| ý | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) |   |
|--------|-------------------------------------------------------|--------|
|   | OF      THE SECURITIES EXCHANGE ACT OF 1934           |   |

| For      the quarterly period ended | June      30, 2008 |   |
|-------------------------------------|--------------------|--------|
|                                |               |   |
|                                | OR                 |   |
|                                |               |   |

| o                                                                   | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) |   |
|---------------------------------------------------------------------|--------------------------------------------------------|--------|
|                                                                | OF      THE SECURITIES EXCHANGE ACT OF 1934            |   |
|                                                                |                                                   |   |
| For      the transition period from ____________ to _______________ |                                                   |
|                                                                |                                                   |   |
| Commission      File No. 0-23433                                    |                                                   |

|   | WAYNE      SAVINGS BANCSHARES, INC.                         |   |
|--------|-------------------------------------------------------------|--------|
|   | (Exact      name of registrant as specified in its charter) |   |

| Delaware                             |   | 31-1557791                  |
|--------------------------------------|--------|-----------------------------|
| (State      or other jurisdiction of |   | (I.R.S.      Employer       |
| incorporation      or organization)  |   | Identification      Number) |
| 151      North Market Street         |   |                        |
|                                 |   |                        |
| Wooster,      Ohio                   |   | 44691                       |
| (Address      of principal           |   | (Zip      Code)             |
| executive      office)               |   |                        |

----

d

|                                                                                                                                                                     | Page   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                     |   |
| PART I - FINANCIAL INFORMATION                                                                                                                                           |   |
|                                                                                                                                                                     |   |
|      Item 1  Condensed Consolidated Balance      Sheets                                                                               | 2      |
|                        Condensed Consolidated Statements of      Income             | 3      |
|                        Condensed Consolidated Statements of Comprehensive      Loss | 4      |
|                        Condensed Consolidated Statements of      Cash Flows         | 5      |
|                   Notes to Condensed Consolidated Financial      Statements    | 7      |
|                                                                                                                                                                     |   |
|      Item 2  Management’s Discussion and Analysis of      Financial Condition  and Results of    Operations           | 12     |
|                                                                                                                                                                     |   |
|      Item 3  Quantitative and Qualitative Disclosures      About Market Risk                                                          | 19     |
|                                                                                                                                                                     |   |
|      Item 4T  Controls and Procedures                                                                                                 | 19     |
|                                                                                                                                                                     |   |
|                                                                                                                                                                     |   |
| PART II - OTHER INFORMATION                                                                                                                                              |   |
|                                                                                                                                                                     |   |
|      Item 1  Legal Proceedings                                                                                                        | 20     |
|                                                                                                                                                                     |   |
|      Item 1A  Risk Factors                                                                                                            | 20     |
|                                                                                                                                                                     |   |
|      Item 2  Unregistered Sales of Equity Securities and      Use of Proceeds                                                         | 20     |
|                                                                                                                                                                     |   |
|      Item 3  Defaults Upon Senior      Securities                                                                                     | 20     |
|                                                                                                                                                                     |   |
|      Item 4  Submission of Matters to a Vote of Security      Holders                                                                 | 20     |
|                                                                                                                                                                     |   |
|      Item 5  Other Information                                                                                                        | 21     |
|                                                                                                                                                                     |   |
|      Item 6  Exhibits                                                                                                                 | 21     |
|                                                                                                                                                                     |   |
| SIGNATURES                                                                                                                                                               | 22     |

----

Index

n

n

|                                                                                                                                            |   | June      30, 2008 |    |   | March      31, 2008 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|---------------------|--------|
|                                                                                                                                            |   | (Unaudited)        |    |   |                |   |
| ASSETS                                                                                                                                          |   |               |    |   |                |   |
| Cash      and due from banks                                                                                                                    |   | $                  | 2,596   |   |                | $      | 1,901 |   |
| Federal      funds sold                                                                                                                         |   |               | – |   |                |   | 6,000 |   |
| Interest-bearing      demand deposits                                                                                                           |   |               | 3,615   |   |                |   | 5,162 |   |
| Cash      and cash equivalents                                                                                                                  |   |               | 6,211   |   |                |   | 13,063 |   |
| Available-for-sale      securities                                                                                                              |   |               | 123,286 |   |                |   | 120,170 |   |
| Held-to-maturity      securities                                                                                                                |   |               | 1,184   |   |                |   | 1,240 |   |
| Loans      receivable – net of allowance for loan losses of $1,838 and $1,777 at      June      30, 2008 and March 31, 2008, respectively |   |               | 244,651 |   |                |   | 242,255 |   |
| Premises      and equipment                                                                                                                     |   |               | 7,942   |   |                |   | 8,012 |   |
| Federal      Home Loan Bank stock                                                                                                               |   |               | 4,958   |   |                |   | 4,892 |   |
| Foreclosed      assets held for sale  -  net                                                                                |   |               | 121     |   |                |   | 93 |   |
| Accrued      interest receivable                                                                                                                |   |               | 1,648   |   |                |   | 1,753 |   |
| Bank-owned      life insurance                                                                                                                  |   |               | 6,327   |   |                |   | 6,268 |   |
| Goodwill                                                                                                                                        |   |               | 1,719   |   |                |   | 1,719 |   |
| Other      intangible assets                                                                                                                    |   |               | 550     |   |                |   | 577 |   |
| Other      assets                                                                                                                               |   |               | 1,061   |   |                |   | 1,360 |   |
| Prepaid      federal income taxes                                                                                                               |   |               | – |   |                |   | 182 |   |
| Total      assets                                                                                                                               |   | $                  | 399,658 |   |                | $      | 401,584 |   |
|                                                                                                                                            |   |               |    |   |                |   |   |   |
|                                                                                                                                            |   |               |    |   |                |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                                                 |   |               |    |   |                |   |   |   |
|     Liabilities                                                                                                             |   |               |    |   |                |   |   |   |
|       Deposits                                                                                                    |   |               |    |   |                |   |   |   |
|   Demand                                                                                                                              |   | $                  | 52,408  |   |                | $      | 50,884 |   |
|   Savings      and money market                                                                                                       |   |               | 85,745  |   |                |   | 83,811 |   |
|   Time                                                                                                                                |   |               | 177,298 |   |                |   | 183,036 |   |
| Total      deposits                                                                                                                             |   |               | 315,451 |   |                |   | 317,731 |   |
| Other      short-term borrowings                                                                                                                |   |               | 8,393   |   |                |   | 7,287 |   |
| Advances      from the Federal Home Loan Bank                                                                                                   |   |               | 40,150  |   |                |   | 38,500 |   |
| Accrued      interest payable and other liabilities                                                                                             |   |               | 2,403   |   |                |   | 2,511 |   |
| Accrued      federal income taxes                                                                                                               |   |               | 20      |   |                |   | – |   |
| Deferred      federal income taxes                                                                                                              |   |               | 749     |   |                |   | 1,451 |   |
| Total      liabilities                                                                                                                          |   |               | 367,166 |   |                |   | 367,480 |   |
|                                                                                                                                            |   |               |    |   |                |   |   |   |
| Commitments      and Contingencies                                                                                                              |   |               | – |   |                |   | – |   |
|                                                                                                                                            |   |               |    |   |                |   |   |   |
| Stockholders’      equity                                                                                                                 |   |               |    |   |                |   |   |   |
| Preferred      stock, 500,000 shares of $.10 par value authorized; no shares      issued                                                        |   |               | – |   |                |   | – |   |
| Common      stock, $.10 par value; authorized 9,000,000 shares;     3,978,731      shares issued                       |   |               | 398     |   |                |   | 398 |   |
| Additional      paid-in capital                                                                                                                 |   |               | 36,135  |   |                |   | 36,127 |   |
| Retained      earnings                                                                                                                          |   |               | 12,172  |   |                |   | 12,450 |   |
| Shares      acquired by ESOP                                                                                                                    |   |               | (1,097  | )      |                |   | (1,097 | ) |
| Accumulated      other comprehensive income (loss), net of tax effects                                                                          |   |               | (587    | )      |                |   | 707 |   |
| Treasury      stock, at cost                                                                                                                    |   |               |    |   |                |   |   |   |
|       Common:      June 30, 2008 - 974,618 shares, March 31, 2008 – 969,627      shares                     |   |               | (14,529 | )      |                |   | (14,481 | ) |
| Total      stockholders’ equity                                                                                                           |   |               | 32,492  |   |                |   | 34,104 |   |
| Total      liabilities and stockholders’ equity                                                                                           |   | $                  | 399,658 |   |                | $      | 401,584 |   |

----

Index

e

|                                                     |   | 2008   |   |   | 2007   |   |
|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                     |   |   |   |   |   |   |
| Interest      and Dividend Income                        |   |   |   |   |   |   |
| Loans                                                    |   | $      | 3,814  |   |   | $      | 4,090 |   |
| Securities                                               |   |   | 1,519  |   |   |   | 1,454 |   |
| Dividends      on Federal Home Loan Bank Stock and other |   |   | 99     |   |   |   | 155 |   |
| Total      interest and dividend income                  |   |   | 5,432  |   |   |   | 5,699 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Interest      Expense                                    |   |   |   |   |   |   |   |   |
| Deposits                                                 |   |   | 2,096  |   |   |   | 2,473 |   |
| Other      short term borrowings                         |   |   | 21     |   |   |   | 58 |   |
| Federal      Home Loan Bank advances                     |   |   | 470    |   |   |   | 386 |   |
| Total      interest expense                              |   |   | 2,587  |   |   |   | 2,917 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Net      Interest Income                                 |   |   | 2,845  |   |   |   | 2,782 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Provision      for Loan Losses                           |   |   | 61     |   |   |   | 30 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Net      Interest Income After Provision for Loan Losses |   |   | 2,784  |   |   |   | 2,752 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Noninterest      Income                                  |   |   |   |   |   |   |   |   |
| Trust      income                                        |   |   | 46     |   |   |   | 56 |   |
| Earnings      on bank-owned life insurance               |   |   | 55     |   |   |   | 58 |   |
| Service      fees, charges and other operating           |   |   | 328    |   |   |   | 334 |   |
| Total      noninterest income                            |   |   | 429    |   |   |   | 448 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Noninterest      Expense                                 |   |   |   |   |   |   |   |   |
| Salaries      and employee benefits                      |   |   | 1,382  |   |   |   | 1,383 |   |
| Occupancy      and equipment                             |   |   | 501    |   |   |   | 486 |   |
| Federal      deposit insurance premiums                  |   |   | 9      |   |   |   | 10 |   |
| Franchise      taxes                                     |   |   | 102    |   |   |   | 96 |   |
| Amortization      of intangible assets                   |   |   | 27     |   |   |   | 27 |   |
| Other                                                    |   |   | 494    |   |   |   | 492 |   |
| Total      noninterest expense                           |   |   | 2,515  |   |   |   | 2,494 |   |
| Income      Before Income Taxes                          |   |   | 698    |   |   |   | 706 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Provision      for Federal Income Taxes                  |   |   | 167    |   |   |   | 183 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Net      Income                                          |   | $      | 531    |   |   | $      | 523 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Basic      Earnings Per Share                            |   | $      | .18    |   |   | $      | .17 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Diluted      Earnings Per Share                          |   | $      | .18    |   |   | $      | .17 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Dividends      Per Share                                 |   | $      | .12    |   |   | $      | .12 |   |
|                                                     |   |   |   |   |   |   |   |   |

----

Index

n

|                                                                                                                          |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                                                          |   |   |   |   |   |   |
| Net      Income                                                                                                               |   | $      | 531    |   |   | $      | 523 |   |
| Other      comprehensive loss:                                                                                                |   |   |   |   |   |   |   |   |
| Unrealized      holding losses on securities, net of related tax benefits of $667 and      $432 during the respective periods |   |   | (1,294 | )      |   |   | (839 | ) |
|                                                                                                                          |   |   |   |   |   |   |   |   |
| Comprehensive      loss                                                                                                       |   | $      | (763   | )      |   | $      | (316 | ) |
|                                                                                                                          |   |   |   |   |   |   |   |   |
| Accumulated      other comprehensive loss                                                                                     |   | $      | (587   | )      |   | $      | (1,315 | ) |
|                                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                                          |   |   |   |   |   |   |   |   |

----

Index

m

|                                                           |   | 2008   |    |   | 2007   |   |
|----------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                           |   |   |    |   |   |   |
| Operating      Activities                                      |   |   |    |   |   |   |
| Net      Income                                                |   | $      | 531     |   |   | $      | 523 |   |
| Items      not requiring (providing) cash                      |   |   |    |   |   |   |   |   |
| Depreciation      and amortization                             |   |   | 167     |   |   |   | 159 |   |
| Provision      for loan losses                                 |   |   | 61      |   |   |   | 30 |   |
| Amortization      of premiums and discounts on securities      |   |   | (28     | )      |   |   | (2 | ) |
| Amortization      of mortgage servicing rights                 |   |   | 9       |   |   |   | 6 |   |
| Amortization      of deferred loan origination fees            |   |   | (14     | )      |   |   | (13 | ) |
| Amortization      of intangible assets                         |   |   | 27      |   |   |   | 27 |   |
| Federal      Home Loan Bank stock dividends                    |   |   | (66     | )      |   |   | –– |   |
| Increase      in value of bank owned life insurance            |   |   | (59     | )      |   |   | (57 | ) |
| Changes      in                                                |   |   |    |   |   |   |   |   |
| Accrued      interest receivable                               |   |   | 105     |   |   |   | 223 |   |
| Other      assets                                              |   |   | 472     |   |   |   | 86 |   |
| Interest      payable and other liabilities                    |   |   | (41     | )      |   |   | 4 |   |
| Deferred      income taxes                                     |   |   | (35     | )      |   |   | (47 | ) |
| Net      cash provided by operating activities                 |   |   | 1,129   |   |   |   | 939 |   |
|                                                           |   |   |    |   |   |   |   |   |
| Investing      Activities                                      |   |   |    |   |   |   |   |   |
| Purchase      of  available-for-sale securities      |   |   | (10,235 | )      |   |   | (14,097 | ) |
| Proceeds      from maturities of available-for-sale securities |   |   | 5,186   |   |   |   | 16,841 |   |
| Proceeds      from maturities of held-to-maturity securities   |   |   | 56      |   |   |   | 165 |   |
| Net      change in loans                                       |   |   | (2,520  | )      |   |   | (4,483 | ) |
| Purchase      of premises and equipment                        |   |   | (97     | )      |   |   | (32 | ) |
| Proceeds      from the sale of foreclosed assets               |   |   | 41      |   |   |   | –– |   |
| Net      cash used in investing activities                     |   |   | (7,569  | )      |   |   | (1,606 | ) |
|                                                           |   |   |    |   |   |   |   |   |

----

Index

|                                                                                            |   | 2008   |    |   | 2007   |   |
|-------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                                            |   |   |    |
|                                                                                            |   |   |    |   |   |   |
| Financing      Activities                                                                       |   |   |    |   |   |   |
| Net      change in deposits                                                                     |   | $      | (2,280  | )      |   | $      | (7,818 | ) |
| Net      change in other short-term borrowings                                                  |   |   | 1,106   |   |   |   | 655 |   |
| Proceeds      from Federal Home Loan Bank advances                                              |   |   | 9,500   |   |   |   | 4,050 |   |
| Repayments      of Federal Home Loan Bank advances                                              |   |   | (7,850  | )      |   |   | (3,100 | ) |
| Advances      by borrowers for taxes and insurance                                              |   |   | (488    | )      |   |   | (411 | ) |
| Cash      dividends paid                                                                        |   |   | (352    | )      |   |   | (383 | ) |
| Treasury      stock purchases                                                                   |   |   | (48     | )      |   |   | – |   |
| Net      cash used in financing activities                                                      |   |   | (412    | )      |   |   | (7,007 | ) |
|                                                                                            |   |   |    |   |   |   |   |   |
| Decrease      in Cash and Cash Equivalents                                                      |   |   | (6,852  | )      |   |   | (7,674 | ) |
|                                                                                            |   |   |    |   |   |   |   |   |
| Cash      and Cash equivalents, Beginning of period                                             |   |   | 13,063  |   |   |   | 17,215 |   |
|                                                                                            |   |   |    |   |   |   |   |   |
| Cash      and Cash equivalents, End of period                                                   |   | $      | 6,211   |   |   | $      | 9,541 |   |
|                                                                                            |   |   |    |   |   |   |   |   |
| Supplemental      Cash Flows Information      Cash      Paid For: |   |   |    |   |   |   |   |   |
| Interest      on deposits and borrowings                                                        |   | $      | 2,582   |   |   | $      | 2,865 |   |
|                                                                                            |   |   |    |   |   |   |   |   |
| Federal      income taxes                                                                       |   | $      | – |   |   | $      | 85 |   |
|                                                                                            |   |   |    |   |   |   |   |   |
|                                                                                            |   |   |    |   |   |   |   |   |
| Supplemental      Disclosure of Non-Cash Investing and Financing Activities                     |   |   |    |   |   |   |   |   |
| Transfers      from loans to real estate owned and other repossessed    assets                  |   | $      | 69      |   |   | $      | 113 |   |
|                                                                                            |   |   |    |   |   |   |   |   |
| Unrealized      losses on securities designated as available for sale,                          |   |   |    |   |   |   |   |   |
|     net      of related tax effects                                         |   | $      | (1,294  | )      |   | $      | (839 | ) |
|                                                                                            |   |   |    |   |   |   |   |   |
| Dividends      payable                                                                          |   | $      | 360     |   |   | $      | 383 |   |

----

Index

c

| Note      1: | Basis      of Presentation |
|--------------|----------------------------|

| Note      2: | Principles      of Consolidation |
|--------------|----------------------------------|

----

Index

| Note      3: | Earnings      Per Share |
|--------------|-------------------------|

|                                                      |   | For      the three months ended |
|-----------------------------------------------------------|--------|---------------------------------|
|                                                      |   | June      30,                   |
|                                                      |   | 2008                            |   | 2007 |
|                                                      |   |                            |   |   |
| Weighted-average      common shares outstanding (basic)   |   |                            | 2,905,931 |   |   | 3,085,641 |   |
|                                                      |   |                            |   |   |   |   |   |
| Dilutive      effect of assumed exercise of stock options |   |                            | – |   |   | – |   |
|                                                      |   |                            |   |   |   |   |   |
| Weighted-average      common shares outstanding (diluted) |   |                            | 2,905,931 |   |   | 3,085,641 |   |

| Note      4: | Stock      Option Plan |
|--------------|------------------------|

----

Index

|                                    |   | Three      months endedJune      30, |          |   | Year      endedMarch      31, |    |
|-----------------------------------------|--------|--------------------------------------|---------------|--------|-------------------------------|---------|
|                                    |   | 2008                                 |          |   | 2008                          |    |   | 2007 |   |
|                                    |   |   Shares                   |          |   | WeightedAverageexerciseprice  |    |   |   Shares |   |   | WeightedAverageexerciseprice |   |   |   Shares |   |   | WeightedAverageexerciseprice |   |
| Outstanding      at beginning of period |   |                                 | 104,224       |   |                          | $       | 13.95 |   |   |   | 114,224 |   |   | $ | 13.95 |   |   |   | 179,148 |   |   | $ | 13.92 |   |
| Granted                                 |   |                                 | –       |   |                          |    | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Exercised                               |   |                                 | –       |   |                          |    | – |   |   |   | – |   |   |   | – |   |   |   | (60,924 | ) |   |   | 13.86 |   |
| Forfeited                               |   |                                 | –       |   |                          | – |   |   |   | 10,000 |   |   |   | 13.95 |   |   |   | (4,000 | ) |   |   | 13.95 |   |
|                                    |   |                                 |          |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding      at end of period       |   |                                 |  104,224 |   |                          | $       |  13.95 |   |   |   |  104,224 |   |   | $ | 13.95 |   |   |   |  114,224 |   |   | $ | 13.95 |   |
|                                    |   |                                 |          |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Options      exercisable at period-end  |   |                                 |  104,224 |   |                          | $       | 13.95 |   |   |   | 104,224 |   |   | $ | 13.95 |   |   |   | 114,224 |   |   | $ | 13.95 |   |

| Number      outstanding                                  |   |            | 104,224 |   |
|----------------------------------------------------------|--------|-----------------|---------|--------|
| Exercise      price on all remaining options outstanding |   | $               | 13.95   |   |
| Weighted-average      remaining contractual life         |   | 5.75      years |    |

| Note      5: | Recent      Accounting Developments |
|--------------|-------------------------------------|

----

Index

| Note      6: | Fair      Value Measurements |
|--------------|------------------------------|

|   | Level 1 | Quoted      prices in active markets for identical assets or    liabilities |
|--------|---------|-----------------------------------------------------------------------------|

|   | Level 2 | Observable      inputs other than Level 1 prices, such as quoted prices for similar assets      or liabilities; quoted prices in markets that are not active; or other      inputs that are observable or can be corroborated by observable market      data for substantially the full term of the assets or      liabilities |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3 | Unobservable      inputs that are supported by little or no market activity and that are      significant to the fair value of the assets or  liabilities |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

|                               |   |            |    |   | Fair      Value Measurements Using                                            |   |
|------------------------------------|--------|-----------------|---------|--------|-------------------------------------------------------------------------------|--------|
|                               |   | Fair      Value |    |   | Quoted      Pricesin      ActiveMarkets      forIdenticalAssets(Level      1) |   |   | SignificantOtherObservableInputs(Level      2) |   |   | SignificantUnobservableInputs(Level      3) |   |
|                               |   |            |    |   |                                                                          |   |   |   |   |   |   |   |
| Available-for-sale      securities |   | $               | 123,286 |   |                                                                          | $      | –– |   |   | $ | 123,286 |   |   | $ | –– |   |

|                |   |            |   |   | Fair      Value Measurements Using                                            |   |
|---------------------|--------|-----------------|--------|--------|-------------------------------------------------------------------------------|--------|
|                |   | Fair      Value |   |   | Quoted      Pricesin      ActiveMarkets      forIdenticalAssets(Level      1) |   |   | SignificantOtherObservableInputs(Level      2) |   |   | SignificantUnobservableInputs(Level      3) |   |
|                |   |            |   |   |                                                                          |   |   |   |   |   |   |   |
| Impaired      loans |   | $               | 795    |   |                                                                          | $      | –– |   |   | $ | –– |   |   | $ | 795 |   |

----

Index

|                                     |   | June      30, 2008          |        | March      31, 2008 |   |
|------------------------------------------|--------|-----------------------------|-------------|---------------------|--------|
|                                     |   | (Dollars      in thousands) |        |
| Mortgage      loans:                     |   |                        |        |                |   |   |   |   |   |   |   |   |
| One-      to four-family residential(1)  |   | $                           | 142,535     |                |   |   | 57.17 | % |   | $ | 142,010 |   |   |   | 57.49 | % |
| Residential      construction loans      |   |                        | 1,573       |                |   |   | .63 |   |   |   | 1,636 |   |   |   | .66 |   |
| Multi-family      residential            |   |                        | 8,862       |                |   |   | 3.55 |   |   |   | 8,929 |   |   |   | 3.61 |   |
| Non-residential      real estate/land(2) |   |                        | 61,505      |                |   |   | 24.67 |   |   |   | 61,407 |   |   |   | 24.86 |   |
| Total      mortgage loans                |   |                        | 214,475     |                |   |   | 86.02 |   |   |   | 213,982 |   |   |   | 86.62 |   |
| Other      loans:                        |   |                        |        |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Consumer      loans(3)                   |   |                        | 5,742       |                |   |   | 2.30 |   |   |   | 6,183 |   |   |   | 2.50 |   |
| Commercial      business loans           |   |                        | 29,133      |                |   |   | 11.68 |   |   |   | 26,873 |   |   |   | 10.88 |   |
| Total      other loans                   |   |                        | 34,875      |                |   |   | 13.98 |   |   |   | 33,056 |   |   |   | 13.38 |   |
| Total      loans before net items        |   |                        | 249,350     |                |   |   | 100.00 | % |   |   | 247,038 |   |   |   | 100.00 | % |
| Less:                                    |   |                        |        |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      in process                    |   |                        | 2,460       |                |   |   |   |   |   |   | 2,616 |   |   |   |   |   |
| Deferred      loan origination fees      |   |                        | 401         |                |   |   |   |   |   |   | 390 |   |   |   |   |   |
| Allowance      for loan losses           |   |                        |  1,838 |                |   |   |   |   |   |   | 1,777 |   |   |   |   |   |
| Total      loans receivable, net         |   | $                           | 244,651     |                |   |   |   |   |   | $ | 242,255 |   |   |   |   |   |
| Mortgage-backed      securities, net(4)  |   | $                           | 89,063      |                |   |   |   |   |   | $ | 85,879 |   |   |   |   |   |

| (1) | Includes      equity loans collateralized by second mortgages in the aggregate amount of      $16.5 million and $17.0 million as of June 30, 2008 and March 31, 2008,      respectively.  Such loans have been underwritten on      substantially the same basis as the Company’s first mortgage      loans. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes      land loans of $192,000 and $175,000 as of June 30, 2008 and March 31,      2008, respectively. |
|-----|--------------------------------------------------------------------------------------------------------------|

| (3) | Includes      second mortgage loans of $1.5 million and $1.7 million as of June 30, 2008      and March 31, 2008, respectively. |
|-----|---------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes mortgage-backed      securities designated as available for  sale. |
|-----|-----------------------------------------------------------------------------|

----

Index

|                                                    |   | June      30,2008           |    | March      31,2008 |   |
|---------------------------------------------------------|--------|-----------------------------|---------|--------------------|--------|
|                                                    |   | (Dollars      in thousands) |    |
| Past      due loans 30-89 days:                         |   |                        |    |               |   |   |
| Mortgage      loans:                                    |   |                        |    |               |   |   |
| One-      to four-family residential                    |   | $                           | 630     |               |   | $ | 812 |   |
| Nonresidential                                          |   |                        | 706     |               |   |   | – |   |
| Land                                                    |   |                        | – |               |   |   | – |   |
| Non-mortgage      loans:                                |   |                        |    |               |   |   |   |   |
| Commercial      business loans                          |   |                        | – |               |   |   | – |   |
| Consumer      loans                                     |   |                        | 6       |               |   |   | 7 |   |
|                                                    |   | $                           | 1,342   |               |   | $ | 819 |   |
|                                                    |   |                        |    |               |   |   |   |   |
| Non-performing      loans:                              |   |                        |    |               |   |   |   |   |
| Mortgage      loans:                                    |   |                        |    |               |   |   |   |   |
| One-      to four-family residential                    |   | $                           | 1,351   |               |   | $ | 790 |   |
| All      other mortgage loans                           |   |                        | 1,046   |               |   |   | 1,038 |   |
| Non-mortgage      loans:                                |   |                        |    |               |   |   |   |   |
| Commercial      business loans                          |   |                        | – |               |   |   | 42 |   |
| Consumer                                                |   |                        | 1       |               |   |   | 1 |   |
| Total      non-performing loans                         |   |                        | 2,398   |               |   |   | 1,871 |   |
| Total      real estate acquired through foreclosure     |   |                        | 121     |               |   |   | 93 |   |
| Total      non-performing assets                        |   | $                           | 2,519   |               |   | $ | 1,964 |   |
|                                                    |   |                        |    |               |   |   |   |   |
|                                                    |   |                        |    |               |   |   |   |   |
| Total      non-performing loans to net loans receivable |   |                        | 0.98    | %                  |   |   | 0.77 | % |
| Total      non-performing loans to total assets         |   |                        | 0.60    | %                  |   |   | 0.47 | % |
| Total      non-performing assets to total assets        |   |                        | 0.63    | %                  |   |   | 0.49 | % |

----

Index

|                                                                                       |   | For      the threemonths      endedJune      30, 2008 |    | For      theyear      endedMarch      31, 2008 |   |
|--------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|---------|------------------------------------------------|--------|
|                                                                                       |   | (Dollars      in thousands)                           |    |
| Loans      receivable, net                                                                 |   | $                                                     | 244,651 |                                           |   | $ | 242,255 |   |
| Average      loans receivable, net                                                         |   | $                                                     | 242,870 |                                           |   | $ | 244,800 |   |
| Allowance      balance (at beginning of period)                                            |   | $                                                     | 1,777   |                                           |   | $ | 1,523 |   |
| Provision      for losses                                                                  |   |                                                  | 61      |                                           |   |   | 234 |   |
| Charge-offs:                                                                               |   |                                                  |    |                                           |   |   |   |   |
| Mortgage      loans:                                                                       |   |                                                  |    |                                           |   |   |   |   |
| One-      to four-family                                                                   |   |                                                  | – |                                           |   |   | (15 | ) |
| Residential      construction                                                              |   |                                                  | – |                                           |   |   | – |   |
| Multi-family      residential                                                              |   |                                                  | – |                                           |   |   | – |   |
| Non-residential      real estate and land                                                  |   |                                                  | – |                                           |   |   | – |   |
| Other      loans:                                                                          |   |                                                  |    |                                           |   |   |   |   |
| Consumer                                                                                   |   |                                                  | (2      | )                                              |   |   | (1 | ) |
| Commercial                                                                                 |   |                                                  | – |                                           |   |   | – |   |
| Gross      charge-offs                                                                     |   |                                                  | (2      | )                                              |   |   | (16 | ) |
| Recoveries:                                                                                |   |                                                  |    |                                           |   |   |   |   |
| Mortgage      loans:                                                                       |   |                                                  |    |                                           |   |   |   |   |
| One-      to four-family                                                                   |   |                                                  | – |                                           |   |   | 13 |   |
| Residential      construction                                                              |   |                                                  | – |                                           |   |   | – |   |
| Multi-family      residential                                                              |   |                                                  | – |                                           |   |   | – |   |
| Non-residential      real estate and land                                                  |   |                                                  | – |                                           |   |   | – |   |
| Other      loans:                                                                          |   |                                                  |    |                                           |   |   |   |   |
| Consumer                                                                                   |   |                                                  | 2       |                                           |   |   | 23 |   |
| Commercial                                                                                 |   |                                                  | – |                                           |   |   | – |   |
| Gross      recoveries                                                                      |   |                                                  | 2       |                                           |   |   | 36 |   |
| Net      (charge-offs) recoveries                                                          |   |                                                  | – |                                           |   |   | 20 |   |
|                                                                                       |   |                                                  |    |                                           |   |   |   |   |
| Allowance      for loan losses balance (at end of period)                                  |   | $                                                     | 1,838   |                                           |   | $ | 1,777 |   |
| Allowance      for loan losses as a percent of loans receivable, net at end of      period |   |                                                  | 0.75    | %                                              |   |   | 0.73 | % |
| Net      loans charged off as a percent of average loans receivable,      net              |   |                                                  | 0.00    | %                                              |   |   | (0.01 | )% |
| Ratio      of allowance for loan losses to non-                                            |   |                                                  |    |                                           |   |   |   |   |
|   performing      loans at end of period                                         |   |                                                  | 76.65   | %                                              |   |   | 94.98 | % |

----

Index

----

Index

|                                                                                                   |   | For      the three months ended June 30, |    |
|--------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                                                                   |   | 2008                                     |    |   | 2007 |   |
|                                                                                                   |   | AverageBalance                           |    |   | Interest |   |   | AverageRate |   |   | AverageBalance |   |   | Interest |   |   | AverageRate |   |
|                                                                                                   |   | (Dollars      in thousands)              |    |
| Interest-earning      assets:                                                                          |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      receivable, net1                                                                            |   | $                                        | 242,870 |   |   | $ | 3,814 |   |   |   | 6.28 | % |   | $ | 240,058 |   |   | $ | 4,090 |   |   |   | 6.82 | % |
| Investment      securities2                                                                            |   |                                     | 123,869 |   |   |   | 1,519 |   |   |   | 4.91 |   |   |   | 121,560 |   |   |   | 1,454 |   |   |   | 4.78 |   |
| Interest-earning      deposits3                                                                        |   |                                     | 11,851  |   |   |   | 99 |   |   |   | 3.34 |   |   |   | 13,448 |   |   |   | 155 |   |   |   | 4.61 |   |
| Total      interest-earning assets                                                                     |   |                                     | 378,590 |   |   |   | 5,432 |   |   |   | 5.74 |   |   |   | 375,066 |   |   |   | 5,699 |   |   |   | 6.08 |   |
| Non-interest-earning      assets                                                                       |   |                                     | 24,524  |   |   |   |   |   |   |   |   |   |   |   | 21,926 |   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                                                                                      |   | $                                        | 403,114 |   |   |   |   |   |   |   |   |   |   | $ | 396,992 |   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                                                     |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                               |   | $                                        | 316,777 |   |   |   | 2,096 |   |   |   | 2.65 |   |   | $ | 320,938 |   |   |   | 2,473 |   |   |   | 3.08 |   |
| Other      short-term borrowings                                                                       |   |                                     | 8,049   |   |   |   | 21 |   |   |   | 1.04 |   |   |   | 5,530 |   |   |   | 58 |   |   |   | 4.20 |   |
| Borrowings                                                                                             |   |                                     | 40,002  |   |   |   | 470 |   |   |   | 4.70 |   |   |   | 32,214 |   |   |   | 386 |   |   |   | 4.79 |   |
| Total      interest-bearing liabilities                                                                |   |                                     | 364,828 |   |   |   | 2,587 |   |   |   | 2.84 |   |   |   | 358,682 |   |   |   | 2,917 |   |   |   | 3.25 |   |
|                                                                                                   |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest      bearing  liabilities                                                       |   |                                     | 4,845   |   |   |   |   |   |   |   |   |   |   |   | 4,030 |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                                 |   |                                     | 369,673 |   |   |   |   |   |   |   |   |   |   |   | 362,712 |   |   |   |   |   |   |   |   |   |
| Stockholders’      equity                                                                        |   |                                     | 33,441  |   |   |   |   |   |   |   |   |   |   |   | 34,280 |   |   |   |   |   |   |   |   |   |
| Total      liabilities and stockholders’ equity                                                  |   | $                                        | 403,114 |   |   |   |   |   |   |   |   |   |   | $ | 396,992 |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                                               |   |                                     |    |   |   | $ | 2,845 |   |   |   |   |   |   |   |   |   |   | $ | 2,782 |   |   |   |   |   |
| Interest      rate spread4                                                                             |   |                                     |    |   |   |   |   |   |   |   | 2.90 | % |   |   |   |   |   |   |   |   |   |   | 2.83 | % |
| Net      yield on interest-earning      assets5                                                        |   |                                     |    |   |   |   |   |   |   |   | 3.01 | % |   |   |   |   |   |   |   |   |   |   | 2.97 | % |
| Ratio      of average interest- earning assets to average  interest-bearing      liabilities |   |                                     |    |   |   |   |   |   |   |   | 103.77 | % |   |   |   |   |   |   |   |   |   |   | 104.57 | % |

| 1 | Includes      non-accrual loan balances. |
|---|------------------------------------------|

| 2 | Includes      mortgage-backed securities both designated as available for sale and held      to maturity. |
|---|-----------------------------------------------------------------------------------------------------------|

| 3 | Includes      federal funds sold and interest-bearing deposits in other financial      institutions. |
|---|------------------------------------------------------------------------------------------------------|

| 4 | Interest      rate spread represents the difference between the average yield on      interest-earning assets and the average cost of interest-bearing      liabilities. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Net      yield on interest-earning assets represents net interest income as a      percentage of average interest-earningassets. |
|---|----------------------------------------------------------------------------------------------------------------------------------|

----

Index

----

Index

----

Index

| ITEM 3 | Quantitative      and Qualitative Disclosures About MarketRisk |
|--------|----------------------------------------------------------------|

| ITEM 4T | Controls      and Procedures |
|---------|------------------------------|

|   | (a) | Evaluation      of disclosure controls andprocedures. |
|--------|-----|-------------------------------------------------------|

|   | (b) | Changes      in internal controls. |
|--------|-----|------------------------------------|

----

Index

B

| ITEM      1. | Legal      Proceedings |
|--------------|------------------------|

| ITEM      1A. | Risk      Factors |
|---------------|-------------------|

| ITEM      2. | Unregistered Sales of Equity Securities and Use of    Proceeds |
|--------------|----------------------------------------------------------------|

|   | (a) | Not      applicable |
|--------|-----|---------------------|

|   | (b) | Not      applicable |
|--------|-----|---------------------|

|   | (c) | The      following table sets forth certain information regarding repurchases by      the Company for the quarter ended June 30,2008. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------|

|                            |   |             |    |   |            |   |    | Total      # of       |   |   | Maximum      # of shares |   |
|---------------------------------|--------|------------------|---------|--------|-----------------|--------|---------|-----------------------|--------|--------|--------------------------|--------|
|                            |   | Total            |    |   | Average         |   |    | shares      purchased |   |   | which      may still be  |   |
|                            |   | #      of shares |    |   | price      paid |   |    | as      part of the   |   |   | purchased      as part   |   |
| Period                          |   | purchased        |    |   | per share       |   |    | announced plan        |   |   | of the announced plan    |   |
|                            |   |             |    |   |            |   |    |                  |   |   |                     |   |
| April      1-30, 2008           |   |             | – |   |            |   | – |                  |   |   | –                  |   |   |   | 4,991 |   |
| May  1-31,      2008  |   |             | – |   |            |   | – |                  |   |   | –                  |   |   |   | 4,991 |   |
| June  1-30,      2008 |   |             | 4,991   |   |            |   | 9.80    |                  |   |   | 4,991                    |   |   |   | – |   |

| ITEM      3. | Defaults      UponSeniorSecurities |
|--------------|------------------------------------|

| ITEM      4 | Submission      of Matters to a Vote of Security  Holders |
|-------------|-----------------------------------------------------------|

----

Index

| ITEM      5. | Other      Information |
|--------------|------------------------|

| ITEM      6. | Exhibits |
|--------------|----------|

|   | EX-31.1 | Certification      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002, 18 U.S.C. Section 1350                                                |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                |
|   | EX-31.2 | Certification      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002, 18 U.S.C. Section 1350                                                |
|   |    |                                                                                                                                                                                |
|   | EX-32   | Written      Statement of Chief Executive Officer and Chief Financial Officer furnished      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.      Section 1350 |

----

Index

A

| Date:  | August   11,      2008 |   | By:    | /s/Phillip      E. Becker                             |
|--------|---------------------------------------|--------|--------|-------------------------------------------------------|
|   |                                  |   |   | Phillip      E. Becker                                |
|   |                                  |   |   | President      and Chief  Executive Officer |
|   |                                  |   |   |                                                  |
|   |                                  |   |   |                                                  |
|   |                                  |   |   |                                                  |
| Date:  | August   11,      2008 |   | By:    | /s/H.      Stewart Fitz Gibbon III                    |
|   |                                  |   |   | H.      Stewart Fitz Gibbon III                       |
|   |                                  |   |   | Executive      Vice President and                     |
|   |                                  |   |   | Chief      Financial Officer                          |