UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

                For the quarterly period ended September 30, 2008

                                       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 registrant 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)

                                      None
             (Former name, former address and former fiscal year, if
                           changed since last report)

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 check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

     Large accelerated filer  |_|            Accelerated filer         |_|
     Non-accelerated filer    |_|            Smaller reporting company |X|

Indicate by check mark 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, 2,638,387 shares
outstanding as of November 11, 2008.

<PAGE>

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

Part I.  Financial Information                                              Page
         ---------------------                                              ----
Item 1:  Financial Statements (Unaudited)

         Consolidated Statements of Financial Condition
         at September 30, 2008 and June 30, 2008                               1

         Consolidated Statements of Operations for the Three
         Months Ended September 30, 2008 and 2007                              2

         Consolidated Statements of Changes in Stockholders'
         Equity for the Three Months Ended September 30, 2008 and 2007         3

         Consolidated Statements of Cash Flows for the
         Three Months Ended September 30, 2008 and 2007                        4

         Notes to Condensed Consolidated Financial Statements                  6

Item 2:  Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                            9

Item 3:  Quantitative and Qualitative Disclosure About Market Risk            16

Item 4T: Controls and Procedures                                              16

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

Item 1:  Legal Proceedings                                                    16
Item 1A: Risk Factors                                                         16
Item 2:  Unregistered Sales of Equity Securities and Use of Proceeds          16
Item 3:  Defaults upon Senior Securities                                      16
Item 4:  Submission of Matters to a Vote of Security Holders                  16
Item 5:  Other Information                                                    16
Item 6:  Exhibits                                                             16

SIGNATURES                                                                    17

<PAGE>

PART I--FINANCIAL INFORMATION

ITEM 1. Financial Statements

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

<TABLE>
<CAPTION>
                                                                            At                  At
                                                                       September 30,         June 30,
                                                                           2008                2008
                                                                       -------------      -------------
                                                                              (In thousands)
<S>                                                                    <C>                <C>
Cash and due from banks                                                $       3,737      $       2,532
Short-term investments                                                         2,784              2,923
                                                                       -------------      -------------
               Total cash and cash equivalents                                 6,521              5,455

Securities available for sale, at fair value                                  11,333             12,703
Securities held to maturity, at amortized cost                                 5,942              6,274
Federal Home Loan Bank stock, at cost                                          3,111              3,008
Loans, net of allowance for loan losses of $1,299,000
  at September 30, 2008 and $1,212,000 at June 30, 2008                      155,639            148,909
Premises and equipment, net                                                    4,414              4,458
Accrued interest receivable                                                      710                674
Bank-owned life insurance                                                      2,392              2,406
Other assets                                                                     885                854
                                                                       -------------      -------------

               Total assets                                            $     190,947      $     184,741
                                                                       =============      =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                               $     113,762      $     106,292
Short-term Federal Home Loan Bank advances                                     7,475             14,000
Long-term Federal Home Loan Bank advances                                     50,558             45,321
Securities sold under agreements to repurchase                                   625                552
Mortgagors' escrow accounts                                                      403                361
Accrued expenses and other liabilities                                         1,304              1,442
                                                                       -------------      -------------
               Total liabilities                                             174,127            167,968
                                                                       -------------      -------------

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                                     278                278
Additional paid-in capital                                                    11,452             11,452
Retained earnings                                                              6,823              6,819
Accumulated other comprehensive income (loss)                                      3                (19)
Unearned compensation - ESOP (55,223 and 57,271 shares unallocated
  at September 30, 2008 and June 30, 2008, respectively)                        (552)              (573)
Treasury stock, at cost (138,863 shares at September 30, 2008
  and June 30, 2008)                                                          (1,184)            (1,184)
                                                                       -------------      -------------
               Total stockholders' equity                                     16,820             16,773
                                                                       -------------      -------------

               Total liabilities and stockholders' equity              $     190,947      $     184,741
                                                                       =============      =============
</TABLE>

See notes to condensed consolidated financial statements.


                                       1
<PAGE>

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

<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                                       September 30,
                                                                 2008                   2007
                                                            --------------        --------------
                                                           (In thousands, except per share data)
<S>                                                         <C>                   <C>
Interest and dividend income:
    Loans, including fees                                   $        2,312        $        1,976
    Securities                                                         223                   286
    Short-term investments                                               5                    16
                                                            --------------        --------------
               Total interest and dividend income                    2,540                 2,278
                                                            --------------        --------------

Interest expense:
    Deposits                                                           563                   731
    Short-term Federal Home Loan Bank advances                          76                   113
    Long-term Federal Home Loan Bank advances                          528                   468
    Securities sold under agreements to repurchase                       1                     2
                                                            --------------        --------------
               Total interest expense                                1,168                 1,314
                                                            --------------        --------------

Net interest income                                                  1,372                   964
Provision for loan losses                                               87                     1
                                                            --------------        --------------
Net interest income, after provision for loan losses                 1,285                   963
                                                            --------------        --------------

Non-interest income:
    Customer service fees                                              160                   148
    (Loss) income from bank-owned life insurance                       (14)                   16
    Other                                                               12                     8
                                                            --------------        --------------
               Total non-interest income                               158                   172
                                                            --------------        --------------

Non-interest expenses:
    Salaries and employee benefits                                     785                   706
    Occupancy and equipment expenses                                   193                   210
    Data processing expenses                                            89                    83
    Professional fees                                                   70                    82
    Advertising expense                                                 61                    60
    Other general and administrative expenses                          207                   206
                                                            --------------        --------------
               Total non-interest expenses                           1,405                 1,347
                                                            --------------        --------------

Income (loss) before income taxes                                       38                  (212)

Income tax provision (benefit)                                          26                   (74)
                                                            --------------        --------------

Net income (loss)                                           $           12        $         (138)
                                                            ==============        ==============

Weighted average number of common shares outstanding:
   Basic and diluted                                             2,581,814             2,615,752

Net income (loss) per share:
   Basic and diluted                                        $         0.00        $        (0.05)
</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, 2007                       $    278   $  11,452   $  7,522     $   (179)     $    (655)   $    (808)   $ 17,610
                                                                                                                           --------

Comprehensive income (loss):
  Net loss                                                                (138)                                                (138)
  Net unrealized gain on securities
    available for sale, net of related
    tax effects of $53,000                                                               88                                      88
                                                                                                                           --------
             Total comprehensive loss                                                                                           (50)
                                                                                                                           --------

Common stock held by ESOP allocated or
  committed to be allocated (2,048 shares)                                  (5)                         21                       16

Treasury stock purchased (23,863 shares)                                                                           (167)       (167)
                                               --------   ---------   --------     --------      ---------    ---------    --------

Balance at September 30, 2007                  $    278   $  11,452   $  7,379     $    (91)     $    (634)   $    (975)   $ 17,409
                                               ========   =========   ========     ========      =========    =========    ========

Balance at June 30, 2008                       $    278   $  11,452   $  6,819     $    (19)     $    (573)   $  (1,184)   $ 16,773


Comprehensive income:
  Net income                                                                12                                                   12
  Net unrealized gain on securities
    available for sale, net of related
    tax effects of $13,000                                                               22                                      22
                                                                                                                           --------
             Total comprehensive income                                                                                          34
                                                                                                                           --------

Common stock held by ESOP allocated or
    committed to be allocated (2,048 shares)                                (8)                         21                       13
                                               --------   ---------   --------     --------      ---------    ---------    --------

Balance at September 30, 2008                  $    278   $  11,452   $  6,823     $      3      $    (552)   $  (1,184)   $ 16,820
                                               ========   =========   ========     ========      =========    =========    ========
</TABLE>

See notes to condensed consolidated financial statements.


                                       3
<PAGE>

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

                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                           Three Months Ended
                                                                                               September 30,
                                                                                          2008                2007
                                                                                       -----------        -----------
                                                                                               (In thousands)
<S>                                                                                    <C>                <C>
Cash flows from operating activities:
Net income (loss)                                                                      $        12        $      (138)
    Adjustments to reconcile net income (loss) to net cash
        used by operating activities:
            Provision for loan losses                                                           87                  1
            Accretion of securities, net                                                        (7)                (9)
            Accretion of deferred loan costs, net                                              (22)                (7)
            Depreciation and amortization expense                                               95                115
            Increase  in accrued interest receivable                                           (36)                (7)
            Loss (income) from bank-owned life insurance                                        14                (16)
            ESOP compensation expense                                                           13                 16
            Increase in accrual for supplemental retirement agreement liability                 26                  8
            Net change in other assets and liabilities                                        (208)              (118)
                                                                                       -----------        -----------
                  Net cash used by operating activities                                        (26)              (155)
                                                                                       -----------        -----------

Cash flows from investing activities:
    Activity in available-for-sale securities:
         Maturities, prepayments and calls                                                   1,409              1,924
         Purchases                                                                              --             (2,006)
    Activity in held-to-maturity securities:
         Maturities, prepayments and calls                                                     335                879
    Purchase of Federal Home Loan Bank stock                                                  (103)                --
    Loan principal originations, net                                                        (6,795)            (3,191)
    Purchase of premises and equipment                                                         (51)               (61)
                                                                                       -----------        -----------
                 Net cash used by investing activities                                      (5,205)            (2,455)
                                                                                       -----------        -----------
                                (continued)
</TABLE>

See notes to condensed consolidated financial statements.


                                       4
<PAGE>

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

                                   (unaudited)
                                   (concluded)

<TABLE>
<CAPTION>
                                                                  Three Months Ended
                                                                     September 30,
                                                                2008               2007
                                                            -----------        -----------
                                                                     (In thousands)
<S>                                                         <C>                <C>
Cash flows from financing activities:
    Net increase in deposits                                      7,470              1,809
    Net increase in securities sold under agreements
      to repurchase                                                  73                 58
    Net change in borrowings with maturities of three
      months or less                                             (9,025)              (450)
    Proceeds of Federal Home Loan Bank advances
      with maturities greater than three months                  14,000              2,000
    Repayments of Federal Home Loan Bank advances
      with maturities greater than three months                  (6,263)            (1,013)
    Treasury stock purchased                                         --               (167)
    Net change in mortgagors' escrow accounts                        42                 35
                                                            -----------        -----------
         Net cash provided by financing activities                6,297              2,272

Net change in cash and cash equivalents                           1,066               (338)

Cash and cash equivalents at beginning of year                    5,455              5,603
                                                            -----------        -----------

Cash and cash equivalents at end of year                    $     6,521        $     5,265
                                                            ===========        ===========

Supplementary information:
    Interest paid on deposit accounts                       $       565        $       730
    Interest paid on Federal Home Loan Bank advances                592                600
    Interest paid on securities sold under agreement
      to repurchase                                                   1                  2
    Income taxes paid                                                 3                  4
</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-Q
and with  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  three-month  period  ended
September  30, 2008 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 2008 Consolidated  Financial Statements presented in the
Company's  Annual Report on Form 10-KSB filed with the  Securities  and Exchange
Commission on September 29, 2008. 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 Income (Loss) Per Common Share

      Basic and diluted net income (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 allocated or committed to be released,  are considered outstanding for basic
and diluted EPS.

<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                                       September 30,
                                                                   2008              2007
                                                               -----------        -----------
<S>                                                            <C>                <C>
      Net income (loss) available to common stockholders       $    12,000        $  (138,000)
                                                               ===========        ===========

      Basic common shares:
      Weighted average shares outstanding                        2,638,387          2,681,788
      Weighted average unallocated ESOP shares                     (56,573)           (66,036)
                                                               -----------        -----------
      Basic weighted average shares outstanding                  2,581,814          2,615,752

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

      Diluted weighted average shares outstanding                2,581,814          2,615,752
                                                               ===========        ===========

      Basic and diluted EPS                                    $      0.00        $     (0.05)
                                                               ===========        ===========
</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 57.9% of the Common Stock
of the Company as of September 30, 2008.

      (5)   Impact of Recent Accounting Pronouncements

      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 and is not expected to have a material  impact on the Company's
consolidated financial statements.

      In March  2008,  the FASB issued  Statement  No.  161,  Disclosures  about
Derivative  Instruments and Hedging  Activities,  an amendment of FASB Statement
No. 133, which changes the disclosure  requirements  for derivative  instruments
and  hedging  activities.  This  Statement  is  intended  to enhance the current
disclosure  framework in Statement 133. The Statement  requires that  objectives
for using  derivative  instruments be disclosed in terms of underlying  risk and
accounting   designation.   This   Statement  is  effective  for  the  Company's
consolidated  financial  statements  issued for fiscal years and interim periods
beginning  after November 15, 2008 and is not expected to have a material impact
on the Company's consolidated financial statements.

      (6)   Fair Value Measurements

      Effective  July 1,  2008,  the  Company  adopted  Statement  of  Financial
Accounting Standards No. 157 (SFAS 157), Fair Value Measurements, which provides
a  framework  for  measuring  fair value  under  generally  accepted  accounting
principles.  At the same time, the Company also adopted SFAS No. 159 (SFAS 159),
The Fair Value Option for Financial Assets and Financial Liabilities,  including
an


                                       7
<PAGE>

amendment of FASB  Statement No. 115. SFAS 159 allows an entity the  irrevocable
option to elect fair value treatment for the initial and subsequent  measurement
for certain  financial  assets and liabilities on a contract-by  contract basis.
The  Company  did not elect fair value  treatment  for any  financial  assets or
liabilities upon adoption.

      In  October,  2008,  the FASB issued  FASB Staff  Position  No. FAS 157-3,
Determining  the Fair Value of a Financial  Asset When the Market for That Asset
Is Not Active (FSP 157-3).  FSP 157-3 clarifies the application of SFAS 157 in a
market  that  is  not  active  and  provides  an  example  to   illustrate   key
considerations  in  determining  the fair  value of a  financial  asset when the
market  for  that  financial  asset  is not  active.  FSP  157-3  was  effective
immediately  upon  issuance,  and  includes  prior  periods for which  financial
statements have not been issued.  The Company applied the guidance  contained in
FSP 157-3 in determining  fair values at September 30, 2008, and it did not have
a material impact on the consolidated financial statements.

      In accordance  with SFAS 157, the Company groups its financial  assets and
financial  liabilities  measured  at fair  value in three  levels,  based on the
markets in which the assets and  liabilities  are traded and the  reliability of
the assumptions used to determine fair value as follows:

      Level l -  Quoted  prices  in  active  markets  for  identical  assets  or
liabilities.  Level l assets and liabilities  include debt and equity securities
that are traded in an active  exchange.  Market  valuations  are  obtained  from
readily available pricing sources for market  transactions  involving  identical
assets or liabilities.

      Level 2 -  Observable  inputs  other than  Level l prices,  such as quoted
prices for similar assets or liabilities;  quoted prices in markets that are not
active; or other inputs that are observable or can be corroborated by observable
market data for  substantially  the full term of the assets or liabilities.  For
example,  Level 2 assets and liabilities may include debt securities with quoted
prices that are traded  less  frequently  than  exchange-traded  instruments  or
mortgage  loans  held for sale,  for  which the fair  value is based on what the
securitization  market is currently  offering  for  mortgage  loans with similar
characteristics.

      Level 3 -  Unobservable  inputs that are  supported by little or no market
activity  and  that  are  significant  to  the  fair  value  of  the  assets  or
liabilities.  Leve1 3 assets and liabilities include financial instruments whose
value is determined using pricing models, discounted cash flow methodologies, or
similar  techniques,  as well as instruments for which the determination of fair
value requires  significant  management  judgment or  estimation.  This category
generally  includes  certain private equity  investments,  residential  mortgage
servicing rights, and long-term derivative contracts.

      The  Company's  assets  measured  at fair value are grouped in the Level 2
category because the valuation  technique used is from quoted prices for similar
assets that are traded less frequently than exchange-traded  instruments.  There
are no liabilities measured at fair value.

      Assets  measured at fair value on a recurring  basis at September 30, 2008
are summarized below.

<TABLE>
<CAPTION>
                                                                                 Assets
                                        Level 1     Level 2      Level 3    at Fair Value
                                        -------     -------      -------    -------------
                                                        (In Thousands)
<S>                                    <C>          <C>         <C>          <C>
      Securities available for sale    $     --     $ 11,333    $      --    $    11,333
                                       -------------------------------------------------
      Total assets                     $     --     $ 11,333    $      --    $    11,333
                                       =================================================
</TABLE>

      (7)   Subsequent Events

      On October 27, 2008 the board of  directors  of the Company  approved  the
filing of an application  under the United States  Treasury's  Capital  Purchase
Program,  which  is part of the  United  States  Treasury's  Emergency  Economic
Stabilization  Act of 2008. It is anticipated  that the application will request
$4.1 million in senior  preferred  stock and will require that the Company issue
common  stock  warrants  representing  15%  of the  ultimate  amount  of  senior
preferred   stock   issued.   While   the   Company   and  the   Bank  are  both
well-capitalized,  participation  in the program  might  enhance  the  Company's
flexibility in meeting future capital needs that may arise.  The Company has not
made a final determination as to participation in the program.

      In connection with its regular  examination of the Bank, the OTS requested
and the Bank's  board of directors  agreed to on October 27, 2008 the  following
voluntary constraints on the Bank's 2009 leveraged growth strategy:

      o     the Bank will  maintain a Tier one (core)  capital ratio of at least
            7.1%;

      o     in the event the Tier one (core) capital ratio decreases below 7.5%,
            the ratio of "high-risk"  loans to Tier one (core) capital would not
            exceed  350%;  the ratio of  classified  assets  to Tier one  (core)
            capital  (plus the  allowance for loan losses) would not exceed 15%;
            and the  ratio of  nonperforming  assets to total  assets  would not
            exceed 1.5%.


                                       8
<PAGE>

      The Bank currently satisfies each of these standards.  Moreover,  the Bank
does not expect any of these standards to materially impair its execution of its
business plan. The OTS has agreed to revisit these  voluntary  constraints  from
time to time.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

      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",  and "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.

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 three months ended  September 30, 2008
continued  to improve,  as the  Company  returned  to  profitability  during the
quarter.  Our improved  financial  performance  was driven by an  expanding  net
interest  margin,  primarily due to originations of  higher-yielding  commercial
loans.  Funding for these loans was  entirely  provided by  increases  in retail
deposits, as our North Andover office achieved profitability during the quarter.
The  asset  quality  of  our  loan  portfolio   improved   during  the  quarter.
Additionally,  the Company  was never  involved  in the  business  of  sub-prime
lending  and has no  financial  exposure  to equity  investments  in Fannie Mae,
Freddie Mac or any equity  investment or corporate  debt of the recently  failed
Wall Street investment banks.

Comparison of Financial Condition at September 30, 2008 and June 30, 2008

      Total assets  increased by $6.2  million,  or 3.4%,  to $190.9  million at
September 30, 2008,  from $184.7 million at June 30, 2008. The increase in total
assets  resulted  primarily from increases in net loans  receivable and cash and
cash equivalents,  partially offset by decreases in investment  securities.  Net
loans receivable increased $6.7 million, or 4.5%, to $155.6 million at September
30, 2008, from $148.9 million at June 30, 2008, primarily due to a $2.9 million,
or 12.7%  increase in  commercial  real estate loans,  a $1.6  million,  or 1.8%
increase in residential  mortgage  loans,  a $1.3 million,  or 10.9% increase in
home equity loans and a $795,000,  or 4.1% increase in  commercial  construction
loans.  Cash and cash equivalents  increased $1.1 million,  or 19.5%,  primarily
related to normal operating fluctuations.  Total investment securities decreased
$1.7  million,  or 9.0%,  to $17.3  million at September  30,  2008,  from $19.0
million at June 30, 2008,  which  reflected the use of investment  cash flows to
fund loan demand. At September 30, 2008 investment  securities were comprised of
government- sponsored enterprises' debt obligations, mortgage-backed securities,
all of which are guaranteed by United States Government  agencies or government-
sponsored  enterprises  and FHLB stock.  Our  investment  securities  impairment
considerations generally arise from fluctuations in market interest rates. Total
earning assets  increased $5.1 million,  or 2.9%, to $180.1 million at September
30, 2008, from $175.0 million at June 30, 2008.


                                       9
<PAGE>
      Non-performing  Assets.  The  table  below  sets  forth  the  amounts  and
categories of our non-performing assets at the dates indicated. Delinquent loans
that  are 90 days or more  past  due  are  generally  considered  non-performing
assets.
                                                At September 30,    At June 30,
                                                ----------------    -----------
                                                      2008              2008
                                                ----------------    -----------
                                                     (Dollars in thousands)
Non-accrual loans:
     One-to-four family                            $      519        $      508
     Residential construction                              66                --
     Home equity loans and lines of credit                 50                47
     Multi-family and commercial real estate               --                --
     Commercial construction                              612               612
     Commercial                                            --                --
     Consumer                                              --                --
                                                   ----------        ----------
     Total non-accrual loans                            1,247             1,167

Restructured loans                                         --               219
                                                   ----------        ----------

     Total non-performing loans                         1,247             1,386

Real estate owned                                          57                --
                                                   ----------        ----------

     Total non-performing assets                   $    1,304        $    1,386
                                                   ==========        ==========

Ratios:
     Non-performing loans to total loans                 0.79%             0.92%
     Non-performing assets to total assets               0.68%             0.75%

      Nonperforming  assets  decreased  $82,000 to $1.3 million at September 30,
2008 compared to $1.4 million at June 30, 2008. These balances  represented .68%
of total assets at September 30, 2008 and .75% of total assets at June 30, 2008.
At September 30, 2008, there were two restructured  loans totaling $268,000 that
were included in the non-accrual  loan total.  The allowance for loan losses was
$1.3  million at  September  30,  2008 and $1.2  million at June 30,  2008.  The
allowance  represented  0.83% of total loans at September  30, 2008 and 0.81% of
total loans at June 30, 2008,  primarily as a result of a growth in loans with a
higher  degree of risk.  At these  levels,  the  allowance  for loan losses as a
percentage of  nonperforming  loans was 104.17% at September 30, 2008 and 87.45%
at June 30, 2008.

      Total  deposits  increased by $7.5 million,  or 7.0%, to $113.8 million at
September  30,  2008,  from $106.3  million at June 30,  2008.  The  increase in
deposits was primarily due to increases in certificates of deposit, money market
accounts  and demand  deposit  accounts,  partially  offset by  decreases in NOW
checking accounts and savings  accounts.  Certificates of deposit increased $7.3
million,  or 19.4% and money market  accounts  increased $1.5 million,  or 4.5%,
reflecting   promotional  efforts,   while  demand  deposit  accounts  increased
$270,000,  or 1.9%, offset by decreases in NOW checking accounts of $982,000, or
9.8% and decreases in savings  accounts of $660,000,  or 6.3%.  Total borrowings
from the Federal  Home Loan Bank (FHLB)  decreased  $1.3  million,  or 2.2%,  as
deposit increases were used to pay off maturing borrowings.

      Total  stockholders'  equity increased $47,000 or 0.3% to $16.8 million at
September  30,  2008,   primarily  due  to  an  increase  in  accumulated  other
comprehensive  income of  $22,000,  net income of $12,000  for the three  months
ended  September  30,  2008,  as  well as a net  $12,000  decrease  in  unearned
compensation  associated  with the Company's  employee stock ownership plan. The
accumulated  other  comprehensive  loss at June 30,  2008 of  $19,000  decreased
$22,000 to $3,000 of  accumulated  other  comprehensive  income at September 30,
2008, reflecting $5,000 in net unrealized gains on securities available for sale
at September 30, 2008. The net unrealized gains on securities available for sale
were attributable to changes in market interest rates.

Comparison  of Operating  Results for the Three Months Ended  September 30, 2008
and 2007

      General.  Net income for the three  months  ended  September  30, 2008 was
$12,000,  or $.00  per  basic  and  diluted  share,  compared  to a net  loss of
$138,000,  or $.05 per  basic and  diluted  share  for the  three  months  ended
September 30, 2007.  The increase in net income was primarily due to an increase
in net interest  income,  partially  offset by an increase in our  provision for
loan losses, an increase in non-interest  expense and a decrease in non-interest
income.

      Interest Income.  Interest income increased by $262,000, or 11.5%, to $2.5
million for the three months ended  September  30, 2008.  The increase  resulted
primarily from an increase of $336,000,  or 17.0%,  in interest  income on loans
receivable,  partially  offset by a decrease in interest and dividend  income on
securities of $63,000,  or 22.0% and a decrease in interest income on short-term
investments of $11,000, or 69.8%.

                                       10
<PAGE>

      Interest income on loans receivable increased $336,000,  or 17.0%, to $2.3
million for the three months ended September 30, 2008, from $2.0 million for the
three months ended  September  30, 2007.  The increase was due to an increase in
the average  balance of loans  receivable of $23.5 million,  or 18.2%, to $152.7
million for the three months ended  September 30, 2008,  from $129.2 million for
the three months ended  September  30, 2007,  partially  offset by a decrease in
average  loan  yields of 6 basis  points to 6.06%  for the  three  months  ended
September 30, 2008, from 6.12% for the three months ended September 30, 2007.

      Interest and dividend income on investment  securities  decreased $63,000,
or 22.0% for the three  months  ended  September  30, 2008  compared to the same
period in 2007.  The  decrease in  interest  income was due to a decrease in the
average  balance of investment  securities of $2.5 million,  or 10.7%,  to $20.9
million for the three months ended  September  30, 2008,  from $23.4 million for
the  three  months  ended  September  30,  2007  and by a  decrease  in  average
investment  yields  of 62 basis  points  to 4.28%  for the  three  months  ended
September 30, 2008, from 4.90% for the three months ended September 30, 2007.

      Interest income on short-term  investments decreased $11,000, or 69.8% for
the three months ended  September  30, 2008 compared to the same period in 2007.
The  decrease  in interest  income was due to a decrease  in average  short-term
investment  yields of 340 basis  points  to 1.88%  for the  three  months  ended
September 30, 2008, from 5.28% for the three months ended September 30, 2007 and
by a decrease in the average  balance of  short-term  investment  securities  of
$145,000,  or 11.9%,  to $1.1 million for the three months ended  September  30,
2008, from $1.2 million for the three months ended September 30, 2007.

      Interest Expense.  Interest expense decreased $146,000,  or 11.1%, to $1.2
million for the three months ended September 30, 2008, from $1.3 million for the
three months ended  September  30,  2007.  The decrease in interest  expense was
primarily   due  to  a  87  basis  point   decrease  in  the  average   cost  of
interest-bearing  liabilities to 3.06% for the three months ended  September 30,
2008, from 3.93% for the same period in 2007, partially offset by an increase in
the average balance of interest-bearing  liabilities of $19.0 million, or 14.2%,
to $152.9  million for the three months ended  September  30, 2008,  from $133.9
million for the same period in 2007.

      Interest  expense on  interest-bearing  deposits  decreased  $168,000,  or
23.0%,  to $563,000 for the three months ended September 30, 2008, from $731,000
for the same period in 2007.  The decrease was primarily due to a 99 basis point
decrease in the average cost of interest-bearing deposits to 2.42% for the three
months  ended  September  30,  2008,  from  3.41%  for the same  period in 2007,
partially  offset by an  increase  in the  average  balance of  interest-bearing
deposits of $7.2  million,  or 8.4%, to $93.0 million for the three months ended
September 30, 2008 from $85.8 million for the same period in 2007. Additionally,
interest expense on FHLB short-term and long-term advances increased $23,000, or
3.9%, to $604,000 for the three months ended  September 30, 2008,  from $581,000
for the same period in 2007.  The increase was  primarily  due to an increase in
the average balance of FHLB short-term and long-term  advances of $12.0 million,
or 25.3%,  to $59.2  million for the three months ended  September 30, 2008 from
$47.3 million for the same period in 2007,  partially offset by a 84 basis point
decrease in the average cost of FHLB short-term and long-term  advances to 4.08%
for the three months ended September 30, 2008, from 4.92% for the same period in
2007.

      Net Interest Income. Net interest income increased $408,000,  or 42.4%, to
$1.4 million for the three months ended  September  30, 2008,  from $964,000 for
the same period in 2007.  The increase in net interest  income was primarily the
result of a 63 basis  point  increase  in net  interest  margin to 3.14% for the
three months ended September 30, 2008, from 2.51% for the same period ended 2007
and by the $1.8  million,  or 9.2%,  increase  in net  average  interest-earning
assets to $21.8  million for the three months  ended  September  30, 2008,  from
$19.9 million for the same period in 2007.

      Provision  for Loan Losses.  The  provision  for loan losses for the three
months ended  September  30, 2008 was $87,000,  compared to $1,000 for the three
months ended  September  30, 2007,  reflecting  the  increased  risk in the loan
portfolio  resulting  from the increase in  commercial  loans as a percentage of
total loans.  Loan  charge-offs  were $1,000 and equaled loan recoveries for the
three months ended  September  30, 2008,  as compared to net loan  recoveries of
$31,000 for the same period in 2007.

      Non-interest  Income.  Non-interest  income decreased $14,000, or 8.2%, to
$158,000 for the three months ended  September  30, 2008,  from $172,000 for the
same period in 2007. The decrease in non-interest income was primarily due to an
adjustment of the cash  surrender  value of variable  bank-owned  life insurance
(BOLI),  partially  offset by increases in customer  service fees. For the three
months  ended  September  30, 2008,  the net expense  from BOLI was $14,000,  as
compared to $16,000 of income for the same period in 2007. Customer service fees
increased $12,000,  or 7.6% to $160,000 for the three months ended September 30,
2008,  from  $148,000 for the same period in 2007,  primarily due to ATM service
charges.

      Non-interest Expense.  Non-interest expense increased $58,000, or 4.3%, to
$1.4 million for the three months ended  September  30, 2008,  from $1.3 million
for the same period in 2007. The increase in non-interest  expense was primarily
due to an  increase  in  salaries  and  benefits  and data  processing  expense,
partially  offset  by  a  decrease  in  occupancy  and  equipment   expense  and
professional  fees.  Salary and benefits expense  increased  $79,000,  or 11.2%,
primarily  due to  $32,000  of costs  associated  with  supplemental  retirement
agreements,  which were  restructured in June 2008,  $19,000 of costs associated
with one  additional  employee  and a $10,000  increase in costs  related to the
Company's  incentive plan.  Occupancy  expense  decreased  $17,000,  or 8.5%, to
$193,000 for the three months ended  September  30, 2008,  from $210,000 for the
same period in 2007,  primarily  due to a reduction  of  equipment  depreciation
related to the Company's main office.  Data processing expense increased $6,000,
or 7.5%, to $89,000 for the three months ended  September 30, 2008, from $83,000
for the same period in 2007.  Professional fees decreased $12,000,  or 15.1%, to
$70,000 for the three  months  ended  September  30,  2008,  primarily  due to a
decrease in consulting  fees.  Advertising  expense  increased $1,000 or 3.0% to
$61,000  for the three  months  ended  September  30,  2008.  Other  general and
administrative  expenses  increased  $1,000,  or 0.7%, to $207,000 for the three
months ended September 30, 2008. Management is expecting to


                                       11
<PAGE>

incur a significant increase in deposit insurance costs, which is anticipated to
be  effective  January 1, 2009,  as a result of the  Federal  Deposit  Insurance
Company's  (FDIC)  efforts to replenish its deposit  insurance  fund,  which was
depleted due to losses from several large troubled  financial  institutions  and
not related to our Company's activities.

      Income  Taxes.  The income  before  income  taxes of $38,000 for the three
months ended  September  30, 2008 resulted in an income tax provision of $26,000
for the three months ended  September  30, 2008,  as compared to the loss before
income  taxes of $212,000 and income tax benefit of $74,000 for the three months
ended  September 30, 2007. The $26,000  provision for income taxes for the three
months ended September 30, 2008 included  $13,000 in additional state income tax
provision,  reflecting  the one-time  impact of a  Massachusetts  bill,  "An Act
Relative to Tax Fairness and  Business  Competitiveness",  which was signed into
law on July 3,  2008.  The  effective  tax  rates  for the  three  months  ended
September 30, 2008 and 2007 were 68.2% and 34.9%, respectively.


                                       12
<PAGE>

      Average Balance Sheet. 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.

<TABLE>
<CAPTION>
                                                                                 Three Months Ended September 30,
                                            At September 30,    -------------------------------------------------------------------
                                                  2008                        2008                              2007
                                        ----------------------  -------------------------------   ---------------------------------
                                                      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                                     $156,938      6.01%    $152,719    $  2,312      6.06%    $129,240    $  1,976      6.12%
Investment securities (1)                   20,386      4.15%      20,855         223      4.28%      23,355         286      4.90%
Short-term investments                       2,784      1.09%       1,066           5      1.88%       1,211          16      5.28%
                                          --------               --------    --------               --------    --------
     Total interest-earning assets         180,108      5.72%     174,640       2,540      5.82%     153,806       2,278      5.92%
Non-interest-earning assets                 10,839                 10,227          --                  9,797          --
                                          --------               --------    --------               --------    --------
Total assets                              $190,947               $184,867    $  2,540               $163,603    $  2,278
                                          ========               ========    ========               ========    ========

Interest-bearing liabilities:
Savings deposits                          $  9,838      0.12%    $ 10,200           3      0.12%    $ 11,500           9      0.31%
NOW accounts                                 9,075      0.14%       9,024           3      0.13%       9,421          38      1.61%
Money market accounts                       35,042      2.52%      34,786         211      2.43%      24,229         229      3.78%
Certificates of deposit                     45,037      3.50%      38,972         346      3.55%      40,611         455      4.48%
                                          --------               --------    --------               --------    --------
Total interest-bearing deposits             98,992      2.51%      92,982         563      2.42%      85,761         731      3.41%
FHLB advances                               58,033      4.02%      59,246         604      4.08%      47,267         581      4.92%
Repurchase agreements                          625      0.50%         656           1      0.61%         853           2      0.94%
                                          --------               --------    --------               --------    --------
    Total interest-bearing liabilities     157,650      3.06%     152,884       1,168      3.06%     133,881       1,314      3.93%
Non-interest-bearing liabilities:
Demand deposits                             14,770                 13,622                             11,282
Other non-interest-bearing liabilities       1,707                  1,366                                724
                                          --------               --------                           --------
Total liabilities                          174,127                167,872                            145,887
Stockholders' equity                        16,820                 16,995                             17,716
                                          --------               --------                           --------
     Total liabilities and equity         $190,947               $184,867                           $163,603
                                          ========               ========                           ========

Net interest income                                                          $  1,372                           $    964
                                                                             ========                           ========
Net interest rate spread (2)                            2.66%                              2.76%                              1.99%
Net interest-earning assets (3)           $ 22,458               $ 21,756                           $ 19,925
                                          ========               ========                           ========
Net interest margin (4)                                                                    3.14%                              2.51%
Average of interest-earning
     assets to interest-bearing
      liabilitities                                   114.25%                            114.23%                            114.88%
</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.


                                       13
<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.

<TABLE>
<CAPTION>
                                                Three Months Ended September 30,
                                                           2008 vs. 2007
                                          -------------------------------------------
                                           Increase (Decrease) Due to
                                          ---------------------------
                                            Volume            Rate             Net
                                          -----------     -----------     -----------
                                                        (In thousands)
<S>                                       <C>             <C>             <C>
Interest-earning assets:
Loans                                     $       359     $       (23)    $       336
Investment securities                             (31)            (32)            (63)
Short-term investments                             (2)             (9)            (11)
                                          -----------     -----------     -----------

     Total interest-earning assets                326             (64)            262
                                          -----------     -----------     -----------

Interest-bearing liabilities:
Savings deposits                                   (1)             (5)             (6)
NOW accounts                                       (2)            (33)            (35)
Money market accounts                             100            (118)            (18)
Certificates of deposit                           (18)            (91)           (109)
                                          -----------     -----------     -----------
Total interest-bearing deposits                    79            (247)           (168)
FHLB advances                                     147            (124)             23
Repurchase agreements                              --              (1)             (1)
                                          -----------     -----------     -----------
    Total interest-bearing liabilities            226            (372)           (146)
                                          -----------     -----------     -----------

Change in net interest income             $       100     $       308     $       408
                                          ===========     ===========     ===========
</TABLE>


                                       14
<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  September  30,  2008,  cash and cash
equivalents totaled $6.5 million.  Securities classified as  available-for-sale,
which  provide  additional  sources  of  liquidity,  totaled  $11.3  million  at
September 30, 2008.  Our policies  also allow for access to the wholesale  funds
market for up to 50.0% of total assets, or $95.5 million. At September 30, 2008,
we had $58.0 million in FHLB advances  outstanding,  allowing the Company access
to an additional $37.5 million in wholesale funds based on policy guidelines.

      At  September  30,  2008,   we  had  $4.2  million  in  loan   commitments
outstanding. In addition to commitments to originate loans, we had $19.0 million
in unadvanced funds to borrowers. Certificates of deposit due within one year of
September 30, 2008 totaled $12.9 million,  or 11.3% 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  September 30, 2008. 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 three months ended  September  30, 2008, we
originated $15.3 million of loans.

      Financing activities consist primarily of activity in deposit accounts and
FHLB borrowings and advances. We experienced a net increase in total deposits of
$7.5 million for the three months ended  September  30, 2008.  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  decrease of $1.3 million
during the three months ended  September 30, 2008.  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 September  30,  2008,  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  three  months  ended  September  30,  2008,  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.


                                       15
<PAGE>

Item 3. Quantitative and Qualitative Disclosure About Market Risk

      Not applicable

Item 4T. 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) that they are alerted in a timely manner about 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 1A. Risk Factors

            Not applicable

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

           (a)    Not applicable

           (b)    Not applicable

           (c)    The Company did not repurchase any shares during the quarter
                  ended September 30, 2008.

Item 3. Defaults Upon Senior Securities

            Not applicable

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

            Not applicable

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 10Q.

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


                                       16
<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: November 11, 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)


                                       17