | 2,454,959 |   |
| Interest-bearing deposits with other institutions                                             |   |              | 51,578,423  |   |   |   | 5,971,571 |   |
|                                                                                          |   |              |        |   |   |   |   |   |
| Cash and cash equivalents                                                                     |   |              | 54,004,549  |   |   |   | 8,426,530 |   |
|                                                                                          |   |              |        |   |   |   |   |   |
| Investment securities available for sale                                                      |   |              | 27,350,263  |   |   |   | 30,601,587 |   |
| Investment securities held to maturity (fair value $26,075,142 and $13,640,975)               |   |              | 26,127,630  |   |   |   | 13,780,267 |   |
| Loans receivable (net of allowance for loan losses of $833,984 and $1,115,141)                |   |              | 137,665,300 |   |   |   | 150,177,130 |   |
| Covered loans                                                                                 |   |              | 32,808,086  |   |   |   | - |   |
| Accrued interest receivable                                                                   |   |              | 1,073,223   |   |   |   | 930,336 |   |
| Federal Home Loan Bank stock                                                                  |   |              | 3,465,600   |   |   |   | 2,279,200 |   |
| Premises and equipment, net                                                                   |   |              | 4,571,178   |   |   |   | 4,760,680 |   |
| Bank-owned life insurance                                                                     |   |              | 4,140,267   |   |   |   | 4,053,225 |   |
| FDIC indemnification asset                                                                    |   |              | 5,397,192   |   |   |   | - |   |
| Other assets                                                                                  |   |              | 2,225,661   |   |   |   | 3,061,704 |   |
|                                                                                          |   |              |        |   |   |   |   |   |
| TOTAL ASSETS                                                                                  |   | $                 | 298,828,949 |   |   | $ | 218,070,659 |   |
|                                                                                          |   |              |        |   |   |   |   |   |
| LIABILITIES                                                                                   |   |              |        |   |   |   |   |   |
| Deposits                                                                                      |   | $                 | 239,705,812 |   |   | $ | 164,207,245 |   |
| FHLB advances - long-term                                                                     |   |              | 28,426,193  |   |   |   | 26,473,524 |   |
| Advances by borrowers for taxes and insurance                                                 |   |              | 1,005,753   |   |   |   | 1,280,863 |   |
| Accrued interest payable                                                                      |   |              | 103,534     |   |   |   | 63,647 |   |
| Other liabilities                                                                             |   |              | 2,328,096   |   |   |   | 2,200,421 |   |
|                                                                                          |   |              |        |   |   |   |   |   |
| TOTAL LIABILITIES                                                                             |   |              | 271,569,388 |   |   |   | 194,225,700 |   |
|                                                                                          |   |              |        |   |   |   |   |   |
| Commitments and contingencies (Note 12)                                                       |   |              | -           |   |   |   | - |   |
|                                                                                          |   |              |        |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                                                                          |   |              |        |   |   |   |   |   |
| Preferred stock ($.01 par value; 1,000,000 shares authorized; none issued or outstanding)     |   |              | -           |   |   |   | - |   |
| Common stock ($.01 par value; 14,000,000 shares authorized; 3,306,250 shares issued)          |   |              | 33,063      |   |   |   | 33,063 |   |
| Additional paid-in-capital                                                                    |   |              | 13,863,863  |   |   |   | 13,694,394 |   |
| Retained earnings                                                                             |   |              | 15,001,215  |   |   |   | 11,837,420 |   |
| Unallocated shares held by Employee Stock Ownership Plan ("ESOP") (95,043 and 103,684 shares) |   |              | (950,437    | ) |   |   | (1,036,840 | ) |
| Treasury stock (149,154 and 147,172 shares)                                                   |   |              | (1,262,141  | ) |   |   | (1,251,735 | ) |
| Accumulated other comprehensive income                                                        |   |              | 573,998     |   |   |   | 568,657 |   |
|                                                                                          |   |              |        |   |   |   |   |   |
| TOTAL STOCKHOLDERS' EQUITY                                                                    |   |              | 27,259,561  |   |   |   | 23,844,959 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                    |   | $                 | 298,828,949 |   |   | $ | 218,070,659 |   |

----

|                                                               |   | Year Ended December 31, |      |
|--------------------------------------------------------------------|--------|----------------------------------------|-----------|
|                                                               |   | 2010                                   |      |   | 2009 |   |
| INTEREST AND DIVIDEND INCOME                        |   |                                   |      |   |   |   |
| Loans receivable                                                   |   | $                                      | 8,250,705 |   |   | $ | 8,772,106 |   |
| Investment securities                                              |   |                                   | 1,584,270 |   |   |   | 1,926,637 |   |
| Interest-bearing deposits and other dividends                      |   |                                   | 9,471     |   |   |   | 8,751 |   |
| Total interest and dividend income                                 |   |                                   | 9,844,446 |   |   |   | 10,707,494 |   |
|                                                               |   |                                   |      |   |   |   |   |   |
| INTEREST EXPENSE                                                   |   |                                   |      |   |   |   |   |   |
| Deposits                                                           |   |                                   | 2,833,205 |   |   |   | 4,209,076 |   |
| FHLB advances - short-term                                         |   |                                   | -         |   |   |   | 396 |   |
| FHLB advances - long-term                                          |   |                                   | 818,853   |   |   |   | 763,705 |   |
| Advances by borrowers for taxes and insurance                      |   |                                   | 22,909    |   |   |   | 27,057 |   |
| Total interest expense                                             |   |                                   | 3,674,967 |   |   |   | 5,000,234 |   |
|                                                               |   |                                   |      |   |   |   |   |   |
| NET INTEREST INCOME BEFORE PROVISION FOR (RECOVERY OF) LOAN LOSSES |   |                                   | 6,169,479 |   |   |   | 5,707,260 |   |
| Provision for (recovery of) loan losses                            |   |                                   | (115,408  | ) |   |   | 252,489 |   |
|                                                               |   |                                   |      |   |   |   |   |   |
| NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) LOAN LOSSES  |   |                                   | 6,284,887 |   |   |   | 5,454,771 |   |
|                                                               |   |                                   |      |   |   |   |   |   |
| NONINTEREST INCOME                                                 |   |                                   |      |   |   |   |   |   |
| Service fees on deposit accounts                                   |   |                                   | 86,311    |   |   |   | 92,211 |   |
| Earnings on bank-owned life insurance                              |   |                                   | 87,042    |   |   |   | 116,867 |   |
| Investment securities gains, net                                   |   |                                   | 293,815   |   |   |   | 485,886 |   |
| Gain on sale of loans                                              |   |                                   | 365,945   |   |   |   | 287,641 |   |
| Rental income                                                      |   |                                   | 287,847   |   |   |   | 290,173 |   |
| Acquisition related gains                                          |   |                                   | 4,600,480 |   |   |   | - |   |
| Other                                                              |   |                                   | 388,998   |   |   |   | 171,117 |   |
| Total noninterest income                                           |   |                                   | 6,110,438 |   |   |   | 1,443,895 |   |
|                                                               |   |                                   |      |   |   |   |   |   |
| NONINTEREST EXPENSE                                                |   |                                   |      |   |   |   |   |   |
| Compensation and employee benefits                                 |   |                                   | 3,655,662 |   |   |   | 3,503,238 |   |
| Occupancy and equipment                                            |   |                                   | 1,030,236 |   |   |   | 1,012,502 |   |
| Federal deposit insurance premiums                                 |   |                                   | 375,983   |   |   |   | 408,643 |   |
| Data processing expense                                            |   |                                   | 286,901   |   |   |   | 269,026 |   |
| Professional fees                                                  |   |                                   | 354,478   |   |   |   | 331,296 |   |
| Other                                                              |   |                                   | 1,942,236 |   |   |   | 1,034,195 |   |
| Total noninterest expense                                          |   |                                   | 7,645,496 |   |   |   | 6,558,900 |   |
|                                                               |   |                                   |      |   |   |   |   |   |
| Income before income tax expense                                   |   |                                   | 4,749,829 |   |   |   | 339,766 |   |
| Income tax expense                                                 |   |                                   | 1,586,034 |   |   |   | 8,424 |   |
|                                                               |   |                                   |      |   |   |   |   |   |
| NET INCOME                                                         |   | $                                      | 3,163,795 |   |   | $ | 331,342 |   |
|                                                               |   |                                   |      |   |   |   |   |   |
| EARNINGS PER SHARE, BASIC AND DILUTED                              |   | $                                      | 1.04      |   |   | $ | 0.11 |   |
|                                                               |   |                                   |      |   |   |   |   |   |
| Weighted-average common shares outstanding, basic and diluted      |   |                                   | 3,033,208 |   |   |   | 3,015,800 |   |

----

|                                                                                                           |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       | Accumulated |   |   |          |   |   |   |    |
|---------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|--------|------------|--------|--------|----------------------|--------|--------|-------------|--------|--------|------------------|------------|--------|---------------|--------|------------|-------------|--------|--------|---------------|--------|--------|--------|---------|
|                                                                                                                |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       | Other       |   |   |          |   |   |   |    |
|                                                                                                                |   | Common Stock |      |   | Additional |   |   | Retained             |   |   | Unallocated |   |   | Treasury         |       |   | Comprehensive |   |       |        |   |   | Comprehensive |   |
|                                                                                                                |   | Shares            |      |   | Amount     |   |   | Paid-In Capital |   |   | Earnings    |   |   | ESOP Shares |       |   | Stock         |   |       | Income      |   |   | Total         |   |   | Income |    |
|                                                                                                                |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |
| Balance, December 31, 2008                                                                                          |   |              | 3,306,250 |   |       | $      | 33,063 |                 |   | $      | 13,515,680  |   |   | $                | 11,506,078 |   |          | $      | (1,123,243 | )           |   | $      | (983,145      | )      |   | $      | 655,248 |   |   | $ | 23,603,681 |   |   |   |   |
|                                                                                                                |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   |   |   |
| Net income                                                                                                          |   |              |      |   |       |   |   |                 |   |   |        |   |   |             | 331,342    |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   | 331,342 |   |   | $ | 331,342 |   |
| Other comprehensive loss:                                                                                           |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Unrealized loss on available-for-sale securities, net of reclassification adjustment, net of tax benefit of $44,607 |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   | (86,591 | ) |   |   | (86,591 | ) |   |   | (86,591 | ) |
| Comprehensive income                                                                                                |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   | $  | 244,751 |   |
| Purchase of treasury stock (31,982 shares)                                                                          |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   | (268,590      | )      |   |   |    |   |   |   | (268,590 | ) |   |   |   |   |
| Stock options compensation expense                                                                                  |   |              |      |   |       |   |   |                 |   |   | 89,593      |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   | 89,593 |   |   |   |   |   |
| Allocation of unearned ESOP shares                                                                                  |   |              |      |   |       |   |   |                 |   |   | (26,612     | )      |   |             |       |   |          |   | 86,403     |        |   |   |          |   |   |   |    |   |   |   | 59,791 |   |   |   |   |   |
| Allocation of unearned restricted stock                                                                             |   |              |      |   |       |   |   |                 |   |   | 115,733     |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   | 115,733 |   |   |   |   |   |
|                                                                                                                |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                                                                          |   |              | 3,306,250 |   |       |   | 33,063 |                 |   |   | 13,694,394  |   |   |             | 11,837,420 |   |          |   | (1,036,840 | )           |   |   | (1,251,735    | )      |   |   | 568,657 |   |   |   | 23,844,959 |   |   |   |   |   |
|                                                                                                                |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                          |   |              |      |   |       |   |   |                 |   |   |        |   |   |             | 3,163,795  |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   | 3,163,795 |   |   | $ | 3,163,795 |   |
| Other comprehensive income:                                                                                         |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Unrealized gain on available-for-sale securities, net of reclassification adjustment, net of taxes of $2,752        |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   | 5,341   |   |   |   | 5,341 |   |   |   | 5,341 |   |
| Comprehensive income                                                                                                |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   | $ | 3,169,136 |   |
| Purchase of treasury stock (1,982 shares)                                                                           |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   | (10,406       | )      |   |   |    |   |   |   | (10,406 | ) |   |   |   |   |
| Stock options compensation expense                                                                                  |   |              |      |   |       |   |   |                 |   |   | 89,593      |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   | 89,593 |   |   |   |   |   |
| Allocation of unearned ESOP shares                                                                                  |   |              |      |   |       |   |   |                 |   |   | (35,857     | )      |   |             |       |   |          |   | 86,403     |        |   |   |          |   |   |   |    |   |   |   | 50,546 |   |   |   |   |   |
| Allocation of unearned restricted stock                                                                             |   |              |      |   |       |   |   |                 |   |   | 115,733     |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   | 115,733 |   |   |   |   |   |
|                                                                                                                |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2010                                                                                          |   |              | 3,306,250 |   |       | $      | 33,063 |                 |   | $      | 13,863,863  |   |   | $                | 15,001,215 |   |          | $      | (950,437   | )           |   | $      | (1,262,141    | )      |   | $      | 573,998 |   |   | $ | 27,259,561 |   |   |   |   |   |
|                                                                                                                |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   |   |   |   |
|                                                                                                                |   |              |      |   |       |   |   |                 |   |   |        |   |   | 2010             |       |   | 2009          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   |   |
| Components of other comprehensive income (loss):                                                                    |   |              |      |   |       |   |   |                 |   |   |        |   |   |             |       |   |          |   |       |        |   |   |          |   |   |   |    |   |   |   |   |   |   |   |
| Changes in net unrealized gain on investment securities available for sale                                          |   |              |      |   |       |   |   |                 |   |   |        |   |   | $                | 199,259    |   |          | $      | 234,094    |        |   |   |          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Realized gains included in net income, net of taxes of $99,897 and $165,201, respectively                           |   |              |      |   |       |   |   |                 |   |   |        |   |   |             | (193,918   | )      |          |   | (320,685   | )           |   |   |          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Total                                                                                                               |   |              |      |   |       |   |   |                 |   |   |        |   |   | $                | 5,341      |   |          | $      | (86,591    | )           |   |   |          |   |   |   |    |   |   |   |   |   |   |   |   |   |

----

|                                                                                    |   | Year Ended December 31, |            |
|----------------------------------------------------------------------------------------------|--------|----------------------------------------|-----------------|
|                                                                                         |   | 2010                                   |            |   | 2009 |   |
| OPERATING ACTIVITIES                                                                         |   |                                   |            |   |   |   |
| Net income                                                                                   |   | $                                      | 3,163,795       |   |   | $ | 331,342 |   |
| Adjustments to reconcile net income to net cash provided by (used for) operating activities: |   |                                   |            |   |   |   |   |   |
| Provision for (recovery of) loan losses                                                      |   |                                   | (115,408        | ) |   |   | 252,489 |   |
| Depreciation, amortization, and accretion                                                    |   |                                   | 484,976         |   |   |   | 256,772 |   |
| Decrease (increase) in prepaid federal deposit insurance premium                             |   |                                   | 280,996         |   |   |   | (1,019,486 | ) |
| Investment securities gains, net                                                             |   |                                   | (293,815        | ) |   |   | (485,886 | ) |
| Proceeds from sale of loans                                                                  |   |                                   | 17,117,989      |   |   |   | 24,872,007 |   |
| Net gain on sale of loans                                                                    |   |                                   | (365,945        | ) |   |   | (287,641 | ) |
| Loans originated for sale                                                                    |   |                                   | (16,752,044     | ) |   |   | (24,584,366 | ) |
| Earnings on bank-owned life insurance                                                        |   |                                   | (87,042         | ) |   |   | (116,867 | ) |
| Deferred federal income taxes                                                                |   |                                   | 1,543,642       |   |   |   | (137,322 | ) |
| Increase in accrued interest receivable                                                      |   |                                   | (142,887        | ) |   |   | (48,382 | ) |
| Increase (decrease) in accrued interest payable                                              |   |                                   | 39,887          |   |   |   | (220 | ) |
| Compensation expense for stock options, ESOP, and restricted stock                           |   |                                   | 255,872         |   |   |   | 265,117 |   |
| Net gain on acquisition                                                                      |   |                                   | (4,600,480      | ) |   |   | - |   |
| Other, net                                                                                   |   |                                   | 41,284          |   |   |   | 278,295 |   |
| Net cash provided by (used for) operating activities                                         |   |                                   | 570,820         |   |   |   | (424,148 | ) |
|                                                                                         |   |                                   |            |   |   |   |   |   |
| INVESTING ACTIVITIES                                                                         |   |                                   |            |   |   |   |   |   |
| Investment securities available for sale                                                     |   |                                   |            |   |   |   |   |   |
| Proceeds from sales                                                                          |   |                                   | 6,483,428       |   |   |   | 9,786,536 |   |
| Proceeds from principal repayments and maturities                                            |   |                                   | 12,929,518      |   |   |   | 13,863,947 |   |
| Purchases                                                                                    |   |                                   | (9,251,651      | ) |   |   | (29,924,517 | ) |
| Investment securities held to maturity                                                       |   |                                   |            |   |   |   |   |   |
| Proceeds from principal repayments and maturities                                            |   |                                   | 4,183,761       |   |   |   | - |   |
| Purchases                                                                                    |   |                                   | (16,716,427     | ) |   |   | - |   |
| Decrease in loans receivable, net                                                            |   |                                   | 14,055,313      |   |   |   | 17,380,558 |   |
| Loans purchased                                                                              |   |                                   | -               |   |   |   | (3,979,689 | ) |
| Purchase of Federal Home Loan Bank stock                                                     |   |                                   | (54,600         | ) |   |   | - |   |
| Redemptions of Federal Home Loan Bank stock                                                  |   |                                   | 116,700         |   |   |   | - |   |
| Purchase of premises and equipment                                                           |   |                                   | (104,598        | ) |   |   | (86,991 | ) |
| Net cash received from acquisition                                                           |   |                                   | 46,776,710      |   |   |   | - |   |
| Net cash provided by investing activities                                                    |   |                                   | 58,418,154      |   |   |   | 7,039,844 |   |
|                                                                                         |   |                                   |            |   |   |   |   |   |
| FINANCING ACTIVITIES                                                                         |   |                                   |            |   |   |   |   |   |
| Decrease in deposits, net                                                                    |   |                                   | (15,078,108     | ) |   |   | (379,160 | ) |
| Net decrease in FHLB advances - short-term                                                   |   |                                   | -               |   |   |   | (4,000,000 | ) |
| Repayment of FHLB advances - long-term                                                       |   |                                   | (2,047,331      | ) |   |   | (1,079,825 | ) |
| Proceeds of FHLB advances - long-term                                                        |   |                                   | 4,000,000       |   |   |   | 3,000,000 |   |
| Purchase of treasury stock                                                                   |   |                                   | (10,406         | ) |   |   | (268,590 | ) |
| Decrease in advances by borrowers for taxes and insurance, net                               |   |                                   | (275,110        | ) |   |   | (132,533 | ) |
| Net cash used for financing activities                                                       |   |                                   | (13,410,955     | ) |   |   | (2,860,108 | ) |
|                                                                                         |   |                                   |            |   |   |   |   |   |
| Increase in cash and cash equivalents                                                        |   |                                   | 45,578,019      |   |   |   | 3,755,588 |   |
|                                                                                         |   |                                   |            |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                               |   |                                   | 8,426,530       |   |   |   | 4,670,942 |   |
|                                                                                         |   |                                   |            |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS AT END OF YEAR                                                     |   | $                                      | 54,004,549      |   |   | $ | 8,426,530 |   |
|                                                                                         |   |                                   |            |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW DISCLOSURES                                                           |   |                                   |            |   |   |   |   |   |
| Cash paid:                                                                                   |   |                                   |            |   |   |   |   |   |
| Interest                                                                                     |   | $                                      | 3,635,080  |   |   | $ | 5,000,454  |   |
| Income taxes                                                                                 |   |                                   | 90,000          |   |   |   | 93,569 |   |
|                                                                                         |   |                                   |            |   |   |   |   |   |
| Acquisitions (for more information, refer to Note 3 FDIC - Assisted Acquisition)             |   |                                   |            |   |   |   |   |   |
| Non-cash assets acquired at fair value                                                       |   | $                                      | 48,453,027      |   |   | $ | - |   |
| Liabilities assumed at fair value                                                            |   |                                   | (90,629,257     | ) |   |   | - |   |
| Net liabilities assumed                                                                      |   | $                                      | (42,176,230     | ) |   | $ | - |   |
|                                                                                         |   |                                   |            |   |   |   |   |   |
| Net cash and cash equivalents acquired                                                       |   | $                                      | 46,776,710      |   |   | $ | - |   |
|                                                                                         |   |                                   |            |   |   |   |   |   |
| Net gain recorded on acquisition                                                             |   | $                                      | 4,600,480       |   |   | $ | - |   |

----

| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|--------------------------------------------|

----

| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----|--------------------------------------------------------|

----

| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----|--------------------------------------------------------|

----

| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----|--------------------------------------------------------|

----

| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----|--------------------------------------------------------|

|   | · | Levels of and trends in delinquencies |
|--------|--------|---------------------------------------|

|   | · | Trends in volume and terms |
|--------|--------|----------------------------|

|   | · | Trends in credit quality ratings |
|--------|--------|----------------------------------|

|   | · | Changes in management and lending staff |
|--------|--------|-----------------------------------------|

|   | · | Economic trends |
|--------|--------|-----------------|

|   | · | Concentrations of credit |
|--------|--------|--------------------------|

----

| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----|--------------------------------------------------------|

----

| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----|--------------------------------------------------------|

----

| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----|--------------------------------------------------------|

----

| 2. | EARNINGS PER SHARE |
|----|--------------------|

|                                                                                                   |   | 2010   |      |   | 2009   |   |
|--------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Weighted-average common shares outstanding                                                             |   |   | 3,306,250 |   |   |   | 3,306,250 |   |
| Average unearned nonvested shares                                                                      |   |   | (26,170   | )      |   |   | (38,482 | ) |
| Average unallocated shares held by ESOP                                                                |   |   | (99,010   | )      |   |   | (107,650 | ) |
| Average treasury stock shares                                                                          |   |   | (147,862  | )      |   |   | (144,318 | ) |
| Weighted-average common shares and common stock equivalents used to calculate basic earnings per share |   |   | 3,033,208 |   |   |   | 3,015,800 |   |

| 3. | FDIC-ASSISTED ACQUISITION |
|----|---------------------------|

----

| 3. | FDIC-ASSISTED ACQUISITION (Continued) |
|----|---------------------------------------|

|                                            |   | Acquired from |       |   | Fair Value |   |       | As Recorded         |   |
|-------------------------------------------------|--------|--------------------|------------|--------|-----------------|--------|------------|--------------------------|--------|
|                                            |   | the FDIC      |       |   | Adjustments     |   |       | by the Company |   |
| Assets:                                         |   |               |       |   |            |   |       |                     |   |
| Cash and due from banks                         |   | $                  | 16,300,282 |   |            | $      | -          |                     |   | $ | 16,300,282 |   |
| Investment securities                           |   |               | 8,187,478  |   |            |   | -          |                     |   |   | 8,187,478 |   |
| Loans receivable not covered by FDIC loss share |   |               | 1,609,117  |   |            |   | (339,000   | )                        |   |   | 1,270,117 |   |
| Loans receivable covered by FDIC loss share     |   |               | 40,515,228 |   |            |   | (7,292,213 | )                        |   |   | 33,223,015 |   |
| FDIC indemnifiation asset                       |   |               | -          |   |            |   | 5,397,192  |                     |   |   | 5,397,192 |   |
| Other assets                                    |   |               | 375,225    |   |            |   | -          |                     |   |   | 375,225 |   |
| Total assets acquired                           |   |               | 66,987,330 |   |            |   | (2,234,021 | )                        |   |   | 64,753,309 |   |
|                                            |   |               |       |   |            |   |       |                     |   |   |   |   |
| Liabilities:                                    |   |               |       |   |            |   |       |                     |   |   |   |   |
| Deposits                                        |   |               | 90,411,176 |   |            |   | 165,499    |                     |   |   | 90,576,675 |   |
| Other liabilities                               |   |               | 52,582     |   |            |   | -          |                     |   |   | 52,582 |   |
| Total liabilites assumed                        |   | $                  | 90,463,758 |   |            | $      | 165,499    |                     |   | $ | 90,629,257 |   |
|                                            |   |               |       |   |            |   |       |                     |   |   |   |   |
| Cash received on acquisition                    |   |               |       |   |            |   |       |                     |   | $ | 30,476,428 |   |
|                                            |   |               |       |   |            |   |       |                     |   |   |   |   |
| Gain on acquisition                             |   |               |       |   |            |   |       |                     |   | $ | 4,600,480 |   |

|                     |   | 2010   |       |
|--------------------------|--------|--------|------------|
|                     |   |   |       |   |
| Unpaid principal balance |   | $      | 3,337,356  |   |
| Interest                 |   |   | 1,082,028  |   |
| Contractual cash flows   |   |   | 4,419,384  |   |
| Non-accretable discount  |   |   | (2,657,833 | ) |
| Expected cash flows      |   |   | 1,761,551  |   |
| Accretable discount      |   |   | (114,448   | ) |
| Estimated fair value     |   | $      | 1,647,103  |   |

----

| 3. | FDIC-ASSISTED ACQUISITION (Continued) |
|----|---------------------------------------|

| 4. | INVESTMENT SECURITIES |
|----|-----------------------|

|                                                                |   | December 31, 2010 |       |
|---------------------------------------------------------------------|--------|-----------------------------|------------|
|                                                                |   |                        |       |   | Gross |   |   | Gross |   |   |   |   |
|                                                                |   | Amortized                   |       |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                                                |   | Cost                        |       |   | Gains |   |   | Losses |   |   | Value |   |
| Available for Sale                                        |   |                        |       |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities:                                         |   |                        |       |   |   |   |   |   |   |   |   |   |
| Fannie Mae                                                          |   | $                           | 7,557,936  |   |   | $ | 440,925 |   |   | $ | - |   |   | $ | 7,998,861 |   |
| Freddie Mac                                                         |   |                        | 1,061,808  |   |   |   | 54,633 |   |   |   | - |   |   |   | 1,116,441 |   |
| Government National Mortgage Association                            |   |                        | 1,054,443  |   |   |   | 124,805 |   |   |   | - |   |   |   | 1,179,248 |   |
| Collateralized mortgage obligations - government-sponsored entities |   |                        | 6,236,550  |   |   |   | 24,575 |   |   |   | (16,411 | ) |   |   | 6,244,714 |   |
| Total mortgage-backed securities                                    |   |                        | 15,910,737 |   |   |   | 644,938 |   |   |   | (16,411 | ) |   |   | 16,539,264 |   |
| Corporate securities                                                |   |                        | 10,551,331 |   |   |   | 251,437 |   |   |   | (869 | ) |   |   | 10,801,899 |   |
| Total debt securities                                               |   |                        | 26,462,068 |   |   |   | 896,375 |   |   |   | (17,280 | ) |   |   | 27,341,163 |   |
| Equity securities - financial services                              |   |                        | 18,500     |   |   |   | - |   |   |   | (9,400 | ) |   |   | 9,100 |   |
|                                                                |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                               |   | $                           | 26,480,568 |   |   | $ | 896,375 |   |   | $ | (26,680 | ) |   | $ | 27,350,263 |   |
| Held to Maturity                                                    |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities:                                         |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                                                          |   | $                           | 22,611,248 |   |   | $ | 165,083 |   |   | $ | (213,520 | ) |   | $ | 22,562,811 |   |
| Freddie Mac                                                         |   |                        | 3,516,382  |   |   |   | - |   |   |   | (4,051 | ) |   |   | 3,512,331 |   |
| Total mortgage-backed securities                                    |   | $                           | 26,127,630 |   |   | $ | 165,083 |   |   | $ | (217,571 | ) |   | $ | 26,075,142 |   |

|                                                                |   | December 31, 2009 |       |
|---------------------------------------------------------------------|--------|-----------------------------|------------|
|                                                                |   |                        |       |   | Gross |   |   | Gross |   |   |   |   |
|                                                                |   | Amortized                   |       |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                                                |   | Cost                        |       |   | Gains |   |   | Losses |   |   | Value |   |
| Available for Sale                                                  |   |                        |       |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities:                                         |   |                        |       |   |   |   |   |   |   |   |   |   |
| Fannie Mae                                                          |   | $                           | 13,162,586 |   |   | $ | 557,138 |   |   | $ | - |   |   | $ | 13,719,724 |   |
| Freddie Mac                                                         |   |                        | 2,763,475  |   |   |   | 142,253 |   |   |   | - |   |   |   | 2,905,728 |   |
| Government National Mortgage Association                            |   |                        | 1,339,327  |   |   |   | 107,672 |   |   |   | - |   |   |   | 1,446,999 |   |
| Collateralized mortgage obligations - government-sponsored entities |   |                        | 85,639     |   |   |   | 4,873 |   |   |   | (3,558 | ) |   |   | 86,954 |   |
| Total mortgage-backed securities                                    |   |                        | 17,351,027 |   |   |   | 811,936 |   |   |   | (3,558 | ) |   |   | 18,159,405 |   |
| Corporate securities                                                |   |                        | 12,370,458 |   |   |   | 156,124 |   |   |   | (101,900 | ) |   |   | 12,424,682 |   |
| Total debt securities                                               |   |                        | 29,721,485 |   |   |   | 968,060 |   |   |   | (105,458 | ) |   |   | 30,584,087 |   |
| Equity securities - financial services                              |   |                        | 18,500     |   |   |   | - |   |   |   | (1,000 | ) |   |   | 17,500 |   |
| Total                                                               |   | $                           | 29,739,985 |   |   | $ | 968,060 |   |   | $ | (106,458 | ) |   | $ | 30,601,587 |   |
| Held to Maturity                                                    |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae mortgage-backed securities                               |   | $                           | 13,780,267 |   |   | $ | - |   |   | $ | (139,292 | ) |   | $ | 13,640,975 |   |

----

| 4. | INVESTMENT SECURITIES (Continued) |
|----|-----------------------------------|

|                                                                |   | December 31, 2010            |       |
|---------------------------------------------------------------------|--------|----------------------------------------|------------|
|                                                                |   | Less Than Twelve Months |       |   | Twelve Months or Greater |   |   | Total |   |
|                                                                |   |                                   |       |   | Gross |   |   |   |   |   | Gross |   |   |   |   |   | Gross |   |
|                                                                |   | Fair                                   |       |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                                                |   | Value                                  |       |   | Losses |   |   | Value |   |   | Losses |   |   | Value |   |   | Losses |   |
| Mortage backed securities:                                |   |                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                                                          |   | $                                      | 10,974,673 |   |   | $ | (213,520 | ) |   | $ | - |   |   | $ | - |   |   | $ | 10,974,673 |   |   | $ | (213,520 | ) |
| Freddie Mac                                                         |   |                                   | 3,512,331  |   |   |   | (4,051 | ) |   |   | - |   |   |   | - |   |   |   | 3,512,331 |   |   |   | (4,051 | ) |
| Collateralized mortgage obligations - government-sponsored entities |   |                                   | 3,500,603  |   |   |   | (14,718 | ) |   |   | 7,712 |   |   |   | (1,693 | ) |   |   | 3,508,315 |   |   |   | (16,411 | ) |
| Total mortgage-backed securities                                    |   |                                   | 17,987,607 |   |   |   | (232,289 | ) |   |   | 7,712 |   |   |   | (1,693 | ) |   |   | 17,995,319 |   |   |   | (233,982 | ) |
| Corporate securities                                                |   |                                   | 874,765    |   |   |   | (869 | ) |   |   | - |   |   |   | - |   |   |   | 874,765 |   |   |   | (869 | ) |
| Equity securities - financial services                              |   |                                   | 9,100      |   |   |   | (9,400 | ) |   |   | - |   |   |   | - |   |   |   | 9,100 |   |   |   | (9,400 | ) |
|                                                                |   |                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                               |   | $                                      | 18,871,472 |   |   | $ | (242,558 | ) |   | $ | 7,712 |   |   | $ | (1,693 | ) |   | $ | 18,879,184 |   |   | $ | (244,251 | ) |

|                                                                |   | December 31, 2009            |       |
|---------------------------------------------------------------------|--------|----------------------------------------|------------|
|                                                                |   | Less Than Twelve Months |       |   | Twelve Months or Greater |   |   | Total |   |
|                                                                |   |                                   |       |   | Gross |   |   |   |   |   | Gross |   |   |   |   |   | Gross |   |
|                                                                |   | Fair                                   |       |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                                                |   | Value                                  |       |   | Losses |   |   | Value |   |   | Losses |   |   | Value |   |   | Losses |   |
| Mortage backed securities:                                          |   |                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fannie Mae                                                          |   | $                                      | 13,640,975 |   |   | $ | (139,292 | ) |   | $ | - |   |   | $ | - |   |   | $ | 13,640,975 |   |   | $ | (139,292 | ) |
| Collateralized mortgage obligations - government-sponsored entities |   |                                   | -          |   |   |   | - |   |   |   | 7,790 |   |   |   | (3,558 | ) |   |   | 7,790 |   |   |   | (3,558 | ) |
| Total mortgage-backed securities                                    |   |                                   | 13,640,975 |   |   |   | (139,292 | ) |   |   | 7,790 |   |   |   | (3,558 | ) |   |   | 13,648,765 |   |   |   | (142,850 | ) |
| Corporate securities                                                |   |                                   | 5,898,100  |   |   |   | (101,900 | ) |   |   | - |   |   |   | - |   |   |   | 5,898,100 |   |   |   | (101,900 | ) |
| Equity securities - financial services                              |   |                                   | 17,500     |   |   |   | (1,000 | ) |   |   | - |   |   |   | - |   |   |   | 17,500 |   |   |   | (1,000 | ) |
|                                                                |   |                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                               |   | $                                      | 19,556,575 |   |   | $ | (242,192 | ) |   | $ | 7,790 |   |   | $ | (3,558 | ) |   | $ | 19,564,365 |   |   | $ | (245,750 | ) |

----

| 4. | INVESTMENT SECURITIES (Continued) |
|----|-----------------------------------|

|                                   |   | Available for Sale |       |   | Held to Maturity |   |
|----------------------------------------|--------|------------------------------|------------|--------|----------------------------|--------|
|                                   |   | Amortized                    |       |   | Fair                       |   |   | Amortized |   |   | Fair |   |
|                                   |   | Cost                         |       |   | Value                      |   |   | Cost |   |   | Value |   |
| Due within one year                    |   | $                            | 192        |   |                       | $      | 192 |   |   | $ | - |   |   | $ | - |   |
| Due after one year through five years  |   |                         | 10,331,092 |   |                       |   | 10,609,445 |   |   |   | - |   |   |   | - |   |
| Due after five years through ten years |   |                         | 5,766,949  |   |                       |   | 6,024,761 |   |   |   | 12,798,259 |   |   |   | 12,936,778 |   |
| Due after ten years                    |   |                         | 10,363,835 |   |                       |   | 10,706,765 |   |   |   | 13,329,371 |   |   |   | 13,138,364 |   |
| Total                                  |   | $                            | 26,462,068 |   |                       | $      | 27,341,163 |   |   | $ | 26,127,630 |   |   | $ | 26,075,142 |   |

| 5. | LOANS RECEIVABLE |
|----|------------------|

|                                   |   | December 31, |        |
|----------------------------------------|--------|-------------------|-------------|
|                                   |   | 2010              |        |   | 2009 |   |
| Mortgage loans:                        |   |              |        |   |   |   |
| One-to-four family                     |   | $                 | 119,085,014 |   |   | $ | 131,570,796 |   |
| Multi-family and commercial            |   |              | 10,272,043  |   |   |   | 10,214,036 |   |
|                                   |   |              | 129,357,057 |   |   |   | 141,784,832 |   |
| Home equity loans                      |   |              | 2,918,492   |   |   |   | 3,372,071 |   |
| Home equity lines of credit ("HELOCs") |   |              | 2,023,561   |   |   |   | 3,036,690 |   |
| Education loans                        |   |              | 3,178,622   |   |   |   | 3,281,029 |   |
| Other consumer loans                   |   |              | 29,062      |   |   |   | 32,390 |   |
| Non-covered loans purchased            |   |              | 1,270,117   |   |   |   | - |   |
| Covered loans                          |   |              | 32,808,086  |   |   |   | - |   |
|                                   |   |              | 171,584,997 |   |   |   | 151,507,012 |   |
| Less:                                  |   |              |        |   |   |   |   |   |
| Net deferred loan fees                 |   |              | 277,627     |   |   |   | 214,741 |   |
| Allowance for loan losses              |   |              | 833,984     |   |   |   | 1,115,141 |   |
| Total                                  |   | $                 | 170,473,386 |   |   | $ | 150,177,130 |   |

----

| 5. | LOANS RECEIVABLE (Continued) |
|----|------------------------------|

|   |      |   |      |   |    | Amounts   |   |   |    |   |
|--------|-----------|--------|-----------|--------|---------|-----------|--------|--------|---------|--------|
| 2009   |      |   | Additions |   |    | Collected |   |   | 2010    |   |
|   |      |   |      |   |    |      |   |   |    |   |
| $      | 2,038,928 |   |      | $      | 944,134 |      |   | $      | 223,653 |   |   | $ | 2,759,409 |   |

| 6. | ALLOWANCE FOR LOAN LOSSES |
|----|---------------------------|

|   | · | Levels of and trends in delinquencies |
|--------|--------|---------------------------------------|

|   | · | Trends in volume and terms |
|--------|--------|----------------------------|

|   | · | Trends in credit quality ratings |
|--------|--------|----------------------------------|

|   | · | Changes in management and lending staff |
|--------|--------|-----------------------------------------|

|   | · | Economic trends |
|--------|--------|-----------------|

|   | · | Concentrations of credit |
|--------|--------|--------------------------|

|                                 |   | Year Ended December 31, |      |
|--------------------------------------|--------|----------------------------------------|-----------|
|                                 |   | 2010                                   |      |   | 2009 |   |
| Balance, January 1                   |   | $                                      | 1,115,141 |   |   | $ | 857,702 |   |
| Add:                                 |   |                                   |      |   |   |   |   |   |
| Provision (recovery) for loan losses |   |                                   | (115,408  | ) |   |   | 252,489 |   |
| Loan recoveries                      |   |                                   | 4,357     |   |   |   | 4,950 |   |
|                                 |   |                                   | 1,004,090 |   |   |   | 1,115,141 |   |
| Less:                                |   |                                   |      |   |   |   |   |   |
| Charge-offs                          |   |                                   | 170,106   |   |   |   | - |   |
|                                 |   |                                   |      |   |   |   |   |   |
| Balance, December 31                 |   | $                                      | 833,984   |   |   | $ | 1,115,141 |   |

----

| 6. | ALLOWANCE FOR LOAN LOSSES (Continued) |
|----|---------------------------------------|

|                         |   | 2010        |        |
|------------------------------|--------|-------------|-------------|
|                         |   | One-to-     |        |   | Multi-family and |   |   |   |   |   |   |   |   | Education |   |   |   |   |
|                         |   | Four Family |        |   | Commercial |   |   |   |   |   |   |   |   | and Other |   |   |   |   |
|                         |   | Real Estate |        |   | Real Estate |   |   | Home Equity |   |   | HELOCs |   |   | Consumer |   |   | Total |   |
| Allowance for loan losses:   |   |        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance               |   | $           | 519,182     |   |   | $ | 274,286 |   |   | $ | 14,592 |   |   | $ | 9,885 |   |   | $ | 16,039 |   |   | $ | 833,984 |   |
| Ending balance: individually |   |        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   | $           | -           |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Ending balance: collectively |   |        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   | $           | 519,182     |   |   | $ | 274,286 |   |   | $ | 14,592 |   |   | $ | 9,885 |   |   | $ | 16,039 |   |   | $ | 833,984 |   |
| Loans:                       |   |        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending Balance               |   | $           | 119,085,014 |   |   | $ | 10,272,043 |   |   | $ | 2,918,492 |   |   | $ | 2,023,561 |   |   | $ | 3,207,684 |   |   | $ | 137,506,794 |   |
| Ending balance: individually |   |        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   | $           | -           |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Ending balance: collectively |   |        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment     |   | $           | 119,085,014 |   |   | $ | 10,272,043 |   |   | $ | 2,918,492 |   |   | $ | 2,023,561 |   |   | $ | 3,207,684 |   |   | $ | 137,506,794 |   |

----

| 6.   | ALLOWANCE FOR LOAN LOSSES (Continued) |
|----------------|---------------------------------------|

|            |   | Multi-Family   |       |
|-----------------|--------|----------------|------------|
|            |   | and Commercial |       |
|            |   | Real Estate    |       |
| Pass            |   | $              | 7,475,825  |   |
| Special Mention |   |           | 2,775,251  |   |
| Substandard     |   |           | 20,967     |   |
| Doubtful        |   |           | -          |   |
| Loss            |   |           | -          |   |
| Ending Balance  |   | $              | 10,272,043 |   |

|          |   |                         |        |   |   |   |      |   |   |   | Education |   |   | Non-Covered |      |
|---------------|--------|------------------------------|-------------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|-------------|-----------|
|          |   | One-to-Four                  |        |   | Home   |   |      |   |   |   | and Other |   |   | Loans       |      |
|          |   | Family Real Estate |        |   | Equity |   |      | HELOCs |   |   | Consumer  |   |   | Purchased   |      |
| Performing    |   | $                            | 118,335,481 |   |   | $      | 2,918,492 |   |   | $      | 1,976,912 |   |   | $           | 2,992,563 |   |   | $ | 1,258,908 |   |
| Nonperforming |   |                         | 749,533     |   |   |   | -         |   |   |   | 46,649    |   |   |        | 215,121   |   |   |   | 11,209 |   |
| Total         |   | $                            | 119,085,014 |   |   | $      | 2,918,492 |   |   | $      | 2,023,561 |   |   | $           | 3,207,684 |   |   | $ | 1,270,117 |   |

----

| 6. | ALLOWANCE FOR LOAN LOSSES (Continued) |
|----|---------------------------------------|

|   | Credit Quality Information (Continued) |
|--------|----------------------------------------|

|                                    |   | 2010       |    |
|-----------------------------------------|--------|------------|---------|
|                                    |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Recorded |   |
|                                    |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   | Total |   |   | Investment > |   |
|                                    |   | 30-59 Days |    |   | 60-89 Days |   |   | 90 Days |   |   | Total Past |   |   |   |   |   | Loans |   |   | 90 Days and |   |
|                                    |   | Past Due   |    |   | Past Due |   |   | Or Greater |   |   | Due |   |   | Current |   |   | Receivable |   |   | Accruing |   |
| One-to-Four Family Real Estate          |   | $          | 389,875 |   |   | $ | 741,652 |   |   | $ | 749,533 |   |   | $ | 1,881,060 |   |   | $ | 117,203,954 |   |   | $ | 119,085,014 |   |   | $ | - |   |
| Multi-family and Commercial Real Estate |   |       | 20,967  |   |   |   | - |   |   |   | - |   |   |   | 20,967 |   |   |   | 10,251,076 |   |   |   | 10,272,043 |   |   |   | - |   |
| Home Equity                             |   |       | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,918,492 |   |   |   | 2,918,492 |   |   |   | - |   |
| HELOCs                                  |   |       | -       |   |   |   | - |   |   |   | 46,649 |   |   |   | 46,649 |   |   |   | 1,976,912 |   |   |   | 2,023,561 |   |   |   | - |   |
| Education and Other Consumer            |   |       | 66,274  |   |   |   | 24,397 |   |   |   | 215,121 |   |   |   | 305,792 |   |   |   | 2,901,892 |   |   |   | 3,207,684 |   |   |   | - |   |
| Non-covered loans purchased             |   |       | 3,254   |   |   |   | 1,756 |   |   |   | 11,209 |   |   |   | 16,219 |   |   |   | 1,253,898 |   |   |   | 1,270,117 |   |   |   | - |   |
| Total                                   |   | $          | 480,370 |   |   | $ | 767,805 |   |   | $ | 1,022,512 |   |   | $ | 2,270,687 |   |   | $ | 136,506,224 |   |   | $ | 138,776,911 |   |   | $ | - |   |

|                         |   | 2010   |      |
|------------------------------|--------|--------|-----------|
| One-to-four family mortgage  |   | $      | 749,533   |   |
| HELOCs                       |   |   | 46,649    |   |
| Education and other consumer |   |   | 215,121   |   |
| Non-covered loans purchased  |   |   | 11,209    |   |
| Total                        |   | $      | 1,022,512 |   |

| 7. | COVERED LOANS |
|----|---------------|

----

| 7.  | COVERED LOANS (Continued) |
|----------|---------------------------|

|                        |   | December 31, |       |
|-----------------------------|--------|--------------|------------|
|                        |   | 2010         |       |
| Mortgage loans:             |   |         |       |
| One-to-four family          |   | $            | 18,771,142 |   |
| Multi-family and commercial |   |         | 12,783,952 |   |
|                        |   |         | 31,555,094 |   |
| Commercial                  |   |         | 1,252,992  |   |
| Total Loans                 |   | $            | 32,808,086 |   |

|                        |   | 2010       |      |
|-----------------------------|--------|------------|-----------|
|                        |   |       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Recorded |   |
|                        |   |       |      |   |   |   |   |   |   |   |   |   |   |   |   |   | Total |   |   | Investment > |   |
|                        |   | 30-59 Days |      |   | 60-89 Days |   |   | 90 Days |   |   | Total Past |   |   |   |   |   | Loans |   |   | 90 Days and |   |
|                        |   | Past Due   |      |   | Past Due |   |   | Or Greater |   |   | Due |   |   | Current |   |   | Receivable |   |   | Accruing |   |
| Mortgage loans:             |   |       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-four family          |   | $          | 2,056,663 |   |   | $ | 123,007 |   |   | $ | 206,035 |   |   | $ | 2,385,705 |   |   | $ | 16,385,437 |   |   | $ | 18,771,142 |   |   | $ | - |   |
| Multi-family and commercial |   |       | 145,487   |   |   |   | - |   |   |   | 178,512 |   |   |   | 323,999 |   |   |   | 12,459,953 |   |   |   | 12,783,952 |   |   |   | - |   |
| Commercial                  |   |       | -         |   |   |   | - |   |   |   | 595,768 |   |   |   | 595,768 |   |   |   | 657,224 |   |   |   | 1,252,992 |   |   |   | - |   |
| Total                       |   | $          | 2,202,150 |   |   | $ | 123,007 |   |   | $ | 980,315 |   |   | $ | 3,305,472 |   |   | $ | 29,502,614 |   |   | $ | 32,808,086 |   |   | $ | - |   |

|                        |   | As of             |      |
|-----------------------------|--------|-------------------|-----------|
|                        |   | December 31, 2010 |      |
| Mortgage loans:             |   |              |      |
| One-to-four family          |   | $                 | 305,466   |   |
| Multi-family and commercial |   |              | 178,512   |   |
| Commercial                  |   |              | 595,768   |   |
|                        |   | $                 | 1,079,746 |   |

----

| 8. | PREMISES AND EQUIPMENT |
|----|------------------------|

|                               |   | December 31, |      |
|------------------------------------|--------|--------------|-----------|
|                               |   | 2010         |      |   | 2009 |   |
| Land                               |   | $            | 55,000    |   |   | $ | 55,000 |   |
| Buildings                          |   |         | 6,968,562 |   |   |   | 6,968,562 |   |
| Furniture, fixtures, and equipment |   |         | 2,373,945 |   |   |   | 2,320,162 |   |
|                               |   |         | 9,397,507 |   |   |   | 9,343,724 |   |
| Less accumulated depreciation      |   |         | 4,826,329 |   |   |   | 4,583,044 |   |
| Total                              |   | $            | 4,571,178 |   |   | $ | 4,760,680 |   |

| 9. | DEPOSITS |
|----|----------|

|                        |   | 2010   |        |   | 2009   |   |
|-----------------------------|--------|--------|-------------|--------|--------|--------|
|                        |   | Amount |        |   | %      |   |   | Amount |   |   | % |   |
| Non-interest-bearing demand |   | $      | 8,806,067   |   |   |   | 3.68 | % |   | $ | 5,649,802 |   |   |   | 3.44 | % |
| NOW accounts                |   |   | 14,767,387  |   |   |   | 6.16 |   |   |   | 11,118,180 |   |   |   | 6.77 |   |
| Money market deposit        |   |   | 56,768,776  |   |   |   | 23.70 |   |   |   | 32,859,511 |   |   |   | 20.01 |   |
| Savings                     |   |   | 29,523,229  |   |   |   | 12.32 |   |   |   | 29,088,102 |   |   |   | 17.71 |   |
|                        |   |   | 109,865,459 |   |   |   | 45.86 |   |   |   | 78,715,595 |   |   |   | 47.93 |   |
| Time deposits:              |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 0.01 - 0.99%                |   |   | 15,470,915  |   |   |   | 6.45 |   |   |   | - |   |   |   | - |   |
| 1.00 - 1.99%                |   |   | 71,933,905  |   |   |   | 30.00 |   |   |   | 32,382,963 |   |   |   | 19.72 |   |
| 2.00 - 3.99%                |   |   | 21,859,336  |   |   |   | 9.12 |   |   |   | 26,128,457 |   |   |   | 15.91 |   |
| 4.00 - 5.99%                |   |   | 20,576,197  |   |   |   | 8.57 |   |   |   | 26,980,230 |   |   |   | 16.44 |   |
|                        |   |   | 129,840,353 |   |   |   | 54.14 |   |   |   | 85,491,650 |   |   |   | 52.07 |   |
|                        |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                       |   | $      | 239,705,812 |   |   |   | 100.00 | % |   | $ | 164,207,245 |   |   |   | 100.00 | % |

|   |   | December 31, 2010 |        |
|--------|--------|-------------------|-------------|
| 2011   |   | $                 | 91,850,547  |   |
| 2012   |   |              | 13,548,290  |   |
| 2013   |   |              | 6,151,673   |   |
| 2014   |   |              | 1,597,679   |   |
| 2015   |   |              | 16,692,164  |   |
|   |   |              |        |   |
| Total  |   | $                 | 129,840,353 |   |

----

| 9. | DEPOSITS (Continued) |
|----|----------------------|

|                      |   | December 31, 2010 |       |
|---------------------------|--------|-------------------|------------|
|                      |   |              |       |   |
| Within three months       |   | $                 | 12,357,408 |   |
| Three through six months  |   |              | 5,848,364  |   |
| Six through twelve months |   |              | 12,055,311 |   |
| Over twelve months        |   |              | 10,126,561 |   |
|                      |   |              |       |   |
| Total                     |   | $                 | 40,387,644 |   |

|                 |   | Year ended December 31, |      |
|----------------------|--------|-------------------------|-----------|
|                 |   | 2010                    |      |   | 2009 |   |
|                 |   |                    |      |   |   |   |   |   |
| NOW accounts         |   | $                       | 73,902    |   |   | $ | 76,736 |   |
| Money market deposit |   |                    | 353,057   |   |   |   | 581,998 |   |
| Savings              |   |                    | 148,812   |   |   |   | 237,084 |   |
| Time deposits        |   |                    | 2,257,434 |   |   |   | 3,313,258 |   |
|                 |   |                    |      |   |   |   |   |   |
| Total                |   | $                       | 2,833,205 |   |   | $ | 4,209,076 |   |

| 10.  | FHLB ADVANCES – LONG-TERM |
|-----------|---------------------------------|

|                  |   |                |   | Weighted- |   |               | Stated interest |   |   |                      |   |
|-----------------------|--------|---------------------|--------|-----------|--------|--------------------|----------------------|--------|--------|---------------------------|--------|
|                  |   | Maturity range |   | average   |   |               | rate range      |   |   | At December 31, |   |
| Description           |   | from                |   | to        |   | interest rate |                 |   | from   |                      |   | to |   |   | 2010 |   |   | 2009 |   |
|                  |   |                |   |      |   |               |                 |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Convertible           |   | 03/19/18            |   | 08/27/18  |   |               | 3.08                 | %      |   |                      | 2.13   | % |   |   | 4.15 | % |   | $ | 17,000,000 |   |   | $ | 17,000,000 |   |
| Fixed-rate            |   | 02/06/13            |   | 02/06/13  |   |               | 3.58                 | %      |   |                      | 3.58   | % |   |   | 3.58 | % |   |   | 1,500,000 |   |   |   | 1,500,000 |   |
| Fixed-rate amortizing |   | 12/26/12            |   | 12/26/12  |   |               | 3.87                 | %      |   |                      | 3.87   | % |   |   | 3.87 | % |   |   | 1,160,193 |   |   |   | 1,707,524 |   |
| Mid-term repo fixed   |   | 02/07/11            |   | 01/11/13  |   |               | 1.97                 | %      |   |                      | 1.41   | % |   |   | 3.15 | % |   |   | 8,766,000 |   |   |   | 6,266,000 |   |
|                  |   |                |   |      |   |               |                 |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                  |   | Total               |   |      |   |               |                 |   |   |                      |   |   |   |   |   |   |   | $ | 28,426,193 |   |   | $ | 26,473,524 |   |

| Year Ending                   |   |   |       |   | Weighted-         |   |
|-------------------------------|--------|--------|------------|--------|-------------------|--------|
| December 31,                  |   | Amount |       |   | Average Rate |   |
|                          |   |   |       |   |              |   |   |   |
| 2011                          |   | $      | 2,334,891  |   |              |   | 3.21 | % |
| 2012                          |   |   | 5,591,302  |   |              |   | 1.80 | % |
| 2013                          |   |   | 3,500,000  |   |              |   | 2.73 | % |
| 2018                          |   |   | 17,000,000 |   |              |   | 3.08 | % |
| Total     |   | $      | 28,426,193 |   |              |   | 2.80 | % |

----

| 10. | FHLB ADVANCES – LONG-TERM (Continued) |
|-----|---------------------------------------------|

| 11. | INCOME TAXES |
|-----|--------------|

|                |   | Year Ended December 31, |      |
|---------------------|--------|-------------------------|-----------|
|                |   | 2010                    |      |   | 2009 |   |
|                |   |                    |      |   |   |   |   |   |
| Current tax expense |   | $                       | 42,393    |   |   | $ | 145,746 |   |
| Deferred taxes      |   |                    | 1,543,641 |   |   |   | (137,322 | ) |
|                |   |                    |      |   |   |   |   |   |
| Total               |   | $                       | 1,586,034 |   |   | $ | 8,424 |   |

|                                       |   | Year Ended December 31, |      |
|--------------------------------------------|--------|-------------------------|-----------|
|                                       |   | 2010                    |      |   | 2009 |   |
| Deferred tax assets:                       |   |                    |      |   |   |   |
| Allowance for loan losses                  |   | $                       | 283,231   |   |   | $ | 350,897 |   |
| Deferred loan fees                         |   |                    | 55        |   |   |   | 112 |   |
| Deferred compensation                      |   |                    | 1,060,020 |   |   |   | 1,010,510 |   |
| Investment securities impairment           |   |                    | 163,710   |   |   |   | 163,710 |   |
| Deferred health care                       |   |                    | 69,913    |   |   |   | 69,062 |   |
| State net operating loss carryforward      |   |                    | 196,662   |   |   |   | 177,765 |   |
| Capital loss carryforwards                 |   |                    | 75,359    |   |   |   | 181,282 |   |
| Premises and equipment                     |   |                    | 79,684    |   |   |   | 85,203 |   |
| Charitable contribution carryforward       |   |                    | 44,323    |   |   |   | 31,114 |   |
| Goodwill                                   |   |                    | 269,843   |   |   |   | - |   |
| Other                                      |   |                    | 107,126   |   |   |   | 45,109 |   |
| Total gross deferred tax assets            |   |                    | 2,349,926 |   |   |   | 2,114,764 |   |
| Valuation allowance                        |   |                    | (316,344  | ) |   |   | (390,160 | ) |
| Total net deferred tax assets              |   |                    | 2,033,582 |   |   |   | 1,724,604 |   |
|                                       |   |                    |      |   |   |   |   |   |
| Deferred tax liabilities:                  |   |                    |      |   |   |   |   |   |
| Prepaid insurance                          |   |                    | 61,907    |   |   |   | 44,333 |   |
| Deferred gain on FDIC-assisted acquisition |   |                    | 1,835,045 |   |   |   | - |   |
| Net unrealized gain on securities          |   |                    | 295,696   |   |   |   | 292,945 |   |
| Total gross deferred tax liabilities       |   |                    | 2,192,648 |   |   |   | 337,278 |   |
|                                       |   |                    |      |   |   |   |   |   |
| Net deferred tax assets (liabilities)      |   | $                       | (159,066  | ) |   | $ | 1,387,326 |   |

----

| 11. | INCOME TAXES (Continued) |
|-----|--------------------------|

|                                  |   | Year Ended December 31, |      |
|---------------------------------------|--------|-------------------------|-----------|
|                                  |   | 2010                    |      |   | 2009 |   |
|                                  |   |                    |      |   | % of |   |   |   |   |   | % of |   |
|                                  |   | Amount                  |      |   | PretaxIncome |   |   | Amount |   |   | PretaxIncome |   |
| Provision at statutory rate           |   | $                       | 1,614,942 |   |   |   | 34.0 | % |   | $ | 115,521 |   |   |   | 34.0 | % |
| Tax-exempt income                     |   |                    | (29,594   | ) |   |   | (0.6 | ) |   |   | (39,735 | ) |   |   | (11.7 | ) |
| Valuation allowance                   |   |                    | (92,713   | ) |   |   | (2.0 | ) |   |   | (110,456 | ) |   |   | (32.5 | ) |
| Other, net                            |   |                    | 93,399    |   |   |   | 2.0 |   |   |   | 43,094 |   |   |   | 12.7 |   |
| Actual tax expense and effective rate |   | $                       | 1,586,034 |   |   |   | 33.4 | % |   | $ | 8,424 |   |   |   | 2.5 | % |

----

| 12. | COMMITMENTS AND CONTINGENT LIABILITIES |
|-----|----------------------------------------|

|                         |   | December 31, |      |
|------------------------------|--------|--------------|-----------|
|                         |   | 2010         |      |   | 2009 |   |
|                         |   |         |      |   |   |   |   |   |
| Commitments to extend credit |   | $            | 3,963,600 |   |   | $ | 1,362,650 |   |
| Unused lines of credit       |   |         | 9,602,562 |   |   |   | 663,304 |   |
| Letters of Credit            |   |         | 36,091    |   |   |   | 155,978 |   |

| 13.  | EMPLOYEE BENEFITS |
|-----------|-------------------|

----

| 13. | EMPLOYEE BENEFITS (Continued) |
|-----|-------------------------------|

|                            |   | 2010   |    |   | 2009   |   |
|---------------------------------|--------|--------|---------|--------|--------|--------|
| Allocated shares                |   |   | 34,562  |   |   |   | 25,921 |   |
| Unreleased shares               |   |   | 95,043  |   |   |   | 103,684 |   |
| Total ESOP shares               |   |   | 129,605 |   |   |   | 129,605 |   |
| Fair value of unreleased shares |   | $      | 522,736 |   |   | $      | 725,788 |   |

----

| 13. | EMPLOYEE BENEFITS (Continued) |
|-----|-------------------------------|

|                           |   |             |   |   | Weighted-  |   |
|--------------------------------|--------|------------------|--------|--------|------------|--------|
|                           |   |             |   |   | Average    |   |
|                           |   | Number of        |   |   | Grant Date |   |
|                           |   | Restricted Stock |   |   | Fair Value |   |
| Nonvested at December 31, 2009 |   |             | 36,936 |   |       | $      | 9.40 |   |
| Granted                        |   |             | -      |   |       |   | - |   |
| Vested                         |   |             | 12,312 |   |       |   | 9.40 |   |
| Forfeited                      |   |             | -      |   |       |   | - |   |
|                           |   |             |   |   |       |   |   |   |
| Nonvested at December 31, 2010 |   |             | 24,624 |   |       | $      | 9.40 |   |

|                          |   |   |    |   |      |   |   | Weighted-                 |   |   |      |   |
|------------------------------------|--------|--------|---------|--------|-----------|--------|--------|---------------------------|--------|--------|-----------|--------|
|                               |   |   |    |   | Weighted- |   |   | Average                   |   |   |      |   |
|                               |   |   |    |   | Average   |   |   | Remaining                 |   |   | Aggregate |   |
|                               |   |   |    |   | Exercise  |   |   | Contractual               |   |   | Intrinsic |   |
|                               |   | 2010   |    |   | Price     |   |   | Term (in years) |   |   | Value     |   |
| Outstanding, beginning             |   |   | 153,903 |   |      | $      | 9.40   |                      |   |   | 7.64      |   |   |   | - |   |
| Granted                            |   |   | -       |   |      |   | -      |                      |   |   | -         |   |   |   | - |   |
| Exercised                          |   |   | -       |   |      |   | -      |                      |   |   | -         |   |   |   | - |   |
| Forfeited                          |   |   | -       |   |      |   | -      |                      |   |   | -         |   |   |   | - |   |
| Outstanding, ending                |   |   | 153,903 |   |      | $      | 9.40   |                      |   |   | 6.64      |   |   |   | - |   |
| Vested and exercisable at year-end |   |   | 92,342  |   |      | $      | 9.40   |                      |   |   | 6.64      |   |   |   | - |   |

|                           |   |          |    |   | Weighted-  |   |
|--------------------------------|--------|---------------|---------|--------|------------|--------|
|                           |   |          |    |   | average    |   |
|                           |   | Number of     |    |   | Grant Date |   |
|                           |   | Stock Options |    |   | Fair Value |   |
| Nonvested at December 31, 2009 |   |          | 92,342  |   |       | $      | 9.40 |   |
| Granted                        |   |          | -       |   |       |   | - |   |
| Vested                         |   |          | (30,781 | )      |       |   | 9.40 |   |
| Forfeited                      |   |          | -       |   |       |   | - |   |
|                           |   |          |    |   |       |   |   |   |
| Nonvested at December 31, 2010 |   |          | 61,561  |   |       | $      | 9.40 |   |

----

| 13. | EMPLOYEE BENEFITS (Continued) |
|-----|-------------------------------|

|   | Supplemental Retirement Plan |
|--------|------------------------------|

|                                     |   | For the Year Ended |    |
|------------------------------------------|--------|--------------------|---------|
|                 |   | 2010               |    |   | 2009 |   |
| Components of net periodic benefit cost: |   |               |    |   |   |   |
| Service cost                             |   | $                  | 55,970  |   |   | $ | 62,472 |   |
| Interest cost                            |   |               | 92,847  |   |   |   | 90,284 |   |
| Net periodic benefit cost                |   | $                  | 148,817 |   |   | $ | 152,756 |   |

| 14. | REGULATORY RESTRICTIONS |
|-----|-------------------------|

----

| 14.   | REGULATORY RESTRICTIONS (Continued) |
|-----------------|-------------------------------------|

|                                   |   | December 31, |       |
|----------------------------------------|--------|--------------|------------|
|                                   |   | 2010         |       |   | 2009 |   |
|                                   |   |         |       |   |   |   |   |   |
| Total stockholders' equity             |   | $            | 27,171,088 |   |   | $ | 20,869,520 |   |
| Accumulated other comprehensive income |   |         | (573,998   | ) |   |   | (568,657 | ) |
|                                   |   |         |       |   |   |   |   |   |
| Tier I, core, and tangible capital     |   |         | 26,597,090 |   |   |   | 20,300,863 |   |
|                                   |   |         |       |   |   |   |   |   |
| Allowance for loan losses              |   |         | 833,984    |   |   |   | 1,115,141 |   |
|                                   |   |         |       |   |   |   |   |   |
| Total risk-based capital               |   | $            | 27,431,074 |   |   | $ | 21,416,004 |   |

|                          |   | December 31, |       |
|-------------------------------|--------|--------------|------------|
|                          |   | 2010         |       |   | 2009 |   |
|                          |   | Amount       |       |   | Ratio |   |   | Amount |   |   | Ratio |   |
| Total Capital                 |   |         |       |   |   |   |   |   |   |   |   |   |
| (to Risk-Weighted Assets)     |   |         |       |   |   |   |   |   |   |   |   |   |
|                          |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Actual                        |   | $            | 27,431,074 |   |   |   | 18.18 | % |   | $ | 21,416,004 |   |   |   | 19.78 | % |
| For Capital Adequacy Purposes |   |         | 12,073,520 |   |   |   | 8.00 |   |   |   | 8,663,360 |   |   |   | 8.00 |   |
| To Be Well Capitalized        |   |         | 15,091,900 |   |   |   | 10.00 |   |   |   | 10,829,200 |   |   |   | 10.00 |   |
|                          |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier I Capital                |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (to Risk-Weighted Assets)     |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Actual                        |   | $            | 26,597,090 |   |   |   | 17.62 | % |   | $ | 20,300,863 |   |   |   | 18.75 | % |
| For Capital Adequacy Purposes |   |         | 6,036,760  |   |   |   | 4.00 |   |   |   | 4,331,680 |   |   |   | 4.00 |   |
| To Be Well Capitalized        |   |         | 9,055,140  |   |   |   | 6.00 |   |   |   | 6,497,520 |   |   |   | 6.00 |   |
|                          |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Core Capital                  |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (to Adjusted Assets)          |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Actual                        |   | $            | 26,597,090 |   |   |   | 8.92 | % |   | $ | 20,300,863 |   |   |   | 9.34 | % |
| For Capital Adequacy Purposes |   |         | 11,924,772 |   |   |   | 4.00 |   |   |   | 8,695,776 |   |   |   | 4.00 |   |
| To Be Well Capitalized        |   |         | 14,905,965 |   |   |   | 5.00 |   |   |   | 10,869,720 |   |   |   | 5.00 |   |
|                          |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tangible Capital              |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (to Adjusted Assets)          |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Actual                        |   | $            | 26,597,090 |   |   |   | 8.92 | % |   | $ | 20,300,863 |   |   |   | 9.34 | % |
| For Capital Adequacy Purposes |   |         | 5,962,386  |   |   |   | 1.50 |   |   |   | 4,347,888 |   |   |   | 1.50 |   |
| To Be Well Capitalized        |   |         | N/A        |   |   |   | N/A |   |   |   | N/A |   |   |   | N/A |   |

----

| 14.   | REGULATORY RESTRICTIONS (Continued) |
|-----------------|-------------------------------------|

| 15. | FAIR VALUE MEASUREMENTS |
|-----|-------------------------|

|   | Level I: |  Quoted prices are available in active markets for identical assets or liabilities as of the reported date. |
|--------|----------|------------------------------------------------------------------------------------------------------------------|

|   | Level II: | Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed. |
|--------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level III: | Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------|

|                       |   | December 31, 2010 |
|----------------------------|--------|-------------------|
|                       |   | Level I           |   |   | Level II |   |   | Level III |   |   | Total |   |
| Assets:                    |   |              |   |   |   |   |   |   |   |   |   |   |
| Investment securities      |   |              |   |   |   |   |   |   |   |   |   |   |
| available for sale:        |   |              |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities |   | $                 | - |   |   | $ | 16,539,264 |   |   | $ | - |   |   | $ | 16,539,264 |   |
| Corporate securities       |   |              | - |   |   |   | 10,801,899 |   |   |   | - |   |   |   | 10,801,899 |   |
| Equity securities -        |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| financial services         |   |              | - |   |   |   | 9,100 |   |   |   | - |   |   |   | 9,100 |   |
|                       |   | $                 | - |   |   | $ | 27,350,263 |   |   | $ | - |   |   | $ | 27,350,263 |   |

|                       |   | December 31, 2009 |   |
|----------------------------|--------|-------------------|--------|
|                       |   | Level I           |   |   | Level II |   |   | Level III |   |   | Total |   |
| Assets:                    |   |              |   |   |   |   |   |   |   |   |   |   |
| Investment securities      |   |              |   |   |   |   |   |   |   |   |   |   |
| available for sale:        |   |              |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities |   | $                 | -      |   |   | $ | 18,159,405 |   |   | $ | - |   |   | $ | 18,159,405 |   |
| Corporate securities       |   |              | -      |   |   |   | 12,424,682 |   |   |   | - |   |   |   | 12,424,682 |   |
| Equity securities -        |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| financial services         |   |              | -      |   |   |   | 17,500 |   |   |   | - |   |   |   | 17,500 |   |
|                       |   | $                 | -      |   |   | $ | 30,601,587 |   |   | $ | - |   |   | $ | 30,601,587 |   |

----

| 16.  | FAIR VALUE DISCLOSURE |
|-----------|-----------------------|

|                         |   | December 31, 2010 |        |   | December 31, 2009 |   |
|------------------------------|--------|-------------------|-------------|--------|-------------------|--------|
|                         |   | Carrying          |        |   | Fair              |   |   | Carrying |   |   | Fair |   |
|                         |   | Value             |        |   | Value             |   |   | Value |   |   | Value |   |
|                         |   |              |        |   |              |   |   |   |   |   |   |   |
| Financial assets:            |   |              |        |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents    |   | $                 | 54,004,549  |   |              | $      | 54,004,549 |   |   | $ | 8,426,530 |   |   | $ | 8,426,530 |   |
| Investment securities        |   |              |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Available for sale           |   |              | 27,350,263  |   |              |   | 27,350,263 |   |   |   | 30,601,587 |   |   |   | 30,601,587 |   |
| Held to maturity             |   |              | 26,127,630  |   |              |   | 26,075,142 |   |   |   | 13,780,267 |   |   |   | 13,640,975 |   |
| Net loans receivable         |   |              | 170,473,386 |   |              |   | 178,676,219 |   |   |   | 150,177,130 |   |   |   | 156,195,753 |   |
| Accrued interest receivable  |   |              | 1,073,223   |   |              |   | 1,073,223 |   |   |   | 930,336 |   |   |   | 930,336 |   |
| FDIC indemnification asset   |   |              | 5,397,192   |   |              |   | 5,397,192 |   |   |   | - |   |   |   | - |   |
| Federal Home Loan Bank stock |   |              | 3,465,600   |   |              |   | 3,465,600 |   |   |   | 2,279,200 |   |   |   | 2,279,200 |   |
| Bank-owned life insurance    |   |              | 4,140,267   |   |              |   | 4,140,267 |   |   |   | 4,053,225 |   |   |   | 4,053,225 |   |
|                         |   |              |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:       |   |              |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                     |   | $                 | 239,705,812 |   |              | $      | 241,401,576 |   |   | $ | 164,207,245 |   |   | $ | 166,885,243 |   |
| FHLB advances - long-term    |   |              | 28,426,193  |   |              |   | 29,900,092 |   |   |   | 26,473,524 |   |   |   | 27,365,487 |   |
| Advances by borrowers        |   |              |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| for taxes and insurance      |   |              | 1,005,753   |   |              |   | 1,005,753 |   |   |   | 1,280,863 |   |   |   | 1,280,863 |   |
| Accrued interest payable     |   |              | 103,534     |   |              |   | 103,534 |   |   |   | 63,647 |   |   |   | 63,647 |   |

----

| 16. | FAIR VALUE DISCLOSURE (Continued) |
|-----|-----------------------------------|

----

| 17.  | PARENT COMPANY |
|-----------|----------------|

|                                       |   | December 31, |       |
|--------------------------------------------|--------|--------------|------------|
|                                       |   | 2010         |       |   | 2009 |   |
| ASSETS                                     |   |         |       |   |   |   |
| Cash                                       |   | $            | 178,520    |   |   | $ | 3,170,220 |   |
| Loans receivable                           |   |         | 950,437    |   |   |   | 1,036,840 |   |
| Investment in subsidiary                   |   |         | 26,220,651 |   |   |   | 19,832,680 |   |
| Other assets                               |   |         | 119,237    |   |   |   | 120,719 |   |
|                                       |   |         |       |   |   |   |   |   |
| TOTAL ASSETS                               |   | $            | 27,468,845 |   |   | $ | 24,160,459 |   |
|                                       |   |         |       |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY       |   |         |       |   |   |   |   |   |
| Other liabilities                          |   | $            | 209,284    |   |   | $ | 315,500 |   |
| Stockholders' equity                       |   |         | 27,259,561 |   |   |   | 23,844,959 |   |
|                                       |   |         |       |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |   | $            | 27,468,845 |   |   | $ | 24,160,459 |   |

|                                           |   | Year Ended December 31, |      |
|------------------------------------------------|--------|----------------------------------------|-----------|
|                                           |   | 2010                                   |      |   | 2009 |   |
| INCOME                                         |   |                                   |      |   |   |   |
| ESOP loan interest income                      |   | $                                      | 94,149    |   |   | $ | 98,668 |   |
| Investment income                              |   |                                   | 35,151    |   |   |   | 62,995 |   |
| Total income                                   |   |                                   | 129,300   |   |   |   | 161,663 |   |
|                                           |   |                                   |      |   |   |   |   |   |
| EXPENSES                                       |   |                                   | 211,387   |   |   |   | 211,469 |   |
|                                           |   |                                   |      |   |   |   |   |   |
| Loss before income tax expense                 |   |                                   | (82,087   | ) |   |   | (49,806 | ) |
| Income tax expense                             |   |                                   | 346       |   |   |   | 21,396 |   |
|                                           |   |                                   |      |   |   |   |   |   |
| Loss before equity in undistributed            |   |                                   |      |   |   |   |   |   |
| earnings of subsidiary                         |   |                                   | (82,433   | ) |   |   | (71,202 | ) |
| Equity in undistributed earnings of subsidiary |   |                                   | 3,246,228 |   |   |   | 402,544 |   |
|                                           |   |                                   |      |   |   |   |   |   |
| NET INCOME                                     |   | $                                      | 3,163,795 |   |   | $ | 331,342 |   |

----

| 17.  | PARENT COMPANY (Continued) |
|-----------|----------------------------|

|                                           |   | Year Ended December 31, |       |
|------------------------------------------------|--------|----------------------------------------|------------|
|                                           |   | 2010                                   |       |   | 2009 |   |
| OPERATING ACTIVITIES                           |   |                                   |       |   |   |   |
| Net income                                     |   | $                                      | 3,163,795  |   |   | $ | 331,342 |   |
| Adjustments to reconcile net income to         |   |                                   |       |   |   |   |   |   |
| net cash provided by operating activities:     |   |                                   |       |   |   |   |   |   |
| Equity in undistributed earnings of subsidiary |   |                                   | (3,246,228 | ) |   |   | (402,544 | ) |
| Stock compensation expense                     |   |                                   | 255,872    |   |   |   | 265,117 |   |
| Other, net                                     |   |                                   | (104,733   | ) |   |   | (118,935 | ) |
| Net cash provided by operating activities      |   |                                   | 68,706     |   |   |   | 74,980 |   |
|                                           |   |                                   |       |   |   |   |   |   |
| INVESTING ACTIVITIES                           |   |                                   |       |   |   |   |   |   |
| Capital contribution in subsidiary Bank        |   |                                   | (3,050,000 | ) |   |   | - |   |
| Net cash used for investing activities         |   |                                   | (3,050,000 | ) |   |   | - |   |
|                                           |   |                                   |       |   |   |   |   |   |
| FINANCING ACTIVITIES                           |   |                                   |       |   |   |   |   |   |
| Purchase of treasury stock                     |   |                                   | (10,406    | ) |   |   | (268,590 | ) |
| Net cash used for financing activities         |   |                                   | (10,406    | ) |   |   | (268,590 | ) |
|                                           |   |                                   |       |   |   |   |   |   |
| Decrease in cash                               |   |                                   | (2,991,700 | ) |   |   | (193,610 | ) |
|                                           |   |                                   |       |   |   |   |   |   |
| CASH AT BEGINNING OF PERIOD                    |   |                                   | 3,170,220  |   |   |   | 3,363,830 |   |
|                                           |   |                                   |       |   |   |   |   |   |
| CASH AT END OF PERIOD                          |   | $                                      | 178,520    |   |   | $ | 3,170,220 |   |

----

| 18.  | SELECTED QUARTERLY DATA (Unaudited) |
|-----------|-------------------------------------|

|                       |   | Three Months Ended |      |
|----------------------------|--------|--------------------|-----------|
|                       |   | March 31,          |      |   | June 30, |   |   | September 30, |   |   | December 31, |   |
|                       |   | 2010               |      |   | 2010 |   |   | 2010 |   |   | 2010 |   |
| Total interest income      |   | $                  | 2,571,912 |   |   | $ | 2,487,226 |   |   | $ | 2,352,631 |   |   | $ | 2,432,677 |   |
| Total interest expense     |   |               | 954,217   |   |   |   | 923,558 |   |   |   | 898,598 |   |   |   | 898,594 |   |
|                       |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income        |   |               | 1,617,695 |   |   |   | 1,563,668 |   |   |   | 1,454,033 |   |   |   | 1,534,083 |   |
| Provision for loan losses  |   |               | (134,484  | ) |   |   | (77,650 | ) |   |   | (62,736 | ) |   |   | 159,462 |   |
|                       |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income after  |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| provision for loan losses  |   |               | 1,752,179 |   |   |   | 1,641,318 |   |   |   | 1,516,769 |   |   |   | 1,374,621 |   |
|                       |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total noninterest income   |   |               | 487,679   |   |   |   | 459,377 |   |   |   | 300,277 |   |   |   | 4,863,105 |   |
| Total noninterest expense  |   |               | 2,067,499 |   |   |   | 1,953,180 |   |   |   | 1,719,813 |   |   |   | 1,905,004 |   |
|                       |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes |   |               | 172,359   |   |   |   | 147,515 |   |   |   | 97,233 |   |   |   | 4,332,722 |   |
| Income taxes (benefit)     |   |               | (43,623   | ) |   |   | 48,103 |   |   |   | 36,514 |   |   |   | 1,545,040 |   |
|                       |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                 |   | $                  | 215,982   |   |   | $ | 99,412 |   |   | $ | 60,719 |   |   | $ | 2,787,682 |   |
|                       |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per share data:            |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                 |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted          |   | $                  | 0.07      |   |   | $ | 0.03 |   |   | $ | 0.02 |   |   | $ | 0.92 |   |
| Average shares outstanding |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted          |   |               | 3,025,995 |   |   |   | 3,030,173 |   |   |   | 3,033,579 |   |   |   | 3,036,537 |   |

|                              |   | Three Months Ended |      |
|-----------------------------------|--------|--------------------|-----------|
|                              |   | March 31,          |      |   | June 30, |   |   | September 30, |   |   | December 31, |   |
|                              |   | 2009               |      |   | 2009 |   |   | 2009 |   |   | 2009 |   |
| Total interest income             |   | $                  | 2,752,754 |   |   | $ | 2,696,094 |   |   | $ | 2,656,452 |   |   | $ | 2,602,193 |   |
| Total interest expense            |   |               | 1,340,048 |   |   |   | 1,288,966 |   |   |   | 1,217,880 |   |   |   | 1,153,340 |   |
|                              |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income               |   |               | 1,412,706 |   |   |   | 1,407,128 |   |   |   | 1,438,572 |   |   |   | 1,448,853 |   |
| Provision for loan losses         |   |               | 105,328   |   |   |   | 113,712 |   |   |   | 80,304 |   |   |   | (46,855 | ) |
|                              |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income after         |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| provision for loan losses         |   |               | 1,307,378 |   |   |   | 1,293,416 |   |   |   | 1,358,268 |   |   |   | 1,495,708 |   |
|                              |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total noninterest income          |   |               | 205,719   |   |   |   | 244,271 |   |   |   | 233,485 |   |   |   | 760,420 |   |
| Total noninterest expense         |   |               | 1,666,295 |   |   |   | 1,626,810 |   |   |   | 1,551,849 |   |   |   | 1,713,945 |   |
|                              |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) before income taxes |   |               | (153,198  | ) |   |   | (89,123 | ) |   |   | 39,904 |   |   |   | 542,183 |   |
| Income taxes (benefit)            |   |               | (38,368   | ) |   |   | (44,495 | ) |   |   | 15,421 |   |   |   | 75,866 |   |
|                              |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                 |   | $                  | (114,830  | ) |   | $ | (44,628 | ) |   | $ | 24,483 |   |   | $ | 466,317 |   |
|                              |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per share data:                   |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                 |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted                 |   | $                  | (0.04     | ) |   | $ | (0.01 | ) |   | $ | 0.01 |   |   | $ | 0.15 |   |
| Average shares outstanding        |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted                 |   |               | 3,013,469 |   |   |   | 3,011,203 |   |   |   | 3,014,501 |   |   |   | 3,017,567 |   |

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