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 March 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 by check whether the registrant is an accelerated  filer (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,  2,699,250 shares
outstanding as of May 12, 2007

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
         as of March 31, 2007 and June 30, 2006                               1

         Consolidated Statements of Operations for the Three and
         Nine Months Ended March 31, 2007 and 2006                            2

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

         Consolidated Statements of Cash Flows for the
         Nine Months Ended March 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                                                    18
Item 6: Exhibits                                                             18

SIGNATURES                                                                   19

<page>

PART I--FINANCIAL INFORMATION

ITEM 1. Financial Statements

<table>
<caption>

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

                                                                             At             At
                                                                          March 31,      June 30,
                                                                            2007           2006
                                                                        -----------    -----------
                                                                       (In thousands) (In thousands)

                                                                     <c>            <c>
Cash and due from banks                                                 $     3,756    $     3,257
Short-term investments                                                          799            720
                                                                        -----------    -----------
               Total cash and cash equivalents                                4,555          3,977

Securities available for sale, at fair value                                 13,334         15,465
Securities held to maturity, at amortized cost                                8,571          9,823
Federal Home Loan Bank stock, at cost                                         2,905          2,905
Loans, net of allowance for loan losses of $1,113,000
    at  March 31, 2007 and $1,016,000 at June 30, 2006                      127,597        128,778
Premises and equipment                                                        4,909          5,230
Accrued interest receivable                                                     663            674
Bank-owned life insurance                                                     1,391          1,211
Other assets                                                                    926            852
                                                                        -----------    -----------

               Total assets                                             $   164,851    $   168,915
                                                                        ===========    ===========

                                LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                                $    95,452    $    96,571
Short-term borrowings                                                        14,100         22,300
Long-term Federal Home Loan Bank advances                                    35,885         28,921
Securities sold under agreements to repurchase                                  848            762
Mortgagors' escrow accounts                                                     331            289
Accrued expenses and other liabilities                                          352          1,413
                                                                        -----------    -----------
               Total liabilities                                            146,968        150,256
                                                                        -----------    -----------

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, 2,699,250 and
  2,777,250 shares outstanding at March 31, 2007
  and June 30, 2006, respectively                                               278            278
Additional paid-in capital                                                   11,452         11,452
Retained earnings                                                             7,676          7,996
Accumulated other comprehensive loss                                            (97)          (330)
Treasury stock, at cost (78,000 shares at March 31, 2007)                      (751)            --
Unearned compensation - ESOP                                                   (675)          (737)
                                                                        -----------    -----------
               Total stockholders' equity                                    17,883         18,659
                                                                        -----------    -----------

               Total liabilities and stockholders' equity               $   164,851    $   168,915
                                                                        ===========    ===========

See notes to condensed consolidated financial statements.

                                                 1
</table>
<page>
<table>
<caption>

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

                                                              Three Months Ended                   Nine Months Ended
                                                           March 31,         March 31,         March 31,         March 31,
                                                             2007              2006              2007              2006
                                                        --------------    --------------    --------------    --------------
                                                       (In thousands, except share data)   (In thousands, except share data)

                                                                <c>               <c>               <c>             <c>
Interest and dividend income:
    Loans, including fees                               $        1,879    $        1,676    $        5,684    $        4,904
    Investment interest and dividends                              308               355               985             1,035
    Short-term investments                                          15                40                37               100
                                                        --------------    --------------    --------------    --------------
               Total interest and dividend income                2,202             2,071             6,706             6,039
                                                        --------------    --------------    --------------    --------------

Interest expense:
   Deposits                                                        649               498             1,963             1,357
   Short-term borrowings                                           202               277               695               828
   Long-term Federal Home Loan Bank advances                       402               281             1,149               713
   Securities sold under agreements to repurchase                    2                 2                 6                 5
                                                        --------------    --------------    --------------    --------------
               Total interest expense                            1,255             1,058             3,813             2,903
                                                        --------------    --------------    --------------    --------------

Net interest income                                                947             1,013             2,893             3,136
Provision for loan losses                                            4                --               109                58
                                                        --------------    --------------    --------------    --------------
Net interest income, after provision for loan losses               943             1,013             2,784             3,078
                                                        --------------    --------------    --------------    --------------

Non-interest income:
    Customer service fees                                          141               115               436               297
    Income from bank-owned life insurance                           18                11                45                34
    Other                                                            9                 8                24                19
                                                        --------------    --------------    --------------    --------------
               Total non-interest income                           168               134               505               350
                                                        --------------    --------------    --------------    --------------

Non-interest expenses:
    Salaries and employee benefits                                 683               740             2,011             2,019
    Occupancy and equipment expenses                               215               235               623               577
    Data processing expenses                                        76                36               224               160
    Professional fees                                               66                64               203               237
    Advertising expense                                             92                35               151               136
    Other general and administrative expenses                      179               142               555               444
                                                        --------------    --------------    --------------    --------------
               Total non-interest expenses                       1,311             1,252             3,767             3,573
                                                        --------------    --------------    --------------    --------------

Loss before income taxes                                          (200)             (105)             (478)             (145)

Income tax benefit                                                 (71)              (39)             (164)              (56)
                                                        --------------    --------------    --------------    --------------

Net loss                                                $         (129)   $          (66)   $         (314)   $          (89)
                                                        ==============    ==============    ==============    ==============

Net loss per share:
Basic and diluted                                       $        (0.05)   $        (0.02)   $        (0.12)   $        (0.03)

Basic and diluted weighted average shares outstanding        2,630,397         2,700,077         2,644,631         2,698,395

See notes to condensed consolidated financial statements.


                                                             2
</table>
<page>
<table>
<caption>

                                                      GEORGETOWN BANCORP, INC.
                                     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                    -------------------------------------------------------------
                                                  (In thousands, except share data)
                                                             (unaudited)

                                                                        Accumulated
                                                 Additional                Other                              Unearned
                                       Common     Paid-in    Retained  Comprehensive     Treasury Stock     Compensation
                                       Stock      Capital    Earnings      Loss        Shares     Amount        ESOP        Total
                                     ---------  ----------  ----------  ----------   ----------  ---------   ----------   ---------

                                 <c>        <c>         <c>         <c>           <c>        <c>         <c>          <c>
Balance at June 30, 2005             $     278  $   11,452  $    8,383  $      (17)          --  $      --   $     (811)  $  19,285
                                                                                                                          ---------

Comprehensive income (loss):
  Net loss                                                         (89)                                                         (89)
  Change in unrealized loss on
      securities available for
      sale, net of  tax effects                                               (292)                                            (292)
                                                                                                                          ---------
           Total comprehensive
             income (loss)                                                                                                     (381)
                                                                                                                          ---------

Common stock held by ESOP committed
  to be allocated (23,900 shares)           --          --          (5)         --                                   50          45
                                     ---------  ----------  ----------  ----------   ----------  ---------   ----------   ---------

Balance at March 31, 2006            $     278  $   11,452  $    8,289  $     (309)          --  $      --   $     (761)     18,949
                                     =========  ==========  ==========  ==========   ==========  =========   ==========   =========

Balance at June 30, 2006             $     278  $   11,452  $    7,996  $     (330)          --  $      --   $     (737)  $  18,659

Comprehensive income (loss):
  Net loss                                                        (314)                                                        (314)
  Change in unrealized loss on
      securities available for
      sale, net of  tax effects                                                233                                              233
                                                                                                                          ---------
           Total comprehensive
             income (loss)                                                                                                      (81)
                                                                                                                          ---------

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

Common stock held by ESOP committed
   to be allocated (2,048 shares)                                   (6)                                              62          56
                                     ---------  ----------  ----------  ----------   ----------  ---------   ----------   ---------

Balance at March 31, 2007            $     278  $   11,452  $    7,676  $      (97)      78,000  $    (751)  $     (675)  $  17,883
                                     =========  ==========  ==========  ==========   ==========  =========   ==========   =========

See notes to condensed consolidated financial statements.

                                                                 3
</table>
<page>
<table>
<caption>

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

                                           (unaudited)
                                                                         Nine Months Ended
                                                                      March 31,       March 31,
                                                                        2007            2006
                                                                    ------------    ------------
                                                                   (In thousands)  (In thousands)

                                                                           <c>             <c>
Cash flows from operating activities:
Net loss                                                            $       (314)   $        (89)
    Adjustments to reconcile net loss to net cash
        used by operating activities:
            Provision for loan losses                                        109              58
            Accretion  of securities, net                                    (35)            (35)
            Accretion of deferred loan costs                                 (21)            (26)
            Depreciation and amortization expense                            345             318
            Decrease  in accrued interest receivable                          11               2
            Income from bank-owned life insurance                            (45)            (34)
            ESOP compensation expense                                         56              45
            Other, net                                                    (1,409)           (319)
                                                                    ------------    ------------
                  Net cash used by operating activities                   (1,303)            (80)
                                                                    ------------    ------------

Cash flows from investing activities:
    Activity in available-for-sale securities:
         Maturities, prepayments and calls                                 3,024           3,214
         Purchases                                                          (499)         (5,888)
    Activity in held-to-maturity securities:
         Maturities, prepayments and calls                                 1,265           2,169
    Purchase of Federal Home Loan Bank stock                                  --            (258)
    Loan principal repayments (originations)                               1,093          (4,794)
    Purchase of premises and equipment                                       (24)           (750)
                                                                    ------------    ------------
                 Net cash provided (used) by investing activities          4,859          (6,307)
                                                                    ------------    ------------

                                            Continued

See notes to condensed consolidated financial statements.


                                               4
</table>
<page>
<table>
<caption>

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

                                           (unaudited)
                                           (continued)
                                                                         Nine Months Ended
                                                                     March 31,       March 31,
                                                                        2007            2006
                                                                    ------------    ------------
                                                                   (In thousands)  (In thousands)

                                                                           <c>             <c>
Cash flows from financing activities:
    Net (decrease) increase in deposits                                   (1,119)          3,318
    Net increase (decrease) in securities sold under agreements
         to repurchase                                                        86            (275)
    Net change in borrowings with maturities of  three
        months or less                                                      (850)         (5,925)
    Proceeds of Federal Home Loan Bank advances
        with maturities greater than three months                         18,000          39,400
    Repayments of Federal Home Loan Bank advances
        with maturities greater than three months                        (18,386)        (28,335)
    Treasury stock purchased                                                (751)             --
    Net change in mortgagors' escrow accounts                                 42              49
                                                                    ------------    ------------
              Net cash (used) provided by financing activities            (2,978)          8,232
                                                                    ------------    ------------

Net change in cash and cash equivalents                                      578           1,845

Cash and cash equivalents at beginning of year                             3,977           5,078
                                                                    ------------    ------------

Cash and cash equivalents at end of year                            $      4,555    $      6,923
                                                                    ============    ============

Supplementary information:
Interest paid on deposit accounts                                   $      1,955    $      1,345
Interest paid on Federal Home Loan Bank advances                           1,831           1,490
Interest paid on securities sold under agreement
to repurchase                                                                  6               5
Income taxes paid, net of refunds                                           (185)            (85)


See notes to condensed consolidated financial statements.


                                               5
</table>
<page>

                            GEORGETOWN BANCORP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


         (1)      Basis of Presentation

         The  accompanying  unaudited  financial  statements  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 three and  nine-month  period  ended  March 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 2006
Consolidated  Financial  Statements  presented in the Company's Annual Report on
Form 10-KSB filed at the  Securities  and Exchange  Commission  on September 28,
2006. 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,  risk  weighting  (if  applicable)  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  regardless  of the extent of our analysis of
customer  performance,  portfolio trends or risk management  processes,  certain
inherent but undetected  losses are probable within our loan portfolio.  This is
due to several  factors,  including  inherent  delays in  obtaining  information
regarding a customer's  financial  condition  or changes in a customer's  unique
business  conditions,  the  judgmental  nature of individual  loan  evaluations,
collateral assessments and the interpretation of economic trends.  Volatility of
economic  or  customer-specific  conditions  affecting  the  identification  and
estimation of losses from larger non-homogeneous  credits and the sensitivity of
assumptions  utilized to establish  allowances for homogeneous  groups of loans,
loan portfolio  concentrations,  and other subjective  considerations  are among
other factors.  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.

         (3)      Net (Loss) Income Per Common Share

         Basic and diluted net (loss)  income 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.

                                       6
<page>
<table>
<caption>

                                             Three Months Ended  Three Months Ended   Nine Months Ended   Nine Months Ended
                                               March 31, 2007      March 31, 2006      March 31, 2007      March 31, 2006
                                               --------------      --------------      --------------      --------------

                                                   <c>                 <c>                 <c>                 <c>
Net loss attributable to common stockholders        ($129,000)           ($66,000)          ($314,000)           ($89,000)
                                               ==============      ==============      ==============      ==============

Basic potential common shares:
    Weighted average shares outstanding             2,699,250           2,777,250           2,723,522           2,777,250
    Weighted average unallocated ESOP shares          (68,853)            (77,173)            (78,891)            (78,855)
                                               --------------      --------------      --------------      --------------
 Basic weighted average shares outstanding          2,630,397           2,700,077           2,644,631           2,698,395

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

Dilutive weighted average shares outstanding        2,630,397           2,700,077           2,644,631           2,698,395
                                               ==============      ==============      ==============      ==============


Basic and diluted EPS                                  ($0.05)             ($0.02)             ($0.12)             ($0.03)
                                               ==============      ==============      ==============      ==============
</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 56.6% of the Common Stock
of the Company as of March 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 fiscal years  beginning
after  December  15, 2006 and is not  expected to 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 January 1, 2008, with earlier adoption
permitted for fiscal 2007, 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 November
2006, the Emerging Issues Task Force reached a tentative conclusion on Issue No.
06-10,  "Accounting for Deferred Compensation and Postretirement Benefit Aspects
of Collateral Assignment Split-Dollar Life Insurance Arrangements." As a result,
effective for fiscal years  beginning  after December 15, 2007, the Company will
be required to  recognize a  liability  for future  benefits,  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.  Management  is in the process of  evaluating  the impact of Issue No.
06-10 on the Company's consolidated financial statements.

         On February 15, 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's  2008 fiscal year,  with early
adoption permitted for the Company's 2007 fiscal year, provided that the Company
also  adopts  Statement  No.  157  for  fiscal  2007.  Management  is  currently
evaluating the potential  impacts of adopting this Statement on its consolidated
financial statements.

                                       7
<page>

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.

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.

Comparison of Financial Condition at March 31, 2007 and June 30, 2006

         Total assets  decreased by $4.1 million,  or 2.4%, to $164.9 million at
March 31,  2007,  from $168.9  million at June 30,  2006.  The decrease in total
assets resulted primarily from decreases in investment  securities and net loans
receivable.  Investment securities available for sale decreased $2.1 million, or
13.8%,  to $13.3 million at March 31, 2007, from $15.5 million at June 30, 2006.
Investment securities held to maturity decreased $1.3 million, or 12.7%, to $8.6
million at March 31, 2007, from $9.8 million at June 30, 2006.  Decreases in the
investment  portfolio  reflected the use of  investment  cash flows to pay off a
$2.0 million maturing brokered certificate of deposit and fund the repurchase of
Company shares. Net loans receivable  decreased $1.2 million, or 0.9%, to $127.6
million at March 31, 2007,  from $128.8 million at June 30, 2006,  primarily due
to a $5.7 million or 59.6% decrease in construction loans, which completed their
construction  phase and were paid off,  partially  offset by a $2.6  million  or
21.7% increase in commercial real estate loans.  Total earning assets  decreased
$4.4 million,  or 2.8% to $154.3 million at March 31, 2007,  from $158.7 million
at June 30, 2006.

         Total deposits decreased by $1.1 million,  or 1.2%, to $95.5 million at
March 31, 2007,  from $96.6  million at June 30, 2006.  The decrease in deposits
was  primarily  due to the pay off of a $2.0  million  brokered  certificate  of
deposit,  as increases in retail  certificates  of deposit and NOW accounts were
offset by decreases in money market, savings and demand deposit accounts. Retail
certificates  of  deposit  increased  $1.4  million,  or 3.5%  and NOW  checking
accounts  increased  $2.7  million,  or 35.2%,  offset by  decreases  in savings
accounts of $2.5 million,  or 16.5%,  decreases in money market deposit accounts
of $831,000,  or 3.8% and decreases in demand deposit  accounts of $614,000,  or
5.4%.  Total  borrowings  from the Federal Home Loan Bank (FHLB)  decreased $1.2
million, or 2.4%.

         Total stockholders'  equity decreased $776,000 or 4.2% to $17.9 million
at March 31, 2007,  from $18.7  million at June 30, 2006,  primarily  due to the
repurchase of 78,000 shares of the Company's  common stock at a cost of $751,000
and an  operating  loss of $314,000  for the nine months  ended March 31,  2007.
Accumulated other  comprehensive loss decreased $233,000 to $97,000 at March 31,
2007,  from  $330,000 at June 30, 2006,  reflecting  $152,000 in net  unrealized
losses on securities  available for sale at March 31, 2007.  The net  unrealized
losses 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 March 31, 2007 and
2006

         General.  The net loss for the three  months  ended  March 31, 2007 was
$129,000,  or $.05  per  basic  and  diluted  share,  compared  to a net loss of
$66,000,  or $.02 per basic and diluted  share for the three  months ended March
31, 2006.  The increase in the net loss was  primarily  due to a decrease in net
interest income and an increase in non-interest expense,  partially offset by an
increase in non-interest income.

                                       8
<page>

         Interest  Income.  Interest income  increased by $131,000,  or 6.3%, to
$2.2 million for the three  months  ended March 31, 2007,  from $2.1 million for
the three months ended March 31, 2006. The increase  resulted  primarily from an
increase  of  $203,000,  or  12.1%,  in  interest  income  on loans  receivable,
partially  offset by a decrease of $47,000,  or 13.2%,  in interest and dividend
income on securities and a decrease of $25,000,  or 62.8% in interest  income on
short-term investments.  Additionally, the increase in interest income reflected
a 36 basis point  increase in the average  yield on  interest-earning  assets to
5.71% for the three  months ended March 31, 2007 from 5.35% for the three months
ended March 31, 2006,  partially offset by a $700,000,  or 0.5%, decrease in the
average balance of interest-earning  assets for the three months ended March 31,
2007 to $154.2  million from $154.9 million for the three months ended March 31,
2006.

         Interest income on loans receivable  increased  $203,000,  or 12.1%, to
$1.9 million for the three  months  ended March 31, 2007,  from $1.7 million for
the three months  ended March 31, 2006.  The increase was due to the increase in
the average  balance of loans  receivable  of $8.3  million,  or 7.0%, to $127.5
million for the three  months  ended March 31, 2007 from $119.2  million for the
three months ended March 31, 2006. Average loan yields increased 27 basis points
to 5.89% for the three  months  ended  March 31,  2007 from  5.62% for the three
months ended March 31, 2006.

         Interest  and  dividend  income  on  investment   securities  decreased
$47,000,  or 13.2%,  to $308,000 for the three months ended March 31, 2007, from
$355,000  for the three  months  ended March 31,  2006.  The  decrease in income
reflected  management's  use of  investment  security cash flows to fund deposit
outflow and loan demand. The average balance of investment  securities decreased
$6.4 million,  or 20.0%, to $25.5 million from $31.9 million for the same period
in 2006. The average yield on investment securities increased 38 basis points to
4.83% for the three months ended March 31, 2007, from 4.45% for the three months
ended March 31, 2006.

         Interest  Expense.  Interest expense increased  $197,000,  or 18.6%, to
$1.3 million for the three  months  ended March 31, 2007,  from $1.1 million for
the three  months ended March 31,  2006.  The  increase in interest  expense was
primarily due to a 59 basis point  increase in the average cost to 3.75% for the
three months ended March 31, 2007,  from 3.15% for the same period in 2006.  The
average balance of interest-bearing  liabilities decreased $233,000, or 0.2%, to
$133.9  million for the three months ended March 31, 2007,  from $134.1  million
for the same period in 2006.

         Interest expense on interest-bearing  deposits increased  $151,000,  or
30.3%,  to $649,000 for the three months ended March 31, 2007, from $498,000 for
the same period in 2006.  The  increase  was  primarily  due to a 67 basis point
increase in the average cost of interest-bearing deposits to 3.13% for the three
months ended March 31, 2007, from 2.46% for the same period in 2006. The average
balance of  interest-bearing  deposits  increased  $1.9  million or 2.4% for the
three months ended March 31, 2007,  to $82.9  million from $81.0 million for the
same  period  in  2006.  Additionally,   interest  expense  on  FHLB  short-term
borrowings and long-term advances increased $45,000, or 8.1%, primarily due to a
57 basis point  increase in the average cost of the  borrowings  and advances to
4.82% for the three months ended March 31, 2007,  from 4.25% for the same period
in 2006,  offset by a $2.4  million or 4.5%  decrease in the average  balance of
borrowings  and advances  for the three  months  ended March 31, 2007,  to $50.2
million, from $52.6 million for the same period in 2006.

         Net Interest Income. Net interest income decreased $66,000, or 6.6%, to
$947,000 for the three  months  ended March 31, 2007,  from $1.0 million for the
same period in 2006. The decrease in net interest  income was the result of a 16
basis point decrease in net interest  margin to 2.46% for the three months ended
March  31,  2007,  from  2.62%  for the same  period  ended  2006.  Net  average
interest-earning assets decreased by $467,000, or 2.3%, to $20.3 million for the
three  months ended March 31,  2007,  from $20.8  million for the same period in
2006.

         Provision for Loan Losses.  The provision for loan losses for the three
months ended March 31, 2007 was $4,000,  compared to no provision  for the three
months ended March 31, 2006.  The  allowance for loan losses was $1.1 million or
0.87% of net loans  outstanding  at March 31, 2007, as compared to $947,000,  or
0.79% of net loans outstanding at March 31, 2006.

         Non-interest  Income.  Non-interest income increased $34,000, or 25.0%,
to $168,000 for the three months  ended March 31,  2007,  from  $134,000 for the
same period in 2006. The increase in non-interest income was primarily due to an
increase in overdraft  fees  generated  from our  overdraft  privilege  program,
partially  offset by a decrease in income from our financial  services  program.
Overdraft  fees  increased  $65,000,  or 240.5% to $92,000 for the three  months
ended March 31, 2007,  from $27,000 for the same period ended 2006.  Income from
our  financial  services  program  decreased  $41,000 or 98.6% to $1,000 for the
three months ended March 31, 2007,  from $42,000 for the same period ended 2006,
reflecting the departure of the operating manager of the program.  Management is
currently reviewing its options for the program.

                                       9
<page>

         Non-interest Expense.  Non-interest expense increased $59,000, or 4.6%,
to $1.3  million for the three  months  ended March 31,  2007.  The  increase in
non-interest  expense was primarily due to an increase in  advertising  expense,
reflecting  implementation  of a new marketing plan in 2007.  Salary and benefit
expense decreased $57,000,  or 7.8%,  primarily due to a reduction in directors'
fees of  $30,000,  or  50.4%,  resulting  from a  restructuring  of the board of
directors and a reduction of $22,000,  or 100.0%, in commission  expense related
to the Company's  financial  services program.  Occupancy and equipment expenses
decreased $21,000, or 8.8%, primarily due to a reduction of $10,000, or 97.4% in
custodial services,  resulting from a personnel restructuring and a reduction in
depreciation  expense of $4,000,  or 3.2%.  Data  processing  expense  increased
$39,000 or 107.6% to $76,000, primarily due to one-time credits accounted for in
the three  months  ended  March  31,  2006,  totaling  $36,000,  related  to the
Company's core processing  conversion in June 2005.  Professional fees increased
$2,000 or 3.0% to  $66,000  for the three  months  ended  March 31,  2007,  from
$64,000 for the three months ended March 31, 2006. Advertising expense increased
$57,000 or 162.5% to $92,000 for the three  months  ended March 31,  2007,  from
$35,000 for the three months ended March 31, 2006, reflecting  implementation of
a new  marketing  plan  in  2007.  Other  general  and  administrative  expenses
increased  $37,000,  or 26.8%,  to $179,000 for the three months ended March 31,
2007, from $142,000 from the three months ended March 31, 2006, primarily due to
$16,000 in expense associated with our overdraft privilege program and a $16,000
increase in expense on problem loans, reflecting $8,000 of expense for the three
months ended March 31, 2007,  compared to the  recovery of  previously  expensed
items totaling $8,000 for the three months ended March 31, 2006.

         Income Taxes. The loss before income taxes of $200,000 and $105,000 for
the three  months  ended March 31, 2007 and 2006,  respectively,  resulted in an
income tax benefit of $71,000 and $39,000 for the three  months  ended March 31,
2007 and 2006, respectively.  The effective tax rates for the three months ended
March 31, 2007 and 2006 were 35.4% and 36.7%, 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 March 31,
                                            At March 31,      --------------------------------------------------------------------
                                                2007                         2007                               2006
                                       ---------------------  ---------------------------------  ---------------------------------
                                                    Weighted    Average                            Average
                                       Outstanding  Average   Outstanding               Yield/   Outstanding               Yield/
                                         Balance      Rate      Balance     Interest     Rate      Balance     Interest     Rate
                                       -----------  --------   ----------  ----------  --------   ----------  ----------  --------

                                            <c>      <c>         <c>            <c>     <c>         <c>            <c>     <c>
                                                                         (Dollars in thousands)

Interest-earning assets:
  Loans                                 $  128,710      5.95%  $  127,540  $    1,879      5.89%  $  119,232  $    1,676      5.62%
  Investment securities (1)                 24,810      4.67%      25,493         308      4.83%      31,883         355      4.45%
  Interest-earning deposits                    799      5.03%       1,172          15      5.12%       3,790          40      4.22%
                                         ----------            ----------  ----------             ----------  ----------
     Total interest-earning assets         154,319      5.74%     154,205       2,202      5.71%     154,905       2,071      5.35%
  Non-interest-earning assets               10,532                  9,334          --                  9,575          --
                                        ----------             ----------  ----------             ----------  ----------
  Total assets                          $  164,851             $  163,539       2,202             $  164,480       2,071
                                        ==========            ==========   ==========             ==========  ==========


Interest-bearing liabilities:
  Savings deposits                          12,533      0.32%  $   12,640          10      0.32%  $   16,775          13      0.31%
  NOW accounts                              10,220      1.64%       9,085          35      1.54%       6,358          14      0.88%
  Money market accounts                     20,875      3.34%      20,194         161      3.19%      23,215         150      2.58%
  Certificates of deposit                   40,378      4.39%      40,979         443      4.32%      34,618         321      3.71%
                                         ----------            ----------  ----------             ----------  ----------
    Total interest-bearing deposits         84,006      3.19%      82,898         649      3.13%      80,966         498      2.46%
  FHLB advances                             49,985      4.80%      50,168         604      4.82%      52,559         558      4.25%
  Repurchase agreements                        848      1.00%         852           2      0.94%         626           2      1.28%
                                         ----------            ----------  ----------             ----------  ----------
    Total interest-bearing liabilities  $  134,839      3.77%  $  133,918       1,255      3.75%  $  134,151       1,058      3.15%
Non-interest-bearing liabilities:
  Demand deposits                           11,446                 11,304                              9,996
  Other non-interest-bearing liabilities       683                    283                              1,209
Total Liabilities                          146,968                145,505                            145,356
  Stockholders' Equity                      17,883                 18,034                             19,124
                                        ----------             ----------                         ----------
     Total liabilities and equity       $  164,851             $  163,539                         $  164,480
                                        ==========             ==========                         ==========


Net interest income                                                        $      947                         $    1,013
                                                                           ==========                         ==========
Net interest rate spread (2)                            1.97%                              1.96%                              2.20%
Net interest-earning assets (3)         $   19,480             $   20,287                         $   20,754
                                        ==========             ==========                         ==========
Net interest margin (4)                                                                    2.46%                              2.62%
Average of interest-earning
     assets to interest-bearing
      liabilitities                                   114.45%                            115.15%                            115.47%

</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 March 31,
                                                     2007 vs. 2006
                                        ----------------------------------------
                                                     (In Thousands)

                                        Increase (Decrease) Due To:    Total
                                        --------------------------    Increase
                                           Volume         Rate       (Decrease)
                                         ----------    ----------    ----------

Interest-earning assets:
Loans                                    $      117    $       86    $      203
Investment securities                           (71)           24           (47)
Interest-earning deposits                       (28)            3           (25)
                                         ----------    ----------    ----------

     Total interest-earning assets               18           113           131
                                         ----------    ----------    ----------


Interest-bearing liabilities:
Savings deposits                                 (3)           --            (3)
NOW                                               6            15            21
Money market                                    (20)           31            11
CDs                                              59            63           122
                                         ----------    ----------    ----------
Total deposits                                   42           109           151
FHLB advances                                   (25)           71            46
Repurchase agreements                            --            --            --
                                         ----------    ----------    ----------
    Total interest-bearing liabilities           17           180           197
                                         ----------    ----------    ----------

Change in net interest income            $        1    $      (67)   $      (66)
                                         ==========    ==========    ==========

Comparison  of  Operating  Results for the Nine Months  Ended March 31, 2007 and
2006

         General.  The net loss for the nine  months  ended  March 31,  2007 was
$314,000,  or $.12  per  basic  and  diluted  share,  compared  to a net loss of
$89,000, or $.03 per basic and diluted share for the nine months ended March 31,
2006.  The  increase  in the net loss was  primarily  due to a  decrease  in net
interest income and an increase in non-interest expense,  partially offset by an
increase in non-interest income.

         Interest Income.  Interest income  increased by $667,000,  or 11.0%, to
$6.7 million for the nine months ended March 31, 2007, from $6.0 million for the
nine months  ended March 31,  2006.  The  increase  resulted  primarily  from an
increase of  $780,000,  or 15.9%,  in interest  income on net loans  receivable,
partially  offset by a decrease of  $63,000,  or 63.4%,  in  interest  income on
short-term  investments  and by a decrease of $50,000,  or 4.8%, in interest and
dividend income on investment securities. Additionally, the increase in interest
income  reflected a $3.4 million,  or 2.2%,  increase in the average  balance of
interest-earning  assets  for the nine  months  ended  March 31,  2007 to $156.6
million  from  $153.2  million for the nine months  ended March 31,  2006.  Also
contributing  to the increase in interest income was the 46 basis point increase
in the  average  yield on  interest-earning  assets to 5.71% for the nine months
ended March 31, 2007 from 5.25% for the nine months ended March 31, 2006.

         Interest income on net loans receivable  increased $780,000,  or 15.9%,
to $5.7 million for the nine months ended March 31, 2007,  from $4.9 million for
the nine months  ended March 31,  2006.  The increase was due to the increase in
the average  balance of loans  receivable of $11.1  million,  or 9.4%, to $129.1
million  for the nine months  ended  March 31, 2007 from $118.0  million for the
nine months ended March 31, 2006.  Average loan yields increased 33 basis points
to 5.87% for the nine months ended March 31, 2007 from 5.54% for the nine months
ended March 31, 2006.

         Interest income on short-term  investments decreased $63,000, or 63.4%,
to $37,000 for the nine months ended March 31, 2007,  from $100,000 for the nine
months  ended March 31,  2006.  The average  balance of  short-term  investments
decreased  $2.6  million,  or 73.8%,  to $928,000 from $3.5 million for the same
period in 2006, as short-term  investment cash flows were used primarily to fund
deposit  outflow and loan demand.  The average yield on  short-term  investments
increased  156 basis  points to 5.32% for the nine months  ended March 31, 2007,
from 3.76% for the nine months ended March 31, 2006.

                                       12
<page>

         Interest  and  dividend  income  on  investment   securities  decreased
$50,000,  or 4.8%,  to $985,000 for the nine months  ended March 31, 2007,  from
$1.0 million for the nine months ended March 31,  2006.  The average  balance of
investment  securities  decreased $5.1 million,  or 16.2%, to $26.6 million from
$31.7  million for the same period in 2006,  as  investment  security cash flows
were used primarily to fund deposit  outflow and loan demand.  The average yield
on investment  securities increased 59 basis points to 4.95% for the nine months
ended March 31, 2007, from 4.36% for the nine months ended March 31, 2006.

         Interest  Expense.  Interest expense increased  $910,000,  or 31.4%, to
$3.8 million for the nine months ended March 31, 2007, from $2.9 million for the
nine months ended March 31, 2006. The increase in interest expense was primarily
due to a 78 basis  point  increase  in the  average  cost to 3.73%  for the nine
months  ended March 31,  2007,  from 2.95% for the same period in 2006,  and the
$5.0  million,  or 3.8%,  increase  in the average  balance of  interest-bearing
liabilities  to $136.3  million for the nine months ended March 31,  2007,  from
$131.3 million for the same period in 2006.

         Interest expense on interest-bearing  deposits increased  $606,000,  or
44.7%,  to $2.0  million for the nine months  ended  March 31,  2007,  from $1.4
million for the same period in 2006.  The  increase was  primarily  due to an 82
basis point increase in the average cost of  interest-bearing  deposits to 3.08%
for the nine  months  ended  March 31,  2007,  from 2.26% for the same period in
2006. The average balance of interest-bearing deposits increased $5.0 million or
6.2% for the nine  months  ended March 31,  2007,  to $84.9  million  from $79.9
million  for the same  period in 2006.  Additionally,  interest  expense on FHLB
short-term  borrowings and long-term advances increased $303,000,  or 19.7%, due
to an 80 basis point increase in the average cost of the borrowings and advances
to 4.86% for the nine  months  ended  March 31,  2007,  from  4.06% for the same
period in 2006.  The average  balance of  borrowings  and  advances for the nine
months ended March 31, 2007 and 2006 was $50.6 million, respectively.

         Net Interest Income. Net interest income decreased  $243,000,  or 7.8%,
to $2.9 million for the nine months ended March 31, 2007,  from $3.1 million for
the same period in 2006. The decrease in net interest income was the result of a
27 basis  point  decrease  in net  interest  margin to 2.46% for the nine months
ended March 31, 2007,  from 2.73% for the same period  ended 2006,  and the $1.6
million,  or 7.4%,  decrease  in net  average  interest-earning  assets to $20.3
million for the nine months  ended March 31,  2007,  from $21.9  million for the
same period in 2006.

         Provision  for Loan Losses.  The provision for loan losses for the nine
months ended March 31, 2007 was $109,000, compared to a provision of $58,000 for
the nine months ended March 31,  2006.  The  allowance  for loan losses was $1.1
million or 0.87% of net loans  outstanding  at March 31,  2007,  as  compared to
$947,000, or 0.79% of net loans outstanding at March 31, 2006.

         Non-interest Income.  Non-interest income increased $155,000, or 44.0%,
to $505,000 for the nine months ended March 31, 2007, from $350,000 for the same
period in 2006.  The increase in  non-interest  income was  primarily  due to an
increase in overdraft  fees  generated  from our  overdraft  privilege  program,
partially  offset by a decrease in income from our financial  services  program.
Overdraft  fees  increased  $182,000,  or 202.1% to $272,000 for the nine months
ended March 31, 2007,  from $90,000 for the same period ended 2006.  Income from
our financial  services  program  decreased  $52,000 or 69.5% to $23,000 for the
nine months ended March 31,  2007,  from $75,000 for the same period ended 2006,
reflecting the departure of the operating manager of the program.  Management is
currently reviewing its options for the program.

         Non-interest Expense. Non-interest expense increased $194,000, or 5.4%,
to $3.8 million for the nine months ended March 31, 2007,  from $3.6 million for
the nine months ended March 31, 2006. The increase in  non-interest  expense was
primarily due to increases in occupancy  expense  related to the North  Andover,
Massachusetts  office,  which was opened on December 5, 2005,  increases in data
processing  expense  and  increases  in  general  and  administrative  expenses.
Salaries and employee benefits increased $8,000, or 0.4%, which included $65,000
in personnel  restructuring  expense and  additional  personnel  and  associated
benefits  for the North  Andover  office,  partially  offset by a  reduction  of
$85,000,  or 48.8%,  in directors'  fees and $47,000,  or 82.0%, in compensation
expense from our financial  services program.  Occupancy and equipment  expenses
increased  $46,000,  or 7.9%,  primarily  due to increases  related to the North
Andover office.  Data processing expense increased $64,000, or 39.6% to $224,000
for the nine months  ended March 31,  2007,  from  $160,000  for the nine months
ended March 31, 2006,  partially  due to one-time  credits  accounted for in the
nine months ended March 31, 2006,  totaling  $36,000,  related to the  Company's
core processing conversion in June 2005. Professional fees decreased $34,000, or
14.2%,  to $203,000 for the nine months ended March 31, 2007,  from $237,000 for
the nine months  ended March 31, 2006,  primarily  from a reduction of corporate
legal expenses. Advertising expense increased $15,000, or 11.1%, to $151,000 for
the nine months  ended March 31, 2007,  from  $136,000 for the nine months ended
March 31, 2006. Other general and administrative expenses increased $111,000, or
24.9%,  to $555,000 for the nine months ended March 31, 2007, from $444,000 from
the nine months ended March 31, 2006,  primarily due to  recruitment  expense of
$57,000,  related to the hiring of a chief loan  officer  and $43,000 in expense
related to our overdraft privilege program.

                                       13
<page>

         Income Taxes. The loss before income taxes of $478,000 and $145,000 for
the nine  months  ended March 31,  2007 and 2006,  respectively,  resulted in an
income tax benefit of $164,000  and $56,000 for the nine months  ended March 31,
2007 and 2006,  respectively.  The effective tax rates for the nine months ended
March 31, 2007 and 2006 were 34.2% and 38.6%, 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.


                                       14
<page>
<table>
<caption>

                                                                               Nine Months Ended March 31,
                                            At March 31,       ------------------------------------------------------------------
                                                2007                         2007                               2006
                                         --------------------  --------------------------------  --------------------------------
                                                     Weighted    Average                           Average
                                         Outstanding  Average  Outstanding              Yield/   Outstanding              Yield/
                                           Balance      Rate     Balance    Interest     Rate      Balance    Interest     Rate
                                         -----------  -------  ----------  ----------  --------  ----------  ----------  --------

                                       <c>           <c>    <c>         <c>            <c>    <c>         <c>            <c>
Interest-earning assets:
  Loans                                   $  128,710    5.95%  $  129,147  $    5,684     5.87%  $  118,019  $    4,904     5.54%
  Investment securities (1)                   24,810    4.67%      26,550         985     4.95%      31,673       1,035     4.36%
  Interest-earning deposits                      799    5.03%         928          37     5.32%       3,548         100     3.76%
                                          ----------           ----------  ----------            ----------  ----------
     Total interest-earning assets           154,319    5.74%     156,625       6,706     5.71%     153,240       6,039     5.25%
  Non-interest-earning assets                 10,532                9,328          --                 9,061          --
                                          ----------           ----------  ----------            ----------  ----------
  Total assets                            $  164,851           $  165,953       6,706            $  162,301       6,039
                                          ==========           ==========  ==========            ==========  ==========


Interest-bearing liabilities:
  Savings deposits                            12,533    0.32%  $   13,473          35     0.35%  $   18,078          41     0.30%
  NOW accounts                                10,220    1.64%       8,568          89     1.38%       5,745          20     0.46%
  Money market accounts                       20,875    3.34%      20,208         472     3.11%      22,160         385     2.32%
  Certificates of deposit                     40,378    4.39%      42,628       1,367     4.28%      33,922         911     3.58%
                                          ----------           ----------  ----------            ----------  ----------
    Total interest-bearing deposits           84,006    3.19%      84,877       1,963     3.08%      79,905       1,357     2.26%
  FHLB advances                               49,985    4.80%      50,623       1,844     4.86%      50,627       1,541     4.06%
  Repurchase agreements                          848    1.00%         813           6     0.98%         769           5     0.87%
                                          ----------           ----------  ----------            ----------  ----------
    Total interest-bearing liabilities    $  134,839    3.77%  $  136,313       3,813     3.73%  $  131,301       2,903     2.95%
Non-interest-bearing liabilities:
  Demand deposits                             11,446               11,125                            10,340
  Other non-interest-bearing liabilities         683                  284                             1,403
  Total Liabilities                          146,968              147,722                           143,044
  Stockholders' Equity                        17,883               18,231                            19,257
                                          ----------           ----------                        ----------
     Total liabilities and equity         $  164,851           $  165,953                        $  162,301
                                          ==========           ==========                        ==========


Net interest income                                                        $    2,893                        $    3,136
                                                                           ==========                        ==========
Net interest rate spread (2)                            1.97%                             1.98%                             2.30%
Net interest-earning assets (3)           $   19,480          $    20,312                        $   21,939
                                          ==========          ===========                        ==========
Net interest margin (4)                                                                   2.46%                             2.73%
Average of interest-earning
    assets to interest-bearing
     liabilitities                                    114.45%                           114.90%                           116.71%

</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.

                                               Nine Months Ended March 31,
                                                     2007 vs. 2006
                                        ----------------------------------------
                                                     (In Thousands)

                                        Increase (Decrease) Due To:    Total
                                        --------------------------    Increase
                                           Volume         Rate       (Decrease)
                                         ----------    ----------    ----------

Interest-earning assets:
Loans                                    $      462    $      318    $      780
Investment securities                          (167)          117           (50)
Interest-earning deposits                       (74)           11           (63)
                                         ----------    ----------    ----------

     Total interest-earning assets              221           446           667
                                         ----------    ----------    ----------


Interest-bearing liabilities:
Savings deposits                                (10)            4            (6)
NOW                                              10            59            69
Money market                                    (34)          121            87
CDs                                             234           222           456
                                         ----------    ----------    ----------
Total deposits                                  200           406           606
FHLB advances                                    --           303           303
Repurchase agreements                             1            --             1
                                         ----------    ----------    ----------
    Total interest-bearing liabilities          201           709           910
                                         ----------    ----------    ----------

Change in net interest income            $       20    $     (263)   $     (243)
                                         ==========    ==========    ==========

         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 March 31, 2007, cash and cash equivalents
totaled $4.6 million. Securities classified as available-for-sale, which provide
additional  sources of liquidity,  totaled $13.3 million at March 31, 2007.  Our
policies also allow for access to the wholesale  funds market for up to 50.0% of
total assets, or $82.4 million.  At March 31, 2007, we had $50.0 million in FHLB
advances  outstanding,  allowing  the  Company  access  up to $32.4  million  in
wholesale funds based on policy guidelines.

         At March 31, 2007, we had $4.0 million in loan commitments outstanding.
In  addition  to  commitments  to  originate  loans,  we had  $14.6  million  in
unadvanced  funds to borrowers.  Certificates  of deposit due within one year of
March 31, 2007  totaled  $23.4  million,  or 24.5% 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 and FHLB borrowings and advances.
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  March 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.

                                       16
<page>

         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.

         Our primary  investing  activities are the origination of loans and the
purchase  of  securities.  During  the nine  months  ended  March 31,  2007,  we
originated $12.8 million of loans.  During the nine months ended March 31, 2006,
we originated $26.9 million of loans and purchased $3.5 million of securities.

         Financing  activities consist primarily of activity in deposit accounts
and FHLB  borrowings  and  advances.  We  experienced  a net  decrease  in total
deposits of $1.1  million and a net increase of $3.3 million for the nine months
ended March 31, 2007 and 2006,  respectively.  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. In addition, since our conversion to a federally
chartered  savings bank, we no longer have excess  deposit  insurance  coverage,
which  was  provided  to  us,  as a  Massachusetts  savings  bank,  through  the
Depositors Insurance Fund. We do not anticipate any material run-off of deposits
due to the loss of this excess deposit insurance coverage.

         FHLB  borrowings and advances  reflected a net decrease of $1.2 million
and a net increase of $5.1  million  during the nine months ended March 31, 2007
and 2006, respectively. 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 March 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 nine months ended March 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 March 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)
-----------------------------------------------------------------------------------------------------------------------------

                                           <c>             <c>                     <c>                   <c>
January 1 through January 31, 2007              0               $0.00                   0                     60,863
February 1 through February 28, 2007            0               $0.00                   0                     60,863
March 1 through March 31, 2007                  0               $0.00                   0                     60,863

</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 March 31,
              2007, the Company had purchased  78,000 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

              Not applicable

Item 5.  Other Information

              Not applicable

Item 6.  Exhibits

              10.10  Form of  Employment  Agreement  by and  between  Charles R.
                     Shediac,  Senior  Vice  President/Chief  Loan  Officer  and
                     Georgetown Savings Bank
              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

                                       18
<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: May 12, 2007                 /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)


                                       19