UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934

        For the quarterly period ended December 31, 2007

                                       OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

                         Commission File Number: 0-51102

                            GEORGETOWN BANCORP, INC.
        (Exact name of small business issuer as specified in its charter)

            Federal                                        20-2107839
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                         Identification No.)

2 East Main Street, Georgetown, MA                            01833
(Address of principal executive office)                     (Zip Code)

                                 (978) 352-8600
              (Registrant's telephone number, including area code)

Indicate by check whether the registrant:  (1) has filed all reports required to
be filed by Sections 13 or 15(d) of the  Securities  Exchange Act of 1934 during
the preceding 12 months (or for shorter  period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]

Indicate by checkmark  whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Indicate the number of shares  outstanding of the registrant's  common stock, as
of the latest practicable date: Common Stock, $0.10 par value,  2,648,987 shares
outstanding as of February 11, 2008.

Transitional Small Business Disclosure Format: YES [ ] NO [X]

<PAGE>

                                   Form 10-QSB
                            GEORGETOWN BANCORP, INC.
                                Table of Contents

Part I.    Financial Information                                            Page
           ---------------------                                            ----

Item 1:    Financial Statements (Unaudited)

           Consolidated Statements of Financial Condition
           at December 31, 2007 and June 30, 2007                             1

           Consolidated Statements of Operations for the Three and Six
           Months Ended December 31, 2007 and 2006                            2

           Consolidated Statements of Changes in Stockholders'
           Equity for the Six Months Ended December 31, 2007 and 2006         3

           Consolidated Statements of Cash Flows for the
           Six Months Ended December 31, 2007 and 2006                        4

           Notes to Condensed Consolidated Financial Statements               6

Item 2:    Management's Discussion and Analysis or Plan of Operation          8

Item 3:    Controls and Procedures                                           18

Part II.   Other Information
           -----------------

Item 1:    Legal Proceedings                                                 18
Item 2:    Unregistered Sales of Equity Securities and Use of Proceeds       18
Item 3:    Defaults upon Senior Securities                                   18
Item 4:    Submission of Matters to a Vote of Security Holders               18
Item 5:    Other Information                                                 19
Item 6:    Exhibits                                                          19

SIGNATURES                                                                   20

<PAGE>

PART I--FINANCIAL INFORMATION

ITEM 1. Financial Statements

                            GEORGETOWN BANCORP, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                    ----------------------------------------
                                   (unaudited)
                                     ASSETS

<TABLE>
<CAPTION>
                                                                                At            At
                                                                           December 31,    June 30,
                                                                               2007          2007
                                                                           ------------   ---------
                                                                               (In thousands)
<S>                                                                        <C>            <C>
Cash and due from banks                                                    $      2,412   $   3,950
Short-term investments                                                              665       1,653
                                                                           ------------   ---------
      Total cash and cash equivalents                                             3,077       5,603

Securities available for sale, at fair value                                     12,693      12,690
Securities held to maturity, at amortized cost                                    7,009       8,182
Federal Home Loan Bank stock, at cost                                             2,905       2,905
Loans, net of allowance for loan losses of $1,115,000
   at December 31, 2007 and $1,079,000 at June 30, 2007                         135,098     127,659
Premises and equipment, net                                                       4,662       4,816
Accrued interest receivable                                                         668         682
Bank-owned life insurance                                                         1,439       1,416
Other assets                                                                      1,025       1,129
                                                                           ------------   ---------

      Total assets                                                         $    168,576   $ 165,082
                                                                           ============   =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                                   $     99,522   $  97,956
Short-term Federal Home Loan Bank advances                                        9,750       9,850
Long-term Federal Home Loan Bank advances                                        40,347      37,873
Securities sold under agreements to repurchase                                      783         869
Mortgagors' escrow accounts                                                         341         317
Accrued expenses and other liabilities                                              528         607
                                                                           ------------   ---------
      Total liabilities                                                         151,271     147,472
                                                                           ------------   ---------
Commitments and contingencies

Stockholders' equity:
Preferred stock, $ 0.10 par value per share: 1,000,000
   shares authorized; none outstanding                                                -           -
Common Stock, $0.10 par value per share: 10,000,000
   shares authorized; 2,777,250 shares issued, 2,648,987 and
   2,692,050 shares outstanding at December 31, 2007 and
   June 30, 2007, respectively                                                      278         278
Additional paid-in capital                                                       11,452      11,452
Retained earnings                                                                 7,284       7,522
Accumulated other comprehensive income (loss)                                        16        (179)
Unearned compensation - ESOP (61,367 and 65,463 shares unallocated
   at December 31, 2007 and June 30, 2007, respectively)                           (614)       (655)
Treasury stock, at cost (128,263 and 85,200 shares at December 31, 2007
   and June 30, 2007, respectively)                                              (1,111)       (808)
                                                                           ------------   ---------
      Total stockholders' equity                                                 17,305      17,610
                                                                           ------------   ---------

      Total liabilities and stockholders' equity                           $    168,576   $ 165,082
                                                                           ============   =========
</TABLE>

See notes to condensed consolidated financial statements.

                                        1

<PAGE>

                            GEORGETOWN BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            ------------------------
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                             Three Months Ended           Six Months Ended
                                                                                December 31,                December 31,
                                                                             2007          2006          2007          2006
                                                                         -----------   -----------   -----------   -----------
                                                                                   (In thousands, except share data)
<S>                                                                      <C>           <C>           <C>           <C>
Interest and dividend income:
   Loans, including fees                                                 $     2,086   $     1,892   $     4,062   $     3,806
   Investment interest and dividends                                             279           312           565           677
   Short-term investments                                                          9            13            25            21
                                                                         -----------   -----------   -----------   -----------
      Total interest and dividend income                                       2,374         2,217         4,652         4,504
                                                                         -----------   -----------   -----------   -----------

Interest expense:
   Deposits                                                                      743           662         1,474         1,314
   Short-term Federal Home Loan Bank advances                                    136           199           249           493
   Long-term Federal Home Loan Bank advances                                     478           414           946           747
   Securities sold under agreements to repurchase                                  2             2             4             4
                                                                         -----------   -----------   -----------   -----------
      Total interest expense                                                   1,359         1,277         2,673         2,558
                                                                         -----------   -----------   -----------   -----------

Net interest income                                                            1,015           940         1,979         1,946
Provision for loan losses                                                          2            41             3           105
                                                                         -----------   -----------   -----------   -----------
Net interest income, after provision for loan losses                           1,013           899         1,976         1,841
                                                                         -----------   -----------   -----------   -----------

Non-interest income:
   Customer service fees                                                         173           139           321           295
   Income from bank-owned life insurance                                           7            16            23            27
   Other                                                                           9             7            17            15
                                                                         -----------   -----------   -----------   -----------
      Total non-interest income                                                  189           162           361           337
                                                                         -----------   -----------   -----------   -----------

Non-interest expenses:
   Salaries and employee benefits                                                714           642         1,425         1,328
   Occupancy and equipment expenses                                              220           207           430           419
   Data processing expenses                                                       90            71           173           148
   Professional fees                                                              80            81           162           137
   Advertising expense                                                            37            47            97            59
   Other general and administrative expenses                                     196           160           397           365
                                                                         -----------   -----------   -----------   -----------
      Total non-interest expenses                                              1,337         1,208         2,684         2,456
                                                                         -----------   -----------   -----------   -----------

Loss before income taxes                                                        (135)         (147)         (347)         (278)

Income tax benefit                                                               (46)          (48)         (120)          (93)
                                                                         -----------   -----------   -----------   -----------

Net loss                                                                 $       (89)  $       (99)  $      (227)  $      (185)
                                                                         ===========   ===========   ===========   ===========

Weighted average number of common shares outstanding:
   Basic and diluted                                                       2,598,640     2,628,348     2,607,196     2,651,593

Net loss per share:
   Basic and diluted                                                     $     (0.03)  $     (0.04)  $     (0.08)  $     (0.07)
</TABLE>

See notes to condensed consolidated financial statements.

                                        2

<PAGE>

                            GEORGETOWN BANCORP, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                         ---------------------------
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                Accumulated
                                                       Additional                  Other         Unearned
                                              Common     Paid-in    Retained   Comprehensive   Compensation-   Treasury
                                               Stock     Capital    Earnings   Income (Loss)       ESOP          Stock      Total
                                              ------   ----------   --------   -------------   -------------   --------   --------
                                                                                 (In thousands)
<S>                                           <C>      <C>          <C>        <C>             <C>             <C>        <C>
Balance at June 30, 2006                      $  278   $   11,452   $  7,996   $        (330)  $        (737)  $      -   $ 18,659
                                                                                                                          --------
Comprehensive income (loss):
   Net loss                                        -            -       (185)              -               -                  (185)
   Change in net unrealized gain (loss) on
      securities available for sale, net of
      tax effects of $118,000                      -            -          -             199               -                   199
                                                                                                                          --------
         Total comprehensive income (loss)                                                                                      14
                                                                                                                          --------
Common stock held by ESOP allocated or
   committed to be allocated (4,094 shares)                               (3)                             41                    38

Treasury stock purchased (78,000 shares)                                                                           (751)      (751)
                                              ------   ----------   --------   -------------   -------------   --------   --------

Balance at December 31, 2006                  $  278   $   11,452   $  7,808   $        (131)  $        (696)  $   (751)  $ 17,960
                                              ======   ==========   ========   =============   =============   ========   ========

Balance at June 30, 2007                      $  278   $   11,452   $  7,522   $        (179)  $        (655)  $   (808)  $ 17,610

Comprehensive income (loss):
   Net loss                                                             (227)                                                 (227)
   Change in net unrealized gain (loss) on
      securities available for sale, net of
      tax effects of $116,000                                                            195                                   195
                                                                                                                          --------
         Total comprehensive income (loss)                                                                                     (32)
                                                                                                                          --------
Common stock held by ESOP allocated or
   committed to be allocated (4,096 shares)                              (11)                             41                    30

Treasury stock purchased (43,063 shares)                                                                           (303)      (303)
                                              ------   ----------   --------   -------------   -------------   --------   --------

Balance at December 31, 2007                  $  278   $   11,452   $  7,284   $          16   $        (614)  $ (1,111)  $ 17,305
                                              ======   ==========   ========   =============   =============   ========   ========
</TABLE>

See notes to condensed consolidated financial statements.

                                        3

<PAGE>

                            GEORGETOWN BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           --------------------------

                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                  Six Months Ended
                                                                                    December 31,
                                                                                  2007       2006
                                                                                -------    --------
                                                                                  (In thousands)
<S>                                                                             <C>        <C>
Cash flows from operating activities:
 Net loss                                                                       $  (227)   $   (185)
   Adjustments to reconcile net loss to net cash
      used by operating activities:
         Provision for loan losses                                                    3         105
         Accretion of securities, net                                               (16)        (24)
         Accretion of deferred loan costs, net                                        -         (36)
         Depreciation and amortization expense                                      234         231
         Decrease in accrued interest receivable                                     14           8
         Income from bank-owned life insurance                                      (23)        (27)
         ESOP compensation expense                                                   30          38
         Other, net                                                                 (91)        (92)
                                                                                -------    --------
            Net cash (used) provided by operating activities                        (76)         18
                                                                                -------    --------

Cash flows from investing activities:
   Activity in available-for-sale securities:
      Maturities, prepayments and calls                                           3,324       1,529
      Purchases                                                                  (3,006)          -
   Activity in held-to-maturity securities:
      Maturities, prepayments and calls                                           1,179         881
   Loan (principal originations) repayments, net                                 (7,442)      1,901
   Purchase of premises and equipment                                               (80)        (19)
                                                                                -------    --------
            Net cash (used) provided by investing activities                     (6,025)      4,292
                                                                                -------    --------
</TABLE>

                                    Continued

See notes to condensed consolidated financial statements.

                                        4

<PAGE>

                            GEORGETOWN BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           --------------------------

                                   (unaudited)
                                   (continued)

<TABLE>
<CAPTION>
                                                                                  Six Months Ended
                                                                                    December 31,
                                                                                  2007       2006
                                                                                -------    --------
                                                                                   (In thousands)
<S>                                                                             <C>        <C>
Cash flows from financing activities:
   Net increase (decrease) in deposits                                            1,566      (3,272)
   Net decrease in securities sold under agreements
      to repurchase                                                                 (86)        (51)
   Net change in borrowings with maturities of three
      months or less                                                             (3,100)        300
   Proceeds of Federal Home Loan Bank advances
      with maturities greater than three months                                   7,000      15,000
   Repayments of Federal Home Loan Bank advances
      with maturities greater than three months                                  (1,526)    (15,874)
   Treasury stock purchased                                                        (303)       (751)
   Net change in mortgagors' escrow accounts                                         24           4
                                                                                -------    --------
            Net cash provided (used) by financing activities                      3,575      (4,644)

Net change in cash and cash equivalents                                          (2,526)       (334)

Cash and cash equivalents at beginning of year                                    5,603       3,977
                                                                                -------    --------

Cash and cash equivalents at end of year                                        $ 3,077    $  3,643
                                                                                =======    ========

Supplementary information:
      Interest paid on deposit accounts                                         $ 1,479    $  1,311
      Interest paid on Federal Home Loan Bank advances                            1,192       1,227
      Interest paid on securities sold under agreement
         to repurchase                                                                4           4
      Income taxes paid, net of refunds                                               6         (62)
</TABLE>

      See notes to condensed consolidated financial statements.

                                        5

<PAGE>

                            GEORGETOWN BANCORP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

      (1)   Basis of Presentation

      The accompanying  unaudited  financial  statements of Georgetown  Bancorp,
Inc. (the  "Company")  were prepared in accordance  with  instructions  for Form
10-QSB and Regulation S-X and do not include  information or footnotes necessary
for a complete presentation of financial condition,  results of operations,  and
cash flows in conformity with generally accepted accounting principles. However,
in the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments)  necessary for a fair presentation of the financial statements have
been included. The results of operations for the six-month period ended December
31, 2007 are not necessarily  indicative of the results that may be expected for
future periods,  including the entire fiscal year.  These  financial  statements
should be read in  conjunction  with the financial  statements and notes thereto
included  in  the  2007  Consolidated  Financial  Statements  presented  in  the
Company's  Annual  Report on Form 10-KSB  filed at the  Securities  and Exchange
Commission on September 28, 2007. The consolidated  financial statements include
the  accounts of  Georgetown  Savings  Bank (the  "Bank")  and its wholly  owned
subsidiary,  Georgetown  Securities  Corporation,  which  engages in the buying,
selling and holding of securities.  All significant  inter-company  balances and
transactions have been eliminated in consolidation.

      (2)   Critical Accounting Policies

      Our  critical  accounting  policies  are those  that  involve  significant
judgments and assumptions by management and that have, or could have, a material
impact  on our  income  or  the  carrying  value  of our  assets.  Our  critical
accounting  policies are those  related to our  allowance  for loan losses.  The
allowance for loan losses is the amount  estimated by management as necessary to
cover credit  losses  inherent in the loan  portfolio at the balance sheet date.
The  allowance  is  established  through the  provision  for loan losses that is
charged  against  income.  Management  performs a  quarterly  evaluation  of the
adequacy of the allowance  for loan losses.  We consider a variety of factors in
establishing  this  estimate  including,  but not limited to,  current  economic
conditions,  delinquency statistics, geographic and industry concentrations, the
adequacy of the underlying  collateral,  the financial strength of the borrower,
results of internal and external loan reviews and other relevant  factors.  This
evaluation  is  inherently  subjective,  as it requires  material  estimates  by
management that may be susceptible to significant change.

      The analysis has three components:  specific,  general, and an unallocated
component.  The specific  component  relates to loans that are  determined to be
impaired.  Impairment is measured by  determining  the present value of expected
future  cash flows or,  for  collateral-dependent  loans,  the fair value of the
collateral  adjusted for market  conditions  and selling  expenses.  The general
component is determined by segregating  the remaining  loans by type of loan and
payment history. We also analyze historical loss experience, delinquency trends,
general  economic  conditions and geographic and industry  concentrations.  This
analysis  establishes  factors  that are applied to the loan groups to determine
the  amount of the  general  component  of the  allowance  for loan  losses.  An
unallocated  component is  maintained to cover  uncertainties  that could affect
management's  estimate of probable  losses.  The  unallocated  component  of the
allowance  reflects  the  margin  of  imprecision  inherent  in  the  underlying
assumptions used in the  methodologies  for estimating  losses in the portfolio.
Because  of the  imprecision  surrounding  these  factors,  we may  maintain  an
unallocated  component  available  for other  factors that is not allocated to a
specific loan category.

      Actual loan losses may be  significantly  more than the allowances we have
established,  which  could  have a  material  negative  effect on our  financial
results.

                                        6

<PAGE>

      (3)   Net Loss Per Common Share

      Basic and diluted net loss per common share (EPS)  represents  the loss or
income to common  stockholders  divided by the weighted average number of common
shares  outstanding.  Employee stock  ownership  plan (ESOP)  shares,  which are
committed to be released, are considered outstanding for basic and diluted EPS.

<TABLE>
<CAPTION>
                                                                 Three Months Ended         Six Months Ended
                                                                    December 31,               December 31,
                                                                 2007         2006         2007         2006
                                                              ----------   ----------   ----------   ----------
<S>                                                           <C>          <C>          <C>          <C>
Net loss attributable to common stockholders                  $  (89,000)  $  (99,000)  $ (227,000)  $ (185,000)
                                                              ==========   ==========   ==========   ==========

Basic potential common shares:
   Weighted average shares outstanding                         2,661,350    2,699,250    2,660,371    2,723,522
   Weighted average unallocated ESOP shares                      (62,710)     (70,902)     (53,175)     (71,929)
                                                              ----------   ----------   ----------   ----------
Basic weighted average shares outstanding                      2,598,640    2,628,348    2,607,196    2,651,593

Dilutive potential common shares                                      --           --           --           --
                                                              ----------   ----------   ----------   ----------

Dilutive weighted average shares outstanding                   2,598,640    2,628,348    2,607,196    2,651,593
                                                              ==========   ==========   ==========   ==========

Basic and diluted EPS                                         $    (0.03)  $    (0.04)  $    (0.08)  $    (0.07)
                                                              ==========   ==========   ==========   ==========
</TABLE>

      (4)   Mutual Holding Company Reorganization and Minority Stock Issuance

      In conjunction  with its  reorganization  into the mutual holding  company
structure, on January 5, 2005, the Bank (i) converted to a stock savings bank as
the  successor to the Bank in its mutual form;  (ii)  organized the Company as a
federally-chartered  corporation  that owns 100% of the common stock of the Bank
(in  stock  form);   and  (iii)   organized   Georgetown   Bancorp,   MHC  as  a
federally-chartered  mutual holding company that owned 57.2% of the Common Stock
of the Company as of December 31, 2007.

      (5)   Impact of Recent Accounting Pronouncements

      In July 2006, the Financial  Accounting  Standards  Board ("FASB")  issued
Financial Accounting Standards Interpretation No. 48, Accounting for Uncertainty
in Income Taxes ("FIN 48"). FIN 48 clarifies the  accounting for  uncertainty in
income taxes recognized in an entity's  financial  statements in accordance with
FASB  Statement  No. 109,  Accounting  for Income  Taxes.  FIN 48  prescribes  a
recognition  threshold and  measurement  attribute  for the financial  statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return.  FIN 48 also  provides  guidance on  derecognition,  classification,
interest  and  penalties,   accounting  in  interim  periods,   disclosures  and
transitions. FIN 48 is effective for the Company's 2008 fiscal year and adoption
did  not  have  a  material  impact  on  the  Company's  consolidated  financial
statements.

      In  September  2006,  the  FASB  issued  Statement  No.  157,  Fair  Value
Measurements.  This  Statement  defines fair value,  establishes a framework for
measuring  fair  value  in  accordance   with  generally   accepted   accounting
principles,  and  expands  disclosures  about  fair  value  measurements.   This
Statement  is  effective  for the Company on July 1, 2008 and is not expected to
have a material impact on the Company's consolidated financial statements.

      In September  2006,  the  Emerging  Issues Task Force  ("EITF")  reached a
consensus  on  Issue  No.  06-4,   "Accounting  for  Deferred  Compensation  and
Postretirement  Benefit  Aspects  of  Endorsement  Split-Dollar  Life  Insurance
Arrangements".  This issue addresses  accounting for split-dollar life insurance
arrangements  whereby the  employer  purchases a policy to insure the life of an
employee,  and separately  enters into an agreement to split the policy benefits
between the  employer  and the  employee.  This EITF states that the  obligation
arises as a result of a substantive agreement with an employee to provide future
postretirement  benefits.  Under EITF 06-4,  the  obligation is not settled upon
entering into an insurance  arrangement.  Since the obligation is not settled, a
liability  should be  recognized  in accordance  with  applicable  authoritative
guidance.  EITF 06-4 is  effective  for the  Company's  2009 fiscal year and the
Company is in the process of evaluating the impact of adoption.

                                        7

<PAGE>
      In February 2007, the FASB issued Statement No. 159, The Fair Value Option
for Financial Assets and Financial Liabilities, which provides companies with an
option to report  selected  financial  assets  and  liabilities  at fair  value.
Statement No. 159 also  establishes  presentation  and  disclosure  requirements
designed to  facilitate  comparisons  between  companies  that choose  different
measurement  attributes  for  similar  types of  assets  and  liabilities.  This
Statement  is  effective  for the Company on July 1, 2008 and is not expected to
have a material impact on the Company's consolidated financial statements.

      In  January  2002  the  Company  entered  into  a  collateral   assignment
split-dollar life insurance arrangement with certain executives.  In March 2007,
the EITF  reached a consensus  on Issue No.  06-10,  Accounting  for  Collateral
Assignment Split-Dollar Life Insurance Arrangements.  Under this EITF, effective
for the  Company's  2009 fiscal  year,  the  Company is required to  recognize a
liability  for   postretirement   benefits  related  to  collateral   assignment
split-dollar life insurance arrangements,  and may choose to retroactively apply
the accounting change to all periods  presented,  or to cumulatively  adjust the
financial statements as of the beginning of the year of adoption. The Company is
in the process of evaluating the impact of adoption.

      In December 2007, the FASB issued  Statement No. 141 (revised),  "Business
Combinations."  This  Statement  replaces FASB Statement No. 141, and applies to
all business  entities,  including  mutual  entities  that  previously  used the
pooling-of-interests  method of accounting  for certain  business  combinations.
Under  Statement  No. 141 (revised) an acquirer is required to recognize at fair
value the assets acquired, liabilities assumed, and any non-controlling interest
in the acquiree at the  acquisition  date.  This  replaces  the cost  allocation
process under Statement No. 141, which resulted in the  non-recognition  of some
assets and liabilities at the acquisition  date and in measuring some assets and
liabilities  at amounts  other than their fair values at the  acquisition  date.
This Statement requires that acquisition costs and expected  restructuring costs
be  recognized  separately  from the  acquisition,  and that the  acquirer  in a
business  combination  achieved in stages recognize the identifiable  assets and
liabilities,  as well as the  non-controlling  interest in the acquiree,  at the
full amounts of their fair values.  This  Statement also requires an acquirer to
recognize  assets  acquired and  liabilities  assumed  arising from  contractual
contingencies  as of the acquisition  date,  while Statement 141 allowed for the
deferred recognition of pre-acquisition  contingencies until certain recognition
criteria  were met,  and an acquirer is only  required  to  recognize  assets or
liabilities  arising from all other  contingencies if it is more likely than not
that they meet the definition of an asset or a liability.  Under this Statement,
an acquirer is required to recognize contingent consideration at the acquisition
date, whereas contingent  consideration  obligations usually were not recognized
at the acquisition date under Statement 141. Further,  this Statement eliminates
the concept of negative  goodwill and requires gain  recognition in instances in
which the total  acquisition-date  fair  value of the  identifiable  net  assets
acquired  exceeds  the fair  value  of the  consideration  transferred  plus any
non-controlling  interest in the  acquiree.  This  Statement  makes  significant
amendments to other  Statements and other  authoritative  guidance,  and applies
prospectively  to business  combinations for which the acquisition date is on or
after the beginning of the first annual  reporting  period beginning on or after
December 15, 2008. An entity may not apply it before that date.

      In December  2007,  the FASB  issued  Statement  No. 160,  "Noncontrolling
Interests in  Consolidated  Financial  Statements,  an amendment of ARB No. 51."
This  Statement   establishes   accounting  and  reporting   standards  for  the
noncontrolling  interest  in a  subsidiary  and  for  the  deconsolidation  of a
subsidiary.  It clarifies that a  noncontrolling  interest in a subsidiary is an
ownership interest in the consolidated  entity that should be reported as equity
in the consolidated  financial  statements.  This Statement is effective for the
Company's  2009 fiscal  year.  The Company is in the process of  evaluating  the
impact of adoption.

Item 2. Management's Discussion and Analysis or Plan of Operation

      This  document may contain  certain  forward-looking  statements,  such as
statements  of the  Company's  or the Bank's  plans,  objectives,  expectations,
estimates and  intentions.  Forward-looking  statements may be identified by the
use of words such as "expects,"  "subject,"  "believe," "will," "intends," "will
be" or  "would."  These  statements  are  subject  to  change  based on  various
important factors (some of which are beyond the Company's or the Bank's control)
and actual results may differ materially.  Accordingly, readers should not place
undue reliance on any  forward-looking  statements,  which reflect  management's
analysis of factors only as of the date of which they are given.  These  factors
include general  economic  conditions,  trends in interest rates, the ability of
our  borrowers to repay their  loans,  the ability of the Company or the Bank to
effectively  manage its growth,  and results of regulatory  examinations,  among
other factors. The foregoing list of important factors is not exclusive. Readers
should  carefully  review the risk  factors  described  in other  documents  the
Company  files from time to time with the  Securities  and Exchange  Commission,
including Current Reports on Form 8-K.

      Except as required by applicable law and regulation,  the Company does not
undertake - and specifically  disclaims any obligation - to publicly release the
result of any revisions  that may be made to any  forward-looking  statements to
reflect events or circumstances  after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.

                                        8
<PAGE>

Overview

      The Company's  results of operations  depend primarily on net interest and
dividend  income,  which is the  difference  between the  interest  and dividend
income earned on its interest-earning assets, such as loans and securities,  and
the interest expense on its interest-bearing  liabilities,  such as deposits and
borrowings.  The Company also generates non-interest income, primarily from fees
and service charges. Gains on sales of loans and securities are added sources of
non-interest  income. The Company's  non-interest  expense primarily consists of
employee   compensation   and  benefits,   occupancy   and  equipment   expense,
advertising, data processing, professional fees and other operating expenses.

      Our  financial  performance  for the six months  ended  December  31, 2007
improved in several  areas when  compared  to the same  period in 2006.  Our net
interest margin  improved,  as the Company  benefited from the recent decline in
short term rates, as well as the continued  expansion of our commercial business
activities,  which  generally  result  in  higher-yielding  loans.  However,  we
continue to operate in a difficult  operating  environment  with a high level of
local competition for loan and deposit  balances,  which we expect will continue
to put pressure on our net  interest  margin.  Asset  quality  remained  stable,
reflected  in the minimal  provision  for loan  losses.  Increased  non-interest
expenses  were  primarily  related to salary and benefits  and normal  operating
conditions.

Comparison of Financial Condition at December 31, 2007 and June 30, 2007

      Total assets  increased by $3.5  million,  or 2.1%,  to $168.6  million at
December 31, 2007,  from $165.1  million at June 30, 2007. The increase in total
assets  resulted  primarily  from increases in net loans  receivable,  partially
offset by decreases in cash and cash equivalents and investment  securities held
to maturity.  Net loans  receivable  increased $7.4 million,  or 5.8%, to $135.1
million at December 31, 2007,  from $127.7  million at June 30, 2007,  primarily
due to a $5.0 million or 113.9%  increase in commercial  construction  loans,  a
$1.8 million or 83.3%  increase in commercial  loans and a $1.5 million or 10.7%
increase in commercial real estate loans,  partially offset by a $2.2 million or
2.3% decrease in residential mortgage loans. Cash and cash equivalents decreased
$2.5  million  or 45.1%,  primarily  related to normal  operating  fluctuations.
Investment securities held to maturity decreased $1.2 million, or 14.3%, to $7.0
million  at  December  31,  2007,  from $8.2  million  at June 30,  2007,  which
reflected  the use of investment  cash flows to fund loan demand.  Total earning
assets increased $5.3 million,  or 3.5%, to $159.5 million at December 31, 2007,
from $154.2 million at June 30, 2007.

      Total  deposits  increased by $1.6  million,  or 1.6%, to $99.5 million at
December 31, 2007, from $98.0 million at June 30, 2007. The increase in deposits
was  primarily  due to increases in money  market and demand  deposit  accounts,
partially  offset by decreases in certificates of deposit,  savings accounts and
NOW checking accounts.  Money market deposit accounts increased $5.1 million, or
22.4%,  reflecting  promotional  efforts and demand deposit  accounts  increased
$742,000,  or 6.9%,  offset by  decreases  in  certificates  of  deposit of $1.7
million,  or 4.3%,  decreases in savings accounts of $1.4 million, or 12.2%, and
decreases in NOW checking accounts of $1.3 million,  or 11.2%.  Total borrowings
from the  Federal  Home  Loan  Bank  (FHLB)  increased  $2.4  million,  or 5.0%,
primarily to fund loan demand.

      Total stockholders' equity decreased $305,000 or 1.7% to $17.3 million at
December 31, 2007, from $17.6 million at June 30, 2007, primarily due to the
repurchase of 43,063 shares of the Company's common stock at a cost of $303,000,
as well as an operating loss of $227,000 for the six months ended December 31,
2007, partially offset by a $195,000 decrease in accumulated other comprehensive
loss. The accumulated other comprehensive loss at June 30, 2007 of $179,000
decreased $195,000 to $16,000 of accumulated other comprehensive income at
December 31, 2007, reflecting $29,000 in net unrealized gains on securities
available for sale at December 31, 2007. The net unrealized gains on securities
available for sale were attributable to changes in market interest rates and
were not considered by management to be other than temporary.

Comparison of Operating Results for the Three Months Ended December 31, 2007 and
2006

      General.  The net loss for the three  months  ended  December 31, 2007 was
$89,000, or $.03 per basic and diluted share, compared to a net loss of $99,000,
or $.04 per basic and diluted  share for the three  months  ended  December  31,
2006.  The  decrease  in the net loss was  primarily  due to an  increase in net
interest  income,  an  increase  in  non-interest  income and a decrease  in the
provision  for loan  losses,  partially  offset by an increase  in  non-interest
expense.

      Interest Income.  Interest income increased by $157,000,  or 7.1%, to $2.4
million for the three months ended  December  31,  2007.  The increase  resulted
primarily from an increase of $194,000,  or 10.3%,  in interest  income on loans
receivable,  partially  offset by a decrease in interest and dividend  income on
securities of $33,000, or 10.7%.

      Interest income on loans receivable increased $194,000,  or 10.3%, to $2.1
million for the three months ended December 31, 2007,  from $1.9 million for the
three months ended December 31, 2006. The increase was due to an increase in the
average balance of loans receivable of $5.3 million,  or 4.1%, to $134.0 million
for the three months ended December 31, 2007,  from $128.8 million for the three
months ended  December 31, 2006 and by the increase in average loan yields of 35
basis points to 6.23% for the three months ended  December 31, 2007,  from 5.88%
for the three months ended December 31, 2006.

      Interest and dividend income on investment  securities  decreased $33,000,
or 10.7% for the three  months  ended  December  31,  2007  compared to the same
period in 2006.  The  decrease in  interest  income was due to a decrease in the
average  balance of investment  securities of $3.8 million,  or 14.5%,  to $22.7
million for the three months ended December 31, 2007, from $26.6 million for the
three months ended December 31, 2006, partially offset by an increase in average
investment  yields  of 22 basis  points  to 4.91%  for the  three  months  ended
December 31, 2007, from 4.69% for the three months ended December 31, 2006.

                                        9

<PAGE>

      Interest  Expense.  Interest expense increased  $82,000,  or 6.4%, to $1.4
million for the three months ended  December 31, 2007.  The increase in interest
expense was  primarily  due to a 19 basis point  increase in the average cost to
3.95% for the three  months ended  December  31,  2007,  from 3.76% for the same
period in 2006. The average balance of  interest-bearing  liabilities  increased
$1.5 million, or 1.1%, to $137.4 million for the three months ended December 31,
2007, from $136.0 million for the same period in 2006.

      Interest expense on interest-bearing deposits increased $81,000, or 12.2%,
to $743,000 for the three months ended December 31, 2007,  from $662,000 for the
same period in 2006. The increase was primarily due to a 35 basis point increase
in the average cost of  interest-bearing  deposits to 3.46% for the three months
ended  December  31, 2007,  from 3.11% for the same period in 2006.  The average
balance of  interest-bearing  deposits  increased $552,000 or 0.7% for the three
months ended December 31, 2007, to $85.8 million from $85.3 million for the same
period in 2006. Additionally, interest expense on FHLB short-term borrowings and
long-term advances remained flat, primarily due to a $788,000,  or 1.6% increase
in the average  balance of  borrowings  and  advances for the three months ended
December 31, 2007, to $50.7  million,  from $50.0 million for the same period in
2006,  partially  offset by a 7 basis point  decrease in the average cost of the
borrowings  and advances to 4.84% for the three months ended  December 31, 2007,
from 4.91% for the same period in 2006.

      Net Interest Income.  Net interest income increased  $75,000,  or 8.0%, to
$1.0 million for the three months ended December 31, 2007, from $940,000 for the
same period in 2006.  The  increase in net  interest  income was  primarily  the
result of a 17 basis  point  increase  in net  interest  margin to 2.57% for the
three months ended December 31, 2007, from 2.40% for the same period ended 2006.

      Provision  for Loan Losses.  The  provision  for loan losses for the three
months ended December 31, 2007 was $2,000,  compared to a $41,000  provision for
the three months ended December 31, 2006, reflecting the stable asset quality of
the  Company.  The  allowance  for loan losses was $1.1  million or 0.82% of net
loans outstanding at December 31, 2007, as compared to $1.1 million, or 0.87% of
net loans outstanding at December 31, 2006.

      Non-interest  Income.  Non-interest income increased $27,000, or 16.4%, to
$189,000  for the three months ended  December 31, 2007,  from  $162,000 for the
same period in 2006.  The increase in  non-interest  income was primarily due to
income generated from our overdraft privilege program.  Overdraft fees increased
$15,000, or 15.9% to $108,000 for the three months ended December 31, 2007, from
$93,000 for the same period ended 2006.

      Non-interest  Expense.  Non-interest expense increased $129,000, or 10.7%,
to $1.3 million for the three months ended December 31, 2007,  from $1.2 million
for the same period in 2006. The increase in non-interest  expense was primarily
due to an increase in salaries and  benefits,  data  processing  and general and
administrative.   Salary  and  benefit  expense  increased  $72,000,  or  11.0%,
primarily due to costs associated with two new employees and expense  associated
with supplemental  retirement benefits.  Occupancy expense increased $13,000, or
6.6%,  to $220,000 for the three months ended  December 31, 2007,  from $207,000
for the same period in 2006.  Data  processing  expense  increased  $19,000,  or
26.8%, primarily due to technology investments,  to $90,000 for the three months
ended December 31, 2007,  from $71,000 for the same period in 2006.  Advertising
expense  decreased  $10,000  or 20.8% to  $37,000  for the  three  months  ended
December  31, 2007,  from $47,000 for the three months ended  December 31, 2006.
Other  general and  administrative  expenses  increased  $36,000,  or 22.8%,  to
$196,000 for the three months ended  December 31, 2007,  from  $160,000 from the
three months ended  December 31, 2006,  primarily due to increased  FDIC deposit
insurance  assessments  of $12,000,  or 382.3% and Office of Thrift  Supervision
(OTS) assessment expense of $7,000, or 53.5%.

      Income  Taxes.  The loss before  income taxes of $135,000 and $147,000 for
the three months ended December 31, 2007 and 2006, respectively,  resulted in an
income tax benefit of $46,000 and $48,000 for the three  months  ended  December
31, 2007 and 2006,  respectively.  The  effective tax rates for the three months
ended December 31, 2007 and 2006 were 33.9% and 32.6%, respectively.

      Average  Balance.  The  following  table  sets forth  certain  information
regarding  the  Company's  average  balance  sheet  for the  periods  indicated,
including  the  average  yields on its  interest-earning  assets and the average
costs of its  interest-bearing  liabilities.  Average  yields are  calculated by
dividing the interest income produced by the average balance of interest-bearing
assets.  Average costs are calculated by dividing the interest  expense produced
by the average balance of interest-bearing liabilities. The average balances for
the period are derived from average  balances  that are  calculated  daily.  The
average  yields and costs include fees that are  considered  adjustments to such
average yields and costs.

                                       10

<PAGE>

<TABLE>
<CAPTION>
                                                                                   Three Months Ended December 31,
                                                At December 31,     --------------------------------------------------------------
                                                      2007                       2007                            2006
                                            ---------------------   -----------------------------   ------------------------------
                                                         Weighted     Average                         Average
                                            Outstanding  Average    Outstanding            Yield/   Outstanding            Yield/
                                              Balance      Rate       Balance    Interest   Rate      Balance    Interest   Rate
                                            -----------  --------   -----------  --------  ------   -----------  --------  ------
                                                                                           (Dollars in thousands)
<S>                                         <C>            <C>      <C>          <C>       <C>      <C>          <C>       <C>
Interest-earning assets:
   Loans                                    $   136,213      6.17%  $   134,018  $  2,086    6.23%  $   128,760  $  1,892    5.88%
   Investment securities (1)                     22,607      4.73%       22,749       279    4.91%       26,591       312    4.69%
   Short term investments                           665      4.30%        1,401         9    2.57%        1,020        13    5.10%
                                            -----------             -----------  --------           -----------  --------
     Total interest-earning assets              159,485      5.96%      158,168     2,374    6.00%      156,371     2,217    5.67%
   Non-interest-earning assets                    9,091                   9,316         -                 9,224         -
                                            -----------             -----------  --------           -----------  --------
   Total assets                             $   168,576             $   167,484     2,374           $   165,595     2,217
                                            ===========             ===========  ========           ===========  ========

Interest-bearing liabilities:
   Savings deposits                              10,461      0.24%  $    10,905         8    0.29%  $    13,296        10    0.30%
   NOW accounts                                  10,244      1.30%        9,147        35    1.53%        8,661        31    1.43%
   Money market accounts                         27,952      3.60%       26,945       255    3.79%       19,784       155    3.13%
   Certificates of deposit                       38,728      4.55%       38,807       445    4.59%       43,511       466    4.28%
                                            -----------             -----------  --------           -----------  --------
     Total interest-bearing deposits             87,385      3.35%       85,804       743    3.46%       85,252       662    3.11%
   FHLB advances                                 50,097      4.70%       50,735       614    4.84%       49,947       613    4.91%
   Repurchase agreements                            783      1.00%          908         2    0.88%          778         2    1.03%
                                            -----------             -----------  --------           -----------  --------
     Total interest-bearing liabilities     $   138,265      3.82%  $   137,447     1,359    3.95%  $   135,977     1,277    3.76%
Non-interest-bearing liabilities:
   Demand deposits                               12,137                  11,895                          11,117
   Other non-interest-bearing liabilities           869                     700                             412
Total liabilities                               151,271                 150,042                         147,506
   Stockholders' equity                          17,305                  17,442                          18,089
                                            -----------             -----------                     -----------
     Total liabilities and equity           $   168,576             $   167,484                     $   165,595
                                            ===========             ===========                     ===========

Net interest income                                                              $  1,015                        $    940
                                                                                 ========                        ========
Net interest rate spread (2)                                 2.14%                           2.05%                           1.91%
Net interest-earning assets (3)             $    21,220             $    20,721                     $    20,394
                                            ===========             ===========                     ===========
Net interest margin (4)                                                                      2.57%                           2.40%
Average of interest-earning
     assets to interest-bearing
     liabilitities                                         115.35%                         115.08%                         115.00%
</TABLE>

(1)  Consists entirely of taxable investment securities.

(2)  Net interest rate spread represents the difference between the yield on
     average interest-earning assets and the cost of average interest-bearing
     liabilities.

(3)  Net interest-earning assets represents total interest-earning assets less
     total interest-bearing liabilities.

(4)  Net interest margin represents net interest income divided by average total
     interest-earning assets.

                                       11

<PAGE>

      Rate/Volume Analysis. The following table presents the effects of changing
rates and volumes on our net interest income for the periods indicated. The rate
column  shows the  effects  attributable  to  changes in rate  (changes  in rate
multiplied by prior volume). The volume column shows the effects attributable to
changes in volume (changes in volume  multiplied by prior rate).  The net column
represents  the sum of the prior  columns.  For purposes of this table,  changes
attributable  to both rate and volume,  which  cannot be  segregated,  have been
allocated proportionately,  based on the changes due to rate and the changes due
to volume.

                                            Three Months Ended December 31,
                                                     2007 vs. 2006
                                       -----------------------------------------
                                                    (In Thousands)
                                       Increase (Decrease) Due To:     Total
                                       ---------------------------    Increase
                                          Volume          Rate       (Decrease)
                                       ------------   ------------   -----------

Interest-earning assets:
Loans                                  $         77   $       117    $      194
Investment securities                           (45)           12           (33)
Short-term investments                            5            (9)           (4)
                                       ------------   -----------    ----------

   Total interest-earning assets                 37           120           157
                                       ------------   -----------    ----------

Interest-bearing liabilities:
Savings deposits                                 (2)            -            (2)
NOW accounts                                      2             2             4
Money market accounts                            56            44           100
Certificates of deposit                         (50)           29           (21)
                                       ------------   -----------    ----------
Total interest-bearing deposits                   6            75            81
FHLB advances                                    10            (9)            1
Repurchase agreements                            (1)            1             -
                                       ------------   -----------    ----------
   Total interest-bearing liabilities            15            67            82
                                       ------------   -----------    ----------

Change in net interest income          $         22   $        53    $       75
                                       ============   ===========    ==========

                                       12

<PAGE>

Comparison of Operating Results for the Six Months Ended December 31, 2007
and 2006

      General.  The net loss for the six  months  ended  December  31,  2007 was
$227,000,  or $.08  per  basic  and  diluted  share,  compared  to a net loss of
$185,000,  or $.07 per basic and diluted share for the six months ended December
31,  2006.  The  increase  in the net loss was  primarily  due to an increase in
non-interest  expense,  partially offset by a decrease in the provision for loan
losses,  an increase  in net  interest  income and an  increase in  non-interest
income.

      Interest Income.  Interest income increased by $148,000,  or 3.3%, to $4.7
million for the six months ended  December  31, 2007,  from $4.5 million for the
six months ended  December 31, 2006.  The increase  resulted  primarily  from an
increase of $256,000, or 6.7%, in interest income on loans receivable, partially
offset by a decrease in interest and dividend  income on securities of $112,000,
or 16.6%.

      Interest income on loans receivable  increased $256,000,  or 6.7%, to $4.1
million for the six months ended  December  31, 2007,  from $3.8 million for the
six months ended  December 31, 2006.  The increase was due to an increase in the
average balance of loans receivable of $1.7 million,  or 1.3%, to $131.6 million
for the six months  ended  December 31,  2007,  from $129.9  million for the six
months  ended  December 31, 2006 and by an increase in average loan yields of 31
basis points to 6.17% for the six months ended December 31, 2007, from 5.86% for
the six months ended December 31, 2006.

      Interest and dividend income on investment  securities decreased $112,000,
or 16.6% for the six months ended December 31, 2007, compared to the same period
in 2006.  The  decrease in interest  income was due to a decrease in the average
balance of investment securities of $4.0 million, or 14.8%, to $23.1 million for
the six months ended  December 31, 2007,  from $27.1  million for the six months
ended  December  31, 2006 and by a decrease in average  investment  yields of 10
basis points to 4.90% for the six months ended December 31, 2007, from 5.00% for
the six months ended December 31, 2006.

      Interest Expense.  Interest expense increased  $115,000,  or 4.5%, to $2.7
million for the six months ended  December  31,  2007.  The increase in interest
expense was  primarily  due to a 22 basis point  increase in the average cost to
3.94% for the six months ended December 31, 2007, from 3.72% for the same period
in 2006.  The average  balance of  interest-bearing  liabilities  decreased $1.8
million,  or 1.3%, to $135.7 million for the six months ended December 31, 2007,
from $137.5 million for the same period in 2006.

      Interest  expense on  interest-bearing  deposits  increased  $160,000,  or
12.2%,  to $1.5  million for the six months ended  December 31, 2007,  from $1.3
million for the same period in 2006.  The  increase  was  primarily  due to a 38
basis point increase in the average cost of  interest-bearing  deposits to 3.44%
for the six months ended  December  31, 2007,  from 3.06% for the same period in
2006. The average balance of interest-bearing deposits remained flat for the six
months  ended  December  31,  2007,   compared  to  the  same  period  in  2006.
Additionally,  interest  expense on FHLB  short-term  borrowings  and  long-term
advances decreased $45,000,  or 3.7%,  primarily due to a $1.8 million,  or 3.6%
decrease in the average  balance of  borrowings  and advances for the six months
ended  December  31, 2007,  to $49.0  million,  from $50.8  million for the same
period in 2006. The average cost of the borrowings and advances of 4.88% for the
six months ended December 31, 2007,  remained flat,  compared to the same period
in 2006.

      Net Interest Income.  Net interest income increased  $33,000,  or 1.7%, to
$2.0  million for the six months ended  December  31, 2007.  The increase in net
interest  income was  primarily  the result of a 7 basis  point  increase in net
interest  margin to 2.54% for the six months ended December 31, 2007, from 2.47%
for the same period ended 2006.

      Provision  for Loan  Losses.  The  provision  for loan  losses for the six
months ended December 31, 2007 was $3,000,  compared to a $105,000 provision for
the six months ended  December 31, 2006,  reflecting the stable asset quality of
the  Company.  The  allowance  for loan losses was $1.1  million or 0.82% of net
loans outstanding at December 31, 2007, as compared to $1.1 million, or 0.87% of
net loans outstanding at December 31, 2006.

      Non-interest  Income.  Non-interest  income increased $24,000, or 7.0%, to
$361,000 for the six months ended December 31, 2007,  from $337,000 for the same
period in 2006. The increase in non-interest  income was primarily due to income
generated  from  our  overdraft  privilege  program.  Overdraft  fees  increased
$29,000,  or 15.9% to $208,000 for the six months ended December 31, 2007,  from
$179,000 for the same period ended 2006.

      Non-interest Expense. Non-interest expense increased $228,000, or 9.2%, to
$2.7 million for the six months ended  December 31, 2007,  from $2.5 million for
the same period in 2006. The increase in non-interest  expense was primarily due
to an increase in salaries and  benefits,  advertising  and  professional  fees.
Salary and benefit expense increased  $97,000,  or 7.3%,  primarily due to costs
associated  with two new  employees  and expense  associated  with  supplemental
retirement  benefits.  Occupancy expense increased $11,000, or 2.6%, to $430,000
for the six months ended December 31, 2007, from $419,000 for the same period in
2006. Data processing  expense  increased  $25,000,  or 16.8%,  primarily due to
technology investments,  to $173,000 for the six months ended December 31, 2007,
from $148,000 for the same period in 2006.  Professional  fees increased $25,000
or 18.6%,  to $162,000 for the six months ended December 31, 2007, from $137,000
for the six months ended  December 31, 2006,  primarily due to  consulting  fees
associated with the Company's  compliance with Section 404 of the Sarbanes-Oxley
Act.  Advertising  expense  increased  $38,000 or 63.0%,  to $97,000 for the six
months ended  December 31, 2007,  from $59,000 for the six months ended December
31, 2006. Other general and administrative  expenses increased $32,000, or 8.6%,
to $397,000 for the six months ended  December 31, 2007,  from $365,000 from the
six months  ended  December 31, 2006,  primarily  due to increased  FDIC deposit
insurance assessments of 26,000, or 432.8%.

                                       13

<PAGE>

      Income  Taxes.  The loss before  income taxes of $347,000 and $278,000 for
the six months ended  December 31, 2007 and 2006,  respectively,  resulted in an
income tax benefit of $120,000 and $93,000 for the six months ended December 31,
2007 and 2006,  respectively.  The  effective tax rates for the six months ended
December 31, 2007 and 2006 were 34.5% and 33.4%, respectively.

      Average  Balance.  The  following  table  sets forth  certain  information
regarding  the  Company's  average  balance  sheet  for the  periods  indicated,
including  the  average  yields on its  interest-earning  assets and the average
costs of its  interest-bearing  liabilities.  Average  yields are  calculated by
dividing the interest income produced by the average balance of interest-bearing
assets.  Average costs are calculated by dividing the interest  expense produced
by the average balance of interest-bearing liabilities. The average balances for
the period are derived from average  balances  that are  calculated  daily.  The
average  yields and costs include fees that are  considered  adjustments to such
average yields and costs.

                                       14

<PAGE>

<TABLE>
<CAPTION>
                                                                                         Six Months Ended December 31,
                                                  At December 31,     --------------------------------------------------------------
                                                       2007                        2007                            2006
                                              ---------------------   -----------------------------   ------------------------------
                                                           Weighted     Average                         Average
                                              Outstanding   Average   Outstanding            Yield/   Outstanding            Yield/
                                                Balance      Rate       Balance    Interest   Rate      Balance    Interest   Rate
                                              -----------  --------   -----------  --------  ------   -----------  --------  ------
Interest-earning assets:                                                                     (Dollars in thousands)
<S>                                           <C>          <C>        <C>          <C>       <C>      <C>          <C>       <C>
   Loans                                          136,213      6.17%  $   131,629  $  4,062    6.17%  $   129,934  $  3,806    5.86%
   Investment securities (1)                       22,607      4.73%       23,052       565    4.90%       27,066       677    5.00%
   Short term investments                             665      4.30%        1,306        25    3.83%          809        21    5.19%
                                              -----------             -----------  --------           -----------  --------
     Total interest-earning assets                159,485      5.96%      155,987     4,652    5.96%      157,809     4,504    5.71%
   Non-interest-earning assets                      9,091                   9,557         -                 9,324         -
                                              -----------             -----------  --------           -----------  --------
   Total assets                               $   168,576             $   165,544     4,652           $   167,133     4,504
                                              ===========             ===========  ========           ===========  ========

Interest-bearing liabilities:
   Savings deposits                                10,461      0.24%  $    11,203        17    0.30%  $    13,880        25    0.36%
   NOW accounts                                    10,244      1.30%        9,284        73    1.57%        8,315        54    1.30%
   Money market accounts                           27,952      3.60%       25,587       484    3.78%       20,216       311    3.08%
   Certificates of deposit                         38,728      4.55%       39,709       900    4.53%       43,434       924    4.25%
                                              -----------             -----------  --------           -----------  --------
     Total interest-bearing deposits               87,385      3.35%       85,783     1,474    3.44%       85,845     1,314    3.06%
   FHLB advances                                   50,097      4.70%       49,001     1,195    4.88%       50,846     1,240    4.88%
   Repurchase agreements                              783      1.00%          881         4    0.91%          794         4    1.01%
                                              -----------             -----------  --------           -----------  --------
     Total interest-bearing liabilities       $   138,265      3.82%  $   135,665     2,673    3.94%  $   137,485     2,558    3.72%
Non-interest-bearing liabilities:
   Demand deposits                                 12,137                  11,588                          11,038
   Other non-interest-bearing liabilities             869                     712                             284
Total liabilities                                 151,271                 147,965                         148,807
   Stockholders' equity                            17,305                  17,579                          18,326
                                              -----------             -----------                     -----------
     Total liabilities and equity             $   168,576             $   165,544                     $   167,133
                                              ===========             ===========                     ===========

Net interest income                                                                $  1,979                        $  1,946
                                                                                   ========                        ========
Net interest rate spread (2)                                   2.14%                           2.02%                           1.99%
Net interest-earning assets (3)               $    21,220             $    20,322                     $    20,324
                                              ===========             ===========                     ===========
Net interest margin (4)                                                                        2.54%                           2.47%
Average of interest-earning
   assets to interest-bearing
   liabilitities                                             115.35%                         114.98%                         114.78%
</TABLE>

----------
(1)   Consists entirely of taxable investment securities.

(2)   Net interest rate spread represents the difference between the yield on
      average interest-earning assets and the cost of average interest-bearing
      liabilities.

(3)   Net interest-earning assets represents total interest-earning assets less
      total interest-bearing liabilities.

(4)   Net interest margin represents net interest income divided by average
      total interest-earning assets.

                                       15

<PAGE>

      Rate/Volume Analysis. The following table presents the effects of changing
rates and volumes on our net interest income for the periods indicated. The rate
column  shows the  effects  attributable  to  changes in rate  (changes  in rate
multiplied by prior volume). The volume column shows the effects attributable to
changes in volume (changes in volume  multiplied by prior rate).  The net column
represents  the sum of the prior  columns.  For purposes of this table,  changes
attributable  to both rate and volume,  which  cannot be  segregated,  have been
allocated proportionately,  based on the changes due to rate and the changes due
to volume.

                                             Six Months Ended December 31,
                                                     2007 vs. 2006
                                        ----------------------------------------
                                         Increase (Decrease) Due to
                                        ---------------------------
                                          Volume          Rate           Net
                                        ----------   --------------   ---------
                                                     (In thousands)
Interest-earning assets:
Loans                                   $       50   $          206   $     256
Investment securities                         (100)             (12)       (112)
Short-term investments                          13               (9)          4
                                        ----------   --------------   ---------

   Total interest-earning assets               (37)             185         148
                                        ----------   --------------   ---------

Interest-bearing liabilities:
Savings deposits                                (5)              (3)         (8)
NOW accounts                                     6               13          19
Money market accounts                           83               90         173
Certificates of deposit                        (79)              55         (24)
                                        ----------   --------------   ---------
Total interest-bearing deposits                  5              155         160
FHLB advances                                  (45)               -         (45)
Repurchase agreements                            -                -           -
                                        ----------   --------------   ---------
   Total interest-bearing liabilities          (40)             155         115
                                        ----------   --------------   ---------

Change in net interest income           $        3   $           30   $      33
                                        ==========   ==============   =========

                                       16

<PAGE>

      Liquidity and Capital Resources. Liquidity is the ability to meet current
and future financial obligations of a short-term nature. Our primary sources of
funds consist of deposit inflows, loan repayments and maturities and sales of
securities. While maturities and scheduled amortization of loans and securities
are predictable sources of funds, deposit flows and mortgage prepayments are
greatly influenced by general interest rates, economic conditions and
competition.

      We  regularly  adjust  our  investments  in liquid  assets  based upon our
assessment of (1) expected loan demand,  (2) expected  deposit flows, (3) yields
available on interest-earning deposits and securities, and (4) the objectives of
our  asset/liability  management  program.  Excess  liquid  assets are  invested
generally  in  interest-earning   deposits  and  short-  and   intermediate-term
securities.

      Our most liquid assets are cash and cash equivalents.  The levels of these
assets  are  dependent  on  our  operating,  financing,  lending  and  investing
activities  during  any  given  period.  At  December  31,  2007,  cash and cash
equivalents totaled $3.1 million.  Securities classified as  available-for-sale,
which provide additional sources of liquidity, totaled $12.7 million at December
31, 2007.  Our policies also allow for access to the wholesale  funds market for
up to 50.0% of total  assets,  or $84.3  million.  At December 31, 2007,  we had
$50.1 million in FHLB advances  outstanding,  allowing the Company  access to an
additional $34.2 million in wholesale funds based on policy guidelines.

      At December 31, 2007, we had $2.7 million in loan commitments outstanding.
In  addition  to  commitments  to  originate  loans,  we had  $20.4  million  in
unadvanced  funds to borrowers.  Certificates  of deposit due within one year of
December 31, 2007 totaled $30.0 million,  or 30.2% of total  deposits.  If these
deposits do not remain  with us, we will be  required  to seek other  sources of
funds,  including  other  certificates  of  deposit or other  wholesale  funding
options.  Depending on market conditions, we may be required to pay higher rates
on such deposits or other  borrowings than we currently pay on the  certificates
of deposit due on or before  December 31, 2007.  We believe,  however,  based on
past experience that a significant  portion of our  certificates of deposit will
remain with us. We have the ability to attract and retain  deposits by adjusting
the interest rates offered.

      We have no material  commitments  or demands that are likely to affect our
liquidity  other than set forth below. In the event loan demand were to increase
at a pace greater than expected,  or any unforeseen demand or commitment were to
occur, we would access our borrowing  capacity with the FHLB and other wholesale
market sources.

      Our primary  investing  activities  are the  origination  of loans and the
purchase of  securities.  During the six months  ended  December  31,  2007,  we
originated $25.1 million of loans and purchased $3.0 million of securities.

      Financing activities consist primarily of activity in deposit accounts and
FHLB borrowings and advances. We experienced a net increase in total deposits of
$1.6 million for the six months  ended  December  31,  2007.  Deposit  flows are
affected by the overall level of interest rates, the interest rates and products
offered by us and our local  competitors and other factors.  We generally manage
the pricing of our deposits to be competitive.

      FHLB  borrowings  and  advances  reflected a net  increase of $2.4 million
during the six months ended December 31, 2007. FHLB borrowings and advances have
primarily been used to fund loan demand and purchase securities.

      The Bank is subject to various regulatory capital requirements including a
risk-based  capital measure.  The risk-based  capital  guidelines include both a
definition of capital and a framework for  calculating  risk-weighted  assets by
assigning  balance  sheet  assets  and  off-balance  sheet  items to broad  risk
categories.  At December  31,  2007,  the Bank  exceeded  all of its  regulatory
capital  requirements  and is considered  "well  capitalized"  under  regulatory
guidelines.

      Off-Balance Sheet Arrangements. In addition to the normal course of
operations, we engage in a variety of financial transactions that, in accordance
with generally accepted accounting principles are not recorded in our financial
statements. These transactions involve, to varying degrees, elements of credit,
interest rate, and liquidity risk. Such transactions are used primarily to
manage customers' requests for funding and take the form of loan commitments,
lines of credit, and letters of credit.

      For the six months ended  December 31, 2007, we engaged in no  off-balance
sheet transactions  reasonably likely to have a material effect on our financial
condition, results of operations or cash flows.

                                       17

<PAGE>

Item 3. Controls and Procedures

      Under  the  supervision  and with  the  participation  of our  management,
including our Chief Executive Officer and Chief Financial Officer,  we evaluated
the  effectiveness  of the design and operation of our  disclosure  controls and
procedures  (as defined in Rule  13a-15(e)  or  15d-15(e)  under the  Securities
Exchange Act of 1934) as of the end of the period covered by this report.  Based
upon that evaluation,  the Chief Executive  Officer and Chief Financial  Officer
concluded  that,  as of the  end of the  period  covered  by  this  report,  our
disclosure controls and procedures were effective to ensure (1) that information
required to be disclosed in the reports that the Company  files or submits under
the  Securities  Exchange Act of 1934, is recorded,  processed,  summarized  and
reported,  within the time periods  specified in the SEC's rules and forms;  and
(2) in timely  alerting  them to  material  information  relating to the Company
required to be filed in its periodic  SEC  filings.  There has been no change in
the Company's  internal  control over financial  reporting  during the Company's
most recent fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

            Not applicable

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

            a) Not applicable

            b) Not applicable

            c) The  following  table presents  a summary of the  Company's share
            repurchases during the quarter ended December 31, 2007.

<TABLE>
<CAPTION>
                                                                               Total Number of Shares     Maximum Number of
                                                                                Purchased as Part of    Shares That May Yet be
                                       Total Number of    Average Price Paid     Publicly Announced      Purchased Under the
                  Period               Shares Purchased       Per Share              Program(1)              Program(1)
------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                <C>                  <C>                      <C>
October 1 through October 31, 2007            0                 $0.00                    0                      29,800
November 1 through November 30, 2007        19,200              $7.06                  19,200                   10,600
December 1 through December 31, 2007          0                 $0.00                    0                      10,600
</TABLE>

(1) On July 31, 2006 the Company announced that its Board of Directors had
authorized a stock repurchase program pursuant to which the Company intends to
purchase up to 5% of its issued and outstanding shares, or up to 138,863 shares.
As of December 31, 2007, the Company had purchased 128,263 shares in accordance
with the stock repurchase program.

Item 3. Defaults Upon Senior Securities

            Not applicable

Item 4. Submission of Matters to a Vote of Security Holders

            On October 23, 2007, the Company held an annual meeting of
            shareholders. At the meeting, proposals to (1) elect Keith N.
            Congdon, Kathleen R. Sachs, Richard F. Spencer, David A. Splaine and
            Robert T. Wyman to serve as directors of the Company for terms of
            three years and until their respective successors have been elected
            and qualified and elect Marybeth McInnis and John H. Yeaton to serve
            as directors of the Company for terms of two years and until their
            respective successors have been elected and qualified and (2) ratify
            the engagement of Wolf and Company, P.C. to be the Company's
            auditors for the June 30, 2008 fiscal year were approved. There were
            no broker non-votes. The votes cast for and against the proposals
            were as follows:

                                       18

<PAGE>

            Election to the Board of Directors      For      Withheld
            ----------------------------------      ---      --------

            Keith N. Congdon                     2,358,431    122,224

            Kathleen R. Sachs                    2,358,781    121,874

            Richard F. Spencer                   2,359,031    121,624

            David A. Splaine                     2,358,231    122,424

            Robert T. Wyman                      2,359,031    121,624

            Marybeth McInnis                     2,358,281    122,374

            John H. Yeaton                       2,358,281    122,374

            Robert E. Balletto, David H. Condon, Anthony S. Conte, Jr., Stephen
            L. Flynn, Thomas L. Hamelin and Mary L. Williams continued after the
            meeting to serve as directors of the Company.

            Ratification of Appointment of Wolf & Company,  P.C. as auditors for
            the Company for the fiscal year ending June 30, 2008

                                        Abstain      For      Against
                                        -------      ---      -------

            Number of votes              2,550    2,454,928   23,177

Item 5. Other Information

            (a)   Not applicable

            (b)   There were no material changes to the procedures by which
                  security holders may recommend nominees to the Company's board
                  of directors during the period covered by this Form 10QSB.

Item 6. Exhibits

            31.1  Certification of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act
            31.2  Certification of Chief Financial Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act
            32    Certification of Chief Executive Officer and Chief Financial
                  Officer pursuant to Section 906 of the Sarbanes-Oxley Act

                                       19

<PAGE>

                            GEORGETOWN BANCORP, INC.

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                   GEORGETOWN BANCORP, INC.
                                         (Registrant)

Date: February 12, 2008            /s/ Robert E. Balletto
                                   -------------------------------------
                                   Robert E. Balletto
                                   President and Chief Executive Officer
                                   (Principal Executive Officer)

                                   /s/ Joseph W. Kennedy
                                   -------------------------------------
                                   Joseph W. Kennedy
                                   Senior Vice President, Treasurer and Chief
                                   Financial Officer
                                   (Principal Accounting and Financial Officer)

                                       20