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, 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 small business issuer as specified in its charter)

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

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

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

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

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

Indicate the number of shares  outstanding of the registrant's  common stock, as
of the latest practicable date: Common Stock, $0.10 par value,  2,638,387 shares
outstanding as of May 12, 2008.

Transitional Small Business Disclosure Format: YES |_| NO |X|

<PAGE>

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

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

Item 1: Financial Statements (Unaudited)

        Consolidated Statements of Financial Condition
        at March 31, 2008 and June 30, 2007                                  1

        Consolidated Statements of Operations for the Three and Nine
        Months Ended March 31, 2008 and 2007                                 2

        Consolidated Statements of Changes in Stockholders'
        Equity for the Nine Months Ended March 31, 2008 and 2007             3

        Consolidated Statements of Cash Flows for the
        Nine Months Ended March 31, 2008 and 2007                            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                                             19

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

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

SIGNATURES                                                                  20

<PAGE>

PART I--FINANCIAL INFORMATION

ITEM 1. Financial Statements

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

<TABLE>
<CAPTION>
                                                ASSETS
                                                                                At                   At
                                                                             March 31,            June 30,
                                                                               2008                 2007
                                                                            -----------         -----------
                                                                                      (In thousands)
<S>                                                                         <C>                 <C>
Cash and due from banks                                                     $     3,062         $     3,950
Short-term investments                                                            3,500               1,653
                                                                            -----------         -----------
               Total cash and cash equivalents                                    6,562               5,603

Securities available for sale, at fair value                                     11,907              12,690
Securities held to maturity, at amortized cost                                    6,699               8,182
Federal Home Loan Bank stock, at cost                                             2,905               2,905
Loans, net of allowance for loan losses of $1,120,000
    at March 31, 2008 and $1,079,000 at June 30, 2007                           135,807             127,659
Premises and equipment, net                                                       4,545               4,816
Accrued interest receivable                                                         619                 682
Bank-owned life insurance                                                         1,436               1,416
Other assets                                                                      1,031               1,129
                                                                            -----------         -----------

               Total assets                                                 $   171,511         $   165,082
                                                                            ===========         ===========

                                 LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                                    $   101,821         $    97,956
Short-term Federal Home Loan Bank advances                                        4,500               9,850
Long-term Federal Home Loan Bank advances                                        46,334              37,873
Securities sold under agreements to repurchase                                      685                 869
Mortgagors' escrow accounts                                                         367                 317
Accrued expenses and other liabilities                                              527                 607
                                                                            -----------         -----------
               Total liabilities                                                154,234             147,472
                                                                            -----------         -----------

Commitments and contingencies

Stockholders' equity:
Preferred stock, $0.10 par value per share: 1,000,000
shares authorized; none outstanding                                                  --                  --
Common Stock, $0.10 par value per share: 10,000,000
shares authorized; 2,777,250 shares issued, 2,638,387 and
2,692,050 shares outstanding at March 31, 2008 and
June 30, 2007, respectively                                                         278                 278
Additional paid-in capital                                                       11,452              11,452
Retained earnings                                                                 7,213               7,522
Accumulated other comprehensive income (loss)                                       112                (179)
Unearned compensation - ESOP (59,319 and 65,463 shares unallocated
    at March 31, 2008 and June 30, 2007, respectively)                             (594)               (655)
Treasury stock, at cost (138,863 and 85,200 shares at March 31, 2008
    and June 30, 2007, respectively)                                             (1,184)               (808)
                                                                            -----------         -----------
               Total stockholders' equity                                        17,277              17,610
                                                                            -----------         -----------

               Total liabilities and stockholders' equity                   $   171,511         $   165,082
                                                                            ===========         ===========
</TABLE>

See notes to condensed consolidated financial statements.


                                       1
<PAGE>

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

<TABLE>
<CAPTION>
                                                                 Three Months Ended                Nine Months Ended
                                                                      March 31,                         March 31,
                                                               2008              2007              2008              2007
                                                           -----------       -----------       -----------       -----------
                                                                          (In thousands, except share data)
<S>                                                        <C>               <C>               <C>               <C>
Interest and dividend income:
    Loans, including fees                                  $     2,044       $     1,879       $     6,107       $     5,684
    Investment interest and dividends                              263               308               828               985
    Short-term investments                                           9                15                34                37
                                                           -----------       -----------       -----------       -----------
               Total interest and dividend income                2,316             2,202             6,969             6,706
                                                           -----------       -----------       -----------       -----------

Interest expense:
    Deposits                                                       640               649             2,114             1,963
    Short-term Federal Home Loan Bank advances                      71               202               321               695
    Long-term Federal Home Loan Bank advances                      526               402             1,471             1,149
    Securities sold under agreements to repurchase                   2                 2                 6                 6
                                                           -----------       -----------       -----------       -----------
               Total interest expense                            1,239             1,255             3,912             3,813
                                                           -----------       -----------       -----------       -----------

Net interest income                                              1,077               947             3,057             2,893
Provision for loan losses                                            4                 4                 8               109
                                                           -----------       -----------       -----------       -----------
Net interest income, after provision for loan losses             1,073               943             3,049             2,784
                                                           -----------       -----------       -----------       -----------

Non-interest income:
    Customer service fees                                          145               141               466               436
    Income from bank-owned life insurance                           (3)               18                20                45
    Other                                                           10                 9                27                24
                                                           -----------       -----------       -----------       -----------
               Total non-interest income                           152               168               513               505
                                                           -----------       -----------       -----------       -----------

Non-interest expenses:
    Salaries and employee benefits                                 736               678             2,150             1,996
    Occupancy and equipment expenses                               230               221               661               640
    Data processing expenses                                        87                76               259               224
    Professional fees                                              140                66               303               203
    Advertising expense                                             31                92               128               151
    Other general and administrative expenses                      194               178               600               553
                                                           -----------       -----------       -----------       -----------
               Total non-interest expenses                       1,418             1,311             4,101             3,767
                                                           -----------       -----------       -----------       -----------

Loss before income taxes                                          (193)             (200)             (539)             (478)

Income tax benefit                                                (128)              (71)             (247)             (164)
                                                           -----------       -----------       -----------       -----------

Net loss                                                   $       (65)      $      (129)      $      (292)      $      (314)
                                                           ===========       ===========       ===========       ===========

Weighted average number of common shares outstanding:
   Basic and diluted                                         2,584,598         2,630,397         2,599,663         2,644,631

Net loss per share:
   Basic and diluted                                       $     (0.03)      $     (0.05)      $     (0.11)      $     (0.12)
</TABLE>

See notes to condensed consolidated financial statements.


                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                   Accumulated
                                                             Additional                Other        Unearned
                                                    Common     Paid-in   Retained  Comprehensive  Compensation-  Treasury
                                                    Stock      Capital   Earnings  Income (Loss)      ESOP         Stock     Total
                                                   -------   ----------  --------  -------------  -------------  --------  --------
                                                                                   (In thousands)
<S>                                                <C>        <C>        <C>         <C>            <C>          <C>       <C>
Balance at June 30, 2006                           $   278    $ 11,452   $  7,996    $   (330)      $   (737)    $     --  $ 18,659
                                                                                                                           --------

Comprehensive income (loss):
    Net loss                                            --          --       (314)         --             --                   (314)
    Change in net unrealized gain (loss) on
      securities available for sale, net of
      tax effects of $138,000                           --          --         --         233             --                    233
                                                                                                                           --------
         Total comprehensive income (loss)                                                                                      (81)
                                                                                                                           --------

Common stock held by ESOP allocated or committed
    to be allocated (6,142 shares)                                             (6)                        62                     56

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

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

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

Comprehensive income (loss):
    Net loss                                                                 (292)                                             (292)
    Change in net unrealized gain (loss) on
      securities available for sale, net of
      tax effects of $172,000                                                             291                                   291
                                                                                                                           --------
         Total comprehensive income (loss)                                                                                       (1)
                                                                                                                           --------

Common stock held by ESOP allocated or committed
    to be allocated (6,144 shares)                                            (17)                        61                     44

Treasury stock purchased (53,663 shares)                                                                             (376)     (376)
                                                   -------    --------   --------    --------       --------     --------  --------


Balance at March 31, 2008                          $   278    $ 11,452   $  7,213    $    112       $   (594)    $ (1,184) $ 17,277
                                                   =======    ========   ========    ========       ========     ========  ========
</TABLE>

See notes to condensed consolidated financial statements.


                                       3
<PAGE>

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

                                   (unaudited)

<TABLE>
<CAPTION>
                                                                             Nine Months Ended
                                                                                 March 31,
                                                                           2008              2007
                                                                       -----------       -----------
                                                                               (In thousands)
<S>                                                                    <C>               <C>
Cash flows from operating activities:
    Net loss                                                           $      (292)      $      (314)
    Adjustments to reconcile net loss to net cash
        used by operating activities:
            Provision for loan losses                                            8               109
            Accretion of securities, net                                       (23)              (35)
            Accretion of deferred loan costs, net                               (5)              (21)
            Depreciation and amortization expense                              352               345
            Decrease  in accrued interest receivable                            63                11
            Income from bank-owned life insurance                              (20)              (45)
            ESOP compensation expense                                           44                56
            Other, net                                                        (154)             (271)
                                                                       -----------       -----------
                  Net cash used by operating activities                        (27)             (165)
                                                                       -----------       -----------

Cash flows from investing activities:
    Activity in available-for-sale securities:
         Maturities, prepayments and calls                                   4,767             3,024
         Purchases                                                          (3,506)             (499)
    Activity in held-to-maturity securities:
         Maturities, prepayments and calls                                   1,491             1,265
    Loan (principal originations) repayments, net                           (8,151)            1,093
    Purchase of premises and equipment                                         (81)              (24)
                                                                       -----------       -----------
                 Net cash (used) provided by investing activities           (5,480)            4,859
                                                                       -----------       -----------
</TABLE>

                                 Continued

See notes to condensed consolidated financial statements.


                                       4
<PAGE>

                            GEORGETOWN BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        --------------------------------
                                 (unaudited)
                                 (continued)

<TABLE>
<CAPTION>
                                                                             Nine Months Ended
                                                                                 March 31,
                                                                         2008              2007
                                                                     -----------       -----------
                                                                              (In thousands)
<S>                                                                  <C>               <C>
Cash flows from financing activities:
    Net increase (decrease) in deposits                                    3,865            (2,257)
    Net (decrease) increase in securities sold under agreements
        to repurchase                                                       (184)               86
    Net change in borrowings with maturities of  three
        months or less                                                    (8,850)             (850)
    Proceeds of Federal Home Loan Bank advances
        with maturities greater than three months                         15,500            18,000
    Repayments of Federal Home Loan Bank advances
        with maturities greater than three months                         (3,539)          (18,386)
Treasury stock purchased                                                    (376)             (751)
    Net change in mortgagors' escrow accounts                                 50                42
                                                                     -----------       -----------
           Net cash provided (used) by financing activities                6,466            (4,116)

Net change in cash and cash equivalents                                      959               578

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

Cash and cash equivalents at end of year                             $     6,562       $     4,555
                                                                     ===========       ===========

Supplementary information:
    Interest paid on deposit accounts                                $     2,129       $     1,955
    Interest paid on Federal Home Loan Bank advances                       1,786             1,831
    Interest paid on securities sold under agreement
      to repurchase                                                            6                 6
    Income taxes paid, net of refunds                                        (71)             (185)
</TABLE>

See notes to condensed consolidated financial statements.


                                       5
<PAGE>

                            GEORGETOWN BANCORP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

      (1)   Basis of Presentation

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

      (2)   Critical Accounting Policies

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

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

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


                                       6
<PAGE>

      (3)   Net Loss Per Common Share

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

<TABLE>
<CAPTION>
                                                           Three Months Ended                  Nine Months Ended
                                                                March 31,                           March 31,
                                                          2008              2007              2008              2007
                                                      -----------       -----------       -----------       -----------
<S>                                                   <C>               <C>               <C>               <C>
Net loss available to common stockholders             $   (65,000)      $  (129,000)      $  (292,000)      $  (314,000)
                                                      ===========       ===========       ===========       ===========

Basic potential common shares:
    Weighted average shares outstanding                 2,645,260         2,699,250         2,662,799         2,723,522
    Weighted average unallocated ESOP shares              (60,662)          (68,853)          (63,136)          (78,891)
                                                      -----------       -----------       -----------       -----------
       Basic weighted average shares outstanding        2,584,598         2,630,397         2,599,663         2,644,631

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

Dilutive weighted average shares outstanding            2,584,598         2,630,397         2,599,663         2,644,631
                                                      ===========       ===========       ===========       ===========

Basic and diluted EPS                                 $     (0.03)      $     (0.05)      $     (0.11)      $     (0.12)
                                                      -----------       -----------       -----------       -----------
</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 March 31, 2008.

      (5)   Impact of Recent Accounting Pronouncements

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

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

      In September  2006,  the  Emerging  Issues Task Force  ("EITF")  reached a
consensus  on  Issue  No.  06-4,   "Accounting  for  Deferred  Compensation  and
Postretirement  Benefit  Aspects  of  Endorsement  Split-Dollar  Life  Insurance
Arrangements".  This issue addresses  accounting for split-dollar life insurance
arrangements  whereby the  employer  purchases a policy to insure the life of an
employee,  and separately  enters into an agreement to split the policy benefits
between the  employer  and the  employee.  This EITF states that the  obligation
arises as a result of a substantive agreement with an employee to provide future
postretirement  benefits.  Under EITF 06-4,  the  obligation is not settled upon
entering into an insurance  arrangement.  Since the obligation is not settled, a
liability  should be  recognized  in accordance  with  applicable  authoritative
guidance. EITF 06-4 is effective for the Company's 2009 fiscal year. The Company
completed its evaluation and has determined that EITF No. 6-04 is not applicable
to the Company.


                                       7
<PAGE>

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

      In  January   2002  the  Company   entered  into   collateral   assignment
split-dollar life insurance  agreements with certain executives.  In March 2007,
the EITF  reached a consensus  on Issue No.  06-10,  Accounting  for  Collateral
Assignment  Split-Dollar  Life Insurance (CASD)  Arrangements.  Under this EITF,
effective  for the  Company's  2009  fiscal  year,  the  Company is  required to
recognize a liability  for  postretirement  benefits  related to its  collateral
assignment   split-dollar   life  insurance   agreements,   and  may  choose  to
retroactively  apply the  accounting  change  to all  periods  presented,  or to
cumulatively adjust the financial  statements as of the beginning of the year of
adoption.  The Company is currently  negotiating the  restructuring  of the CASD
agreements with certain executive  officers and anticipates the restructuring to
be completed  prior to June 30,  2008.  The impact of the  restructuring  of the
agreements is estimated to be an after-tax  charge to earnings of  approximately
$140,000,  which is expected to be recognized during the three months ended June
30, 2008.

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

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

      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.

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,  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.


                                       8
<PAGE>

      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 nine  months  ended  March  31,  2008
improved in several  areas when  compared  to the same  period in 2007.  Our net
interest margin continued to increase,  as the Company benefited from the recent
decline  in  short  term  rates,  as  well  as the  continued  expansion  of our
commercial business activities, which generally result in higher-yielding loans.
However, we continue to operate in a difficult operating environment with a high
level of local competition for loan and deposit  balances,  which we expect will
continue to put  pressure on our net interest  margin.  Asset  quality  remained
stable,   reflected  in  the  minimal  provision  for  loan  losses.   Increased
non-interest  expenses  were  primarily  related  to  salary  and  benefits  and
professional  fees.  Our  financial  performance  was  also  improved  due to an
increase in our annual  effective tax rate, which was related to the anticipated
recognition of bank owned life insurance  (BOLI)  tax-exempt  income  associated
with the  restructuring  of the CASD  agreements and the  supplemental  employee
retirement plan (SERP) agreements with certain officers of the Company, which is
expected to be completed during the three months ended June 30, 2008.

Comparison of Financial Condition at March 31, 2008 and June 30, 2007

      Total assets  increased by $6.4  million,  or 3.9%,  to $171.5  million at
March 31,  2008,  from $165.1  million at June 30,  2007.  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 $8.1 million, or 6.4%, to $135.8 million at March 31,
2008, from $127.7 million at June 30, 2007,  primarily due to a $6.8 million, or
154.6%  increase in commercial  construction  loans,  a $2.0  million,  or 94.5%
increase in commercial  loans,  a $1.9 million,  or 13.4% increase in commercial
real  estate  loans and a  $934,000,  or 9.1%  increase  in home  equity  loans,
partially  offset by a $3.6 million,  or 3.8% decrease in  residential  mortgage
loans. Cash and cash equivalents increased $959,000, or 17.1%, primarily related
to normal operating  fluctuations.  Total investment  securities  decreased $2.3
million,  or 10.9%,  to $18.6  million at March 31, 2008,  from $20.9 million at
June 30, 2007,  which  reflected the use of  investment  cash flows to fund loan
demand.  Total earning assets increased $7.8 million, or 5.0%, to $161.9 million
at March 31, 2008, from $154.2 million at June 30, 2007.

      Nonperforming  loans decreased  $321,000 to $1.9 million at March 31, 2008
compared to $2.3 million at June 30, 2007.  These balances  represented  1.4% of
total  loans at March 31,  2008 and 1.8% of total  loans at June 30,  2007.  The
allowance  for loan losses was $1.1 million at March 31, 2008 and June 30, 2007.
This represented 0.82% of total loans at March 31, 2008 and 0.84% of total loans
at June 30, 2007. At these levels, the allowance for loan losses as a percentage
of nonperforming loans was 57.6% at March 31, 2008 and 47.6% at June 30, 2007.

      Total  deposits  increased by $3.9 million,  or 3.9%, to $101.8 million at
March 31, 2008,  from $98.0  million at June 30, 2007.  The increase in deposits
was  primarily  due to increases in money  market and demand  deposit  accounts,
partially  offset by decreases in certificates of deposit,  savings accounts and
NOW checking accounts.  Money market deposit accounts increased $5.8 million, or
25.3%, reflecting promotional efforts and demand deposit accounts increased $1.4
million,  or 12.5%,  offset by  decreases  in  certificates  of  deposit of $1.6
million,  or 3.9%,  decreases in savings accounts of $1.3 million, or 10.7%, and
decreases in NOW checking  accounts of $467,000,  or 4.0%. Total borrowings from
the Federal Home Loan Bank (FHLB) increased $3.1 million, or 6.5%,  primarily to
fund loan demand.

      Total stockholders'  equity decreased $333,000 or 1.9% to $17.3 million at
March 31,  2008,  from $17.6  million  at June 30,  2007,  primarily  due to the
repurchase of 53,663 shares of the Company's common stock at a cost of $376,000,
as well as an  operating  loss of $292,000  for the nine months  ended March 31,
2008, partially offset by a $291,000 decrease in accumulated other comprehensive
loss.  The  accumulated  other  comprehensive  loss at June 30, 2007 of $179,000
decreased  $291,000 to $112,000 of  accumulated  other  comprehensive  income at
March 31,  2008,  reflecting  $180,000  in net  unrealized  gains on  securities
available  for sale at March 31, 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 March 31, 2008 and
2007

      General.  The net loss for the  three  months  ended  March  31,  2008 was
$65,000,  or $.03  per  basic  and  diluted  share,  compared  to a net  loss of
$129,000,  or $.05 per basic and diluted  share for the three months ended March
31, 2007.  The decrease in the net loss was  primarily due to an increase in our
annual  effective  tax rate and an increase in net  interest  income,  partially
offset by an increase  in  non-interest  expense and a decrease in  non-interest
income.


                                       9
<PAGE>

      Interest Income.  Interest income increased by $114,000,  or 5.2%, to $2.3
million  for the three  months  ended  March 31,  2008.  The  increase  resulted
primarily  from an increase of $165,000,  or 8.8%,  in interest  income on loans
receivable,  partially  offset by a decrease in interest and dividend  income on
securities of $45,000, or 14.5%.

      Interest income on loans receivable  increased $165,000,  or 8.8%, to $2.0
million for the three  months  ended March 31,  2008,  from $1.9 million for the
three months  ended March 31,  2007.  The increase was due to an increase in the
average balance of loans receivable of $9.3 million,  or 7.3%, to $136.8 million
for the three  months ended March 31,  2008,  from $127.5  million for the three
months  ended  March 31, 2007 and by the  increase  in average  loan yields of 9
basis points to 5.98% for the three months ended March 31, 2008,  from 5.89% for
the three months ended March 31, 2007.

      Interest and dividend income on investment  securities  decreased $45,000,
or 14.5% for the three months  ended March 31, 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 $3.5 million, or 13.8%, to $22.0 million for
the three months ended March 31, 2008,  from $25.5  million for the three months
ended March 31, 2007 and by a decrease in average  investment  yields of 5 basis
points to 4.78% for the three months  ended March 31,  2008,  from 4.83% for the
three months ended March 31, 2007.

      Interest  Expense.  Interest expense decreased  $16,000,  or 1.3%, to $1.2
million for the three  months  ended March 31,  2008.  The  decrease in interest
expense was  primarily  due to a 19 basis point  decrease in the average cost of
interest-bearing liabilities to 3.56% for the three months ended March 31, 2008,
from 3.75% for the same period in 2007,  partially  offset by an increase in the
average  balance of  interest-bearing  liabilities of $5.4 million,  or 4.1%, to
$139.4  million for the three months ended March 31, 2008,  from $133.9  million
for the same period in 2007.

      Interest expense on  interest-bearing  deposits decreased $9,000, or 1.4%,
to $640,000 for the three months  ended March 31,  2008,  from  $649,000 for the
same period in 2007. The decrease was primarily due to a 17 basis point decrease
in the average cost of  interest-bearing  deposits to 2.96% for the three months
ended March 31, 2008, from 3.13% for the same period in 2007,  partially  offset
by an  increase  in the  average  balance of  interest-bearing  deposits of $3.6
million,  or 4.3%,  to $86.5  million for the three  months ended March 31, 2008
from $82.9 million for the same period in 2007.  Additionally,  interest expense
on FHLB short-term and long-term advances decreased $7,000, or 1.0%, to $597,000
for the three months ended March 31, 2008,  from $604,000 for the same period in
2007. The decrease was primarily due to a 24 basis point decrease in the average
cost of FHLB  short-term  and  long-term  advances to 4.58% for the three months
ended March 31, 2008, from 4.82% for the same period in 2007,  partially  offset
by an increase in the average balance of FHLB short-term and long-term  advances
of $2.0 million,  or 3.9%, to $52.1 million for the three months ended March 31,
2008 from $50.2 million for the same period in 2007.

      Net Interest Income. Net interest income increased $130,000,  or 13.8%, to
$1.1 million for the three months  ended March 31, 2008,  from  $947,000 for the
same period in 2007.  The  increase in net  interest  income was  primarily  the
result of a 23 basis  point  increase  in net  interest  margin to 2.69% for the
three months ended March 31, 2008, from 2.46% for the same period ended 2007.

      Provision  for Loan Losses.  The  provision  for loan losses for the three
months  ended March 31, 2008 and for the three  months  ended March 31, 2007 was
$4,000,  reflecting the stable asset quality of the Company. Net loan recoveries
were $1,000 for the three months  ended March 31, 2008,  as compared to net loan
charge-offs of $2,000 for the same period in 2007.

      Non-interest  Income.  Non-interest  income decreased $16,000, or 9.0%, to
$152,000 for the three months ended March 31, 2008,  from  $168,000 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  BOLI. For the three months
ended  March 31,  2008,  the net expense  from BOLI was  $3,000,  as compared to
$18,000 of income for the same period ended 2007.

      Non-interest Expense. Non-interest expense increased $107,000, or 8.2%, to
$1.4 million for the three  months  ended March 31, 2008,  from $1.3 million for
the same period in 2007. The increase in non-interest  expense was primarily due
to an increase in professional fees and salaries and benefits,  partially offset
by a decrease  in  advertising  expense.  Salary and benefit  expense  increased
$58,000,  or 8.5%,  primarily  due to costs  associated  with  three  additional
employees.  Occupancy  expense  increased  $9,000,  or 4.1%, to $230,000 for the
three months ended March 31,  2008,  from  $221,000 for the same period in 2007.
Data processing  expense increased  $11,000,  or 14.8%, to $87,000 for the three
months ended March 31, 2008, from $76,000 for the same period in 2007, primarily
due to technology  investments.  Professional fees increased $74,000, or 111.7%,
to  $140,000  for the three  months  ended  March  31,  2008,  primarily  due to
consulting fees associated  with the  implementation  of compliance with section
404 of the  Sarbanes-Oxley  Act (SOX 404) and with the restructuring of the CASD
agreements  and the SERP  agreements  with  certain  executive  officers  of the
Company. Advertising expense decreased $61,000 or 66.1% to $31,000 for the three
months ended March 31,  2008,  from $92,000 for the three months ended March 31,
2007,   primarily  due  to  the  timing  of  expenditures.   Other  general  and
administrative  expenses increased  $16,000,  or 9.3%, to $194,000 for the three
months ended March 31, 2008, from $178,000 from the three months ended March 31,
2007, primarily due to an increase in the FDIC deposit insurance  assessments of
$18,000, or 613.2%.

      Income  Taxes.  The loss before  income taxes of $193,000 and $200,000 for
the three  months  ended March 31, 2008 and 2007,  respectively,  resulted in an
income tax benefit of $128,000  and $71,000 for the three months ended March 31,
2008 and 2007, respectively.  The effective tax rates for the three months ended
March 31, 2008 and 2007 were 66.4% and 35.4%,  respectively.  The  effective tax
rate for the three months ended March 31, 2008 included an adjustment to reflect
an annual effective tax rate of 45.9%. The annual effective tax rate of 45.9% is
primarily  due  to  the  anticipated   recognition  of  BOLI  tax-exempt  income
associated  with  the   restructuring  of  the  CASD  agreements  and  the  SERP
agreements, which is expected to be completed during the three months ended June
30, 2008.


                                       10
<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.


                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                                                      Three Months Ended March 31,
                                               At March 31,       ------------------------------------------------------------------
                                                    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                                    $  136,927      5.95%  $  136,791   $    2,044    5.98%   $  127,540   $   1,879    5.89%
  Investment securities (1)                    21,511      4.64%      21,986          263    4.78%       25,493         308    4.83%
  Short term investments                        3,500      2.02%       1,185            9    3.04%        1,172          15    5.12%
                                           ----------             ----------   ----------            ----------   ---------
     Total interest-earning assets            161,938      5.69%     159,962        2,316    5.79%      154,205       2,202    5.71%
  Non-interest-earning assets                   9,573                  9,159           --                 9,334          --
                                           ----------             ----------   ----------            ----------   ---------
  Total assets                             $  171,511             $  169,121        2,316            $  163,539       2,202
                                           ==========             ==========   ----------            ==========   ---------


Interest-bearing liabilities:
  Savings deposits                         $   10,639      0.18%  $   10,158            6    0.24%   $   12,640          10    0.32%
  NOW accounts                                 11,072      0.14%       9,236           10    0.43%        9,085          35    1.54%
  Money market accounts                        28,601      2.07%      28,404          192    2.70%       20,194         161    3.19%
  Certificates of deposit                      38,889      4.38%      38,680          432    4.47%       40,979         443    4.32%
                                           ----------             ----------   ----------            ----------   ---------
Total interest-bearing deposits                89,201      2.61%      86,478          640    2.96%       82,898         649    3.13%
  FHLB advances                                50,834      4.50%      52,122          597    4.58%       50,168         604    4.82%
  Repurchase agreements                           685      0.50%         751            2    1.07%          852           2    0.94%
                                           ----------             ----------   ----------            ----------   ---------
     Total interest-bearing liabilities       140,720      3.28%     139,351        1,239    3.56%      133,918       1,255    3.75%
                                                                               ----------                         ---------
Non-interest-bearing liabilities:
  Demand deposits                              12,620                 11,777                             11,304
  Other non-interest-bearing liabilities          894                    626                                283
Total liabilities                             154,234                151,754                            145,505
  Stockholders' equity                         17,277                 17,367                             18,034
                                           ----------             ----------                         ----------
     Total liabilities and equity          $  171,511             $  169,121                         $  163,539
                                           ==========             ==========                         ==========

Net interest income                                                            $    1,077                         $     947
                                                                               ==========                         =========
Net interest rate spread (2)                               2.41%                             2.23%                             1.96%
Net interest-earning assets (3)            $   21,218             $   20,611                         $   20,287
                                           ==========             ==========                         ==========
Net interest margin (4)                                                                      2.69%                             2.46%
Average of interest-earning
     assets to interest-bearing
      liabilitities                                      115.08%                           114.79%                           115.15%
</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.


                                       12
<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 March 31,
                                                               2008 vs. 2007
                                                 -------------------------------------------
                                                               (In Thousands)

                                                 Increase (Decrease) Due To:        Total
                                                 ---------------------------       Increase
                                                   Volume           Rate          (Decrease)
                                                 -----------     -----------     -----------
<S>                                              <C>             <C>             <C>
      Interest-earning assets:
      Loans                                      $       136     $        29     $       165
      Investment securities                              (42)             (3)            (45)
      Short-term investments                              --              (6)             (6)
                                                 -----------     -----------     -----------

           Total interest-earning assets                  94              20             114
                                                 -----------     -----------     -----------

      Interest-bearing liabilities:
      Savings deposits                                    (2)             (2)             (4)
      NOW accounts                                         1             (26)            (25)
      Money market accounts                               65             (34)             31
      Certificates of deposit                            (25)             14             (11)
                                                 -----------     -----------     -----------
      Total interest-bearing deposits                     39             (48)             (9)
      FHLB advances                                       24             (31)             (7)
      Repurchase agreements                               (1)              1              --
                                                 -----------     -----------     -----------
          Total interest-bearing liabilities              62             (78)            (16)
                                                 -----------     -----------     -----------

      Change in net interest income              $        32     $        98     $       130
                                                 ===========     ===========     ===========
</TABLE>


                                       13
<PAGE>

Comparison  of  Operating  Results for the Nine Months  Ended March 31, 2008 and
2007

      General.  The net  loss for the  nine  months  ended  March  31,  2008 was
$292,000,  or $.11  per  basic  and  diluted  share,  compared  to a net loss of
$314,000,  or $.12 per basic and diluted  share for the nine months  ended March
31, 2007.  The decrease in the net loss was  primarily due to an increase in our
annual  effective tax rate and an increase in net interest income and a decrease
in  the  provision  for  loan  losses,   partially  offset  by  an  increase  in
non-interest expense.

      Interest Income.  Interest income increased by $263,000,  or 3.9%, to $7.0
million  for the nine  months  ended  March  31,  2008.  The  increase  resulted
primarily  from an increase of $423,000,  or 7.4%,  in interest  income on loans
receivable,  partially  offset by a decrease in interest and dividend  income on
securities of $157,000, or 15.9%.

      Interest income on loans receivable  increased $423,000,  or 7.4%, to $6.1
million for the nine months ended March 31, 2008, from $5.7 million for the nine
months ended March 31, 2007.  The increase was due to an increase in the average
balance of loans receivable of $4.3 million,  or 3.3%, to $133.4 million for the
nine months ended March 31, 2008,  from $129.1 million for the nine months ended
March 31, 2007 and by the  increase in average loan yields of 23 basis points to
6.10% for the nine months ended March 31,  2008,  from 5.87% for the nine months
ended March 31, 2007.

      Interest and dividend income on investment  securities decreased $157,000,
or 15.9% for the nine months ended March 31, 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 $3.9 million, or 14.6%, to $22.7 million for
the nine months  ended March 31,  2008,  from $26.6  million for the nine months
ended March 31, 2007 and by a decrease in average  investment  yields of 8 basis
points to 4.87% for the nine  months  ended March 31,  2008,  from 4.95% for the
nine months ended March 31, 2007.

      Interest  Expense.  Interest expense increased  $99,000,  or 2.6%, to $3.9
million  for the nine  months  ended March 31,  2008.  The  increase in interest
expense was  primarily  due to an 8 basis point  increase in the average cost of
interest-bearing  liabilities to 3.81% for the nine months ended March 31, 2008,
from  3.73%  for the same  period  in 2007 and by an  increased  in the  average
balance of interest-bearing  liabilities of $554,000, or 0.4%, to $136.9 million
for the nine months  ended  March 31,  2008,  from  $136.3  million for the same
period in 2007.

      Interest expense on interest-bearing deposits increased $151,000, or 7.7%,
to $2.1 million for the nine months ended March 31, 2008,  from $2.0 million for
the same period in 2007.  The  increase  was  primarily  due to a 20 basis point
increase in the average cost of interest-bearing  deposits to 3.28% for the nine
months  ended March 31,  2008,  from 3.08% for the same period in 2007 and by an
increase in the average balance of interest-bearing deposits of $1.2 million, or
1.4%,  to $86.0  million  for the nine  months  ended  March 31, 2008 from $84.9
million  for the same  period in 2007.  Additionally,  interest  expense on FHLB
short-term and long-term advances  decreased  $52,000,  or 2.8%, to $1.8 million
for the nine months ended March 31, 2008,  from $1.8 million for the same period
in 2007.  The  decrease  was  primarily  due to a 8 basis point  decrease in the
average cost of FHLB  short-term  and  long-term  advances to 4.78% for the nine
months  ended  March 31,  2008,  from 4.86% for the same period in 2007 and by a
decrease in the average  balance of FHLB  short-term  and long-term  advances of
$618,000,  or 1.2%,  to $50.0  million for the nine months  ended March 31, 2008
from $50.6 million for the same period in 2007.

      Net Interest Income. Net interest income increased  $164,000,  or 5.7%, to
$3.1 million for the nine months ended March 31, 2008, from $2.9 million for the
same period in 2007.  The  increase in net  interest  income was  primarily  the
result of a 13 basis point increase in net interest margin to 2.59% for the nine
months ended March 31, 2008, from 2.46% for the same period ended 2007.

      Provision  for Loan  Losses.  The  provision  for loan losses for the nine
months ended March 31, 2008 was $8,000, compared to $109,000 for the nine months
ended March 31, 2007,  reflecting  the stable asset quality of the Company.  Net
loan  recoveries  were $33,000 $ or 0.02% of average loans  outstanding  for the
nine months ended March 31, 2008, as compared to net loan charge-offs of $12,000
$, or 0.01% of average  loans  outstanding  for the nine months  ended March 31,
2007.

      Non-interest  Income.  Non-interest  income increased  $8,000, or 1.7%, to
$513,000 for the nine months ended March 31,  2008,  from  $505,000 for the same
period in 2007. The increase in non-interest  income was primarily due to income
generated from our overdraft  privilege program,  partially offset by a decrease
in income from BOLI.  Overdraft fees increased $30,000, or 11.0% to $302,000 for
the nine months  ended March 31, 2008,  from  $272,000 for the same period ended
2007.  Income from BOLI  decreased  $25,000,  or 55.5%,  to $20,000 for the nine
months  ended March 31,  2008,  from  $45,000  for the same  period  ended 2007,
primarily  due to  market  fluctuations  in the cash  surrender  value of a life
insurance policy.

      Non-interest Expense. Non-interest expense increased $334,000, or 8.9%, to
$4.1 million for the nine months ended March 31, 2008, from $3.8 million for the
same period in 2007. The increase in  non-interest  expense was primarily due to
an increase in salaries and benefits and professional fees,  partially offset by
a  decrease  in  advertising  expense.  Salary  and  benefit  expense  increased
$154,000,  or 7.7%,  primarily  due to costs  associated  with three  additional
employees.  Occupancy  expense increased  $21,000,  or 3.1%, to $661,000 for the
nine months  ended March 31,  2008,  from  $640,000 for the same period in 2007.
Data processing  expense increased  $35,000,  or 16.1%, to $259,000 for the nine
months  ended  March  31,  2008,  from  $224,000  for the same  period  in 2007,
primarily due to technology  investments.  Professional fees increased $100,000,
or 49.0%, to $303,000 for the nine months ended March 31, 2008, primarily due to
consulting fees associated  with the  implementation  of compliance with SOX 404
and with the  restructuring  of the CASD agreements and the SERP agreements with
certain executive officers of the Company. Advertising expense decreased $23,000
or 15.4% to $128,000 for the nine


                                       14
<PAGE>

months ended March 31, 2008,  from  $151,000 for the nine months ended March 31,
2007,   primarily  due  to  the  timing  of  expenditures.   Other  general  and
administrative  expenses  increased  $47,000,  or 8.7%, to $600,000 for the nine
months ended March 31, 2008,  from $553,000 from the nine months ended March 31,
2007, primarily due to an increase in the FDIC deposit insurance  assessments of
$44,000, or 493.2%.

      Income  Taxes.  The loss before  income taxes of $539,000 and $478,000 for
the nine  months  ended March 31,  2008 and 2007,  respectively,  resulted in an
income tax benefit of $247,000  and $164,000 for the nine months ended March 31,
2008 and 2007,  respectively.  The effective tax rates for the nine months ended
March 31, 2008 and 2007 were 45.9% and 34.2%, respectively. The annual effective
tax  rate of 45.9%  is  primarily  due to the  anticipated  recognition  of BOLI
tax-exempt  income  associated with the restructuring of the CASD agreements and
the SERP  agreements,  which is expected to be completed during the three months
ended June 30, 2008.

      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.


                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                                                  Nine Months Ended March 31,
                                             At March 31,         ------------------------------------------------------------------
                                                 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                                     $ 136,927     5.95%    $ 133,437   $   6,107    6.10%    $ 129,147   $   5,684     5.87%
  Investment securities (1)                    21,511     4.64%       22,666         828    4.87%       26,550         985     4.95%
  Short term investments                        3,500     2.02%        1,095          34    4.14%          928          37     5.32%
                                            ---------              ---------   ---------             ---------   ---------
     Total interest-earning assets            161,938     5.69%      157,198       6,969    5.91%      156,625       6,706     5.71%
  Non-interest-earning assets                   9,573                  9,453          --                 9,328          --
                                            ---------              ---------   ---------             ---------   ---------
  Total assets                              $ 171,511              $ 166,651       6,969             $ 165,953       6,706
                                            =========              =========   ---------             =========   ---------

Interest-bearing liabilities:
  Savings deposits                          $  10,639     0.18%    $  10,823          22    0.27%    $  13,473          35     0.35%
  NOW accounts                                 11,072     0.14%        9,272          84    1.21%        8,568          89     1.38%
  Money market accounts                        28,601     2.07%       26,573         676    3.39%       20,208         472     3.11%
  Certificates of deposit                      38,889     4.38%       39,367       1,332    4.51%       42,628       1,367     4.28%
                                            ---------              ---------   ---------             ---------   ---------
  Total interest-bearing deposits              89,201     2.61%       86,035       2,114    3.28%       84,877       1,963     3.08%
  FHLB advances                                50,834     4.50%       50,005       1,792    4.78%       50,623       1,844     4.86%
  Repurchase agreements                           685     0.50%          827           6    0.97%          813           6     0.98%
                                            ---------              ---------   ---------             ---------   ---------
     Total interest-bearing liabilities       140,720     3.28%      136,867       3,912    3.81%      136,313       3,813     3.73%
                                                                               ---------                         ---------
Non-interest-bearing liabilities:
  Demand deposits                              12,620                 11,582                            11,125
  Other non-interest-bearing liabilities          894                    674                               284
Total liabilities                             154,234                149,123                           147,722
  Stockholders' equity                         17,277                 17,528                            18,231
                                            ---------              ---------                         ---------
     Total liabilities and equity           $ 171,511              $ 166,651                         $ 165,953
                                            =========              =========                         =========

Net interest income                                                            $   3,057                         $   2,893
                                                                               =========                         =========
Net interest rate spread (2)                              2.41%                             2.10%                              1.98%
Net interest-earning assets (3)             $  21,218              $  20,331                         $  20,312
                                            =========              =========                         =========
Net interest margin (4)                                                                     2.59%                              2.46%
Average of interest-earning
     assets to interest-bearing
      liabilitities                                     115.08%                           114.85%                            114.90%
</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.


                                       16
<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>
                                                       Nine Months Ended March 31,
                                                               2008 vs. 2007
                                                -------------------------------------------
                                                Increase (Decrease) Due to         Total
                                                ---------------------------       Increase
                                                    Volume         Rate          (Decrease)
                                                -----------     -----------     -----------
                                                               (In thousands)
<S>                                             <C>             <C>             <C>
      Interest-earning assets:
      Loans                                     $       189     $       234     $       423
      Investment securities                            (144)            (13)           (157)
      Short-term investments                              7             (10)             (3)
                                                -----------     -----------     -----------

           Total interest-earning assets                 52             211             263
                                                -----------     -----------     -----------

      Interest-bearing liabilities:
      Savings deposits                                   (7)             (6)            (13)
      NOW accounts                                        7             (12)             (5)
      Money market accounts                             149              55             204
      Certificates of deposit                          (105)             70             (35)
                                                -----------     -----------     -----------
      Total interest-bearing deposits                    44             107             151
      FHLB advances                                     (23)            (29)            (52)
      Repurchase agreements                              --              --              --
                                                -----------     -----------     -----------
          Total interest-bearing liabilities             21              78              99
                                                -----------     -----------     -----------

      Change in net interest income             $        31     $       133     $       164
                                                ===========     ===========     ===========
</TABLE>


                                       17
<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 March 31, 2008, cash and cash equivalents
totaled $6.6 million. Securities classified as available-for-sale, which provide
additional  sources of liquidity,  totaled $11.9 million at March 31, 2008.  Our
policies also allow for access to the wholesale  funds market for up to 50.0% of
total assets, or $85.8 million.  At March 31, 2008, we had $50.8 million in FHLB
advances outstanding, allowing the Company access to an additional $35.0 million
in wholesale funds based on policy guidelines.

      At March 31, 2008, we had $4.4 million in loan commitments outstanding. In
addition to commitments to originate  loans,  we had $19.5 million in unadvanced
funds to  borrowers.  Certificates  of deposit  due within one year of March 31,
2008 totaled $28.0 million, or 27.5% 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 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 March 31, 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 nine  months  ended  March 31,  2008,  we
originated $31.6 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 increase in total deposits of
$3.9  million  for the nine  months  ended  March 31,  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  increase of $3.1 million
during the nine months ended March 31, 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 March 31, 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 nine months  ended March 31,  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.


                                       18
<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, 2008.

<TABLE>
<CAPTION>
                                                                                    Total Number of Shares    Maximum Number of
                                                                          Average    Purchased as Part of   Shares That May Yet be
                                                   Total Number of     Price Paid     Publicly Announced     Purchased Under the
                           Period                  Shares Purchased     Per Share         Program (1)            Program (1)
            ----------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                <C>               <C>                   <C>
            January 1 through January 31, 2008            0                $0.00               0                   10,600
            February 1 through February 29, 2008        10,600             $6.86             10,600                   0
            March 1 through March 31, 2008                0                $0.00               0                      0
</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, 2008,
            the Company had completed the repurchase of stock in accordance with
            the publicly announced 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

            (a)   Not applicable

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

Item 6.  Exhibits

            31.1  Certification  of Chief Executive  Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act

            31.2  Certification  of Chief Financial  Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act

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


                                       19
<PAGE>

                            GEORGETOWN BANCORP, INC.

                                   SIGNATURES

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

                                  GEORGETOWN BANCORP, INC.
                                           (Registrant)


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


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


                                       20