----

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|                                                               | Colonial Financial Services, Inc. |   |
|--------------------------------------------------------------------|-----------------------------------|--------|
|   (Exact Name of Registrant as Specified in its Charter) |

|                                                          | Maryland |                                    |   |   | 90-0183739 |   |
|---------------------------------------------------------------|----------|-----------------------------------------|--------|--------|------------|--------|
| (State or Other Jurisdiction of Incorporationor Organization) |     | (I.R.S. Employer Identification Number) |

|                                     | 2745 S. Delsea Drive, Vineland, New Jersey |       |   |                                                    | 08360 |   |
|------------------------------------------|--------------------------------------------|------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|--------|
| (Address of Principal Executive Offices) |                                       | (Zip Code) |

|                                                      | (856) 205-0058 |   |
|-----------------------------------------------------------|----------------|--------|
| (Registrant’s Telephone Number Including Area Code) |

| Title of Each Class                     |   | Name of Each Exchange on Which Registered |
|-----------------------------------------|--------|-------------------------------------------|
| Common Stock, par value $0.01 per share |   | The NASDAQ Stock Market, LLC              |

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| ITEM 1. | Business |
|---------|----------|

|   | ● | statements of our goals, intentions and expectations; |
|--------|---------|-------------------------------------------------------|

|   | ● | statements regarding our business plans, prospects, growth and operating strategies; |
|--------|---------|--------------------------------------------------------------------------------------|

|   | ● | statements regarding the asset quality of our loan and investment portfolios; and |
|--------|---------|-----------------------------------------------------------------------------------|

|   | ● | estimates of our risks and future costs and benefits. |
|--------|---------|-------------------------------------------------------|

|   | ● | general economic conditions, either nationally or in our market areas, that are worse than expected; |
|--------|---------|------------------------------------------------------------------------------------------------------|

|   | ● | competition among depository and other financial institutions; |
|--------|---------|----------------------------------------------------------------|

|   | ● | inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | ● | adverse changes in the securities markets; |
|--------|---------|--------------------------------------------|

|   | ● | changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | our ability to enter new markets successfully and capitalize on growth opportunities; |
|--------|---------|---------------------------------------------------------------------------------------|

|   | ● | our ability to successfully integrate acquired entities, if any; |
|--------|---------|------------------------------------------------------------------|

|   | ● | changes in consumer spending, borrowing and savings habits; |
|--------|---------|-------------------------------------------------------------|

|   | ● | changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | changes in our organization, compensation and benefit plans; and |
|--------|---------|------------------------------------------------------------------|

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|   | ● | changes in the financial condition or future prospects of issuers of securities that we own. |
|--------|---------|----------------------------------------------------------------------------------------------|

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----

|                                  |   | At December 31,        |    |
|---------------------------------------|--------|------------------------|---------|
|                                  |   | 2010                   |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                  |   | Amount                 |    |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                                  |   | (Dollars in thousands) |    |
|                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                    |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential       |   | $                      | 140,244 |   |   |   | 43.3 | % |   | $ | 151,352 |   |   |   | 46.6 | % |   | $ | 145,329 |   |   |   | 47.6 | % |   | $ | 114,745 |   |   |   | 47.3 | % |   | $ | 102,328 |   |   |   | 51.1 | % |
| Home equity loans and lines of credit |   |                   | 35,373  |   |   |   | 10.9 |   |   |   | 37,892 |   |   |   | 11.7 |   |   |   | 41,293 |   |   |   | 13.5 |   |   |   | 40,264 |   |   |   | 16.6 |   |   |   | 38,074 |   |   |   | 19.0 |   |
| Multi-family                          |   |                   | 3,124   |   |   |   | 1.0 |   |   |   | 4,108 |   |   |   | 1.3 |   |   |   | 4,942 |   |   |   | 1.6 |   |   |   | 5,609 |   |   |   | 2.3 |   |   |   | 2,492 |   |   |   | 1.2 |   |
| Commercial                            |   |                   | 114,242 |   |   |   | 35.2 |   |   |   | 97,075 |   |   |   | 29.9 |   |   |   | 81,983 |   |   |   | 26.8 |   |   |   | 55,606 |   |   |   | 22.9 |   |   |   | 39,186 |   |   |   | 19.6 |   |
| Construction                          |   |                   | 5,944   |   |   |   | 1.8 |   |   |   | 14,093 |   |   |   | 4.3 |   |   |   | 12,223 |   |   |   | 4.0 |   |   |   | 10,137 |   |   |   | 4.2 |   |   |   | 8,371 |   |   |   | 4.2 |   |
| Commercial                            |   |                   | 23,253  |   |   |   | 7.2 |   |   |   | 17,864 |   |   |   | 5.5 |   |   |   | 17,177 |   |   |   | 5.6 |   |   |   | 12,600 |   |   |   | 5.2 |   |   |   | 7,337 |   |   |   | 3.7 |   |
| Consumer and other                    |   |                   | 1,783   |   |   |   | 0.6 |   |   |   | 2,223 |   |   |   | 0.7 |   |   |   | 2,616 |   |   |   | 0.9 |   |   |   | 3,752 |   |   |   | 1.5 |   |   |   | 2,427 |   |   |   | 1.2 |   |
|                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans receivable                |   |                   | 323,963 |   |   |   | 100.0 | % |   |   | 324,607 |   |   |   | 100.0 | % |   |   | 305,563 |   |   |   | 100.0 | % |   |   | 242,713 |   |   |   | 100.0 | % |   |   | 200,215 |   |   |   | 100.0 | % |
| Deferred loan fees                    |   |                   | (433    | ) |   |   |   |   |   |   | (394 | ) |   |   |   |   |   |   | (307 | ) |   |   |   |   |   |   | (281 | ) |   |   |   |   |   |   | (323 | ) |   |   |   |   |
| Allowance for loan losses             |   |                   | (3,543  | ) |   |   |   |   |   |   | (2,606 | ) |   |   |   |   |   |   | (2,105 | ) |   |   |   |   |   |   | (1,392 | ) |   |   |   |   |   |   | (1,373 | ) |   |   |   |   |
|                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans receivable, net           |   | $                      | 319,987 |   |   |   |   |   |   | $ | 321,607 |   |   |   |   |   |   | $ | 303,151 |   |   |   |   |   |   | $ | 241,040 |   |   |   |   |   |   | $ | 198,519 |   |   |   |   |   |

----

|                                                                                                                                                                           |   | One- to Four-Family Residential |    |   | Home Equity Loans and Lines of Credit |   |   | Multi-Family |   |   | Commercial Real Estate |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|--------|---------------------------------------|--------|--------|--------------|--------|--------|------------------------|--------|
|                                                                                                                                                                           |   | Amount                          |    |   | Weighted Average Rate                 |   |   | Amount       |   |   | Weighted Average Rate  |   |   | Amount |   |   | Weighted Average Rate |   |   | Amount |   |   | Weighted Average Rate |   |
|                                                                                                                                                                           |   | (Dollars in thousands)          |    |
| Due During the YearsEnding December 31,                                                                                                                                        |   |                            |    |   |                                  |   |   |         |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2011                                    |   | $                               | 7,291   |   |                                  |   | 4.51   | %            |   | $      | 7,484                  |   |   |   | 4.13 | % |   | $ | 645 |   |   |   | 3.00 | % |   | $ | 11,337 |   |   |   | 6.05 | % |
| 2012                                    |   |                            | 2,633   |   |                                  |   | 7.21   | %            |   |   | 1,445                  |   |   |   | 7.00 | % |   |   | - |   |   |   | - | % |   |   | 8,939 |   |   |   | 6.53 | % |
| 2013                                    |   |                            | 5,250   |   |                                  |   | 6.25   | %            |   |   | 4,460                  |   |   |   | 5.74 | % |   |   | 105 |   |   |   | 8.00 | % |   |   | 25,874 |   |   |   | 5.48 | % |
| 2014 to 2015                            |   |                            | 7,263   |   |                                  |   | 6.23   | %            |   |   | 4,728                  |   |   |   | 6.11 | % |   |   | 1,916 |   |   |   | 6.00 | % |   |   | 37,747 |   |   |   | 5.89 | % |
| 2016 to 2020                            |   |                            | 10,039  |   |                                  |   | 4.86   | %            |   |   | 5,449                  |   |   |   | 6.33 | % |   |   | - |   |   |   | - | % |   |   | 21,960 |   |   |   | 6.07 | % |
| 2021 to 2025                            |   |                            | 14,447  |   |                                  |   | 5.12   | %            |   |   | 10,856                 |   |   |   | 6.44 | % |   |   | - |   |   |   | - | % |   |   | 5,263 |   |   |   | 6.08 | % |
| 2026 and beyond                                                                                                                                                                |   |                            | 93,321  |   |                                  |   | 5.90   | %            |   |   | 951                    |   |   |   | 5.64 | % |   |   | 458 |   |   |   | 5.61 | % |   |   | 3,122 |   |   |   | 5.37 | % |
|                                                                                                                                                                           |   |                            |    |   |                                  |   |   |         |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                 |   | $                               | 140,244 |   |                                  |   | 5.73   | %            |   | $      | 35,373                 |   |   |   | 5.80 | % |   | $ | 3,124 |   |   |   | 5.39 | % |   | $ | 114,242 |   |   |   | 5.89 | % |

|                                                                                                                                                                           |   | Construction           |   |   | Commercial            |   |   | Consumer and Other |   |   | Total                 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|--------|--------------------|--------|--------|-----------------------|--------|
|                                                                                                                                                                           |   | Amount                 |   |   | Weighted Average Rate |   |   | Amount             |   |   | Weighted Average Rate |   |   | Amount |   |   | Weighted Average Rate |   |   | Amount |   |   | Weighted Average Rate |   |
|                                                                                                                                                                           |   | (Dollars in thousands) |   |
| Due During the YearsEnding December 31,                                                                                                                                        |   |                   |   |   |                  |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2011                                    |   | $                      | 5,944  |   |                  |   | 5.33   | %                  |   | $      | 9,411                 |   |   |   | 4.87 | % |   | $ | 524 |   |   |   | 7.88 | % |   | $ | 42,636 |   |   |   | 5.07 | % |
| 2012                                    |   |                   | -      |   |                  |   | -      | %                  |   |   | 1,993                 |   |   |   | 6.02 | % |   |   | 376 |   |   |   | 9.51 | % |   |   | 15,386 |   |   |   | 6.70 | % |
| 2013                                    |   |                   | -      |   |                  |   | -      | %                  |   |   | 2,254                 |   |   |   | 5.48 | % |   |   | 403 |   |   |   | 8.93 | % |   |   | 38,346 |   |   |   | 5.66 | % |
| 2014 to 2015                            |   |                   | -      |   |                  |   | -      | %                  |   |   | 6,463                 |   |   |   | 5.83 | % |   |   | 357 |   |   |   | 7.52 | % |   |   | 58,474 |   |   |   | 5.96 | % |
| 2016 to 2020                            |   |                   | -      |   |                  |   | -      | %                  |   |   | 3,132                 |   |   |   | 5.24 | % |   |   | 123 |   |   |   | 6.83 | % |   |   | 40,703 |   |   |   | 5.75 | % |
| 2021 to 2025                            |   |                   | -      |   |                  |   | -      | %                  |   |   | -                     |   |   |   | - | % |   |   | - |   |   |   | - | % |   |   | 30,566 |   |   |   | 5.75 | % |
| 2026 and beyond                                                                                                                                                                |   |                   | -      |   |                  |   | -      | %                  |   |   | -                     |   |   |   | - | % |   |   | - |   |   |   | - | % |   |   | 97,852 |   |   |   | 5.88 | % |
|                                                                                                                                                                           |   |                   |   |   |                  |   |   |               |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                            |   | $                      | 5,944  |   |                  |   | 5.33   | %                  |   | $      | 23,253                |   |   |   | 5.34 | % |   | $ | 1,783 |   |   |   | 8.32 | % |   | $ | 323,963 |   |   |   | 5.77 | % |

|                                                                                                                                                        |   | Due After December 31, 2011 |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------|
|                                                                                                                                                        |   | Fixed                       |    |   | Adjustable |   |   | Total |   |
|                                                                                                                                                        |   | (In thousands)              |    |
| Real estate loans:                                                                                                                                          |   |                        |    |   |   |   |   |   |   |
| One- to four-family residential                                                                                                                             |   | $                           | 112,883 |   |   | $ | 20,070 |   |   | $ | 132,953 |   |
| Home equity loans and lines of credit                                                                                                                       |   |                        | 27,889  |   |   |   | - |   |   |   | 27,889 |   |
| Multi-family                                                                                                                                                |   |                        | 2,479   |   |   |   | - |   |   |   | 2,479 |   |
| Commercial                                                                                                                                                  |   |                        | 102,905 |   |   |   | - |   |   |   | 102,905 |   |
| Commercial                                                                                                                                                  |   |                        | 13,842  |   |   |   | - |   |   |   | 13,842 |   |
| Consumer and other                                                                                                                                          |   |                        | 1,259   |   |   |   | - |   |   |   | 1,259 |   |
|                                                                                                                                                        |   |                        |    |   |   |   |   |   |   |   |   |   |
| Total loans                         |   | $                           | 261,257 |   |   | $ | 20,070 |   |   | $ | 281,327 |   |

----

----

----

|                                  |   | 30-59 DaysPast Due |   |   | 60-89 DaysPast due |   |   | 90 Days andOver |   |   | Total PastDue |   |   | Current |   |   | Total Loans Receivable |   |    | LoansReceivable >90 Days and Accruing |   |
|---------------------------------------|--------|--------------------|--------|--------|--------------------|--------|--------|-----------------|--------|--------|---------------|--------|--------|---------|--------|--------|------------------------|--------|---------|------------------------------------------|--------|
|                                  |   | (In thousands)     |   |
| At December 31, 2010                  |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |
| Real estate loans:                    |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |
| One- to four-family residential       |   | $                  | 3,429  |   |               | $      | 2,354  |            |   | $      | 5,574         |   |   | $       | 11,357 |   |                   | $      | 128,887 |                                     |   | $ | 140,244 |   |   | $ | - |   |
| Multi-family                          |   |               | -      |   |               |   | -      |            |   |   |  -       |   |   |    | -      |   |                   |   | 3,124   |                                     |   |   | 3,124 |   |   |   | - |   |
| Commercial                            |   |               | 124    |   |               |   | 1,899  |            |   |   | 4,337         |   |   |    | 6,360  |   |                   |   | 107,882 |                                     |   |   | 114,242 |   |   |   | - |   |
| Construction                          |   |               | -      |   |               |   | -      |            |   |   | 384           |   |   |    | 384    |   |                   |   | 5,560   |                                     |   |   | 5,944 |   |   |   | - |   |
| Home equity loans and lines of credit |   |               | 446    |   |               |   | 302    |            |   |   | 106           |   |   |    | 854    |   |                   |   | 34,519  |                                     |   |   | 35,373 |   |   |   | - |   |
| Commercial                            |   |               | -      |   |               |   | -      |            |   |   | 288           |   |   |    | 288    |   |                   |   | 22,965  |                                     |   |   | 23,253 |   |   |   | - |   |
| Consumer and other                    |   |               | 67     |   |               |   | 3      |            |   |   | 31            |   |   |    | 101    |   |                   |   | 1,682   |                                     |   |   | 1,783 |   |   |   | - |   |
| Total                                 |   | $                  | 4,066  |   |               | $      | 4,558  |            |   | $      | 10,720        |   |   | $       | 19,344 |   |                   | $      | 304,619 |                                     |   | $ | 323,963 |   |   | $ | - |   |
|                                  |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| At December 31, 2009                  |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| Real estate loans:                    |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| One- to four-family residential       |   | $                  | -      |   |               | $      | 1,085  |            |   | $      | 4,023         |   |   | $       | 5,108  |   |                   | $      | 146,244 |                                     |   | $ | 151,352 |   |   | $ | - |   |
| Multi-family                          |   |               | -      |   |               |   | -      |            |   |   | -             |   |   |    | -      |   |                   |   | 4,108   |                                     |   |   | 4,108 |   |   |   | - |   |
| Commercial                            |   |               | 1,093  |   |               |   | 291    |            |   |   | 535           |   |   |    | 1,919  |   |                   |   | 95,156  |                                     |   |   | 97,075 |   |   |   | - |   |
| Construction                          |   |               | -      |   |               |   | -      |            |   |   | 487           |   |   |    | 487    |   |                   |   | 13,606  |                                     |   |   | 14,093 |   |   |   | - |   |
| Home equity loans and lines of credit |   |               | 128    |   |               |   | 65     |            |   |   | 215           |   |   |    | 408    |   |                   |   | 37,484  |                                     |   |   | 37,892 |   |   |   | - |   |
| Commercial                            |   |               | -      |   |               |   | -      |            |   |   | 15            |   |   |    | 15     |   |                   |   | 17,849  |                                     |   |   | 17,864 |   |   |   | - |   |
| Consumer and other                    |   |               | 74     |   |               |   | 39     |            |   |   | 2             |   |   |    | 115    |   |                   |   | 2,108   |                                     |   |   | 2,223 |   |   |   | - |   |
| Total                                 |   | $                  | 1,295  |   |               | $      | 1,480  |            |   | $      | 5,277         |   |   | $       | 8,052  |   |                   | $      | 316,555 |                                     |   | $ | 324,607 |   |   | $ | - |   |
|                                  |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| At December 31, 2008                  |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| Real estate loans:                    |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| One- to four-family residential       |   | $                  | 941    |   |               | $      | 633    |            |   | $      | 1,015         |   |   | $       | 2,589  |   |                   | $      | 142,740 |                                     |   | $ | 145,329 |   |   | $ | - |   |
| Multi-family                          |   |               | -      |   |               |   | -      |            |   |   |  -       |   |   |    | -      |   |                   |   | 4,942   |                                     |   |   | 4,942 |   |   |   | - |   |
| Commercial                            |   |               | 753    |   |               |   | -      |            |   |   | 511           |   |   |    | 1,264  |   |                   |   | 80,719  |                                     |   |   | 81,983 |   |   |   | - |   |
| Construction                          |   |               | -      |   |               |   | -      |            |   |   | -             |   |   |    | -      |   |                   |   | 12,223  |                                     |   |   | 12,223 |   |   |   | - |   |
| Home equity loans and lines of credit |   |               | 117    |   |               |   | -      |            |   |   | 290           |   |   |    | 407    |   |                   |   | 40,886  |                                     |   |   | 41,293 |   |   |   | - |   |
| Commercial                            |   |               | -      |   |               |   | -      |            |   |   | 13            |   |   |    | 13     |   |                   |   | 17,164  |                                     |   |   | 17,177 |   |   |   | - |   |
| Consumer and other                    |   |               | 62     |   |               |   | 18     |            |   |   | 73            |   |   |    | 153    |   |                   |   | 2,463   |                                     |   |   | 2,616 |   |   |   | - |   |
| Total                                 |   | $                  | 1,873  |   |               | $      | 651    |            |   | $      | 1,902         |   |   | $       | 4,426  |   |                   | $      | 301,137 |                                     |   | $ | 305,563 |   |   | $ | - |   |
|                                  |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| At December 31, 2007                  |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| Real estate loans:                    |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| One- to four-family residential       |   | $                  | -      |   |               | $      | 82     |            |   | $      | 682           |   |   | $       | 764    |   |                   | $      | 113,981 |                                     |   | $ | 114,745 |   |   | $ | - |   |
| Multi-family                          |   |               | -      |   |               |   | -      |            |   |   |  -       |   |   |    | -      |   |                   |   | 5,609   |                                     |   |   | 5,609 |   |   |   | - |   |
| Commercial                            |   |               | -      |   |               |   | -      |            |   |   | -             |   |   |    | -      |   |                   |   | 55,606  |                                     |   |   | 55,606 |   |   |   | - |   |
| Construction                          |   |               | -      |   |               |   | -      |            |   |   | 252           |   |   |    | 252    |   |                   |   | 9,885   |                                     |   |   | 10,137 |   |   |   | - |   |
| Home equity loans and lines of credit |   |               | 78     |   |               |   | -      |            |   |   | 10            |   |   |    | 88     |   |                   |   | 40,176  |                                     |   |   | 40,264 |   |   |   | - |   |
| Commercial                            |   |               | 166    |   |               |   | 31     |            |   |   | 118           |   |   |    | 315    |   |                   |   | 12,285  |                                     |   |   | 12,600 |   |   |   | - |   |
| Consumer and other                    |   |               | 18     |   |               |   | -      |            |   |   | 22            |   |   |    | 40     |   |                   |   | 3,712   |                                     |   |   | 3,752 |   |   |   | - |   |
| Total                                 |   | $                  | 262    |   |               | $      | 113    |            |   | $      | 1,084         |   |   | $       | 1,459  |   |                   | $      | 241,254 |                                     |   | $ | 242,713 |   |   | $ | - |   |
|                                  |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| At December 31, 2006                  |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| Real estate loans:                    |   |               |   |   |               |   |   |            |   |   |          |   |   |    |   |   |                   |   |    |                                     |   |   |   |   |   |   |   |   |
| One- to four-family residential       |   | $                  | 52     |   |               | $      | -      |            |   | $      | 167           |   |   | $       | 219    |   |                   | $      | 102,109 |                                     |   | $ | 102,328 |   |   | $ | - |   |
| Multi-family                          |   |               | -      |   |               |   | -      |            |   |   |  -       |   |   |    | -      |   |                   |   | 2,492   |                                     |   |   | 2,492 |   |   |   | - |   |
| Commercial                            |   |               | -      |   |               |   | -      |            |   |   | -             |   |   |    | -      |   |                   |   | 39,186  |                                     |   |   | 39,186 |   |   |   | - |   |
| Construction                          |   |               | -      |   |               |   | -      |            |   |   | 44            |   |   |    | 44     |   |                   |   | 8,327   |                                     |   |   | 8,371 |   |   |   | - |   |
| Home equity loans and lines of credit |   |               | 250    |   |               |   | 3      |            |   |   | 22            |   |   |    | 275    |   |                   |   | 37,799  |                                     |   |   | 38,074 |   |   |   | - |   |
| Commercial                            |   |               | -      |   |               |   | -      |            |   |   | -             |   |   |    | -      |   |                   |   | 7,337   |                                     |   |   | 7,337 |   |   |   | - |   |
| Consumer and other                    |   |               | 41     |   |               |   | 74     |            |   |   | -             |   |   |    | 115    |   |                   |   | 2,312   |                                     |   |   | 2,427 |   |   |   | - |   |
| Total                                 |   | $                  | 343    |   |               | $      | 77     |            |   | $      | 233           |   |   | $       | 653    |   |                   | $      | 199,562 |                                     |   | $ | 200,215 |   |   | $ | - |   |

----

|                                                                    |   | At December 31,        |   |
|-------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                    |   | 2010                   |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                    |   | (Dollars in thousands) |   |
| Non-accrual loans:                                                      |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                                      |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                         |   | $                      | 5,574  |   |   | $ | 4,023 |   |   | $ | 1,015 |   |   | $ | 764 |   |   | $ | 167 |   |
| Multi-family                                                            |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                                              |   |                   | 4,337  |   |   |   | 535 |   |   |   | 511 |   |   |   | 252 |   |   |   | - |   |
| Construction                                                            |   |                   | 384    |   |   |   | 487 |   |   |   | - |   |   |   | - |   |   |   | 44 |   |
| Home equity loans and lines of credit                                   |   |                   | 106    |   |   |   | 215 |   |   |   | 290 |   |   |   | 10 |   |   |   | 22 |   |
| Commercial                                                              |   |                   | 288    |   |   |   | 15 |   |   |   | 13 |   |   |   | 118 |   |   |   | - |   |
| Consumer                                                                |   |                   | 31     |   |   |   | 2 |   |   |   | 73 |   |   |   | 22 |   |   |   | 9 |   |
| Total non-accrual loans                                                 |   |                   | 10,720 |   |   |   | 5,277 |   |   |   | 1,902 |   |   |   | 1,166 |   |   |   | 233 |   |
|                                                                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accruing loans 90 days or more past due:                                |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| All loans                                                               |   | $                      | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing loans                                              |   |                   | 10,720 |   |   |   | 5,277 |   |   |   | 1,902 |   |   |   | 1,166 |   |   |   | 233 |   |
|                                                                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreclosed real estate                                                  |   |                   | 276    |   |   |   | - |   |   |   | 113 |   |   |   | - |   |   |   | - |   |
| Other non-performing assets                                             |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing assets                                             |   |                   | 10,996 |   |   |   | 5,277 |   |   |   | 2,015 |   |   |   | 1,166 |   |   |   | 233 |   |
|                                                                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Performing troubled debt restructurings:                                |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                                      |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                         |   |                   | 855    |   |   |   | 525 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Multi-family                                                            |   |                   | 645    |   |   |   | 742 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                                              |   |                   | 13,051 |   |   |   | 2,096 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Construction                                                            |   |                   | 1,369  |   |   |   | 1,426 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Home equity loans and lines of credit                                   |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                                              |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer                                                                |   |                   | 9      |   |   |   | 18 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total performing troubled debt restructurings                           |   |                   | 15,929 |   |   |   | 4,807 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing assets and performing troubled debt restructurings |   | $                      | 26,925 |   |   | $ | 10,084 |   |   | $ | 2,015 |   |   | $ | 1,166 |   |   | $ | 233 |   |
|                                                                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                                                 |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing loans to total loans                               |   |                   | 3.31   | % |   |   | 1.63 | % |   |   | 0.62 | % |   |   | 0.48 | % |   |   | 0.12 | % |
| Total non-performing loans to total assets                              |   |                   | 1.82   | % |   |   | 0.93 | % |   |   | 0.36 | % |   |   | 0.25 | % |   |   | 0.06 | % |
| Total non-performing assets to total assets                             |   |                   | 1.86   | % |   |   | 0.93 | % |   |   | 0.38 | % |   |   | 0.25 | % |   |   | 0.06 | % |

----

|                    |   | At December 31, |    |
|-------------------------|--------|-----------------|---------|
|                    |   | 2010            |    |   | 2009 |   |
|                    |   | (In thousands)  |    |
|                    |   |            |    |
| Classified assets:      |   |            |    |   |   |   |
| Substandard             |   | $               | 20,179  |   |   | $ | 10,746 |   |
| Doubtful                |   |            | — |   |   |   | — |   |
| Loss                    |   |            | — |   |   |   | — |   |
| Total classified assets |   | $               | 20,179  |   |   | $ | 10,746 |   |
| Special mention         |   | $               | 9,429   |   |   | $ | 11,660 |   |

----

|   | (1) | specific allowances established for (a) any impaired commercial real estate, commercial, construction and multi-family mortgage loans or (b) non-accrual residential real estate loans, in either case where the recorded investment in the loan exceeds the measured value of the loan; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | general allowances for loan losses for each loan type based on historical loan loss experience; and |
|--------|-----|-----------------------------------------------------------------------------------------------------|

|   | (3) | adjustments to historical loss experience (unallocated allowances), maintained to cover uncertainties that affect our estimate of probable losses for each loan type. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | levels of, and trends in, charge-offs and recoveries; |
|--------|---------|-------------------------------------------------------|

|   | ● | national and local economic trends and conditions; |
|--------|---------|----------------------------------------------------|

|   | ● | trends in volume and terms of loans, including any credit concentrations in the loan portfolio; and |
|--------|---------|-----------------------------------------------------------------------------------------------------|

|   | ● | experience, ability, and depth of lending management and other relevant staff. |
|--------|---------|--------------------------------------------------------------------------------|

----

|                                                             |   | At or For the Years Ended December 31, |    |
|------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                             |   | 2010                                   |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                             |   | (Dollars in thousands)                 |    |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of year                                     |   | $                                      | 2,606   |   |   | $ | 2,105 |   |   | $ | 1,392 |   |   | $ | 1,373 |   |   | $ | 1,168 |   |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Charge-offs:                                                     |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                               |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                  |   |                                   | (223    | ) |   |   | — |   |   |   | (11 | ) |   |   | — |   |   |   | — |   |
| Home equity loans and lines of credit                            |   |                                   | — |   |   |   | (34 | ) |   |   | (2 | ) |   |   | — |   |   |   | — |   |
| Multi-family                                                     |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                       |   |                                   | (144    | ) |   |   | — |   |   |   | (5 | ) |   |   | (62 | ) |   |   | — |   |
| Construction                                                     |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                       |   |                                   | (15     | ) |   |   | (9 | ) |   |   | — |   |   |   | — |   |   |   | — |   |
| Consumer and other                                               |   |                                   | (38     | ) |   |   | (74 | ) |   |   | (32 | ) |   |   | (6 | ) |   |   | (10 | ) |
| Total charge-offs                                                |   |                                   | (420    | ) |   |   | (117 | ) |   |   | (50 | ) |   |   | (68 | ) |   |   | (10 | ) |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries:                                                      |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                               |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                  |   |                                   | — |   |   |   | — |   |   |   | 3 |   |   |   | — |   |   |   | — |   |
| Home equity loans and lines of credit                            |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 15 |   |
| Multi-family                                                     |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                       |   |                                   | 5       |   |   |   | — |   |   |   | 4 |   |   |   | — |   |   |   | — |   |
| Construction                                                     |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                       |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Consumer and other                                               |   |                                   | 12      |   |   |   | 3 |   |   |   | — |   |   |   | 3 |   |   |   | 21 |   |
| Total recoveries                                                 |   |                                   | 17      |   |   |   | 3 |   |   |   | 7 |   |   |   | 3 |   |   |   | 36 |   |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net recoveries (charge-offs)                                     |   |                                   | (403    | ) |   |   | (114 | ) |   |   | (43 | ) |   |   | (65 | ) |   |   | 26 |   |
| Provision for loan losses                                        |   |                                   | 1,340   |   |   |   | 615 |   |   |   | 756 |   |   |   | 84 |   |   |   | 179 |   |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at end of year                                           |   | $                                      | 3,543   |   |   | $ | 2,606 |   |   | $ | 2,105 |   |   | $ | 1,392 |   |   | $ | 1,373 |   |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                                          |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net recoveries (charge-offs) to average loans outstanding        |   |                                   | (0.12   | )% |   |   | (0.04 | )% |   |   | (0.02 | )% |   |   | (0.03 | )% |   |   | 0.01 | % |
| Allowance for loan losses to non-performing loans at end of year |   |                                   | 33.05   | % |   |   | 49.38 | % |   |   | 110.67 | % |   |   | 119.38 | % |   |   | 589.27 | % |
| Allowance for loan losses to total loans at end of year          |   |                                   | 1.09    | % |   |   | 0.80 | % |   |   | 0.69 | % |   |   | 0.57 | % |   |   | 0.69 | % |

----

|                                  |   | At December 31,        |   |
|---------------------------------------|--------|------------------------|--------|
|                                  |   | 2010                   |   |   | 2009 |   |   | 2008 |   |
|                                  |   | Amount                 |   |   | Percent of Allowance to Total Allowance |   |   | Percent of Loans in Category to Total Loans |   |   | Amount |   |   | Percent of Allowance to Total Allowance |   |   | Percent of Loans in Category to Total Loans |   |   | Amount |   |   | Percent of Allowance to Total Allowance |   |   | Percent of Loans in Category to Total Loans |   |
|                                  |   | (Dollars in thousands) |   |
| Real estate loans:                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential       |   | $                      | 580    |   |   |   | 16.4 | % |   |   | 43.3 | % |   | $ | 418 |   |   |   | 16.0 | % |   |   | 46.6 | % |   | $ | 273 |   |   |   | 13.0 | % |   |   | 47.6 | % |
| Home equity loans and lines of credit |   |                   | 35     |   |   |   | 1.0 |   |   |   | 10.9 |   |   |   | 42 |   |   |   | 1.6 |   |   |   | 11.7 |   |   |   | 57 |   |   |   | 2.7 |   |   |   | 13.5 |   |
| Multi-family                          |   |                   | 27     |   |   |   | 0.8 |   |   |   | 1.0 |   |   |   | 10 |   |   |   | 0.4 |   |   |   | 1.3 |   |   |   | 16 |   |   |   | 0.7 |   |   |   | 1.6 |   |
| Commercial                            |   |                   | 1,800  |   |   |   | 50.8 |   |   |   | 35.2 |   |   |   | 1,010 |   |   |   | 38.8 |   |   |   | 29.9 |   |   |   | 863 |   |   |   | 41.0 |   |   |   | 26.8 |   |
| Construction                          |   |                   | 65     |   |   |   | 1.8 |   |   |   | 1.8 |   |   |   | 157 |   |   |   | 6.0 |   |   |   | 4.3 |   |   |   | 63 |   |   |   | 3.0 |   |   |   | 4.0 |   |
| Commercial                            |   |                   | 406    |   |   |   | 11.4 |   |   |   | 7.2 |   |   |   | 283 |   |   |   | 10.9 |   |   |   | 5.5 |   |   |   | 271 |   |   |   | 12.9 |   |   |   | 5.6 |   |
| Consumer and other                    |   |                   | 130    |   |   |   | 3.7 |   |   |   | 0.6 |   |   |   | 164 |   |   |   | 6.3 |   |   |   | 0.7 |   |   |   | 212 |   |   |   | 10.1 |   |   |   | 0.9 |   |
| Unallocated                           |   |                   | 500    |   |   |   | 14.1 |   |   |   | — |   |   |   | 522 |   |   |   | 20.0 |   |   |   | — |   |   |   | 350 |   |   |   | 16.6 |   |   |   | — |   |
|                                  |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total allowance for loan losses       |   | $                      | 3,543  |   |   |   | 100.0 | % |   |   | 100.0 | % |   | $ | 2,606 |   |   |   | 100.0 | % |   |   | 100.0 | % |   | $ | 2,105 |   |   |   | 100.0 | % |   |   | 100.0 | % |

|                                  |   | At December 31,        |    |
|---------------------------------------|--------|------------------------|---------|
|                                  |   | 2007                   |    |   | 2006 |   |
|                                  |   | Amount                 |    |   | Percent of Allowance to TotalAllowance |   |   | Percent ofLoans in Category toTotal Loans |   |   | Amount |   |   | Percent of Allowance to TotalAllowance |   |   | Percent ofLoans in Category toTotal Loans |   |
|                                  |   | (Dollars in thousands) |    |
| Real estate loans:                    |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential       |   | $                      | 115     |   |   |   | 8.3 | % |   |   | 47.3 | % |   | $ | 265 |   |   |   | 19.3 | % |   |   | 51.1 | % |
| Home equity loans and lines of credit |   |                   | 40      |   |   |   | 2.9 |   |   |   | 16.6 |   |   |   | 95 |   |   |   | 6.9 |   |   |   | 19.0 |   |
| Multi-family                          |   |                   | 70      |   |   |   | 5.0 |   |   |   | 2.3 |   |   |   | — |   |   |   | — |   |   |   | 1.2 |   |
| Commercial                            |   |                   | 825     |   |   |   | 59.3 |   |   |   | 22.9 |   |   |   | 695 |   |   |   | 50.6 |   |   |   | 19.6 |   |
| Construction                          |   |                   | 71      |   |   |   | 5.1 |   |   |   | 4.2 |   |   |   | — |   |   |   | — |   |   |   | 4.2 |   |
| Commercial                            |   |                   | 158     |   |   |   | 11.3 |   |   |   | 5.2 |   |   |   | 220 |   |   |   | 16.0 |   |   |   | 3.7 |   |
| Consumer and other                    |   |                   | 113     |   |   |   | 8.1 |   |   |   | 1.5 |   |   |   | 98 |   |   |   | 7.2 |   |   |   | 1.2 |   |
| Unallocated                           |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total allowance for loan losses       |   | $                      | 1,392   |   |   |   | 100.0 | % |   |   | 100.0 | % |   | $ | 1,373 |   |   |   | 100.0 | % |   |   | 100.0 | % |

----

----

----

|                                |   | At December 31, |    |
|-------------------------------------|--------|-----------------|---------|
|                                |   | 2010            |    |   | 2009 |   |   | 2008 |   |
|                                |   | AmortizedCost   |    |   | Fair Value |   |   | AmortizedCost |   |   | Fair Value |   |   | AmortizedCost |   |   | Fair Value |   |
|                                |   | (In thousands)  |    |
| Securities available-for-sale:      |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities          |   | $               | 60,799  |   |   | $ | 64,483 |   |   | $ | 83,802 |   |   | $ | 88,000 |   |   | $ | 115,245 |   |   | $ | 117,010 |   |
| Collateralized mortgage obligations |   |            | 56,342  |   |   |   | 56,432 |   |   |   | 28,460 |   |   |   | 28,888 |   |   |   | — |   |   |   | — |   |
| U.S. Government obligations         |   |            | 42,653  |   |   |   | 42,439 |   |   |   | 28,973 |   |   |   | 29,142 |   |   |   | 21,963 |   |   |   | 22,245 |   |
| Corporate debt obligations          |   |            | 9,712   |   |   |   | 9,912 |   |   |   | 10,563 |   |   |   | 10,672 |   |   |   | 15,249 |   |   |   | 13,483 |   |
| Mutual funds (1)                    |   |            | 850     |   |   |   | 901 |   |   |   | 1,561 |   |   |   | 1,625 |   |   |   | 2,643 |   |   |   | 2,643 |   |
| Municipal debt obligations          |   |            | 4,176   |   |   |   | 4,154 |   |   |   | 2,817 |   |   |   | 2,830 |   |   |   | 3,659 |   |   |   | 3,632 |   |
| SBA pools                           |   |            | 3,252   |   |   |   | 3,246 |   |   |   | 5,231 |   |   |   | 5,221 |   |   |   | 6,453 |   |   |   | 6,449 |   |
| Total securities available-for-sale |   | $               | 177,784 |   |   | $ | 181,567 |   |   | $ | 161,407 |   |   | $ | 166,378 |   |   | $ | 165,212 |   |   | $ | 165,462 |   |
|                                |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held-to-maturity:        |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities          |   | $               | 1,740   |   |   | $ | 1,842 |   |   | $ | 2,650 |   |   | $ | 2,803 |   |   | $ | 3,143 |   |   | $ | 3,256 |   |
| U.S. Government obligations         |   |            | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 932 |   |   |   | 970 |   |
| Corporate debt obligations          |   |            | 1,190   |   |   |   | 1,402 |   |   |   | 5,209 |   |   |   | 5,292 |   |   |   | 3,969 |   |   |   | 3,259 |   |
| Municipal debt obligations          |   |            | 35,284  |   |   |   | 35,121 |   |   |   | 33,173 |   |   |   | 33,300 |   |   |   | 8,853 |   |   |   | 8,847 |   |
| Total securities held-to-maturity   |   | $               | 38,214  |   |   | $ | 38,365 |   |   | $ | 41,032 |   |   | $ | 41,395 |   |   | $ | 16,897 |   |   | $ | 16,332 |   |

----

| (1) | The cost and fair value for 2010, 2009 and 2008 reflect an impairment charge of approximately $0, $100,000 and $1.2 million before income tax benefit. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                |   | At December 31, 2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|
|                                                                                                                                                                                                                                                |   | Less than 12 months  |   |   | 12 months or more |   |   | Total |   |
|                                                                                                                                                                                                                                                |   | Fair Value           |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                                                                                                                                                                                                                                |   | (In thousands)       |   |
|                                                                                                                                                                                                                                                |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                                                                                                                                                                                                                     |   | $                    | 1,620  |   |   | $ | 42 |   |   | $ | 115 |   |   | $ | 1 |   |   | $ | 1,735 |   |   | $ | 43 |   |
| Collateralized mortgage obligations                                                                                                                                                                                                                 |   |                 | 20,539 |   |   |   | 484 |   |   |   | - |   |   |   | - |   |   |   | 20,539 |   |   |   | 484 |   |
| U. S. Government obligations                                                                                                                                                                                                                        |   |                 | 26,176 |   |   |   | 338 |   |   |   | - |   |   |   | - |   |   |   | 26,176 |   |   |   | 338 |   |
| Corporate debt obligations                                                                                                                                                                                                                          |   |                 | 1,953  |   |   |   | 10 |   |   |   | 937 |   |   |   | 33 |   |   |   | 2,890 |   |   |   | 43 |   |
| Municipal debt obligations                                                                                                                                                                                                                          |   |                 | 1,619  |   |   |   | 23 |   |   |   | 595 |   |   |   | 35 |   |   |   | 2,214 |   |   |   | 58 |   |
| SBA pools                                        |   |                 | -      |   |   |   |  - |   |   |   | 1,832 |   |   |   | 14 |   |   |   | 1,832 |   |   |   | 14 |   |
| Total                                                                          |   | $                    | 51,907 |   |   | $ | 897 |   |   | $ | 3,479 |   |   | $ | 83 |   |   | $ | 55,386 |   |   | $ | 980 |   |

|                                                                                                                                                                                                                                                |   | At December 31, 2009 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|
|                                                                                                                                                                                                                                                |   | Less than 12 months  |   |   | 12 months or more |   |   | Total |   |
|                                                                                                                                                                                                                                                |   | Fair Value           |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                                                                                                                                                                                                                                |   | (In thousands)       |   |
|                                                                                                                                                                                                                                                |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                                                                                                                                                                                                                          |   | $                    | 87     |   |   | $ | 3 |   |   | $ | 89 |   |   | $ | 1 |   |   | $ | 176 |   |   | $ | 4 |   |
| Collateralized mortgage obligations                                                                                                                                                                                                                 |   |                 | 1,263  |   |   |   | 13 |   |   |   | 1,975 |   |   |   | 1 |   |   |   | 3,238 |   |   |   | 13 |   |
| Corporate debt obligations                                                                                                                                                                                                                          |   |                 | 766    |   |   |   | 16 |   |   |   | 1,357 |   |   |   | 107 |   |   |   | 2,123 |   |   |   | 123 |   |
| Municipal debt obligations                                                                                                                                                                                                                          |   |                 | 846    |   |   |   | 36 |   |   |   | - |   |   |   | - |   |   |   | 846 |   |   |   | 36 |   |
| SBA pools                                        |   |                 | -      |   |   |   | - |   |   |   | 2,278 |   |   |   | 39 |   |   |   | 2,278 |   |   |   | 39 |   |
| Total                                                                          |   | $                    | 2,962  |   |   | $ | 67 |   |   | $ | 5,699 |   |   | $ | 148 |   |   | $ | 8,661 |   |   | $ | 215 |   |

|                                                                                                                                                                                                  |   | At December 31, 2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|
|                                                                                                                                                                                                  |   | Less than 12 months  |   |   | 12 months or more |   |   | Total |   |
|                                                                                                                                                                                                  |   | Fair Value           |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                                                                                                                                                                                  |   | (In thousands)       |   |
|                                                                                                                                                                                                  |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Municipal debt obligations                                                                                                                                                                            |   | $                    | 2,346  |   |   | $ | 226 |   |   | $ | 228 |   |   | $ | 33 |   |   | $ | 2,574 |   |   | $ | 259 |   |
| Total                                 |   | $                    | 2,346  |   |   | $ | 226 |   |   | $ | 228 |   |   | $ | 33 |   |   | $ | 2,574 |   |   | $ | 259 |   |

|                                                                                                                                                                                                  |   | At December 31, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|
|                                                                                                                                                                                                  |   | Less than 12 months  |   |   | 12 months or more |   |   | Total |   |
|                                                                                                                                                                                                  |   | Fair Value           |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                                                                                                                                                                                  |   | (In thousands)       |   |
|                                                                                                                                                                                                  |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate debt obligations                                                                                                                                                                            |   | $                    | 462    |   |   | $ | 7 |   |   | $ | — |   |   | $ | — |   |   | $ | 462 |   |   | $ | 7 |   |
| Municipal debt obligations                                                                                                                                                                            |   |                 | 1,306  |   |   |   | 85 |   |   |   | 391 |   |   |   | 8 |   |   |   | 1,697 |   |   |   | 93 |   |
| Total                                 |   | $                    | 1,768  |   |   | $ | 92 |   |   | $ | 391 |   |   | $ | 8 |   |   | $ | 2,159 |   |   | $ | 100 |   |

----

----

|                                |   | One Year or Less       |   |   | More than One Year through Five Years |   |   | More than Five Years through Ten Years |   |   | More than Ten Years    |   |   | Total Securities |   |
|-------------------------------------|--------|------------------------|--------|--------|---------------------------------------|--------|--------|----------------------------------------|--------|--------|------------------------|--------|--------|------------------|--------|
|                                |   | Amortized Cost         |   |   | Weighted Average Yield                |   |   | Amortized Cost                         |   |   | Weighted Average Yield |   |   | Amortized Cost   |   |   | Weighted Average Yield |   |   | Amortized Cost |   |   | Weighted Average Yield |   |   | Amortized Cost |   |   | Fair Value |   |   | Weighted Average Yield |   |
|                                |   | (Dollars in thousands) |   |
| Securities available for sale:      |   |                   |   |   |                                  |   |   |                                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities          |   | $                      | 917    |   |                                  |   | 6.20   | %                                      |   | $      | -                      |   |   |             | -      | % |   | $ | 1,623 |   |   |   | 4.64 | % |   | $ | 58,259 |   |   |   | 4.74 | % |   | $ | 60,799 |   |   | $ | 64,483 |   |   |   | 4.76 | % |
| Collateralized mortgage obligations |   |                   | -      |   |                                  |   | -      |                                   |   |   | 8,854                  |   |   |             | 2.01   |   |   |   | 22,315 |   |   |   | 2.21 |   |   |   | 25,173 |   |   |   | 2.46 |   |   |   | 56,342 |   |   |   | 56,432 |   |   |   | 2.29 |   |
| U.S. government obligations         |   |                   | -      |   |                                  |   | -      |                                   |   |   | 39,174                 |   |   |             | 1.55   |   |   |   | 2,000 |   |   |   | 3.25 |   |   |   | 1,479 |   |   |   | 5.00 |   |   |   | 42,653 |   |   |   | 42,439 |   |   |   | 1.75 |   |
| Corporate debt obligations          |   |                   | 3,492  |   |                                  |   | 4.17   |                                   |   |   | 3,251                  |   |   |             | 3.09   |   |   |   | 2,469 |   |   |   | 3.50 |   |   |   | 500 |   |   |   | 4.00 |   |   |   | 9,712 |   |   |   | 9,912 |   |   |   | 3.63 |   |
| Mutual funds                        |   |                   | 850    |   |                                  |   | 2.83   |                                   |   |   | -                      |   |   |             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 850 |   |   |   | 901 |   |   |   | 2.83 |   |
| Municipal debt obligations          |   |                   | 205    |   |                                  |   | 6.00   |                                   |   |   | 1,958                  |   |   |             | 3.42   |   |   |   | 817 |   |   |   | 6.69 |   |   |   | 1,196 |   |   |   | 6.53 |   |   |   | 4,176 |   |   |   | 4,154 |   |   |   | 5.08 |   |
| SBA pools                           |   |                   | 4      |   |                                  |   | 2.40   |                                   |   |   | 1,280                  |   |   |             | 3.36   |   |   |   | - |   |   |   | - |   |   |   | 1,968 |   |   |   | 1.48 |   |   |   | 3,252 |   |   |   | 3,246 |   |   |   | 2.22 |   |
| Total securities available for sale |   | $                      | 5,468  |   |                                  |   | 4.37   | %                                      |   | $      | 54,517                 |   |   |             | 1.83   | % |   | $ | 29,224 |   |   |   | 2.65 | % |   | $ | 88,575 |   |   |   | 4.04 | % |   | $ | 177,784 |   |   | $ | 181,567 |   |   |   | 3.14 | % |
|                                |   |                   |   |   |                                  |   |   |                                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held to maturity:        |   |                   |   |   |                                  |   |   |                                   |   |   |                   |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities          |   | $                      | -      |   |                                  |   | -      | %                                      |   | $      | 415                    |   |   |             | 6.09   | % |   | $ | 110 |   |   |   | 6.86 | % |   | $ | 1,215 |   |   |   | 6.20 | % |   | $ | 1,740 |   |   | $ | 1,842 |   |   |   | 6.22 | % |
| Corporate debt obligations          |   |                   | -      |   |                                  |   | -      |                                   |   |   | -                      |   |   |             | -      |   |   |   | 994 |   |   |   | 7.13 |   |   |   | 196 |   |   |   | 6.44 |   |   |   | 1,190 |   |   |   | 1,402 |   |   |   | 7.01 |   |
| Municipal debt obligations          |   |                   | 30,664 |   |                                  |   | 2.02   |                                   |   |   | 305                    |   |   |             | 6.97   |   |   |   | 2,508 |   |   |   | 7.59 |   |   |   | 1,807 |   |   |   | 8.09 |   |   |   | 35,284 |   |   |   | 35,121 |   |   |   | 2.77 |   |
| Total securities held to maturity   |   | $                      | 30,664 |   |                                  |   | 2.02   | %                                      |   | $      | 720                    |   |   |             | 6.46   | % |   | $ | 3,612 |   |   |   | 7.44 | % |   | $ | 3,218 |   |   |   | 7.28 | % |   | $ | 38,214 |   |   | $ | 38,365 |   |   |   | 3.06 | % |

----

|                        |   | At December 31,        |    |
|-----------------------------|--------|------------------------|---------|
|                        |   | 2010                   |    |   | 2009 |   |   | 2008 |   |
|                        |   | Balance                |    |   | Percent |   |   | Weighted AverageRate |   |   | Balance |   |   | Percent |   |   | Weighted AverageRate |   |   | Balance |   |   | Percent |   |   | Weighted AverageRate |   |
|                        |   | (Dollars in thousands) |    |
| Deposit type:               |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing demand |   | $                      | 20,279  |   |   |   | 3.95 | % |   |   | — | % |   | $ | 21,111 |   |   |   | 4.22 | % |   |   | — | % |   | $ | 18,146 |   |   |   | 3.97 | % |   |   | — | % |
| Savings                     |   |                   | 106,367 |   |   |   | 20.74 |   |   |   | 1.52 |   |   |   | 90,957 |   |   |   | 18.18 |   |   |   | 2.63 |   |   |   | 81,050 |   |   |   | 17.73 |   |   |   | 2.76 |   |
| NOW accounts                |   |                   | 115,514 |   |   |   | 22.52 |   |   |   | 0.89 |   |   |   | 98,810 |   |   |   | 19.74 |   |   |   | 0.85 |   |   |   | 55,439 |   |   |   | 12.12 |   |   |   | 0.72 |   |
| Super NOW accounts          |   |                   | 34,182  |   |   |   | 6.67 |   |   |   | 1.16 |   |   |   | 19,755 |   |   |   | 3.95 |   |   |   | 1.47 |   |   |   | 15,532 |   |   |   | 3.40 |   |   |   | 1.75 |   |
| Money market deposit        |   |                   | 66,901  |   |   |   | 13.05 |   |   |   | 1.24 |   |   |   | 63,005 |   |   |   | 12.59 |   |   |   | 1.63 |   |   |   | 45,404 |   |   |   | 9.93 |   |   |   | 3.26 |   |
| Total transaction accounts  |   |                   | 343,243 |   |   |   | 66.93 |   |   |   | 1.13 |   |   |   | 293,638 |   |   |   | 58.68 |   |   |   | 1.55 |   |   |   | 215,571 |   |   |   | 47.15 |   |   |   | 2.03 |   |
|                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Certificates of deposit     |   |                   | 169,593 |   |   |   | 33.07 |   |   |   | 2.36 |   |   |   | 206,728 |   |   |   | 41.32 |   |   |   | 2.91 |   |   |   | 241,660 |   |   |   | 52.85 |   |   |   | 3.97 |   |
|                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total deposits              |   | $                      | 512,836 |   |   |   | 100.00 | % |   |   | 1.54 | % |   | $ | 500,366 |   |   |   | 100.00 | % |   |   | 2.11 | % |   | $ | 457,231 |   |   |   | 100.00 | % |   |   | 3.06 | % |

|                                                                                                                                                                                                                                                                                   |   | AtDecember 31, 2010 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|
|                                                                                                                                                                                                                                                                                   |   | (In thousands)      |   |
|                                                                                                                                                                                                                                                                                   |   |                |   |
| Three months or less                                            |   | $                   | 8,686  |   |
| Over three months through six months                                                                                                                                                                                                                                                   |   |                | 15,449 |   |
| Over six months through one year                                                                                                                                                                                                                                                       |   |                | 22,770 |   |
| Over one year to three years                                                                                                                                                                                                                                                           |   |                | 10,944 |   |
| Over three years                                                |   |                | 11,030 |   |
|                                                                                                                                                                                                                                                                                   |   |                |   |   |
| Total                                                           |   | $                   | 68,879 |   |

----

|                                          |   | At or For the Year Ended December 31, |   |
|-----------------------------------------------|--------|---------------------------------------|--------|
|                                          |   | 2010                                  |   |   | 2009 |   |   | 2008 |   |
|                                          |   | (Dollars in thousands)                |   |
|                                          |   |                                  |   |   |   |   |   |   |   |
| Balance at end of year                        |   | $                                     | 7,000  |   |   | $ | 21,300 |   |   | $ | 31,227 |   |
| Average balance during year                   |   | $                                     | 12,684 |   |   | $ | 28,226 |   |   | $ | 41,140 |   |
| Maximum outstanding at any month end          |   | $                                     | 16,000 |   |   | $ | 41,490 |   |   | $ | 58,998 |   |
| Weighted average interest rate at end of year |   |                                  | 2.80   | % |   |   | 2.49 | % |   |   | 4.46 | % |
| Average interest rate during year             |   |                                  | 3.20   | % |   |   | 3.92 | % |   |   | 3.99 | % |

----

----

----

----

|   | ● | the total capital distributions for the applicable calendar year exceed the sum of the savings bank’s net income for that year to date plus the savings bank’s retained net income for the preceding two years; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | the savings bank would not be at least adequately capitalized following the distribution; |
|--------|---------|-------------------------------------------------------------------------------------------|

|   | ● | the distribution would violate any applicable statute, regulation, agreement or Office of Thrift Supervision-imposed condition; or |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | the savings bank is not eligible for expedited treatment of its filings. |
|--------|---------|--------------------------------------------------------------------------|

|   | ● | the savings bank would be undercapitalized following the distribution; |
|--------|---------|------------------------------------------------------------------------|

|   | ● | the proposed capital distribution raises safety and soundness concerns; or |
|--------|---------|----------------------------------------------------------------------------|

|   | ● | the capital distribution would violate a prohibition contained in any statute, regulation or agreement. |
|--------|---------|---------------------------------------------------------------------------------------------------------|

----

----

|   | ● | well-capitalized (at least 5% leverage capital, 6% Tier 1 risk-based capital and 10% total risk-based capital); |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|

|   | ● | adequately capitalized (at least 4% leverage capital (3% for savings banks with a composite examination rating of 1), 4% Tier 1 risk-based capital and 8% total risk-based capital); |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | undercapitalized (less than 4% leverage capital (3% for savings banks with a composite examination rating of 1), 4% Tier 1 risk-based capital or 8% total risk-based capital); |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | significantly undercapitalized (less than 6% total risk-based capital, 3% Tier 1 risk-based capital or 3% leverage capital); or |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------|

|   | ● | critically undercapitalized (less than 2% tangible capital). |
|--------|---------|--------------------------------------------------------------|

----

----

|   | ● | Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; |
|--------|---------|------------------------------------------------------------------------------------|

|   | ● | Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; |
|--------|---------|---------------------------------------------------------------------------------------------------------|

|   | ● | Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|

|   | ● | Truth in Savings Act; and |
|--------|---------|---------------------------|

|   | ● | Rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------|

|   | ● | Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | ● | Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The USA PATRIOT Act, which requires savings banks to, among other things, establish broadened anti-money laundering compliance programs, and due diligence policies and controls to ensure the detection and reporting of money laundering. Such required compliance programs are intended to supplement existing compliance requirements that also apply to financial institutions under the Bank Secrecy Act and the Office of Foreign Assets Control regulations; and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The Gramm-Leach-Bliley Act, which places limitations on the sharing of consumer financial information by financial institutions with unaffiliated third parties. Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s privacy policy and provide such customers the opportunity to “opt out” of the sharing of certain personal financial information with unaffiliated third parties. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Location                                                                  |   | Owned or Leased |   | Net Book Value of Real Property |   |
|---------------------------------------------------------------------------|--------|-----------------|--------|---------------------------------|--------|
|                                                                      |   |            |   | (In thousands)                  |   |
| Main Office:                                                              |   |            |   |                            |   |
| 2745 S. Delsea DriveVineland, New Jersey 08360                            |   | Owned           |   | $                               | 5,521  |   |
|  Branch Offices:                                                     |   |            |   |                            |   |   |
| 85 West Broad StreetBridgeton, New Jersey 08302                           |   | Owned           |   | $                               | 396    |   |
|  339 Main StreetCedarville, New Jersey 08311                         |   | Owned           |   | $                               | 373    |   |
|  1107 North High StreetMillville, New Jersey 08332                   |   | Owned           |   | $                               | 261    |   |
|  227 Bridgeton PikeMantua, New Jersey 08051                          |   | Owned           |   | $                               | 492    |   |
|  271 Lambs RoadSewell, New Jersey 08080                              |   | Owned           |   | $                               | 308    |   |
|  Route 77 and Big Oak RoadUpper Deerfield Township, New Jersey 08302 |   | Owned           |   | $                               | 333    |   |
|  1771 South Lincoln AvenueVineland, New Jersey 08361                 |   | Owned           |   | $                               | 305    |   |
|  125 West Landis AvenueVineland, New Jersey 08360                    |   | Owned           |   | $                               | 466    |   |

----

| ITEM 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
|---------|--------------------------------------------------------------------------------------------------------------------|

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

|   | (c) | Purchases of Equity Securities |
|--------|-----|--------------------------------|

----

|                                                                                                                                                                                                                                                                                               |   | At December 31, |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|---------|
|                                                                                                                                                                                                                                                                                               |   | 2010            |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                                                                                                                                                                                               |   | (In thousands)  |    |
| Selected Financial Condition Data:                                                                                                                                                                                                                                                                 |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                               |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                           |   | $               | 590,342 |   |   | $ | 568,541 |   |   | $ | 530,576 |   |   | $ | 457,860 |   |   | $ | 383,597 |   |
| Cash and amounts due from banks                                                                                                                                                                                                                                                                    |   |            | 20,726  |   |   |   | 15,882 |   |   |   | 23,407 |   |   |   | 15,978 |   |   |   | 13,257 |   |
| Investment securities held to maturity                                                                                                                                                                                                                                                             |   |            | 38,214  |   |   |   | 41,032 |   |   |   | 16,897 |   |   |   | 17,213 |   |   |   | 18,722 |   |
| Investment securities available for sale                                                                                                                                                                                                                                                           |   |            | 181,567 |   |   |   | 166,378 |   |   |   | 165,462 |   |   |   | 163,549 |   |   |   | 136,925 |   |
| Loans receivable, net                                                  |   |            | 319,987 |   |   |   | 321,607 |   |   |   | 303,151 |   |   |   | 241,040 |   |   |   | 198,519 |   |
| Deposits                                                               |   |            | 512,836 |   |   |   | 500,366 |   |   |   | 457,231 |   |   |   | 371,382 |   |   |   | 337,254 |   |
| Borrowings                                                             |   |            | 7,000   |   |   |   | 21,300 |   |   |   | 31,227 |   |   |   | 45,939 |   |   |   | 8,324 |   |
| Stockholders’ equity                                             |   |            | 69,412  |   |   |   | 45,517 |   |   |   | 40,630 |   |   |   | 39,028 |   |   |   | 36,663 |   |

|                                                |   | For the Years Ended December 31, |   |
|-----------------------------------------------------|--------|----------------------------------|--------|
|                                                |   | 2010                             |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                |   | (In thousands)                   |   |
| Selected Operating Data:                            |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                     |   | $                                | 26,292 |   |   | $ | 27,355 |   |   | $ | 27,151 |   |   | $ | 23,045 |   |   | $ | 18,509 |   |
| Interest expense                                    |   |                             | 9,216  |   |   |   | 13,514 |   |   |   | 15,696 |   |   |   | 14,432 |   |   |   | 10,208 |   |
| Net interest income                                 |   |                             | 17,076 |   |   |   | 13,841 |   |   |   | 11,455 |   |   |   | 8,613 |   |   |   | 8,301 |   |
| Provision for loan losses                           |   |                             | 1,340  |   |   |   | 615 |   |   |   | 756 |   |   |   | 84 |   |   |   | 179 |   |
| Net interest income after provision for loan losses |   |                             | 15,736 |   |   |   | 13,226 |   |   |   | 10,699 |   |   |   | 8,529 |   |   |   | 8,122 |   |
| Non-interest income                                 |   |                             | 1,574  |   |   |   | 267 |   |   |   | 628 |   |   |   | 1,114 |   |   |   | 1,043 |   |
| Non-interest expense                                |   |                             | 11,747 |   |   |   | 11,661 |   |   |   | 9,629 |   |   |   | 8,866 |   |   |   | 7,430 |   |
| Income before income taxes                          |   |                             | 5,563  |   |   |   | 1,832 |   |   |   | 1,698 |   |   |   | 777 |   |   |   | 1,735 |   |
| Income tax expense (benefit)                        |   |                             | 1,693  |   |   |   | 392 |   |   |   | 353 |   |   |   | (454 | ) |   |   | 124 |   |
| Net income                                          |   | $                                | 3,870  |   |   | $ | 1,440 |   |   | $ | 1,345 |   |   | $ | 1,231 |   |   | $ | 1,611 |   |

----

|                                                                    |   | At or For the Years Ended December 31, |    |
|-------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                    |   | 2010                                   |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Selected Financial Ratios and Other Data:                               |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Performance Ratios:                                                     |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average assets                                                |   |                                   | 0.67    | % |   |   | 0.26 | % |   |   | 0.27 | % |   |   | 0.29 | % |   |   | 0.45 | % |
| Return on average equity                                                |   |                                   | 6.83    | % |   |   | 3.34 | % |   |   | 3.44 | % |   |   | 3.33 | % |   |   | 4.49 | % |
| Interest rate spread (1)                                                |   |                                   | 3.05    | % |   |   | 2.52 | % |   |   | 2.27 | % |   |   | 1.95 | % |   |   | 2.17 | % |
| Net interest margin (2)                                                 |   |                                   | 3.21    | % |   |   | 2.71 | % |   |   | 2.50 | % |   |   | 2.20 | % |   |   | 2.47 | % |
| Efficiency ratio (3)                                                    |   |                                   | 62.99   | % |   |   | 82.66 | % |   |   | 79.69 | % |   |   | 91.15 | % |   |   | 79.52 | % |
| Noninterest expense to average total assets                             |   |                                   | 2.02    | % |   |   | 2.12 | % |   |   | 1.92 | % |   |   | 2.09 | % |   |   | 2.07 | % |
| Average interest-earning assets to average interest-bearing liabilities |   |                                   | 109.33  | % |   |   | 107.28 | % |   |   | 106.49 | % |   |   | 106.73 | % |   |   | 109.99 | % |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset Quality Ratios:                                                   |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing assets as a percent of total assets                      |   |                                   | 1.86    | % |   |   | 0.93 | % |   |   | 0.38 | % |   |   | 0.25 | % |   |   | 0.06 | % |
| Non-performing loans as a percent of total loans                        |   |                                   | 3.31    | % |   |   | 1.63 | % |   |   | 0.62 | % |   |   | 0.48 | % |   |   | 0.12 | % |
| Allowance for loan losses as a percent of non-performing loans          |   |                                   | 33.05   | % |   |   | 49.38 | % |   |   | 110.67 | % |   |   | 119.38 | % |   |   | 589.27 | % |
| Allowance for loan losses as a percent of total loans                   |   |                                   | 1.09    | % |   |   | 0.80 | % |   |   | 0.69 | % |   |   | 0.57 | % |   |   | 0.69 | % |
| Net recoveries (charge-offs) to average loans outstanding               |   |                                   | (0.12   | )% |   |   | (0.04 | )% |   |   | (0.02 | )% |   |   | (0.03 | )% |   |   | 0.01 | % |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital Ratios:                                                         |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total risk-based capital (to risk weighted assets)                      |   |                                   | 18.39   | % |   |   | 12.60 | % |   |   | 13.06 | % |   |   | 14.96 | % |   |   | 18.26 | % |
| Tier 1 risk-based capital (to risk weighted assets)                     |   |                                   | 17.64   | % |   |   | 11.94 | % |   |   | 12.42 | % |   |   | 14.42 | % |   |   | 17.57 | % |
| Tangible capital (to tangible assets)                                   |   |                                   | 10.44   | % |   |   | 7.17 | % |   |   | 7.27 | % |   |   | 8.03 | % |   |   | 9.09 | % |
| Tier 1 leverage (core) capital (to adjusted tangible assets)            |   |                                   | 10.44   | % |   |   | 7.17 | % |   |   | 7.27 | % |   |   | 8.03 | % |   |   | 9.09 | % |
| Equity to total assets                                                  |   |                                   | 11.76   | % |   |   | 8.01 | % |   |   | 7.66 | % |   |   | 8.52 | % |   |   | 9.56 | % |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Data:                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number of full service offices                                          |   |                                   | 9       |   |   |   | 9 |   |   |   | 8 |   |   |   | 7 |   |   |   | 6 |   |
| Dividends declared per share                                            |   | $                                      | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                                                     |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted (4)                                                   |   | $                                      | 0.97    |   |   | $ | 0.36 |   |   | $ | 0.33 |   |   | $ | 0.31 |   |   | $ | 0.39 |   |

----

| (1) | Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the year. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The net interest margin represents net interest income as a percent of average interest-earning assets for the year. |
|-----|----------------------------------------------------------------------------------------------------------------------|

| (3) | The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

| (4) | Information for December 31, 2009 and prior has been adjusted for the 0.9399-for-one exchange from the mutual-to-stock conversion of Colonial Bankshares MHC. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

----

----

----

----

|                                                                    |   | For the Years Ended December 31, |    |
|-------------------------------------------------------------------------|--------|----------------------------------|---------|
|                                                                    |   | 2010                             |    |   | 2009 |   |   | 2008 |   |
|                                                                    |   | AverageBalance                   |    |   | Interest Income/Expense |   |   | Yield/ Cost |   |   | AverageBalance |   |   | Interest Income/Expense |   |   | Yield/ Cost |   |   | AverageBalance |   |   | Interest Income/Expense |   |   | Yield/ Cost |   |
|                                                                    |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                   |   | $                                | 326,529 |   |   | $ | 19,236 |   |   |   | 5.89 | % |   | $ | 311,585 |   |   | $ | 18,677 |   |   |   | 5.99 | % |   | $ | 273,905 |   |   | $ | 16,946 |   |   |   | 6.19 | % |
| Securities:                                                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                 |   |                             | 175,470 |   |   |   | 6,391 |   |   |   | 3.64 | % |   |   | 175,034 |   |   |   | 7,959 |   |   |   | 4.55 | % |   |   | 172,209 |   |   |   | 9,630 |   |   |   | 5.59 | % |
| Tax-exempt                                                              |   |                             | 29,743  |   |   |   | 665 |   |   |   | 2.24 | % |   |   | 24,048 |   |   |   | 719 |   |   |   | 2.99 | % |   |   | 12,283 |   |   |   | 575 |   |   |   | 4.68 | % |
| Total interest-earning assets                                           |   |                             | 531,742 |   |   |   | 26,292 |   |   |   | 4.94 | % |   |   | 510,667 |   |   |   | 27,355 |   |   |   | 5.36 | % |   |   | 458,397 |   |   |   | 27,151 |   |   |   | 5.92 | % |
| Noninterest-earning assets                                              |   |                             | 49,728  |   |   |   |   |   |   |   |   |   |   |   | 42,233 |   |   |   |   |   |   |   |   |   |   |   | 42,530 |   |   |   |   |   |   |   |   |   |
| Total assets                                                            |   | $                                | 581,470 |   |   |   |   |   |   |   |   |   |   | $ | 552,900 |   |   |   |   |   |   |   |   |   |   | $ | 500,927 |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                           |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                                                        |   | $                                | 104,983 |   |   |   | 1,713 |   |   |   | 1.63 | % |   | $ | 85,752 |   |   |   | 2,241 |   |   |   | 2.61 | % |   | $ | 80,384 |   |   |   | 2,232 |   |   |   | 2.78 | % |
| NOW accounts                                                            |   |                             | 122,007 |   |   |   | 1,360 |   |   |   | 1.11 | % |   |   | 79,947 |   |   |   | 799 |   |   |   | 1.00 | % |   |   | 52,940 |   |   |   | 861 |   |   |   | 1.63 | % |
| Money market deposits                                                   |   |                             | 64,505  |   |   |   | 952 |   |   |   | 1.48 | % |   |   | 53,949 |   |   |   | 1,123 |   |   |   | 2.08 | % |   |   | 31,109 |   |   |   | 1,029 |   |   |   | 3.31 | % |
| Certificates of deposit                                                 |   |                             | 182,171 |   |   |   | 4,785 |   |   |   | 2.63 | % |   |   | 228,158 |   |   |   | 8,245 |   |   |   | 3.61 | % |   |   | 224,900 |   |   |   | 9,933 |   |   |   | 4.42 | % |
| Total interest-bearing deposits                                         |   |                             | 473,666 |   |   |   | 8,810 |   |   |   | 1.86 | % |   |   | 447,806 |   |   |   | 12,408 |   |   |   | 2.77 | % |   |   | 389,333 |   |   |   | 14,055 |   |   |   | 3.61 | % |
| Borrowings                                                              |   |                             | 12,684  |   |   |   | 406 |   |   |   | 3.20 | % |   |   | 28,226 |   |   |   | 1,106 |   |   |   | 3.92 | % |   |   | 41,140 |   |   |   | 1,641 |   |   |   | 3.99 | % |
| Total interest-bearing liabilities                                      |   |                             | 486,350 |   |   |   | 9,216 |   |   |   | 1.89 | % |   |   | 476,032 |   |   |   | 13,514 |   |   |   | 2.84 | % |   |   | 430,473 |   |   |   | 15,696 |   |   |   | 3.65 | % |
| Noninterest-bearing liabilities                                         |   |                             | 38,427  |   |   |   |   |   |   |   |   |   |   |   | 33,789 |   |   |   |   |   |   |   |   |   |   |   | 31,308 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                       |   |                             | 524,777 |   |   |   |   |   |   |   |   |   |   |   | 509,821 |   |   |   |   |   |   |   |   |   |   |   | 461,781 |   |   |   |   |   |   |   |   |   |
| Equity                                                                  |   |                             | 56,693  |   |   |   |   |   |   |   |   |   |   |   | 43,079 |   |   |   |   |   |   |   |   |   |   |   | 39,146 |   |   |   |   |   |   |   |   |   |
| Total liabilities and equity                                            |   | $                                | 581,470 |   |   |   |   |   |   |   |   |   |   | $ | 552,900 |   |   |   |   |   |   |   |   |   |   | $ | 500,927 |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                     |   |                             |    |   |   | $ | 17,076 |   |   |   |   |   |   |   |   |   |   | $ | 13,841 |   |   |   |   |   |   |   |   |   |   | $ | 11,455 |   |   |   |   |   |
| Interest rate spread (1)                                                |   |                             |    |   |   |   |   |   |   |   | 3.05 | % |   |   |   |   |   |   |   |   |   |   | 2.52 | % |   |   |   |   |   |   |   |   |   |   | 2.27 | % |
| Net interest-earning assets (2)                                         |   | $                                | 45,392  |   |   |   |   |   |   |   |   |   |   | $ | 34,635 |   |   |   |   |   |   |   |   |   |   | $ | 27,924 |   |   |   |   |   |   |   |   |   |
| Net interest margin (3)                                                 |   |                             |    |   |   |   |   |   |   |   | 3.21 | % |   |   |   |   |   |   |   |   |   |   | 2.71 | % |   |   |   |   |   |   |   |   |   |   | 2.50 | % |
| Average interest-earning assets to average interest-bearing liabilities |   |                             | 109.33  | % |   |   |   |   |   |   |   |   |   |   | 107.28 | % |   |   |   |   |   |   |   |   |   |   | 106.49 | % |   |   |   |   |   |   |   |   |

----

| (1) | Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities. |
|-----|---------------------------------------------------------------------------------------------------------------|

| (3) | Net interest margin represents net interest income divided by average total interest-earning assets. |
|-----|------------------------------------------------------------------------------------------------------|

----

|                               |   | Years Ended December 31,2010 vs. 2009 |   |   | Years Ended December 31,2009 vs. 2008 |   |
|------------------------------------|--------|---------------------------------------|--------|--------|---------------------------------------|--------|
|                               |   | Increase (Decrease) Due to            |   |   | Net                                   |   |   | Increase (Decrease) Due to |   |   | Net |   |
|                               |   | Volume                                |   |   | Rate                                  |   |   | Volume |   |   | Rate |   |
|                               |   | (In thousands)                        |   |
|                               |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:           |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                              |   | $                                     | 852    |   |                                  | $      | (293 | ) |   | $ | 559 |   |   | $ | 2,238 |   |   | $ | (507 | ) |   | $ | 1,731 |   |
| Securities:                        |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                            |   |                                  | 20     |   |                                  |   | (1,588 | ) |   |   | (1,568 | ) |   |   | 162 |   |   |   | (1,833 | ) |   |   | (1,671 | ) |
| Tax-exempt                         |   |                                  | 918    |   |                                  |   | (972 | ) |   |   | (54 | ) |   |   | 231 |   |   |   | (87 | ) |   |   | 144 |   |
| Total interest-earning assets      |   |                                  | 1,790  |   |                                  |   | (2,853 | ) |   |   | (1,063 | ) |   |   | 2,631 |   |   |   | (2,427 | ) |   |   | 204 |   |
|                               |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:      |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                   |   |                                  | 784    |   |                                  |   | (1,312 | ) |   |   | (528 | ) |   |   | 112 |   |   |   | (103 | ) |   |   | 9 |   |
| NOW accounts                       |   |                                  | 464    |   |                                  |   | 97 |   |   |   | 561 |   |   |   | (257 | ) |   |   | 195 |   |   |   | (62 | ) |
| Money market deposit               |   |                                  | 362    |   |                                  |   | (533 | ) |   |   | (171 | ) |   |   | 191 |   |   |   | (97 | ) |   |   | 94 |   |
| Certificates of deposit            |   |                                  | (1,474 | )      |                                  |   | (1,986 | ) |   |   | (3,460 | ) |   |   | 145 |   |   |   | (1,833 | ) |   |   | (1,688 | ) |
| Total interest-bearing deposits    |   |                                  | 136    |   |                                  |   | (3,734 | ) |   |   | (3,598 | ) |   |   | 191 |   |   |   | (1,838 | ) |   |   | (1,647 | ) |
| Borrowings                         |   |                                  | (525   | )      |                                  |   | (175 | ) |   |   | (700 | ) |   |   | (506 | ) |   |   | (29 | ) |   |   | (535 | ) |
| Total interest-bearing liabilities |   |                                  | (389   | )      |                                  |   | (3,909 | ) |   |   | (4,298 | ) |   |   | (315 | ) |   |   | (1,867 | ) |   |   | (2,182 | ) |
|                               |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net change in interest income      |   | $                                     | 2,179  |   |                                  | $      | 1,056 |   |   | $ | 3,235 |   |   | $ | 2,946 |   |   | $ | (560 | ) |   | $ | 2,386 |   |

----

----

----

|   | ● | maintaining our portfolios of shorter-term loans, including commercial real estate loans and home equity loans, subject to the limitations with respect to the amounts of these loans as a percentage of our capital and the allowance for loan losses; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | maintaining adjustable-rate and shorter-term investments; and |
|--------|---------|---------------------------------------------------------------|

|   | ● | maintaining pricing strategies that encourage deposits in longer-term, certificates of deposit. |
|--------|---------|-------------------------------------------------------------------------------------------------|

----

| Change in Interest   |   |              |                   |   | Estimated Increase (Decrease) |   |   | NPV as a Percentage of PresentValue of Assets (3) |   |
|----------------------|--------|-------------------|------------------------|--------|-------------------------------|--------|--------|---------------------------------------------------|--------|
| Rates (basis points) |   |              |                   |   | in NPV                        |   |   | NPV                                               |   |   | Increase (Decrease) |   |
| (1)                  |   | Estimated NPV (2) |                   |   | Amount                        |   |   | Percent                                           |   |   | Ratio (4) |   |   | (basis points) |   |
|                 |   |              | (Dollars in thousands) |   |                          |   |   |                                              |   |   |   |   |   |   |   |   |
|                 |   |              |                   |   |                          |   |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| +300                 |   |              | $                      | 70,369 |                          |   | $      | (22,054                                           | )      |   |   | (24 | )% |   |   | 11.89 | % |   |   | (300 | ) |
| +200                 |   |              |                   | 79,395 |                          |   |   | (13,028                                           | )      |   |   | (14 | )% |   |   | 13.17 | % |   |   | (172 | ) |
| +100                 |   |              |                   | 87,319 |                          |   |   | (5,104                                            | )      |   |   | (6 | )% |   |   | 14.24 | % |   |   | (65 | ) |
| +50                  |   |              |                   | 89,870 |                          |   |   | (2,553                                            | )      |   |   | (3 | )% |   |   | 14.57 | % |   |   | (32 | ) |
| —              |   |              |                   | 92,423 |                          |   |   | -                                                 |   |   |   | - | % |   |   | 14.89 | % |   |   | - |   |
| -50                  |   |              |                   | 94,051 |                          |   |   | 1,028                                             |   |   |   | 2 | % |   |   | 15.08 | % |   |   | 19 |   |
| -100                 |   |              |                   | 97,236 |                          |   |   | 4,813                                             |   |   |   | 5 | % |   |   | 15.49 | % |   |   | 60 |   |

----

| (1) | Assumes an instantaneous uniform change in interest rates at all maturities. |
|-----|------------------------------------------------------------------------------|

| (2) | NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts. |
|-----|----------------------------------------------------------------------------------------------------------------------|

| (3) | Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets. |
|-----|--------------------------------------------------------------------------------------------------------------------|

| (4) | NPV Ratio represents NPV divided by the present value of assets. |
|-----|------------------------------------------------------------------|

----

----

| ITEM 7A. | Quantitative and Qualitative Disclosures About Market Risk |
|----------|------------------------------------------------------------|

----

| ITEM 8. | Financial Statements and Supplementary Data |
|---------|---------------------------------------------|

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                                    |   | Page No. |
|---------------------------------------------------------|--------|----------|
|                                                    |   |     |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |   | F-2      |
|                                                    |   |     |
| CONSOLIDATED FINANCIAL STATEMENTS:                      |   |     |
|                                                    |   |     |
| Consolidated Statements of Financial Condition          |   | F-3      |
|                                                    |   |     |
| Consolidated Statements of Income                       |   | F-4      |
|                                                    |   |     |
| Consolidated Statements of Stockholders’ Equity   |   | F-5      |
|                                                    |   |     |
| Consolidated Statements of Cash Flows                   |   | F-6      |
|                                                    |   |     |
| Notes to Consolidated Financial Statements              |   | F-7      |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                                                                                                                                                                                                                                                               |   | December 31,                                            |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                               |   | 2010                                                    |    |   | 2009 |   |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |
|                                                                                                                                                                                                                                                                               |   | (Dollars In Thousands, Except Share and Per Share Data) |    |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |
| Assets                                                                                                                                                                                                                                                                             |   |                                                    |    |   |   |   |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |
| Cash and amounts due from banks                                                                                                                                                                                                                                                    |   | $                                                       | 20,726  |   |   | $ | 15,882 |   |
| Investment securities available for sale                                                                                                                                                                                                                                           |   |                                                    | 181,567 |   |   |   | 166,378 |   |
| Investment securities held to maturity (fair value 2010 - $38,365; 2009 - $41,395)                                                                                                                                                                                                 |   |                                                    | 38,214  |   |   |   | 41,032 |   |
| Loans receivable (net of allowance for loan losses 2010 - $3,543; 2009 - $2,606)                                                                                                                                                                                                   |   |                                                    | 319,987 |   |   |   | 321,607 |   |
| Loans available for sale                                                                                                                                                                                                                                                           |   |                                                    | 659     |   |   |   | — |   |
| Real estate owned                                                                                                                                                                                                                                                                  |   |                                                    | 276     |   |   |   | — |   |
| Federal Home Loan Bank stock, at cost                                                                                                                                                                                                                                              |   |                                                    | 1,120   |   |   |   | 1,731 |   |
| Office properties and equipment, net                                                                                                                                                                                                                                               |   |                                                    | 10,936  |   |   |   | 11,387 |   |
| Bank-owned life insurance                                                                                                                                                                                                                                                          |   |                                                    | 9,943   |   |   |   | 2,777 |   |
| Accrued interest receivable                                                                                                                                                                                                                                                        |   |                                                    | 2,025   |   |   |   | 2,272 |   |
| Deferred tax asset, net                                                                                                                                                                                                                                                            |   |                                                    | 1,511   |   |   |   | 910 |   |
| Other assets                                                                                                                                                                                                                                                                       |   |                                                    | 3,378   |   |   |   | 4,565 |   |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |   |   |
| Total Assets                                                                                                                                                                                                                                                                       |   | $                                                       | 590,342 |   |   | $ | 568,541 |   |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |   |   |
| Liabilities and Stockholders’ Equity                                                                                                                                                                                                                                         |   |                                                    |    |   |   |   |   |   |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |   |   |
| Liabilities                                                                                                                                                                                                                                                                        |   |                                                    |    |   |   |   |   |   |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |   |   |
| Deposits:                                                                                                                                                                                                                                                                          |   |                                                    |    |   |   |   |   |   |
| Non-interest-bearing                                                                                                                                                                                                                                                               |   | $                                                       | 20,279  |   |   | $ | 21,111 |   |
| Interest-bearing                                                                                                                                                                                                                                                                   |   |                                                    | 492,557 |   |   |   | 479,255 |   |
|             Total deposits                                                                                                                                                                                             |   |                                                    | 512,836 |   |   |   | 500,366 |   |
| Federal Home Loan Bank short-term borrowings                                                                                                                                                                                                                                       |   |                                                    | — |   |   |   | 7,300 |   |
| Federal Home Loan Bank long-term borrowings                                                                                                                                                                                                                                        |   |                                                    | 7,000   |   |   |   | 14,000 |   |
| Advances from borrowers for taxes and insurance                                                                                                                                                                                                                                    |   |                                                    | 544     |   |   |   | 661 |   |
| Other liabilities                                                                                                                                                                                                                                                                  |   |                                                    | 550     |   |   |   | 697 |   |
| Total Liabilities                                                                                                                                                                                                                                                                  |   |                                                    | 520,930 |   |   |   | 523,024 |   |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |   |   |
| Commitments and contingencies                                                                                                                                                                                                                                                      |   |                                                    |    |   |   |   |   |   |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |   |   |
| Stockholders’ Equity                                                                                                                                                                                                                                                         |   |                                                    |    |   |   |   |   |   |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |   |   |
| Preferred stock, $0.01 par value; authorized 50,000,000 shares in 2010 and 1,000,000 in 2009; none issued                                                                                                                                                                          |   |                                                    | — |   |   |   | — |   |
| Common stock, par value: $0.01 per share in 2010 and $0.10 per share in 2009; authorized 100,000,000 shares in 2010 and 10,000,000 shares in 2009; issued 4,188,456 shares in 2010 and 4,521,696 shares in 2009; outstanding 4,188,456 shares in 2010 and 4,440,246 shares in 2009 |   |                                                    | 42      |   |   |   | 452 |   |
| Additional paid-in capital                                                                                                                                                                                                                                                         |   |                                                    | 40,962  |   |   |   | 20,628 |   |
| Unearned shares held by Employee Stock Ownership Plan (ESOP)                                                                                                                                                                                                                       |   |                                                    | (1,794  | ) |   |   | (1,084 | ) |
| Treasury stock, at cost (2009 – 134,125 shares)                                                                                                                                                                                                                              |   |                                                    | — |   |   |   | (1,596 | ) |
| Retained earnings                                                                                                                                                                                                                                                                  |   |                                                    | 27,749  |   |   |   | 23,879 |   |
| Accumulated other comprehensive income                                                                                                                                                                                                                                             |   |                                                    | 2,453   |   |   |   | 3,238 |   |
| Total Stockholders’ Equity                                                                                                                                                                                                                                                   |   |                                                    | 69,412  |   |   |   | 45,517 |   |
|                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |   |   |
| Total Liabilities and Stockholders’ Equity                                                                                                                                                                                                                                   |   | $                                                       | 590,342 |   |   | $ | 568,541 |   |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                                                    |   | Year Ended December31,                        |   |
|-------------------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                                    |   | 2010                                          |   |   | 2009 |   |
|                                                                    |   | (Dollars in Thousands, Except Per Share Data) |   |
| Interest Income                                                         |   |                                          |   |   |   |   |
| Loans, including fees                                                   |   | $                                             | 19,236 |   |   | $ | 18,677 |   |
| Mortgage-backed securities                                              |   |                                          | 4,807  |   |   |   | 5,722 |   |
| Investment securities:                                                  |   |                                          |   |   |   |   |   |   |
| Taxable                                                                 |   |                                          | 1,584  |   |   |   | 2,237 |   |
| Tax-exempt                                                              |   |                                          | 665    |   |   |   | 719 |   |
| Total Interest Income                                                   |   |                                          | 26,292 |   |   |   | 27,355 |   |
| Interest Expense                                                        |   |                                          |   |   |   |   |   |   |
| Deposits                                                                |   |                                          | 8,810  |   |   |   | 12,408 |   |
| Borrowings                                                              |   |                                          | 406    |   |   |   | 1,106 |   |
| Total Interest Expense                                                  |   |                                          | 9,216  |   |   |   | 13,514 |   |
| Net Interest Income                                                     |   |                                          | 17,076 |   |   |   | 13,841 |   |
| Provision for Loan Losses                                               |   |                                          | 1,340  |   |   |   | 615 |   |
| Net Interest Income after Provision for Loan Losses                     |   |                                          | 15,736 |   |   |   | 13,226 |   |
| Non-Interest Income                                                     |   |                                          |   |   |   |   |   |   |
| Fees and service charges                                                |   |                                          | 1,275  |   |   |   | 1,225 |   |
| Gain on sale of loans                                                   |   |                                          | 231    |   |   |   | 56 |   |
| Loss on sale of real estate owned                                       |   |                                          | -      |   |   |   | (5 | ) |
| Net gain on sales and calls of investment securities                    |   |                                          | 52     |   |   |   | 14 |   |
|                                                                    |   |                                          |   |   |   |   |   |   |
| Impairment charge on investment securities                              |   |                                          | (150   | ) |   |   | (1,126 | ) |
| Portion of loss recognized in other comprehensive income (before taxes) |   |                                          | -      |   |   |   | - |   |
| Net impairment losses recognized in earnings                            |   |                                          | (150   | ) |   |   | (1,126 | ) |
|                                                                    |   |                                          |   |   |   |   |   |   |
| Earnings on bank-owned life insurance                                   |   |                                          | 166    |   |   |   | 103 |   |
| Total Non-Interest Income                                               |   |                                          | 1,574  |   |   |   | 267 |   |
| Non-Interest Expenses                                                   |   |                                          |   |   |   |   |   |   |
| Compensation and benefits                                               |   |                                          | 6,077  |   |   |   | 5,779 |   |
| Occupancy and equipment                                                 |   |                                          | 1,759  |   |   |   | 1,621 |   |
| Data processing                                                         |   |                                          | 887    |   |   |   | 837 |   |
| FDIC insurance premiums                                                 |   |                                          | 784    |   |   |   | 964 |   |
| Office supplies                                                         |   |                                          | 159    |   |   |   | 181 |   |
| Professional fees                                                       |   |                                          | 651    |   |   |   | 443 |   |
| Advertising                                                             |   |                                          | 194    |   |   |   | 208 |   |
| Prepayment penalty on payoff of FHLB borrowing                          |   |                                          | -      |   |   |   | 459 |   |
| Other                                                                   |   |                                          | 1,236  |   |   |   | 1,169 |   |
| Total Non-Interest Expenses                                             |   |                                          | 11,747 |   |   |   | 11,661 |   |
| Income before Income Tax Expense                                        |   |                                          | 5,563  |   |   |   | 1,832 |   |
| Income Tax expense                                                      |   |                                          | 1,693  |   |   |   | 392 |   |
| Net Income                                                              |   | $                                             | 3,870  |   |   | $ | 1,440 |   |
|                                                                    |   |                                          |   |   |   |   |   |   |
| Per Share Data (Note 3):                                                |   |                                          |   |   |   |   |   |   |
| Earnings per share – basic                                        |   | $                                             | 0.97   |   |   | $ | 0.36 | * |
| Earnings per share – diluted                                      |   | $                                             | 0.97   |   |   | $ | 0.36 | * |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                                                                                                                     |   | CommonStock |   |   | Additional Paid-in Capital |   |   | Unearned Shares Held by ESOP |   |   | Retained Earnings |   |   | Treasury Stock |   |   | Accumu-lated Other Compre-hensive Income |   |   | Total Stock-holders’ Equity |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|----------------------------|--------|--------|------------------------------|--------|--------|-------------------|--------|--------|----------------|--------|--------|------------------------------------------|--------|--------|-----------------------------------|--------|
| (Dollars in thousands)                                                                                                                   |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |
|                                                                                                                                     |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
| Balance, January 1, 2009                                                                                                                 |   | $           | 452    |   |                       | $      | 20,290 |                         |   | $      | (1,200            | )      |   | $              | 22,439 |   |                                     | $      | (1,559 | )                                 |   | $ | 208 |   |   | $ | 40,630 |   |
| Comprehensive income:                                                                                                                    |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
|                                                                                                                                     |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
| Net income                                                                                                                               |   |        | -      |   |                       |   | -      |                         |   |   | -                 |   |   |           | 1,440  |   |                                     |   | -      |                              |   |   | - |   |   |   | 1,440 |   |
| Net change in unrealized gain on investment securities available for sale, net of reclassification adjustments and tax expense of $1,691 |   |        | -      |   |                       |   | -      |                         |   |   | -                 |   |   |           | -      |   |                                     |   | -      |                              |   |   | 3,030 |   |   |   | 3,030 |   |
|                                                                                                                                     |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
| Total Comprehensive income                                                                                                               |   |        | -      |   |                       |   | -      |                         |   |   | -                 |   |   |           | -      |   |                                     |   | -      |                              |   |   | - |   |   | $ | 4,470 |   |
|                                                                                                                                     |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
| ESOP shares committed to be released (11,603 shares)                                                                                     |   |        | -      |   |                       |   | (32    | )                            |   |   | 116               |   |   |           | -      |   |                                     |   | -      |                              |   |   | - |   |   |   | 84 |   |
| Purchase of treasury stock – 5,500 shares                                                                                          |   |        | -      |   |                       |   | -      |                         |   |   | -                 |   |   |           | -      |   |                                     |   | (37    | )                                 |   |   | - |   |   |   | (37 | ) |
| Stock-based compensation expense (restricted stock awards)                                                                               |   |        | -      |   |                       |   | 222    |                         |   |   | -                 |   |   |           | -      |   |                                     |   | -      |                              |   |   | - |   |   |   | 222 |   |
| Stock-based compensation expense (stock options)                                                                                         |   |        | -      |   |                       |   | 148    |                         |   |   | -                 |   |   |           | -      |   |                                     |   | -      |                              |   |   | - |   |   |   | 148 |   |
|                                                                                                                                     |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                                                                                               |   | $           | 452    |   |                       | $      | 20,628 |                         |   | $      | (1,084            | )      |   | $              | 23,879 |   |                                     | $      | (1,596 | )                                 |   | $ | 3,238 |   |   | $ | 45,517 |   |
|                                                                                                                                     |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                                                                    |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
|                                                                                                                                     |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
| Net income                                                                                                                               |   |        | -      |   |                       |   | -      |                         |   |   | -                 |   |   |           | 3,870  |   |                                     |   | -      |                              |   |   | - |   |   |   | 3,870 |   |
| Net change in unrealized gain on investment securities available for sale, net of reclassification adjustments and tax benefit of $403   |   |        | -      |   |                       |   | -      |                         |   |   | -                 |   |   |           | -      |   |                                     |   | -      |                              |   |   | (785 | ) |   |   | (785 | ) |
|                                                                                                                                     |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
| Total Comprehensive income                                                                                                               |   |        | -      |   |                       |   | -      |                         |   |   | -                 |   |   |           | -      |   |                                     |   | -      |                              |   |   | - |   |   | $ | 3,085 |   |
|                                                                                                                                     |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
| Cancellation of common stock                                                                                                             |   |        | (452   | )      |                       |   | 452    |                         |   |   | -                 |   |   |           | -      |   |                                     |   | -      |                              |   |   | - |   |   |   | - |   |
| Issuance of common stock, net of offering costs of $1.7 million                                                                          |   |        | 42     |   |                       |   | 21,130 |                         |   |   | (918              | )      |   |           | -      |   |                                     |   | -      |                              |   |   | - |   |   |   | 20,254 |   |
| Cancellation of treasury stock                                                                                                           |   |        | -      |   |                       |   | (1,596 | )                            |   |   | -                 |   |   |           | -      |   |                                     |   | 1,596  |                              |   |   |   |   |   |   | - |   |
| ESOP shares committed to be released (20,085 shares)                                                                                     |   |        | -      |   |                       |   | (12    | )                            |   |   | 208               |   |   |           | -      |   |                                     |   | -      |                              |   |   | - |   |   |   | 196 |   |
| Stock-based compensation expense (restricted stock awards)                                                                               |   |        | -      |   |                       |   | 216    |                         |   |   | -                 |   |   |           | -      |   |                                     |   | -      |                              |   |   | - |   |   |   | 216 |   |
| Stock-based compensation expense (stock options)                                                                                         |   |        | -      |   |                       |   | 144    |                         |   |   | -                 |   |   |           | -      |   |                                     |   | -      |                              |   |   | - |   |   |   | 144 |   |
|                                                                                                                                     |   |        |   |   |                       |   |   |                         |   |   |              |   |   |           |   |   |                                     |   |   |                              |   |   |   |   |   |   |   |   |
| Balance, December 31, 2010                                                                                                               |   | $           | 42     |   |                       | $      | 40,962 |                         |   | $      | (1,794            | )      |   | $              | 27,749 |   |                                     | $      | -      |                              |   | $ | 2,453 |   |   | $ | 69,412 |   |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                                                                                                                   |   | Years Ended December 31, |    |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                                                                   |   | 2010                     |    |   | 2009 |   |
| Cash Flows from Operating Activities:                                                                                                  |   | (In thousands)           |    |
| Net income                                                                                                                             |   | $                        | 3,870   |   |   | $ | 1,440 |   |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities:                                            |   |                     |    |   |   |   |   |   |
| Provision for loan losses                                                                                                              |   |                     | 1,340   |   |   |   | 615 |   |
| Depreciation expense                                                                                                                   |   |                     | 676     |   |   |   | 665 |   |
| ESOP expense                                                                                                                           |   |                     | 196     |   |   |   | 84 |   |
| Stock-based compensation expense                                                                                                       |   |                     | 360     |   |   |   | 370 |   |
| Impairment charge on investment securities                                                                                             |   |                     | 150     |   |   |   | 1,126 |   |
| Deferred income taxes                                                                                                                  |   |                     | (198    | ) |   |   | (848 | ) |
| Net earnings on bank-owned life insurance                                                                                              |   |                     | (166    | ) |   |   | (103 | ) |
| Net gain on sales and calls of investment securities                                                                                   |   |                     | (52     | ) |   |   | (14 | ) |
| Loans originated for sale                                                                                                              |   |                     | (13,452 | ) |   |   | (4,128 | ) |
| Proceeds from sale of loans                                                                                                            |   |                     | 13,024  |   |   |   | 4,184 |   |
| Gain on sale of loans                                                                                                                  |   |                     | (231    | ) |   |   | (56 | ) |
| Loss on sale of real estate owned                                                                                                      |   |                     | -       |   |   |   | 5 |   |
| Net amortization of loan fees                                                                                                          |   |                     | 39      |   |   |   | 88 |   |
| Accretion of premium and discount on investment securities, net                                                                        |   |                     | (389    | ) |   |   | (483 | ) |
| Decrease in accrued interest receivable                                                                                                |   |                     | 247     |   |   |   | 26 |   |
| Decrease (increase) in other assets                                                                                                    |   |                     | 1,187   |   |   |   | (3,297 | ) |
| Decrease in other liabilities                                                                                                          |   |                     | (147    | ) |   |   | (171 | ) |
| Net cash provided by (used in) operating activities                                                                                    |   |                     | 6,454   |   |   |   | (497 | ) |
| Cash Flows from Investing Activities:                                                                                                  |   |                     |    |   |   |   |   |   |
| Proceeds from sales of investment securities held to maturity                                                                          |   |                     | 739     |   |   |   | - |   |
| Proceeds from sales of investment securities available for sale                                                                        |   |                     | 1,748   |   |   |   | 5,085 |   |
|            Proceeds from sales of mortgage-backed securities available for sale |   |                     | 1,816   |   |   |   | 1,674 |   |
| Proceeds from calls and maturities of investment securities available for sale                                                         |   |                     | 60,034  |   |   |   | 44,128 |   |
| Proceeds from calls and maturities of investment securities held to maturity                                                           |   |                     | 43,857  |   |   |   | 17,728 |   |
| Purchase of investment securities available for sale                                                                                   |   |                     | (75,256 | ) |   |   | (49,751 | ) |
| Purchase if investment securities held to maturity                                                                                     |   |                     | (42,555 | ) |   |   | (42,947 | ) |
| Purchase of mortgage-backed securities available for sale                                                                              |   |                     | (43,400 | ) |   |   | (26,972 | ) |
| Purchase of office properties and equipment                                                                                            |   |                     | (225    | ) |   |   | (489 | ) |
| Principal repayments from investment securities                                                                                        |   |                     | 2,016   |   |   |   | 1,121 |   |
| Principal repayments from mortgage-backed securities                                                                                   |   |                     | 37,733  |   |   |   | 28,974 |   |
| Net decrease in Federal Home Loan Bank stock                                                                                           |   |                     | 611     |   |   |   | 260 |   |
| Maturity of interest-bearing time deposits                                                                                             |   |                     | -       |   |   |   | 108 |   |
| Proceeds from the sale of foreclosed real estate                                                                                       |   |                     | 213     |   |   |   | - |   |
| Purchase of life insurance                                                                                                             |   |                     | (7,000  | ) |   |   | - |   |
| Net increase in loans receivable                                                                                                       |   |                     | (248    | ) |   |   | (19,159 | ) |
| Net cash used for investing activities                                                                                                 |   |                     | (19,917 | ) |   |   | (40,240 | ) |
| Cash Flows from Financing Activities:                                                                                                  |   |                     |    |   |   |   |   |   |
| Net increase in deposits                                                                                                               |   |                     | 12,470  |   |   |   | 43,135 |   |
| (Decrease) increase in Federal Home Loan Bank short-term borrowings                                                                    |   |                     | (7,300  | ) |   |   | 4,300 |   |
| Proceeds from Federal Home Loan Bank long-term borrowings                                                                              |   |                     | -       |   |   |   | 4,000 |   |
| Repayment of Federal Home Loan Bank long-term borrowings                                                                               |   |                     | (7,000  | ) |   |   | (18,227 | ) |
| Increase (decrease) in advances from borrowers for taxes and insurance                                                                 |   |                     | (117    | ) |   |   | 41 |   |
| Net proceeds from issuance of common stock                                                                                             |   |                     | 20,254  |   |   |   | - |   |
| Acquisition of treasury stock                                                                                                          |   |                     | -       |   |   |   | (37 | ) |
| Net cash provided by financing activities                                                                                              |   |                     | 18,307  |   |   |   | 33,212 |   |
| Increase (decrease) in cash and cash equivalents                                                                                       |   |                     | 4,844   |   |   |   | (7,525 | ) |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                                                       |   |                     | 15,882  |   |   |   | 23,407 |   |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                                                             |   | $                        | 20,726  |   |   | $ | 15,882 |   |
| Supplemental Cash Flow Disclosures:                                                                                                    |   |                     |    |   |   |   |   |   |
| Cash paid:  Interest                                                                                                         |   | $                        | 9,309   |   |   | $ | 13,779 |   |
| Cash paid:  Income taxes                                                                                                     |   | $                        | 2,350   |   |   | $ | 1,086 |   |
| Supplemental Schedule of Noncash Investing and Financing Activities:                                                                   |   |                     |    |   |   |   |   |   |
| Other real estate acquired in settlement of loans                                                                                      |   | $                        | 489     |   |   | $ | - |   |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|   | ● | Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------|

|   | ● | National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Nature and volume of the portfolio and terms of loans. |
|--------|---------|--------------------------------------------------------|

|   | ● | Experience, ability, and depth of lending management and staff. |
|--------|---------|-----------------------------------------------------------------|

|   | ● | Volume and severity of past due, classified and nonaccrual loans as well as other loan modifications. |
|--------|---------|-------------------------------------------------------------------------------------------------------|

|   | ● | Quality of the Company’s loan review system, and the degree of oversight by the Company’s Board of Directors. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------|

|   | ● | Existence and effect of any concentrations of credit and changes in the level of such concentrations. |
|--------|---------|-------------------------------------------------------------------------------------------------------|

|   | ● | Effect of external factors, such as competition and legal and regulatory requirements. |
|--------|---------|----------------------------------------------------------------------------------------|

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                                                       |   | Years Ended December 31, |   |
|----------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                       |   | 2010                     |   |   | 2009 |   |
|                                                                       |   | (In thousands)           |   |
| Unrealized holding gains (losses) on available for sale securities         |   | $                        | (1,296 | ) |   | $ | 4,524 |   |
| Reclassification adjustment for net gains on sales and calls of securities |   |                     | (108   | ) |   |   | (14 | ) |
| Impairment charge on investment securities                                 |   |                     | -      |   |   |   | 211 |   |
| Net unrealized gains (losses)                                              |   |                     | (1,188 | ) |   |   | 4,721 |   |
| Income tax expense (benefit)                                               |   |                     | (403   | ) |   |   | 1,691 |   |
| Net of tax amount                                                          |   | $                        | (785   | ) |   | $ | 3,030 |   |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                                               |   | December 31, |      |
|--------------------------------------------------------------------|--------|--------------|-----------|
|                                                               |   | 2010         |      |   | 2009 |   |
| Net Income                                                         |   | $            | 3,870,000 |   |   | $ | 1,440,000 |   |
|                                                               |   |         |      |   |   |   |   |   |
| Weighted average common shares issued                              |   |         | 4,216,896 |   |   |   | 4,249,942 |   |
| Average unearned ESOP shares                                       |   |         | (145,073  | ) |   |   | (112,744 | ) |
| Average treasury stock shares                                      |   |         | (66,907   | ) |   |   | (125,067 | ) |
| Weighted average common shares outstanding - basic                 |   |         | 4,004,916 |   |   |   | 4,012,131 |   |
| Effect of dilutive non-vested shares and stock options outstanding |   |         | -         |   |   |   | - |   |
| Weighted average common shares outstanding - diluted               |   |         | 4,004,916 |   |   |   | 4,012,131 |   |
| Earnings per share-basic                                           |   | $            | 0.97      |   |   | $ | 0.36 |   |
| Earnings per share-diluted                                         |   | $            | 0.97      |   |   | $ | 0.36 |   |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                |   | Amortized Cost |    |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|-------------------------------------|--------|----------------|---------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
|                                |   | (In thousands) |    |
| Available for Sale:                 |   |           |    |   |                   |   |   |                    |   |   |       |   |
| December 31, 2010                   |   |           |    |   |                   |   |   |                    |   |   |       |   |
| U. S. Government obligations        |   | $              | 42,653  |   |                   | $      | 124    |                    |   | $      | (338       | )      |   | $ | 42,439 |   |
| Corporate debt obligations          |   |           | 9,712   |   |                   |   | 243    |                    |   |   | (43        | )      |   |   | 9,912 |   |
| Mutual funds                        |   |           | 850     |   |                   |   | 51     |                    |   |   | -          |   |   |   | 901 |   |
| Municipal debt obligations          |   |           | 4,176   |   |                   |   | 36     |                    |   |   | (58        | )      |   |   | 4,154 |   |
| SBA pools                           |   |           | 3,252   |   |                   |   | 8      |                    |   |   | (14        | )      |   |   | 3,246 |   |
| Mortgage-backed securities          |   |           | 60,799  |   |                   |   | 3,727  |                    |   |   | (43        | )      |   |   | 64,483 |   |
| Collateralized mortgage obligations |   |           | 56,342  |   |                   |   | 574    |                    |   |   | (484       | )      |   |   | 56,432 |   |
|                                |   | $              | 177,784 |   |                   | $      | 4,763  |                    |   | $      | (980       | )      |   | $ | 181,567 |   |

|                                |   |   |    |   |   |   |   |   |   |   |   |   |
|-------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| December 31, 2009                   |   |   |    |   |   |   |   |   |   |   |   |   |
| U. S. Government obligations        |   | $      | 28,973  |   |   | $      | 169    |   |   | $      | -      |   |   | $ | 29,142 |   |
| Corporate debt obligations          |   |   | 10,563  |   |   |   | 232    |   |   |   | (123   | )      |   |   | 10,672 |   |
| Mutual funds                        |   |   | 1,561   |   |   |   | 64     |   |   |   | -      |   |   |   | 1,625 |   |
| Municipal debt obligations          |   |   | 2,817   |   |   |   | 49     |   |   |   | (36    | )      |   |   | 2,830 |   |
| SBA pools                           |   |   | 5,231   |   |   |   | 29     |   |   |   | (39    | )      |   |   | 5,221 |   |
| Mortgage-backed securities          |   |   | 83,802  |   |   |   | 4,202  |   |   |   | (4     | )      |   |   | 88,000 |   |
| Collateralized mortgage obligations |   |   | 28,460  |   |   |   | 441    |   |   |   | (13    | )      |   |   | 28,888 |   |
|                                |   | $      | 161,407 |   |   | $      | 5,186  |   |   | $      | (215   | )      |   | $ | 166,378 |   |
|                                |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to Maturity:                   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate debt obligations          |   | $      | 1,190   |   |   | $      | 212    |   |   | $      | -      |   |   | $ | 1,402 |   |
| Municipal debt obligations          |   |   | 35,284  |   |   |   | 96     |   |   |   | (259   | )      |   |   | 35,121 |   |
| Mortgage-backed securities          |   |   | 1,740   |   |   |   | 102    |   |   |   | -      |   |   |   | 1,842 |   |
|                                |   | $      | 38,214  |   |   | $      | 410    |   |   | $      | (259   | )      |   | $ | 38,365 |   |
|                                |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009                   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate debt obligations          |   | $      | 5,209   |   |   | $      | 90     |   |   | $      | (7     | )      |   | $ | 5,292 |   |
| Municipal debt obligations          |   |   | 33,173  |   |   |   | 220    |   |   |   | (93    | )      |   |   | 33,300 |   |
| Mortgage-backed securities          |   |   | 2,650   |   |   |   | 153    |   |   |   | -      |   |   |   | 2,803 |   |
|                                |   | $      | 41,032  |   |   | $      | 463    |   |   | $      | (100   | )      |   | $ | 41,395 |   |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                                               |   | Held to Maturity |   |   | Available for Sale |   |
|--------------------------------------------------------------------|--------|------------------|--------|--------|--------------------|--------|
|                                                               |   | Amortized Cost   |   |   | Fair Value         |   |   | Amortized Cost |   |   | Fair Value |   |
|                                                               |   | (In thousands)   |   |
| Due in one year or less                                            |   | $                | 30,664 |   |               | $      | 30,664 |   |   | $ | 4,552 |   |   | $ | 4,655 |   |
| Due after one year through five years                              |   |             | 305    |   |               |   | 310 |   |   |   | 45,663 |   |   |   | 45,504 |   |
| Due after five year through ten years                              |   |             | 3,502  |   |               |   | 3,665 |   |   |   | 5,285 |   |   |   | 5,353 |   |
| Due thereafter                                                     |   |             | 2,003  |   |               |   | 1,884 |   |   |   | 5,143 |   |   |   | 5,140 |   |
|                                                               |   |             | 36,474 |   |               |   | 36,523 |   |   |   | 60,643 |   |   |   | 60,652 |   |
| Mortgage-backed securities and collateralized mortgage obligations |   |             | 1,740  |   |               |   | 1,842 |   |   |   | 117,141 |   |   |   | 120,915 |   |
| Total                                                              |   | $                | 38,214 |   |               | $      | 38,365 |   |   | $ | 177,784 |   |   | $ | 181,567 |   |

| At December 31, 2010                |   | Less than 12 months |   |   | 12 months or more |   |   | Total      |   |
|-------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|------------|--------|
|                                |   | Fair Value          |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                |   | (In thousands)      |   |
| U. S. government obligations        |   | $                   | 26,176 |   |              | $      | 338    |       |   | $ | - |   |   | $ | - |   |   | $ | 26,176 |   |   | $ | 338 |   |
| Corporate debt obligations          |   |                | 1,953  |   |              |   | 10     |       |   |   | 937 |   |   |   | 33 |   |   |   | 2,890 |   |   |   | 43 |   |
| Municipal debt obligations          |   |                | 1,619  |   |              |   | 23     |       |   |   | 595 |   |   |   | 35 |   |   |   | 2,214 |   |   |   | 58 |   |
| SBA pools                           |   |                | -      |   |              |   | -      |       |   |   | 1,832 |   |   |   | 14 |   |   |   | 1,832 |   |   |   | 14 |   |
| Mortgage-backed securities          |   |                | 1,620  |   |              |   | 42     |       |   |   | 115 |   |   |   | 1 |   |   |   | 1,735 |   |   |   | 43 |   |
| Collateralized mortgage obligations |   |                | 20,539 |   |              |   | 484    |       |   |   | - |   |   |   | - |   |   |   | 20,539 |   |   |   | 484 |   |
| Total                               |   | $                   | 51,907 |   |              | $      | 897    |       |   | $ | 3,479 |   |   | $ | 83 |   |   | $ | 55,386 |   |   | $ | 980 |   |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| At December 31, 2009                |   | Less than 12 months |   |   | 12 months or more |   |   | Total      |   |
|-------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|------------|--------|
|                                |   | Fair Value          |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                |   | (In thousands)      |   |
| Corporate debt obligations          |   | $                   | 766    |   |              | $      | 16     |       |   | $ | 1,357 |   |   | $ | 107 |   |   | $ | 2,123 |   |   | $ | 123 |   |
| Municipal debt obligations          |   |                | 846    |   |              |   | 36     |       |   |   | - |   |   |   | - |   |   |   | 846 |   |   |   | 36 |   |
| SBA pools                           |   |                | -      |   |              |   | -      |       |   |   | 2,278 |   |   |   | 39 |   |   |   | 2,278 |   |   |   | 39 |   |
| Mortgage-backed securities          |   |                | 87     |   |              |   | 3      |       |   |   | 89 |   |   |   | 1 |   |   |   | 176 |   |   |   | 4 |   |
| Collateralized mortgage obligations |   |                | 1,263  |   |              |   | 12     |       |   |   | 1,975 |   |   |   | 1 |   |   |   | 3,238 |   |   |   | 13 |   |
| Total                               |   | $                   | 2,962  |   |              | $      | 67     |       |   | $ | 5,699 |   |   | $ | 148 |   |   | $ | 8,661 |   |   | $ | 215 |   |

| At December 31, 2010       |   | Less than 12 months |   |   | 12 months or more |   |   | Total      |   |
|----------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|------------|--------|
|                       |   | Fair Value          |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                       |   | (In thousands)      |   |
| Municipal debt obligations |   | $                   | 2,346  |   |              | $      | 226    |       |   | $ | 228 |   |   | $ | 33 |   |   | $ | 2,574 |   |   | $ | 259 |   |
| Total                      |   | $                   | 2,346  |   |              | $      | 226    |       |   | $ | 228 |   |   | $ | 33 |   |   | $ | 2,574 |   |   | $ | 259 |   |

| At December 31, 2009       |   | Less than 12 months |   |   | 12 months or more |   |   | Total      |   |
|----------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|------------|--------|
|                       |   | Fair Value          |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                       |   | (In thousands)      |   |
| Corporate debt obligations |   | $                   | 462    |   |              | $      | 7      |       |   | $ | - |   |   | $ | - |   |   | $ | 462 |   |   | $ | 7 |   |
| Municipal debt obligations |   |                | 1,306  |   |              |   | 85     |       |   |   | 391 |   |   |   | 8 |   |   |   | 1,697 |   |   |   | 93 |   |
| Total                      |   | $                   | 1,768  |   |              | $      | 92     |       |   | $ | 391 |   |   | $ | 8 |   |   | $ | 2,159 |   |   | $ | 100 |   |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| Cumulative other-than-temporary charges at January 1, 2010                  |   | $      | 1,126 |   |
|-----------------------------------------------------------------------------|--------|--------|-------|--------|
| Additional other-than-temporary charges taken for credit losses during 2010 |   |   | 150   |   |
| Cumulative other-than-temporary charges at December 31, 2010                |   | $      | 1,276 |   |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                               |   | 2010           |    |   | 2009   |   |
|------------------------------------|--------|----------------|---------|--------|--------|--------|
|                               |   | (In thousands) |    |
| Mortgage loans:                    |   |           |    |   |   |   |
| One-to-four family                 |   | $              | 140,244 |   |   | $      | 151,352 |   |
| Multi-family                       |   |           | 3,124   |   |   |   | 4,108 |   |
| Commercial                         |   |           | 114,242 |   |   |   | 97,075 |   |
| Construction                       |   |           | 5,944   |   |   |   | 14,093 |   |
| Home equity loans and credit lines |   |           | 35,373  |   |   |   | 37,892 |   |
| Commercial loans                   |   |           | 23,253  |   |   |   | 17,864 |   |
| Consumer and other loans           |   |           | 1,783   |   |   |   | 2,223 |   |
|                               |   |           | 323,963 |   |   |   | 324,607 |   |
| Deferred loan fees                 |   |           | (433    | )      |   |   | (394 | ) |
| Allowance for loan losses          |   |           | (3,543  | )      |   |   | (2,606 | ) |
|                               |   | $              | 319,987 |   |   | $      | 321,607 |   |

| BalanceJanuary 1, 2010 |   | Transfers |   |   | Additions |   |   | Amounts Collected |   |   | BalanceDecember 31, 2010 |   |
|------------------------|--------|-----------|--------|--------|-----------|--------|--------|-------------------|--------|--------|--------------------------|--------|
| $                      | 5,121  |      | ($     | 3,512  | )         |   | $      | 2,128             |   |   | ($                       | 233    | ) |   | $ | 3,504 |   |

|                            |   | 2010           |   |   | 2009   |   |
|---------------------------------|--------|----------------|--------|--------|--------|--------|
|                            |   | (In thousands) |   |
| Balance, beginning of year      |   | $              | 2,606  |   |   | $      | 2,105 |   |
| Provision charged to operations |   |           | 1,340  |   |   |   | 615 |   |
| Charge-offs                     |   |           | (420   | )      |   |   | (117 | ) |
| Recoveries                      |   |           | 17     |   |   |   | 3 |   |
| Balance, end of year            |   | $              | 3,543  |   |   | $      | 2,606 |   |

----

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| (In thousands)                                 |   | Pass   |    |   | SpecialMention |   |   | Substandard |   |   | Doubtful |   |   | Total  |   |
|------------------------------------------------|--------|--------|---------|--------|----------------|--------|--------|-------------|--------|--------|----------|--------|--------|--------|--------|
|                                           |   |   |    |   |           |   |   |        |   |   |     |   |   |   |   |
| Mortgage loans:                                |   |   |    |   |           |   |   |        |   |   |     |   |   |   |   |
|    One-to-four family           |   | $      | 131,773 |   |           | $      | 2,306  |        |   | $      | 6,165    |   |   | $      | -      |   |   | $ | 140,244 |   |
|    Multi-family                 |   |   | 3,124   |   |           |   | -      |        |   |   | -        |   |   |   | -      |   |   |   | 3,124 |   |
|    Commercial                   |   |   | 96,381  |   |           |   | 5,897  |        |   |   | 11,964   |   |   |   | -      |   |   |   | 114,242 |   |
|    Construction                 |   |   | 5,560   |   |           |   | -      |        |   |   | 384      |   |   |   | -      |   |   |   | 5,944 |   |
|    Home equity and credit lines |   |   | 33,804  |   |           |   | 1,087  |        |   |   | 482      |   |   |   | -      |   |   |   | 35,373 |   |
| Commercial                                     |   |   | 22,919  |   |           |   | 46     |        |   |   | 288      |   |   |   | -      |   |   |   | 23,253 |   |
| Consumer                                       |   |   | 1,644   |   |           |   | 93     |        |   |   | 46       |   |   |   | -      |   |   |   | 1,783 |   |
| Total                                          |   | $      | 295,205 |   |           | $      | 9,429  |        |   | $      | 19,329   |   |   | $      | -      |   |   | $ | 323,963 |   |

| (In thousands)                                                   |   | Recordedinvestment |   |   | UnpaidPrincipalBalance |   |   | RelatedAllowance |   |   | Averagerecordedinvestment |   |   | Interestincomerecognized |   |
|------------------------------------------------------------------|--------|--------------------|--------|--------|------------------------|--------|--------|------------------|--------|--------|---------------------------|--------|--------|--------------------------|--------|
|                                                             |   |               |   |   |                   |   |   |             |   |   |                      |   |   |                     |   |
| With an allowance recorded:                                      |   |               |   |   |                   |   |   |             |   |   |                      |   |   |                     |   |
|    Mortgage loans:                                |   |               |   |   |                   |   |   |             |   |   |                      |   |   |                     |   |
|       One-to-four family           |   | $                  | 2,500  |   |                   | $      | 2,500  |             |   | $      | 287                       |   |   | $                        | 627    |   |   | $ | 92 |   |
|       Multi-family                 |   |               | -      |   |                   |   | -      |             |   |   | -                         |   |   |                     | -      |   |   |   | - |   |
|       Commercial                   |   |               | 5,431  |   |                   |   | 5,431  |             |   |   | 698                       |   |   |                     | 1,361  |   |   |   | 303 |   |
|       Construction                 |   |               | -      |   |                   |   | -      |             |   |   | -                         |   |   |                     | -      |   |   |   | - |   |
|       Home equity and credit lines |   |               | -      |   |                   |   | -      |             |   |   | -                         |   |   |                     | -      |   |   |   | - |   |
|    Commercial                                     |   |               | -      |   |                   |   | -      |             |   |   | -                         |   |   |                     | -      |   |   |   | - |   |
|    Consumer                                       |   |               | -      |   |                   |   | -      |             |   |   | -                         |   |   |                     | -      |   |   |   | - |   |
|                                                             |   |               |   |   |                   |   |   |             |   |   |                      |   |   |                     |   |   |   |   |   |   |
| With no related allowance recorded:                              |   |               |   |   |                   |   |   |             |   |   |                      |   |   |                     |   |   |   |   |   |   |
|    Mortgage loans:                                |   |               |   |   |                   |   |   |             |   |   |                      |   |   |                     |   |   |   |   |   |   |
|        One-to-four family     |   | $                  | 3,929  |   |                   | $      | 3,929  |             |   | $      | -                         |   |   | $                        | 1,370  |   |   | $ | 150 |   |
|       Multi-family                 |   |               | 645    |   |                   |   | 645    |             |   |   | -                         |   |   |                     | 689    |   |   |   | 21 |   |
|       Commercial                   |   |               | 11,957 |   |                   |   | 11,957 |             |   |   | -                         |   |   |                     | 6,232  |   |   |   | 561 |   |
|       Construction                 |   |               | 1,753  |   |                   |   | 1,753  |             |   |   | -                         |   |   |                     | 1,495  |   |   |   | 58 |   |
|       Home equity and credit lines |   |               | 106    |   |                   |   | 106    |             |   |   | -                         |   |   |                     | 27     |   |   |   | 5 |   |
|    Commercial                                     |   |               | 288    |   |                   |   | 288    |             |   |   | -                         |   |   |                     | 292    |   |   |   | 8 |   |
|    Consumer                                       |   |               | 40     |   |                   |   | 40     |             |   |   | -                         |   |   |                     | 12     |   |   |   | 4 |   |
|                                                             |   |               |   |   |                   |   |   |             |   |   |                      |   |   |                     |   |   |   |   |   |   |
| Total                                                            |   |               |   |   |                   |   |   |             |   |   |                      |   |   |                     |   |   |   |   |   |   |
|    Mortgage loans:                                |   |               |   |   |                   |   |   |             |   |   |                      |   |   |                     |   |   |   |   |   |   |
|       One-to-four family           |   | $                  | 6,429  |   |                   | $      | 6,429  |             |   | $      | 287                       |   |   | $                        | 1,997  |   |   | $ | 242 |   |
|       Multi-family                 |   |               | 645    |   |                   |   | 645    |             |   |   | -                         |   |   |                     | 689    |   |   |   | 21 |   |
|       Commercial                   |   |               | 17,388 |   |                   |   | 17,388 |             |   |   | 698                       |   |   |                     | 7,593  |   |   |   | 864 |   |
|       Construction                 |   |               | 1,753  |   |                   |   | 1,753  |             |   |   | -                         |   |   |                     | 1,495  |   |   |   | 58 |   |
|       Home equity and credit lines |   |               | 106    |   |                   |   | 106    |             |   |   | -                         |   |   |                     | 27     |   |   |   | 5 |   |
|    Commercial                                     |   |               | 288    |   |                   |   | 288    |             |   |   | -                         |   |   |                     | 292    |   |   |   | 8 |   |
|    Consumer                                       |   |               | 40     |   |                   |   | 40     |             |   |   | -                         |   |   |                     | 12     |   |   |   | 4 |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| (In thousands)                                                |   | 2009   |   |
|---------------------------------------------------------------|--------|--------|--------|
|                                                          |   |   |   |
| Loans individually evaluated for impairment with an allowance |   | $      | 279    |   |
| Loans individually evaluated for impairment with no allowance |   |   | 758    |   |
|    Total                                       |   | $      | 1,037  |   |
|                                                          |   |   |   |   |
| Average impaired loan balance                                 |   | $      | 390    |   |
|                                                          |   |   |   |   |
| Allowance on impaired loans                                   |   | $      | 107    |   |
|                                                          |   |   |   |   |
| Interest income recognized on impaired loans                  |   | $      | 40     |   |

| (In thousands)                                 |   | Individuallyevaluated forImpairment |   |   | Collectivelyevaluated forimpairment |   |    | Total  |   |
|------------------------------------------------|--------|-------------------------------------|--------|--------|-------------------------------------|--------|---------|--------|--------|
| Mortgage loans:                                |   |                                |   |   |                                |   |    |   |   |
|    One-to-four family           |   | $                                   | 6,429  |   |                                | $      | 133,815 |   |   | $ | 140,244 |   |
|    Multi-family                 |   |                                | 645    |   |                                |   | 2,479   |   |   |   | 3,124 |   |
|    Commercial                   |   |                                | 17,388 |   |                                |   | 96,854  |   |   |   | 114,242 |   |
|    Construction                 |   |                                | 1,753  |   |                                |   | 4,191   |   |   |   | 5,944 |   |
|    Home equity and credit lines |   |                                | 106    |   |                                |   | 35,267  |   |   |   | 35,373 |   |
| Commercial                                     |   |                                | 288    |   |                                |   | 22,965  |   |   |   | 23.253 |   |
| Consumer                                       |   |                                | 40     |   |                                |   | 1,743   |   |   |   | 1,783 |   |
| Total                                          |   | $                                   | 26,649 |   |                                | $      | 297,314 |   |   | $ | 323,963 |   |

| (In thousands)                                 |   | AllowanceAllocated toLoansIndividuallyevaluated forImpairment |   |   | AllowanceAllocated toLoansCollectivelyevaluated forimpairment |   |   | TotalAllowancefor LoanLosses |   |   | TotalLoansReceivable |   |
|------------------------------------------------|--------|---------------------------------------------------------------|--------|--------|---------------------------------------------------------------|--------|--------|------------------------------|--------|--------|----------------------|--------|
| Mortgage loans:                                |   |                                                          |   |   |                                                          |   |   |                         |   |   |                 |   |
|    One-to-four family           |   | $                                                             | 287    |   |                                                          | $      | 293    |                         |   | $      | 580                  |   |   | $ | 140,244 |   |
|    Multi-family                 |   |                                                          | -      |   |                                                          |   | 27     |                         |   |   | 27                   |   |   |   | 3,124 |   |
|    Commercial                   |   |                                                          | 698    |   |                                                          |   | 1,102  |                         |   |   | 1,800                |   |   |   | 114,242 |   |
|    Construction                 |   |                                                          | -      |   |                                                          |   | 65     |                         |   |   | 65                   |   |   |   | 5,944 |   |
|    Home equity and credit lines |   |                                                          | -      |   |                                                          |   | 35     |                         |   |   | 35                   |   |   |   | 35,373 |   |
| Commercial                                     |   |                                                          | -      |   |                                                          |   | 406    |                         |   |   | 406                  |   |   |   | 23,253 |   |
| Consumer                                       |   |                                                          | -      |   |                                                          |   | 130    |                         |   |   | 130                  |   |   |   | 1,783 |   |
| Unallocated                                    |   |                                                          | -      |   |                                                          |   | 500    |                         |   |   | 500                  |   |   |   | - |   |
| Total                                          |   | $                                                             | 985    |   |                                                          | $      | 2,558  |                         |   | $      | 3,543                |   |   | $ | 323,963 |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| (In thousands)                                 |   | 2010   |   |
|------------------------------------------------|--------|--------|--------|
| Mortgage loans:                                |   |   |   |
|    One-to-four family           |   | $      | 5,574  |   |
|    Multi-family                 |   |   | -      |   |
|    Commercial                   |   |   | 4,337  |   |
|    Construction                 |   |   | 384    |   |
|    Home equity and credit lines |   |   | 106    |   |
| Commercial                                     |   |   | 288    |   |
| Consumer                                       |   |   | 31     |   |
|      Total            |   |   | 10,720 |   |

| (In thousands)                     |   | 30-59DaysPast Due |   |   | 60-89DaysPast Due |   |   | 90 Daysand MorePast Due |   |   | TotalPast Due |   |   | Current |   |   | Total LoansReceivable |   |    | LoansReceivable 90Days or Moreand Accruing |   |
|------------------------------------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------------|--------|--------|---------------|--------|--------|---------|--------|--------|-----------------------|--------|---------|-------------------------------------------------|--------|
|                               |   |              |   |   |              |   |   |                    |   |   |          |   |   |    |   |   |                  |   |    |                                            |   |
| Mortgage loans:                    |   |              |   |   |              |   |   |                    |   |   |          |   |   |    |   |   |                  |   |    |                                            |   |
| One- to four-family residential    |   | $                 | 3,429  |   |              | $      | 2,354  |                    |   | $      | 5,574         |   |   | $       | 11,357 |   |                  | $      | 128,887 |                                            |   | $ | 140,244 |   |   | $ | - |   |
| Multi-family                       |   |              | -      |   |              |   | -      |                    |   |   | -             |   |   |    | -      |   |                  |   | 3,124   |                                            |   |   | 3,124 |   |   |   | - |   |
| Commercial                         |   |              | 124    |   |              |   | 1,899  |                    |   |   | 4,337         |   |   |    | 6,360  |   |                  |   | 107,882 |                                            |   |   | 114,242 |   |   |   | - |   |
| Construction                       |   |              | -      |   |              |   | -      |                    |   |   | 384           |   |   |    | 384    |   |                  |   | 5,560   |                                            |   |   | 5,944 |   |   |   | - |   |
| Home equity loans and credit lines |   |              | 446    |   |              |   | 302    |                    |   |   | 106           |   |   |    | 854    |   |                  |   | 34,519  |                                            |   |   | 35,373 |   |   |   | - |   |
| Commercial                         |   |              | -      |   |              |   | -      |                    |   |   | 288           |   |   |    | 288    |   |                  |   | 22,965  |                                            |   |   | 23,253 |   |   |   | - |   |
| Consumer and other                 |   |              | 67     |   |              |   | 3      |                    |   |   | 31            |   |   |    | 101    |   |                  |   | 1,682   |                                            |   |   | 1,783 |   |   |   | - |   |
| Total                              |   | $                 | 4,066  |   |              | $      | 4,558  |                    |   | $      | 10,720        |   |   | $       | 19,344 |   |                  | $      | 304.619 |                                            |   | $ | 323,963 |   |   | $ | - |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| NOTE 6 – OFFICE PROPERTIES AND EQUIPMENT |
|------------------------------------------------|

| Office properties and equipment at December 31, 2010 and 2009 are summarized by major classification as follows: |
|------------------------------------------------------------------------------------------------------------------|

|                              |   | Estimated UsefulLife in Years |        |   | 2010           |   |   | 2009   |   |
|-----------------------------------|--------|-------------------------------|-------------|--------|----------------|--------|--------|--------|--------|
|                              |   |                          |        |   | (In thousands) |   |
|                              |   |                          |        |   |           |   |   |   |   |
| Land                              |   | Indefinite                    |        |   | $              | 4,128  |   |   | $      | 4,105 |   |
| Buildings                         |   |                          | 25          |   |           |   | 8,325  |   |   |   | 8,302 |   |
| Furniture, Fixtures and equipment |   |                          | 3 – 7 |   |           |   | 3,210  |   |   |   | 3,126 |   |
|                              |   |                          |        |   |           |   | 15,663 |   |   |   | 15,533 |   |
| Accumulated depreciation          |   |                          |        |   |           |   | (4,727 | )      |   |   | (4,146 | ) |
|                              |   |                          |        |   |           | $      | 10,936 |   |   | $ | 11,387 |   |

| Deposits at December 31, 2010 and 2009 consist of the following major classifications (dollars in thousands): |
|---------------------------------------------------------------------------------------------------------------|

|                                        |   | 2010   |    |   | 2009        |   |
|---------------------------------------------|--------|--------|---------|--------|-------------|--------|
|                                        |   | Amount |    |   | AverageRate |   |   | Amount |   |   | AverageRate |   |
|                                        |   |   |    |   |        |   |   |   |   |   |   |   |
| Certificates of deposit:                    |   |   |    |   |        |   |   |   |   |   |   |   |
|      0.00% - 2.00% |   | $      | 66,617  |   |        |   | 1.28 | % |   | $ | 58,082 |   |   |   | 1.25 | % |
|      2.01% - 4.00% |   |   | 77,939  |   |        |   | 2.50 |   |   |   | 87,718 |   |   |   | 2.74 |   |
|      4.01% - 6.00% |   |   | 25,037  |   |        |   | 4.79 |   |   |   | 60,928 |   |   |   | 4.75 |   |
| Total certificates of deposit               |   |   | 169,593 |   |        |   | 2.36 |   |   |   | 206,728 |   |   |   | 2.91 |   |
|                                        |   |   |    |   |        |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing demand                 |   |   | 20,279  |   |        |   | - |   |   |   | 21,111 |   |   |   | - |   |
| NOW                                         |   |   | 115,514 |   |        |   | 0.89 |   |   |   | 98,810 |   |   |   | 0.85 |   |
| Super NOW                                   |   |   | 34,182  |   |        |   | 1.16 |   |   |   | 19,755 |   |   |   | 1.47 |   |
| Savings                                     |   |   | 106,367 |   |        |   | 1.52 |   |   |   | 90,957 |   |   |   | 2.63 |   |
| Money market deposit                        |   |   | 66,901  |   |        |   | 1.24 |   |   |   | 63,005 |   |   |   | 1.63 |   |
|                                        |   | $      | 512,836 |   |        |   | 1.54 | % |   | $ | 500,366 |   |   |   | 2.11 | % |

| A summary of certificates of deposit by maturity at December 31, 2010 is as follows (in thousands): |
|-----------------------------------------------------------------------------------------------------|

| 2011       |   | $      | 113,177 |   |
|------------|--------|--------|---------|--------|
| 2012       |   |   | 24,304  |   |
| 2013       |   |   | 8,016   |   |
| 2014       |   |   | 5,597   |   |
| 2015       |   |   | 12,601  |   |
| Thereafter |   |   | 5,898   |   |
|       |   | $      | 169,593 |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                    |   | 2010           |   |   | 2009   |   |
|-------------------------|--------|----------------|--------|--------|--------|--------|
|                    |   | (In thousands) |   |
| NOW and Super NOW       |   | $              | 1,360  |   |   | $      | 799 |   |
| Savings                 |   |           | 1,713  |   |   |   | 2,241 |   |
| Money market demand     |   |           | 952    |   |   |   | 1,123 |   |
| Certificates of deposit |   |           | 4,785  |   |   |   | 8,245 |   |
|                    |   | $              | 8,810  |   |   | $      | 12,408 |   |

| Maturity         |   | Interest Rate |   |   | 2010           |   |   | 2009   |   |
|------------------|--------|---------------|--------|--------|----------------|--------|--------|--------|--------|
|             |   |          |   |   | (In thousands) |   |
| January 4, 2010  |   |          | 0.32   | %      |           | $      | -      |   |   | $ | 5,300 |   |
| June 3, 2010     |   |          | 0.59   | %      |           |   | -      |   |   |   | 2,000 |   |
| June 23, 2010    |   |          | 3.88   | %      |           |   | -      |   |   |   | 3,000 |   |
| October 18, 2010 |   |          | 4.70   | %      |           |   | -      |   |   |   | 4,000 |   |
| April 20, 2011   |   |          | 1.22   | %      |           |   | 2,000  |   |   |   | 2,000 |   |
| June 23, 2011    |   |          | 4.31   | %      |           |   | 3,000  |   |   |   | 3,000 |   |
| October 22, 2012 |   |          | 2.12   | %      |           |   | 2,000  |   |   |   | 2,000 |   |
|             |   |          |   |   |           | $      | 7,000  |   |   | $ | 21,300 |   |

| NOTE 9 – INCOME TAXES |
|-----------------------------|

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| NOTE 9 – INCOME TAXES (CONTINUED) |
|-----------------------------------------|

|          |   | 2010           |   |   | 2009   |   |
|---------------|--------|----------------|--------|--------|--------|--------|
|          |   | (In thousands) |   |
| Current:      |   |           |   |   |   |   |
| Federal       |   | $              | 1,891  |   |   | $      | 1,240 |   |
| State         |   |           | -      |   |   |   | - |   |
| Total current |   | $              | 1,891  |   |   | $      | 1,240 |   |
|          |   |           |   |   |   |   |   |   |
| Deferred      |   |           | (198   | )      |   |   | (848 | ) |
| Total         |   | $              | 1,693  |   |   | $      | 392 |   |

|                                 |   | 2010   |   |   | 2009              |   |
|--------------------------------------|--------|--------|--------|--------|-------------------|--------|
|                                 |   | Amount |   |   | % of PretaxIncome |   |   | Amount |   |   | % of PretaxIncome |   |
| Federal income tax at statutory rate |   | $      | 1,891  |   |              |   | 34.0 | % |   | $ | 623 |   |   |   | 34.0 | % |
| State tax, net of federal benefit    |   |   | (11    | )      |              |   | (3.6 | ) % |   |   | (108 | ) |   |   | (5.9 | ) % |
| Tax exempt income                    |   |   | (226   | )      |              |   | (3.4 | ) % |   |   | (244 | ) |   |   | (13.3 | ) % |
| Life insurance income                |   |   | (56    | )      |              |   | (1.0 | ) % |   |   | (35 | ) |   |   | (1.9 | ) % |
| Other                                |   |   | 95     |   |              |   | 4.4 | % |   |   | 156 |   |   |   | 8.5 | % |
| Total                                |   | $      | 1,693  |   |              |   | 30.4 | % |   | $ | 392 |   |   |   | 21.4 | % |

| The components of the net deferred tax asset are as follows: |
|--------------------------------------------------------------|

|                                                 |   | December 31,   |   |
|------------------------------------------------------|--------|----------------|--------|
|                                                 |   | 2010           |   |   | 2009 |   |
|                                                 |   | (In thousands) |   |
| Deferred tax assets:                                 |   |           |   |   |   |   |
| Deferred loan fees                                   |   | $              | 173    |   |   | $ | 158 |   |
| Allowance for loan losses                            |   |           | 1,415  |   |   |   | 1,407 |   |
| Securities impairment                                |   |           | 125    |   |   |   | 299 |   |
| State net operating loss carryforwards               |   |           | 629    |   |   |   | 662 |   |
| Capital loss carryforwards                           |   |           | 557    |   |   |   | 380 |   |
| Stock-based compensation                             |   |           | 337    |   |   |   | 277 |   |
| Nonaccrual interest adjustment                       |   |           | 150    |   |   |   | 61 |   |
| Prepaid expenses                                     |   |           | 7      |   |   |   | - |   |
| Bonus accrual                                        |   |           | 43     |   |   |   | - |   |
| Total deferred tax assets                            |   |           | 3,436  |   |   |   | 3,244 |   |
|                                                 |   |           |   |   |   |   |   |   |
| Valuation  allowance                       |   |           | (579   | ) |   |   | (585 | ) |
|                                                 |   |           |   |   |   |   |   |   |
| Deferred tax liabilities:                            |   |           |   |   |   |   |   |   |
| Depreciation                                         |   |           | (16    | ) |   |   | (16 | ) |
| Net unrealized gain on securities available for sale |   |           | (1,330 | ) |   |   | (1,733 | ) |
| Total deferred tax liabilities                       |   |           | (1,346 | ) |   |   | (1,749 | ) |
| Net Deferred Tax Asset                               |   | $              | 1,511  |   |   | $ | 910 |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| NOTE 10 – BENEFIT PLANS |
|-------------------------------|

|                            |   | December 31, |      |
|---------------------------------|--------|--------------|-----------|
|                            |   | 2010         |      |   | 2009 |   |
| Shares released for allocation  |   |         | 74,614    |   |   |   | 54,529 |   |
| Unreleased shares               |   |         | 173,585   |   |   |   | 101,870 |   |
| Total ESOP shares               |   |         | 248,199   |   |   |   | 156,399 |   |
| Fair value of unreleased shares |   | $            | 2,117,737 |   |   | $ | 786,867 |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                |   | Number ofshares (asadjusted) |   |   | WeightedAverage GrantDate Fair Value(as adjusted) |   |
|-------------------------------------|--------|------------------------------|--------|--------|---------------------------------------------------|--------|
| Restricted stock, beginning of year |   |                         | 33,319 |   |                                              | $      | 13.27 |   |
| Granted                             |   |                         | -      |   |                                              |   | - |   |
| Forfeited                           |   |                         | -      |   |                                              |   | - |   |
| Vested                              |   |                         | 15,012 |   |                                              |   | 13.27 |   |
| Restricted stock, end of year       |   |                         | 18,307 |   |                                              | $      | 13.27 |   |

|                             |   | Options (asadjusted) |    |   | WeightedAverageExercisePrice (asadjusted) |   |
|----------------------------------|--------|----------------------|---------|--------|-------------------------------------------|--------|
| Outstanding at January 1, 2010   |   |                 | 184,660 |   |                                      | $      | 13.27 |   |
| Granted                          |   |                 | -       |   |                                      |   | - |   |
| Exercised                        |   |                 | -       |   |                                      |   | - |   |
| Forfeitures                      |   |                 | 8,328   |   |                                      |   | 13.27 |   |
| Outstanding at December 31, 2010 |   |                 | 176,332 |   |                                      | $      | 13.27 |   |
| Exercisable at December 31, 2010 |   |                 | 143,571 |   |                                      | $      | 13.27 |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                             |   | Options (asadjusted) |    |   | WeightedAverageExercisePrice (asadjusted) |   |
|----------------------------------|--------|----------------------|---------|--------|-------------------------------------------|--------|
| Outstanding at January 1, 2009   |   |                 | 184,660 |   |                                      | $      | 13.27 |   |
| Granted                          |   |                 | -       |   |                                      |   | - |   |
| Exercised                        |   |                 | -       |   |                                      |   | - |   |
| Forfeitures                      |   |                 | -       |   |                                      |   | 13.27 |   |
| Outstanding at December 31, 2009 |   |                 | 184,660 |   |                                      | $      | 13.27 |   |
| Exercisable at December 31, 2009 |   |                 | 110,797 |   |                                      | $      | 13.27 |   |

|                                       |   | 2010           |   |   | 2009   |   |
|--------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                       |   | (In thousands) |   |
| Commitments to grant loans                 |   | $              | 8,446  |   |   | $      | 13,365 |   |
| Unfunded commitments under lines of credit |   |           | 19,904 |   |   |   | 21,078 |   |
| Standby letters of credit                  |   |           | 2,546  |   |   |   | 4,429 |   |
|                                       |   | $              | 30,896 |   |   | $      | 38,872 |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                           |   | Actual         |   |   | For Capital AdequacyPurposes |   |   | To be Well Capitalizedunder Prompt CorrectiveAction Provisions |   |
|------------------------------------------------|--------|----------------|--------|--------|------------------------------|--------|--------|----------------------------------------------------------------|--------|
|                                           |   | Amount         |   |   | Ratio                        |   |   | Amount                                                         |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                           |   | (In thousands) |   |
| As of December 31, 2010:                       |   |           |   |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |
| Tangible Capital (to Adjusted Tangible Assets) |   | $              | 60,859 |   |                         |   | 10.44  | %                                                              |   | $ |  ≥8,744 |   |   | ≥1.50% |   |   |   | N/A |   |   |   | N/A |   |
| Core Capital (to Adjusted Total Assets)        |   |           | 60,859 |   |                         |   | 10.44  | %                                                              |   | ≥23,317 |   |   | ≥4.00% |   |   | $ | ≥29,147 |   |   | ≥5.00% |   |
| Tier 1 Capital (to Risk-Weighted Assets)       |   |           | 60,859 |   |                         |   | 17.64  | %                                                              |   |   | N/A |   |   |   | N/A |   |   | ≥20,697 |   |   | ≥6.00% |   |
| Total Capital (to Risk-Weighted Assets)        |   |           | 63,444 |   |                         |   | 18.39  | %                                                              |   | ≥27,595 |   |   | ≥8.00% |   |   | ≥34,493 |   |   | ≥10.00% |   |
|                                           |   |           |   |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2009:                       |   |           |   |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tangible Capital (to Adjusted Tangible Assets) |   | $              | 40,398 |   |                         |   | 7.17   | %                                                              |   | $ | ≥8,450 |   |   | ≥1.50% |   |   |   | N/A |   |   |   | N/A |   |
| Core Capital (to Adjusted Total Assets)        |   |           | 40,398 |   |                         |   | 7.17   | %                                                              |   | ≥22,533 |   |   | ≥4.00% |   |   | $ | ≥28,166 |   |   | ≥5.00% |   |
| Tier 1 Capital (to Risk-Weighted Assets)       |   |           | 40,398 |   |                         |   | 11.94  | %                                                              |   |   | N/A |   |   |   | N/A |   |   | ≥20,307 |   |   | ≥6.00% |   |
| Total Capital (to Risk-Weighted Assets)        |   |           | 42,645 |   |                         |   | 12.60  | %                                                              |   | ≥27,076 |   |   | ≥8.00% |   |   | ≥33,845 |   |   | ≥10.00% |   |

|                                                                    |   | December 31,   |   |
|-------------------------------------------------------------------------|--------|----------------|--------|
|                                                                    |   | 2010           |   |   | 2009 |   |
|                                                                    |   | (In thousands) |   |
| Total equity capital                                                    |   | $              | 63,312 |   |   | $ | 43,636 |   |
| Less:                                                                   |   |           |   |   |   |   |   |   |
| Net unrealized gain on available-for-sale securities                    |   |           | 2,453  |   |   |   | 3,238 |   |
| Tier I Capital                                                          |   | $              | 60,859 |   |   | $ | 40,398 |   |
|                                                                    |   |           |   |   |   |   |   |   |
| Allowance for loan losses includable in Tier 2 capital                  |   |           | 2,559  |   |   |   | 2,218 |   |
| Unrealized gains on available-for-sale mutual funds (equity securities) |   |           | 26     |   |   |   | 29 |   |
| Total risk-based capital                                                |   | $              | 63,444 |   |   | $ | 42,645 |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| NOTE 14 – FAIR VALUE OF FINANCIAL INSTRUMENTS |
|-----------------------------------------------------|

|   | Level 1: | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.                                        |
|--------|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |     |                                                                                                                                                                             |
|   | Level 2: | Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.            |
|   |     |                                                                                                                                                                             |
|   | Level 3: | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). |

|                                |   | December 31,2010 |    |   | (Level 1)Quoted Pricesin ActiveMarkets forIdentical Assets |   |   | (Level 2)SignificantObservableOther Inputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|-------------------------------------|--------|------------------|---------|--------|------------------------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|----------------------------------------|--------|
| U. S. government obligations        |   | $                | 42,439  |   |                                                       | $      | -      |                                            |   | $      | 42,439                                 |   |   | $ | - |   |
| Corporate debt obligations          |   |             | 9,912   |   |                                                       |   | -      |                                            |   |   | 9,912                                  |   |   |   | - |   |
| Mutual funds                        |   |             | 901     |   |                                                       |   | 901    |                                            |   |   | -                                      |   |   |   | - |   |
| Municipal debt obligations          |   |             | 4,154   |   |                                                       |   | -      |                                            |   |   | 4,154                                  |   |   |   | - |   |
| SBA pools                           |   |             | 3,246   |   |                                                       |   | -      |                                            |   |   | 3,246                                  |   |   |   | - |   |
| Mortgage-backed securities          |   |             | 64,483  |   |                                                       |   | -      |                                            |   |   | 64,483                                 |   |   |   | - |   |
| Collateralized mortgage obligations |   |             | 56,432  |   |                                                       |   | -      |                                            |   |   | 56,432                                 |   |   |   | - |   |
| Securities available-for-sale       |   | $                | 181,567 |   |                                                       | $      | 901    |                                            |   | $      | 180,666                                |   |   | $ | - |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                |   | December 31,2009 |    |   | (Level 1)Quoted Pricesin ActiveMarkets forIdentical Assets |   |   | (Level 2)SignificantObservableOther Inputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|-------------------------------------|--------|------------------|---------|--------|------------------------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|----------------------------------------|--------|
| U. S. government obligations        |   | $                | 29,142  |   |                                                       | $      | -      |                                            |   | $      | 29,142                                 |   |   | $ | - |   |
| Corporate debt obligations          |   |             | 10,672  |   |                                                       |   | -      |                                            |   |   | 10,672                                 |   |   |   | - |   |
| Mutual funds                        |   |             | 1,625   |   |                                                       |   | 1,625  |                                            |   |   | -                                      |   |   |   | - |   |
| Municipal debt obligations          |   |             | 2,830   |   |                                                       |   | -      |                                            |   |   | 2,830                                  |   |   |   | - |   |
| SBA pools                           |   |             | 5,221   |   |                                                       |   | -      |                                            |   |   | 5,221                                  |   |   |   | - |   |
| Mortgage-backed securities          |   |             | 88,000  |   |                                                       |   | -      |                                            |   |   | 88,000                                 |   |   |   | - |   |
| Collateralized mortgage obligations |   |             | 28,888  |   |                                                       |   | -      |                                            |   |   | 28,888                                 |   |   |   | - |   |
| Securities available-for-sale       |   | $                | 166,378 |   |                                                       | $      | 1,625  |                                            |   | $      | 164,753                                |   |   | $ | - |   |

|              |   | December 31,2010 |   |   | (Level 1) QuotedPrices in ActiveMarkets forIdentical Assets |   |   | (Level 2)SignificantObservable OtherInputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|-------------------|--------|------------------|--------|--------|-------------------------------------------------------------|--------|--------|--------------------------------------------|--------|--------|----------------------------------------|--------|
| Impaired loans    |   | $                | 6,946  |   |                                                        | $      | -      |                                       |   | $      | -                                      |   |   | $ | 6,946 |   |
| Real estate owned |   | $                | 276    |   |                                                        | $      | -      |                                       |   | $      | -                                      |   |   | $ | 276 |   |

|           |   | December 31,2009 |   |   | (Level 1) QuotedPrices in ActiveMarkets forIdentical Assets |   |   | (Level 2)SignificantObservable OtherInputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|----------------|--------|------------------|--------|--------|-------------------------------------------------------------|--------|--------|--------------------------------------------|--------|--------|----------------------------------------|--------|
| Impaired loans |   | $                | 172    |   |                                                        | $      | -      |                                       |   | $      | -                                      |   |   | $ | 172 |   |
|           |   |             |   |   |                                                        |   |   |                                       |   |   |                                   |   |   |   |   |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| Loans Available for Sale (Carried at Lower of Cost or Fair Value) |
|-------------------------------------------------------------------|

| Real Estate Owned |
|-------------------|

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| The estimated fair value of the Company’s financial instruments at December 31, 2010 and 2009 are as follows: |
|---------------------------------------------------------------------------------------------------------------------|

|                                               |   | 2010           |    |   | 2009       |   |
|----------------------------------------------------|--------|----------------|---------|--------|------------|--------|
|                                               |   | CarryingAmount |    |   | Fair Value |   |   | CarryingAmount |   |   | Fair Value |   |
|                                               |   | (In thousands) |    |
|                                               |   |           |    |   |       |   |   |   |   |   |   |   |
| Assets:                                            |   |           |    |   |       |   |   |   |   |   |   |   |
| Cash and amounts due from banks                    |   | $              | 20,726  |   |       | $      | 20,726 |   |   | $ | 15,882 |   |   | $ | 15,882 |   |
| Investment securities available-for-sale           |   |           | 181,567 |   |       |   | 181,567 |   |   |   | 166,378 |   |   |   | 166,378 |   |
| Investment securities held-to-maturity             |   |           | 38,214  |   |       |   | 38,365 |   |   |   | 41,032 |   |   |   | 41,395 |   |
| Federal Home Loan Bank stock                       |   |           | 1,120   |   |       |   | 1,120 |   |   |   | 1,731 |   |   |   | 1,731 |   |
| Loans receivable, net                              |   |           | 319,987 |   |       |   | 340,423 |   |   |   | 321,607 |   |   |   | 334,147 |   |
| Loans available for sale                           |   |           | 659     |   |       |   | 659 |   |   |   | - |   |   |   | - |   |
| Accrued interest receivable                        |   |           | 2,025   |   |       |   | 2,025 |   |   |   | 2,272 |   |   |   | 2,272 |   |
|                                               |   |           |    |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                       |   |           |    |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                           |   |           | 512,836 |   |       |   | 517,364 |   |   |   | 500,366 |   |   |   | 505,687 |   |
| Federal Home Loan Bank short-term borrowings       |   |           | -       |   |       |   | - |   |   |   | 7,300 |   |   |   | 7,300 |   |
| Federal Home Loan Bank long-term borrowings        |   |           | 7,000   |   |       |   | 7,168 |   |   |   | 14,000 |   |   |   | 14,237 |   |
| Accrued interest payable                           |   |           | 75      |   |       |   | 75 |   |   |   | 168 |   |   |   | 168 |   |
|                                               |   |           |    |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance sheet financial instruments:           |   |           |    |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Commitments to extend credit and letters of credit |   |           | -       |   |       |   | - |   |   |   | - |   |   |   | - |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

|                                    |   | December 31,   |   |
|-----------------------------------------|--------|----------------|--------|
|                                    |   | 2010           |   |   | 2009 |   |
| ASSETS                                  |   | (In thousands) |   |
|                                    |   |           |   |   |   |   |
| Cash and cash equivalents               |   | $              | 3,925  |   |   | $ | 435 |   |
| Equity investment in Colonial Bank, FSB |   |           | 63,313 |   |   |   | 43,640 |   |
| Loan receivable – ESOP            |   |           | 1,923  |   |   |   | 1,198 |   |
| Other assets                            |   |           | 251    |   |   |   | 244 |   |
|                                    |   |           |   |   |   |   |   |   |
| Total Assets                            |   | $              | 69,412 |   |   | $ | 45,517 |   |
| STOCKHOLDERS’ EQUITY              |   |           |   |   |   |   |   |   |
|                                    |   |           |   |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY              |   |           |   |   |   |   |   |   |
|                                    |   |           |   |   |   |   |   |   |
| Total Stockholders’ Equity        |   | $              | 69,412 |   |   | $ | 45,517 |   |

|                                       |   | Years Ended December 31, |   |
|--------------------------------------------|--------|--------------------------|--------|
|                                       |   | 2010                     |   |   | 2009 |   |
|                                       |   | (In thousands)           |   |
| Interest income                            |   | $                        | 90     |   |   | $ | 78 |   |
| Equity in earnings of Colonial Bank, FSB   |   |                     | 4,211  |   |   |   | 1,789 |   |
| Total income                               |   |                     | 4,301  |   |   |   | 1,867 |   |
|                                       |   |                     |   |   |   |   |   |   |
| General, administrative and other expenses |   |                     | 431    |   |   |   | 427 |   |
|                                       |   |                     |   |   |   |   |   |   |
| Net income                                 |   | $                        | 3,870  |   |   | $ | 1,440 |   |

|                                                 |   | Years Ended December 31, |   |
|------------------------------------------------------|--------|--------------------------|--------|
|                                                 |   | 2010                     |   |   | 2009 |   |
|                                                 |   | (In thousands)           |   |
|                                                 |   |                     |   |   |   |   |
| Cash flows from operating activities:                |   |                     |   |   |   |   |
| Net income                                           |   | $                        | 3,870  |   |   | $ | 1,440 |   |
| Share-based compensation expense                     |   |                     | 360    |   |   |   | 370 |   |
| Equity in undistributed earnings Colonial Bank, FSB  |   |                     | (4,211 | ) |   |   | (1,789 | ) |
| Increase in cash from ESOP loan repayment            |   |                     | 192    |   |   |   | 94 |   |
| Increase in other assets                             |   |                     | (7     | ) |   |   | (4 | ) |
|                                                 |   |                     |   |   |   |   |   |   |
| Net cash from operating activities                   |   |                     | 204    |   |   |   | 111 |   |
|                                                 |   |                     |   |   |   |   |   |   |
| Cash flows from financing activities:                |   |                     |   |   |   |   |   |   |
| Acquisition of treasury stock                        |   |                     | -      |   |   |   | (37 | ) |
| Net proceeds from sale of stock                      |   |                     | 3,286  |   |   |   | - |   |
|                                                 |   |                     |   |   |   |   |   |   |
| Net cash (used in) financing activities              |   |                     | 3,286  |   |   |   | (37 | ) |
|                                                 |   |                     |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents |   |                     | 3,490  |   |   |   | 74 |   |
|                                                 |   |                     |   |   |   |   |   |   |
| Cash and cash equivalents at beginning of period     |   |                     | 435    |   |   |   | 361 |   |
|                                                 |   |                     |   |   |   |   |   |   |
| Cash and cash equivalents at end of period           |   | $                        | 3,925  |   |   | $ | 435 |   |

----

| COLONIAL FINANCIAL SERVICES, INC. |
|-----------------------------------|

| Three Months Ended:                                 |   | December 31,                                  |   |   | September 30, |   |   | June 30, |   |   | March 31, |   |
|-----------------------------------------------------|--------|-----------------------------------------------|--------|--------|---------------|--------|--------|----------|--------|--------|-----------|--------|
|                                                |   | (Dollars in thousands, except per share data) |   |
| 2010                                                |   |                                          |   |   |          |   |   |     |   |   |      |   |
| Total interest income                               |   | $                                             | 6,282  |   |          | $      | 6,539  |     |   | $      | 6,695     |   |   | $ | 6,776 |   |
| Total interest expense                              |   |                                          | 2,088  |   |          |   | 2,279  |     |   |   | 2,372     |   |   |   | 2,477 |   |
| Net interest income                                 |   |                                          | 4,194  |   |          |   | 4,260  |     |   |   | 4,323     |   |   |   | 4,299 |   |
| Provision for loan losses                           |   |                                          | 809    |   |          |   | 29     |     |   |   | 42        |   |   |   | 460 |   |
| Net interest income after provision for loan losses |   |                                          | 3,385  |   |          |   | 4,231  |     |   |   | 4,281     |   |   |   | 3,839 |   |
| Total non-interest income                           |   |                                          | 488    |   |          |   | 340    |     |   |   | 456       |   |   |   | 290 |   |
| Total non-interest expense                          |   |                                          | 3,102  |   |          |   | 2,959  |     |   |   | 2,864     |   |   |   | 2,822 |   |
| Income before income taxes                          |   |                                          | 771    |   |          |   | 1,612  |     |   |   | 1,873     |   |   |   | 1,307 |   |
| Income taxes                                        |   |                                          | 198    |   |          |   | 506    |     |   |   | 629       |   |   |   | 360 |   |
| Net income                                          |   | $                                             | 573    |   |          | $      | 1,106  |     |   | $      | 1,244     |   |   | $ | 947 |   |
| Basic earnings per share                            |   | $                                             | 0.14   |   |          | $      | 0.28   |     |   | $      | 0.31      | *      |   | $ | 0.24 | * |
| Diluted earnings per share                          |   | $                                             | 0.14   |   |          | $      | 0.28   |     |   | $      | 0.31      | *      |   | $ | 0.24 | * |

| Three Months Ended:                                 |   | December 31,                                  |   |   | September 30, |   |   | June 30, |   |   | March 31, |   |
|-----------------------------------------------------|--------|-----------------------------------------------|--------|--------|---------------|--------|--------|----------|--------|--------|-----------|--------|
|                                                |   | (Dollars in thousands, except per share data) |   |
| 2009                                                |   |                                          |   |   |          |   |   |     |   |   |      |   |
| Total interest income                               |   | $                                             | 6,916  |   |          | $      | 6,819  |     |   | $      | 6,791     |   |   | $ | 6,829 |   |
| Total interest expense                              |   |                                          | 3,037  |   |          |   | 3,347  |     |   |   | 3,523     |   |   |   | 3,607 |   |
| Net interest income                                 |   |                                          | 3,879  |   |          |   | 3,472  |     |   |   | 3,268     |   |   |   | 3,222 |   |
| Provision for loan losses                           |   |                                          | 320    |   |          |   | 100    |     |   |   | -         |   |   |   | 195 |   |
| Net interest income after provision for loan losses |   |                                          | 3,559  |   |          |   | 3,372  |     |   |   | 3,268     |   |   |   | 3,027 |   |
| Total non-interest income                           |   |                                          | (154   | )      |          |   | (211   | )        |   |   | 256       |   |   |   | 376 |   |
| Total non-interest expense                          |   |                                          | 2,825  |   |          |   | 2,751  |     |   |   | 3,289     |   |   |   | 2,796 |   |
| Income before income taxes                          |   |                                          | 580    |   |          |   | 410    |     |   |   | 235       |   |   |   | 607 |   |
| Income taxes                                        |   |                                          | 118    |   |          |   | 80     |     |   |   | 30        |   |   |   | 164 |   |
| Net income                                          |   | $                                             | 462    |   |          | $      | 330    |     |   | $      | 205       |   |   | $ | 443 |   |
| Basic earnings per share (as adjusted)              |   | $                                             | 0.12   | *      |          | $      | 0.08   | *        |   | $      | 0.05      | *      |   | $ | 0.11 | * |
| Diluted earnings per share (as adjusted)            |   | $                                             | 0.12   | *      |          | $      | 0.08   | *        |   | $      | 0.05      | *      |   | $ | 0.11 | * |

|   | *Earnings per share have been adjusted to reflect the impact of the second-step conversion and reorganization of the Company, which occurred on July 13, 2010. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure |
|---------|--------------------------------------------------------------------------------------|

| ITEM 9A. | Controls and Procedures |
|----------|-------------------------|

|   | (a) | Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-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 Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure 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.  There has been no change in the Company’s internal control over financial reporting during the Company’s fourth quarter of fiscal year 2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Management’s annual report on internal control over financial reporting. |
|--------|-----|--------------------------------------------------------------------------------|

| ITEM 9B. | Other Information |
|----------|-------------------|

----

| ITEM 10. | Directors, Executive Officers and Corporate Governance |
|----------|--------------------------------------------------------|

| ITEM 11. | Executive Compensation |
|----------|------------------------|

| ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
|----------|------------------------------------------------------------------------------------------------|

|   | (a) | Securities Authorized for issuance Under Stock-Based Compensation Plans |
|--------|-----|-------------------------------------------------------------------------|

| Equity Compensation Plan Information                       |   |
|------------------------------------------------------------|--------|
|                                                       |   | Number of securities tobe issued upon exerciseof outstanding options,warrants and rights |   |   | Weighted-averageexercise price ofoutstanding options,warrants and rights |   |   | Number of securitiesremaining available forfuture issuance understock-basedcompensation plans(excluding securitiesreflected in firstcolumn) |   |
| Equity compensation plans approved by security holders     |   |   | 256,360 |   |   | $  | 13.27 |   |   |   | 35,185 |   |
| Equity compensation plans not approved by security holders |   |   | N/A |   |   |   | N/A |   |   |   | N/A |   |
| Total                                                      |   |   | 256,360 |   |   | $ | 13.27 |   |   |   | 35,185 |   |

|   | (b) | Security Ownership of Certain Beneficial Owners |
|--------|-----|-------------------------------------------------|

|   | (c) | Security Ownership of Management |
|--------|-----|----------------------------------|

|   | (d) | Changes in Control |
|--------|-----|--------------------|

----

| ITEM 13. | Certain Relationships and Related Transactions, and Director Independence |
|----------|---------------------------------------------------------------------------|

| ITEM 15. | Exhibits and Financial Statement Schedules |
|----------|--------------------------------------------|

|   | 3.1 | Articles of Incorporation (11) |
|--------|-----|--------------------------------|

|   | 3.2 | Bylaws of Colonial Financial Services, Inc. (11) |
|--------|-----|--------------------------------------------------|

|   | 3.3 | Articles of Amendment to Articles of Incorporation (11) |
|--------|-----|---------------------------------------------------------|

|   | 4 | Form of Common Stock Certificate (11) |
|--------|---|---------------------------------------|

|   | 10.1 | [reserved] |
|--------|------|------------|

|   | 10.2 | Colonial Financial Services, Inc. 2006 Stock-Based Incentive Plan (1) |
|--------|------|-----------------------------------------------------------------------|

|   | 10.3 | Form of Colonial Financial Services, Inc. 2006 Stock-Based Incentive Plan Stock Option Agreement (Outside Directors) (2) |
|--------|------|--------------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | Form of Colonial Financial Services, Inc. 2006 Stock-Based Incentive Plan Stock Option Agreement (Employees) (2) |
|--------|------|------------------------------------------------------------------------------------------------------------------|

|   | 10.5 | Form of Colonial Financial Services, Inc. 2006 Stock-Based Incentive Plan Restricted Stock Award Notice (Outside Directors) (2) |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | Form of Colonial Financial Services, Inc. 2006 Stock-Based Incentive Plan Restricted Stock Award Notice (Employees) (2) |
|--------|------|-------------------------------------------------------------------------------------------------------------------------|

|   | 10.7 | Employment Agreement By and Between Colonial Bank, FSB and Edward J. Geletka (3) |
|--------|------|----------------------------------------------------------------------------------|

|   | 10.8 | Employment Agreement By and Between Colonial Bank, FSB and L. Joseph Stella, III (4) |
|--------|------|--------------------------------------------------------------------------------------|

|   | 10.9 | Employment Agreement By and Between Colonial Bank, FSB and William F. Whelan (5) |
|--------|------|----------------------------------------------------------------------------------|

|   | 10.10 | Amended and Restated Employment Agreement with Edward J. Geletka (6) |
|--------|-------|----------------------------------------------------------------------|

|   | 10.11 | Amended and Restated Employment Agreement with L. Joseph Stella, III (7) |
|--------|-------|--------------------------------------------------------------------------|

|   | 10.12 | Amended and Restated Employment Agreement with William F. Whelan (8) |
|--------|-------|----------------------------------------------------------------------|

|   | 10.13 | Bonus Plan, including amendments (9) |
|--------|-------|--------------------------------------|

|   | 10.14 | Colonial Bank, FSB Director Retirement Plan |
|--------|-------|---------------------------------------------|

|   | 10.15 | Colonial Bank, FSB 2011 Director Deferred Fee Plan |
|--------|-------|----------------------------------------------------|

|   | 10.16 | Colonial Bank, FSB Group Term Replacement Plan |
|--------|-------|------------------------------------------------|

|   | 10.17 | Colonial Bank, FSB Director Supplemental Life Insurance Plan |
|--------|-------|--------------------------------------------------------------|

|   | 10.18 | Colonial Bank, FSB 2011 Executive Retirement Incentive Plan |
|--------|-------|-------------------------------------------------------------|

|   | 14 | Code of Ethics |
|--------|----|----------------|

|   | 21 | Subsidiaries of Registrant (10) |
|--------|----|---------------------------------|

|   | 23 | Consent of Independent Registered Public Accounting Firm |
|--------|----|----------------------------------------------------------|

|   | 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (1) | Incorporated by reference to the Definitive Proxy Statement for the Annual Meeting of Stockholders of Colonial Bankshares held July 20, 2006 (File no. 000-51385), filed with the Securities and Exchange Commission on June 15, 2006. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Incorporated by reference to the Current Report on Form 8-K of Colonial Financial Services, Inc. (File no. 000-51385), filed with the Securities and Exchange Commission on October 23, 2006. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on November 14, 2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (4) | Incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on November 14, 2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on November 14, 2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K for the year ended December 31, 2008 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on March 31, 2009. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K for the year ended December 31, 2008 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on March 31, 2009. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Incorporated by reference to Exhibit 10.12 to the Annual Report on Form 10-K for the year ended December 31, 2008 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on March 31, 2009. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K for the year ended December 31, 2008 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on March 31, 2009. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10) | Incorporated by reference to the Registration Statement on Form S-1 (File no. 333-165532), as initially filed March 17, 2010, and as amended on April 28, 2010 and May 7, 2010. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                       |                                            |                  |
|----------------------------|-------------------------------------------------|-----------------------|
|                       | COLONIAL FINANCIAL SERVICES, INC.               |
|                       |                                            |                  |
|  Date: March 30, 2011 | By:                                             | /s/ Edward J. Geletka |
|                       | Edward J. Geletka                               |
|                       | President, Chief Executive Officer and Director |
|                       | (Duly Authorized Representative)                |

| Signatures                   |   | Title                                                                                             |   | Date           |
|------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|----------------|
|                         |   |                                                                                              |   |           |
| /s/ Edward J. Geletka        |   | President, Chief Executive Officer and Director (Principal Executive Officer)                     |   | March 30, 2011 |
| Edward J. Geletka            |   |                                                                                              |   |
|                         |   |                                                                                              |   |           |
| /s/ L. Joseph Stella, III    |   | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |   | March 30, 2011 |
| L. Joseph Stella, III   |   |                                                                                              |   |
|                         |   |                                                                                              |   |           |
| /s/ Albert A. Fralinger, Jr. |   | Chairman of the Board                                                                             |   | March 30, 2011 |
| Albert A. Fralinger, Jr.     |   |                                                                                              |   |           |
|                         |   |                                                                                              |   |           |
| /s/ Gregory J. Facemyer      |   | Vice Chairman of the Board                                                                        |   | March 30, 2011 |
| Gregory J. Facemyer          |   |                                                                                              |   |           |
|                         |   |                                                                                              |   |           |
| /s/ John Fitzpatrick         |   | Director                                                                                          |   | March 30, 2011 |
| John Fitzpatrick             |   |                                                                                              |   |           |
|                         |   |                                                                                              |   |           |
| /s/ Frank M. Hankins, Jr.    |   | Director                                                                                          |   | March 30, 2011 |
| Frank M. Hankins, Jr.        |   |                                                                                              |   |           |
|                         |   |                                                                                              |   |           |
| /s/ Hugh J. McCaffery        |   | Director                                                                                          |   | March 30, 2011 |
| Hugh J. McCaffery            |   |                                                                                              |   |           |
|                         |   |                                                                                              |   |           |
| /s/ Paul J. Ritter, III      |   | Director                                                                                          |   | March 30, 2011 |
| Paul J. Ritter, III          |   |                                                                                              |   |           |