----

----

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

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

| PSB Holdings, Inc.                                      |
|--------------------------------------------------------------|
| (Exact name of registrant as specified in its charter)  |

| United States                                                  |   | 42-1597948                        |
|----------------------------------------------------------------|--------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (IRS Employer Identification No.) |

| 40 Main Street, Putnam, Connecticut  06260                                     |
|------------------------------------------------------------------------------------------|
| (Address of principal executive offices)                                                 |
| (Zip Code)                                                                               |
|                                                                                     |
| (860) 928-6501                                                                           |
| (Issuer’s telephone number)                                                        |
|                                                                                     |
| N/A                                                                                      |
|  (Former name, former address and former fiscal year, if changed since last report) |

----

| Table of Contents |
|-------------------|

|       |                                                                                                                                      |   | Page No. |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
|       |                                                                                                                                      |   |     |
| Part I.    | FINANCIAL INFORMATION                                                                                                                     |   |     |
|       |                                                                                                                                      |   |     |
| Item 1.    | Financial Statements                                                                                                                      |   |     |
|       |                                                                                                                                      |   |     |
|       | Condensed Consolidated Balance Sheets at December 31, 2009 (Unaudited) andJune 30, 2009 (Audited)                                         |   | 1        |
|       |                                                                                                                                      |   |     |
|       | Condensed Consolidated Statements of Income (Loss) for the Three and Six Months EndedDecember 31, 2009 and 2008 (Unaudited)               |   | 2        |
|       |                                                                                                                                      |   |     |
|       | Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Six Months EndedDecember 31, 2009 and 2008 (Unaudited) |   | 3        |
|       |                                                                                                                                      |   |     |
|       | Condensed Consolidated Statements of Cash Flows for the Six Months EndedDecember 31, 2009 and 2008 (Unaudited)                            |   | 4        |
|       |                                                                                                                                      |   |     |
|       | Notes to Consolidated Financial Statements (Unaudited)                                                                                    |   | 5        |
|       |                                                                                                                                      |   |     |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                               |   | 22       |
|       |                                                                                                                                      |   |     |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                                                                |   | 35       |
|       |                                                                                                                                      |   |     |
| Item 4.    | Controls and Procedures                                                                                                                   |   | 35       |
|       |                                                                                                                                      |   |     |
| Item 4T.   | Controls and Procedures                                                                                                                   |   | 35       |
|       |                                                                                                                                      |   |     |
| Part II.   | OTHER INFORMATION                                                                                                                         |   |     |
|       |                                                                                                                                      |   |     |
| Item 1.    | Legal Proceedings                                                                                                                         |   | 36       |
|       |                                                                                                                                      |   |     |
| Item 1A.   | Risk Factors                                                                                                                              |   | 36       |
|       |                                                                                                                                      |   |     |
| Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                                                                               |   | 36       |
|       |                                                                                                                                      |   |     |
| Item 3.    | Defaults Upon Senior Securities                                                                                                           |   | 36       |
|       |                                                                                                                                      |   |     |
| Item 4.    | Submission of Matters to a Vote of Security Holders                                                                                       |   | 36       |
|       |                                                                                                                                      |   |     |
| Item 5.    | Other Information                                                                                                                         |   | 36       |
|       |                                                                                                                                      |   |     |
| Item 6.    | Exhibits                                                                                                                                  |   | 36       |
|       |                                                                                                                                      |   |     |
| SIGNATURES |                                                                                                                                      | 37     |

----

----

|                                                                                                                                                      |   | December 31,                     |                           |   | June 30,  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------------------------------|--------|-----------|--------|
|                                                                                                                                                      |   | 2009                             |                           |   | 2009      |   |
|                                                                                                                                                      |   | (Unaudited)                      |                           |   | (Audited) |   |
|                                                                                                                                                      |   | (in thousands except share data) |                           |
| ASSETS                                                                                                                                                    |   |                             |                           |   |      |   |
| Cash and due from depository institutions                                                                                                                 |   | $                                | 20,975                         |   |      | $      | 5,509 |   |
| Federal funds sold                                                                                                                                        |   |                             | -                              |   |      |   | 550 |   |
| Total cash and cash equivalents                                                                                                                           |   |                             | 20,975                         |   |      |   | 6,059 |   |
| Securities available for sale (at fair value)                                                                                                             |   |                             | 120,753                        |   |      |   | 164,888 |   |
| Securities held-to-maturity (fair value of $37,168 as of December 31, 2009 and $1,945 as of June 30, 2009)                                                |   |                             | 37,436                         |   |      |   | 2,000 |   |
| Federal Home Loan Bank stock, at cost                                                                                                                     |   |                             | 8,056                          |   |      |   | 8,056 |   |
| Loans held-for-sale                                                                                                                                       |   |                             | 425                            |   |      |   | 1,200 |   |
| Loans                                                                                                                                                     |   |                             | 263,319                        |   |      |   | 266,517 |   |
| Allowance for loan losses                                                                                                                                 |   |                             | (2,207                         | )      |      |   | (2,200 | ) |
| Net loans                                                                                                                                                 |   |                             | 261,112                        |   |      |   | 264,317 |   |
| Premises and equipment                                                                                                                                    |   |                             | 5,458                          |   |      |   | 5,159 |   |
| Accrued interest receivable                                                                                                                               |   |                             | 1,635                          |   |      |   | 1,891 |   |
| Other real estate owned                                                                                                                                   |   |                             | 984                            |   |      |   | 1,211 |   |
| Goodwill                                                                                                                                                  |   |                             | 6,912                          |   |      |   | 6,912 |   |
| Intangible assets                                                                                                                                         |   |                             | 562                            |   |      |   | 651 |   |
| Bank owned life insurance                                                                                                                                 |   |                             | 6,052                          |   |      |   | 5,912 |   |
| Other assets                                                                                                                                              |   |                             | 9,898                          |   |      |   | 9,093 |   |
|                                                                                                                                                      |   |                             |       |   |      |   |   |   |
| Total assets                                                                                                                                              |   | $                                | 480,258                        |   |      | $      | 477,349 |   |
|                                                                                                                                                      |   |                             |                           |   |      |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                |   |                             |                           |   |      |
| Liabilities                                                                                                                                               |   |                             |                           |   |      |   |   |   |
| Deposits                                                                                                                                                  |   |                             |                           |   |      |   |   |   |
| Noninterest-bearing                                                                                                                                       |   | $                                | 36,149                         |   |      | $      | 35,246 |   |
| Interest-bearing                                                                                                                                          |   |                             | 288,068                        |   |      |   | 272,853 |   |
| Total deposits                                                                                                                                            |   |                             | 324,217                        |   |      |   | 308,099 |   |
| Mortgagors’ escrow accounts                                                                                                                         |   |                             | 1,505                          |   |      |   | 1,564 |   |
| Federal Home Loan Bank advances                                                                                                                           |   |                             | 102,500                        |   |      |   | 120,500 |   |
|     Securities sold under agreements to repurchase                                                                                    |   |                             | 5,972                          |   |      |   | 4,471 |   |
| Other liabilities                                                                                                                                         |   |                             | 1,974                          |   |      |   | 2,819 |   |
| Total liabilities                                                                                                                                         |   |                             | 436,168                        |   |      |   | 437,453 |   |
|                                                                                                                                                      |   |                             |                           |   |      |   |   |   |
| Commitments and Contingencies                                                                                                                             |   |                             |                           |   |      |   |   |   |
|                                                                                                                                                      |   |                             |                           |   |      |   |   |   |
| Stockholders’ Equity                                                                                                                                |   |                             |                           |   |      |   |   |   |
| Preferred stock, $0.10 par value, 1,000,000 shares authorized, no shares issued and outstanding                                                           |   |                             | -                              |   |      |   | - |   |
| Common stock, $0.10 par value, 12,000,000 shares authorized, 6,943,125 shares issued, 6,529,209 shares outstanding at December 31, 2009 and June 30, 2009 |   |                             | 694                            |   |      |   | 694 |   |
| Additional paid-in capital                                                                                                                                |   |                             | 30,700                         |   |      |   | 30,656 |   |
| Retained earnings                                                                                                                                         |   |                             | 21,219                         |   |      |   | 20,383 |   |
| Accumulated other comprehensive loss                                                                                                                      |   |                             | (2,140                         | )      |      |   | (5,277 | ) |
| Unearned ESOP shares                                                                                                                                      |   |                             | (1,940                         | )      |      |   | (1,940 | ) |
| Unearned stock awards                                                                                                                                     |   |                             | (232                           | )      |      |   | (409 | ) |
| Treasury stock, at cost (413,916 shares at December 31, 2009 and June 30, 2009)                                                                           |   |                             | (4,211                         | )      |      |   | (4,211 | ) |
| Total stockholders’ equity                                                                                                                          |   |                             | 44,090                         |   |      |   | 39,896 |   |
|                                                                                                                                                      |   |                             |                           |   |      |   |   |   |
| Total liabilities and stockholders’ equity                                                                                                          |   | $                                | 480,258                        |   |      | $      | 477,349 |   |

----

|                                                             |   | Three Months Ended                |   |   | Six Months Ended                  |   |
|------------------------------------------------------------------|--------|-----------------------------------|--------|--------|-----------------------------------|--------|
|                                                             |   | December 31,                      |   |   | December 31,                      |   |
|                                                             |   | 2009                              |   |   | 2008                              |   |   | 2009 |   |   | 2008 |   |
|                                                             |   | (in thousands, except share data) |   |   | (in thousands, except share data) |   |
| Interest and dividend income:                                    |   |                              |   |   |                              |   |   |   |   |   |   |   |
| Interest on loans                                                |   | $                                 | 3,754  |   |                              | $      | 3,745 |   |   | $ | 7,494 |   |   | $ | 7,451 |   |
| Interest and dividends on investments                            |   |                              | 2,029  |   |                              |   | 2,792 |   |   |   | 4,302 |   |   |   | 5,595 |   |
| Total interest and dividend income                               |   |                              | 5,783  |   |                              |   | 6,537 |   |   |   | 11,796 |   |   |   | 13,046 |   |
|                                                             |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                                |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits and escrow                                              |   |                              | 1,542  |   |                              |   | 1,743 |   |   |   | 3,157 |   |   |   | 3,505 |   |
| Borrowed funds                                                   |   |                              | 1,045  |   |                              |   | 1,491 |   |   |   | 2,297 |   |   |   | 3,063 |   |
| Total interest expense                                           |   |                              | 2,587  |   |                              |   | 3,234 |   |   |   | 5,454 |   |   |   | 6,568 |   |
| Net interest and dividend income                                 |   |                              | 3,196  |   |                              |   | 3,303 |   |   |   | 6,342 |   |   |   | 6,478 |   |
|                                                             |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                                        |   |                              | 265    |   |                              |   | 323 |   |   |   | 507 |   |   |   | 597 |   |
| Net interest and dividend income after provision for loan losses |   |                              | 2,931  |   |                              |   | 2,980 |   |   |   | 5,835 |   |   |   | 5,881 |   |
|                                                             |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest income (charge):                                     |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Fees for services                                                |   |                              | 595    |   |                              |   | 586 |   |   |   | 1,192 |   |   |   | 1,224 |   |
| Mortgage banking activities                                      |   |                              | 67     |   |                              |   | 18 |   |   |   | 132 |   |   |   | 46 |   |
| Net commissions from brokerage service                           |   |                              | 24     |   |                              |   | 32 |   |   |   | 37 |   |   |   | 79 |   |
| Loss on writedowns of securities                                 |   |                              | (603   | )      |                              |   | (304 | ) |   |   | (932 | ) |   |   | (5,784 | ) |
| Gain on sale of securities                                       |   |                              | 512    |   |                              |   | - |   |   |   | 842 |   |   |   | - |   |
| Other income                                                     |   |                              | 105    |   |                              |   | 266 |   |   |   | 214 |   |   |   | 372 |   |
| Total noninterest income (charge)                                |   |                              | 700    |   |                              |   | 598 |   |   |   | 1,485 |   |   |   | (4,063 | ) |
|                                                             |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest expense:                                             |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Compensation and benefits                                        |   |                              | 1,519  |   |                              |   | 1,497 |   |   |   | 3,021 |   |   |   | 2,962 |   |
| Occupancy and equipment                                          |   |                              | 301    |   |                              |   | 273 |   |   |   | 606 |   |   |   | 543 |   |
| Data processing                                                  |   |                              | 196    |   |                              |   | 164 |   |   |   | 390 |   |   |   | 360 |   |
| Advertising and marketing                                        |   |                              | 82     |   |                              |   | 93 |   |   |   | 146 |   |   |   | 183 |   |
| Prepayment penalties on borrowings                               |   |                              | 41     |   |                              |   | - |   |   |   | 172 |   |   |   | - |   |
| FDIC deposit insurance                                           |   |                              | 149    |   |                              |   | 50 |   |   |   | 353 |   |   |   | 101 |   |
| Writedown of other real estate owned                             |   |                              | -      |   |                              |   | - |   |   |   | 321 |   |   |   | - |   |
| Other noninterest expense                                        |   |                              | 626    |   |                              |   | 541 |   |   |   | 1,084 |   |   |   | 1,035 |   |
| Total noninterest expense                                        |   |                              | 2,914  |   |                              |   | 2,618 |   |   |   | 6,093 |   |   |   | 5,184 |   |
| Income (loss) before income tax expense (benefit)                |   |                              | 717    |   |                              |   | 960 |   |   |   | 1,227 |   |   |   | (3,366 | ) |
|                                                             |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)                                     |   |                              | 189    |   |                              |   | (1,009 | ) |   |   | 296 |   |   |   | (1,324 | ) |
| NET INCOME (LOSS)                                                |   | $                                 | 528    |   |                              | $      | 1,969 |   |   | $ | 931 |   |   | $ | (2,042 | ) |
|                                                             |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) per common share                                 |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   | $                                 | 0.08   |   |                              | $      | 0.31 |   |   | $ | 0.15 |   |   | $ | (0.32 | ) |
| Diluted                                                          |   | $                                 | 0.08   |   |                              | $      | 0.31 |   |   | $ | 0.15 |   |   | $ | (0.32 | ) |

----

|                                                                                        |   | CommonStock    |   |   | AdditionalPaid-inCapital |   |   | RetainedEarnings |   |   | AccumulatedOtherComprehensiveLoss |   |   | UnearnedESOP Shares |    |   | UnearnedStockAwards |   |   | TreasuryStock |   |   | TotalStockholders’Equity |   |
|---------------------------------------------------------------------------------------------|--------|----------------|--------|--------|--------------------------|--------|--------|------------------|--------|--------|-----------------------------------|--------|--------|---------------------|---------|--------|---------------------|--------|--------|---------------|--------|--------|--------------------------------|--------|
|                                                                                        |   | (in thousands) |   |
|                                                                                        |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |
| Balances at June 30, 2008                                                                   |   | $              | 694    |   |                     | $      | 30,795 |             |   | $      | 28,663                            |   |   | $                   | (3,816  | )      |                | $      | (2,089 | )             |   | $      | (605                           | )      |   | $ | (4,205 | ) |   | $ | 49,437 |   |
|                                                                                        |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Dividends declared                                                                          |   |           | -      |   |                     |   | -      |             |   |   | (496                              | )      |   |                | -       |   |                |   | -      |          |   |   | -                              |   |   |   | - |   |   |   | (496 | ) |
| Stock-based compensation                                                                    |   |           | -      |   |                     |   | (48    | )                |   |   | -                                 |   |   |                | -       |   |                |   | -      |          |   |   | 176                            |   |   |   | - |   |   |   | 128 |   |
|                                                                                        |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Comprehensive loss:                                                                         |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                    |   |           | -      |   |                     |   | -      |             |   |   | (2,042                            | )      |   |                | -       |   |                |   | -      |          |   |   | -                              |   |   |   | - |   |   |   | - |   |
| Net change in unrealized holding losses on available-for-sale securities, net of tax effect |   |           | -      |   |                     |   | -      |             |   |   | -                                 |   |   |                | (10,362 | )      |                |   | -      |          |   |   | -                              |   |   |   | - |   |   |   |   |   |
| Comprehensive loss                                                                          |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   | (12,404 | ) |
|                                                                                        |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Balances at December 31, 2008                                                               |   | $              | 694    |   |                     | $      | 30,747 |             |   | $      | 26,125                            |   |   | $                   | (14,178 | )      |                | $      | (2,089 | )             |   | $      | (429                           | )      |   | $ | (4,205 | ) |   | $ | 36,665 |   |
|                                                                                        |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Balances at June 30, 2009                                                                   |   | $              | 694    |   |                     | $      | 30,656 |             |   | $      | 20,383                            |   |   | $                   | (5,277  | )      |                | $      | (1,940 | )             |   | $      | (409                           | )      |   | $ | (4,211 | ) |   | $ | 39,896 |   |
|                                                                                        |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Dividends declared                                                                          |   |           | -      |   |                     |   | -      |             |   |   | (95                               | )      |   |                | -       |   |                |   | -      |          |   |   | -                              |   |   |   | - |   |   |   | (95 | ) |
| Stock-based compensation                                                                    |   |           | -      |   |                     |   | 44     |             |   |   | -                                 |   |   |                | -       |   |                |   | -      |          |   |   | 177                            |   |   |   | - |   |   |   | 221 |   |
|                                                                                        |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                       |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Net income                                                                                  |   |           | -      |   |                     |   | -      |             |   |   | 931                               |   |   |                | -       |   |                |   | -      |          |   |   | -                              |   |   |   | - |   |   |   | - |   |
| Net change in unrealized holding losses on available-for-sale securities, net of tax effect |   |           | -      |   |                     |   | -      |             |   |   | -                                 |   |   |                | 3,137   |   |                |   | -      |          |   |   | -                              |   |   |   | - |   |   |   |   |   |
| Comprehensive income                                                                        |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   | 4,068 |   |
|                                                                                        |   |           |   |   |                     |   |   |             |   |   |                              |   |   |                |    |   |                |   |   |          |   |   |                           |   |   |   |   |   |   |   |   |   |
| Balances at December 31, 2009                                                               |   | $              | 694    |   |                     | $      | 30,700 |             |   | $      | 21,219                            |   |   | $                   | (2,140  | )      |                | $      | (1,940 | )             |   | $      | (232                           | )      |   | $ | (4,211 | ) |   | $ | 44,090 |   |

----

|                                                                                     |   | For the Six Months |    |
|------------------------------------------------------------------------------------------|--------|--------------------|---------|
|                                                                                     |   | Ended December 31, |    |
|                                                                                     |   | 2009               |    |   | 2008 |   |
|                                                                                     |   | (in thousands)     |    |
| Cash flows from operating activities                                                     |   |               |    |   |   |   |
| Net income (loss)                                                                        |   | $                  | 931     |   |   | $ | (2,042 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |   |               |    |   |   |   |   |   |
| Amortization of securities, net                                                          |   |               | 127     |   |   |   | 62 |   |
| Gain on sales and calls of securities, net                                               |   |               | (842    | ) |   |   | - |   |
| Write down of securities                                                                 |   |               | 932     |   |   |   | 5,784 |   |
| Net decrease in loans held-for-sale                                                      |   |               | 775     |   |   |   | 504 |   |
| Change in deferred loan costs, net                                                       |   |               | 6       |   |   |   | (42 | ) |
| Provision for loan losses                                                                |   |               | 507     |   |   |   | 597 |   |
| Loss on sale of other real estate owned                                                  |   |               | 31      |   |   |   | - |   |
| Writedown of other real esate owned                                                      |   |               | 321     |   |   |   | - |   |
| Depreciation and amortization                                                            |   |               | 275     |   |   |   | 186 |   |
| Amortization of core deposit intangible                                                  |   |               | 89      |   |   |   | 103 |   |
| (Increase) decrease in accrued interest receivable and other assets                      |   |               | (2,181  | ) |   |   | 47 |   |
| Increase in cash surrender value of bank owned life insurance                            |   |               | (140    | ) |   |   | (130 | ) |
| Bank owned life insurance benefit income                                                 |   |               | -       |   |   |   | (162 | ) |
| Decrease in other liabilities                                                            |   |               | (626    | ) |   |   | (519 | ) |
| Deferred tax expense (benefit)                                                           |   |               | -       |   |   |   | (1,930 | ) |
| Stock-based compensation                                                                 |   |               | 143     |   |   |   | 50 |   |
| Net cash provided by operating activities                                                |   |               | 348     |   |   |   | 2,508 |   |
| Cash flows from investing activities                                                     |   |               |    |   |   |   |   |   |
| Purchase of available-for-sale securities                                                |   |               | -       |   |   |   | (5,088 | ) |
| Proceeds from sales of available-for-sale securities                                     |   |               | 21,077  |   |   |   | - |   |
| Proceeds from maturities of available-for-sale securities                                |   |               | 27,654  |   |   |   | 13,454 |   |
| Purchase of held-to-maturity securities                                                  |   |               | (35,960 | ) |   |   | - |   |
| Proceeds from maturities of held-to-maturity securities                                  |   |               | 465     |   |   |   | - |   |
| Loan originations net of principal collections, net                                      |   |               | 1,493   |   |   |   | (7,264 | ) |
| Recoveries of loans previously charged off                                               |   |               | 25      |   |   |   | 20 |   |
| Proceeds from sale of other real estate owned                                            |   |               | 1049    |   |   |   | - |   |
| Proceeds from the surrender of bank owned life insurance policy                          |   |               | -       |   |   |   | 345 |   |
| Capital expenditures                                                                     |   |               | (559    | ) |   |   | (45 | ) |
| Net cash provided by investing activities                                                |   |               | 15,244  |   |   |   | 1,422 |   |
| Cash flows from financing activities                                                     |   |               |    |   |   |   |   |   |
| Net increase (decrease) in savings, demand deposits and NOW accounts                     |   |               | 25,681  |   |   |   | 734 |   |
| Net (decrease) increase in time deposit accounts                                         |   |               | (9,563  | ) |   |   | 7,726 |   |
| Net decrease in mortgagors’ escrow account                                         |   |               | (59     | ) |   |   | (63 | ) |
| Net change in short term Federal Home Loan Bank advances                                 |   |               | -       |   |   |   | (4,000 | ) |
| Proceeds from Federal Home Loan Bank advances                                            |   |               | -       |   |   |   | 20,000 |   |
| Repayments of Federal Home Loans Bank advances                                           |   |               | (18,000 | ) |   |   | (23,564 | ) |
| Net increase (decrease) in securities sold under agreement to repurchase                 |   |               | 1,501   |   |   |   | (2,239 | ) |
| Dividends paid                                                                           |   |               | (236    | ) |   |   | (521 | ) |
| Net cash used by financing activities                                                    |   |               | (676    | ) |   |   | (1,927 | ) |
| Increase in cash and cash equivalents                                                    |   |               | 14,916  |   |   |   | 2,003 |   |
| Cash and cash equivalents at beginning of year                                           |   |               | 6,059   |   |   |   | 8,146 |   |
| Cash and cash equivalents at end of period                                               |   | $                  | 20,975  |   |   | $ | 10,149 |   |
| Supplemental disclosures                                                                 |   |               |    |   |   |   |   |   |
| Cash paid during the period for:                                                         |   |               |    |   |   |   |   |   |
| Interest                                                                                 |   | $                  | 5,511   |   |   | $ | 6,561 |   |
| Income taxes paid                                                                        |   | $                  | 20      |   |   | $ | 294 |   |
| Loans transferred to other real estate owned                                             |   | $                  | 1,174   |   |   | $ | 1,211 |   |

----

----

----

----

|                                                                                     |   | Three Months Ended |      |   | Three Months Ended |   |      | Six Months Ended  |   |   | Six Months Ended  |   |
|------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|--------------------|--------|-----------|-------------------|--------|--------|-------------------|--------|
|                                                                                     |   | December 31, 2009  |      |   | December 31, 2008  |   |      | December 31, 2009 |   |   | December 31, 2008 |   |
| Net income (loss)                                                                        |   | $                  | 528,000   |   |               | $      | 1,969,000 |              |   | $      | 931,000           |   |   | $ | (2,042,000 | ) |
| Dividends and undistributed earnings (loss) allocated to unvested shares of stock awards |   |               | 2,381     |   |               |   | 13,199    |              |   |   | 5,301             |   |   |   | (17,471 | ) |
| Net income (loss) available to common shareholders                                       |   |               | 525,619   |   |               |   | 1,955,801 |              |   |   | 925,699           |   |   |   | (2,024,529 | ) |
| Average basic common shares                                                              |   |               | 6,309,519 |   |               |   | 6,276,963 |              |   |   | 6,302,691         |   |   |   | 6,270,346 |   |
| Dilutive effect of stock options                                                         |   |               | 0         |   |               |   | 0         |              |   |   | 0                 |   |   |   | 0 |   |
| Average diluted common shares                                                            |   |               | 6,309,519 |   |               |   | 6,276,963 |              |   |   | 6,302,691         |   |   |   | 6,270,346 |   |
|                                                                                     |   |               |      |   |               |   |      |              |   |   |              |   |   |   |   |   |
| Basic EPS:                                                                               |   | $                  | 0.08      |   |               | $      | 0.31      |              |   | $      | 0.15              |   |   | $ | (0.32 | ) |
| Diluted EPS:                                                                             |   | $                  | 0.08      |   |               | $      | 0.31      |              |   | $      | 0.15              |   |   | $ | (0.32 | ) |

----

|                                  |   | Carrying Value at |    |
|---------------------------------------|--------|-------------------|---------|
|                                  |   | December 31, 2009 |    |   | June 30, 2009 |   |
|                                  |   |              |    |   | Percent |   |   |   |   |   | Percent |   |
|                                  |   | Balance           |    |   | of total |   |   | Balance |   |   | of total |   |
| (Dollars in thousands)                |   |              |    |   |   |   |   |   |   |   |   |   |
| Securities, available-for-sale:       |   |              |    |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency securities |   | $                 | 11,659  |   |   |   | 7.4 | % |   | $ | 19,667 |   |   |   | 11.8 | % |
| Corporate bonds and other securities  |   |              | 5,208   |   |   |   | 3.3 | % |   |   | 9,263 |   |   |   | 5.6 | % |
| Mortgage-backed securities            |   |              | 94,044  |   |   |   | 59.5 | % |   |   | 123,596 |   |   |   | 74.0 | % |
| Equity securities                     |   |              | 9,842   |   |   |   | 6.2 | % |   |   | 12,362 |   |   |   | 7.4 | % |
| Total securities, available-for-sale  |   |              | 120,753 |   |   |   | 76.4 | % |   |   | 164,888 |   |   |   | 98.8 | % |
| Securities, held-to-maturity:         |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency securities |   |              | 17,747  |   |   |   | 11.2 | % |   |   | 2,000 |   |   |   | 1.2 | % |
| Mortgage-backed securities            |   |              | 19,689  |   |   |   | 12.4 | % |   |   | 0 |   |   |   | 0.0 | % |
| Total securities, held-to-maturity    |   |              | 37,436  |   |   |   | 23.6 | % |   |   | 2,000 |   |   |   | 1.2 | % |
| Total securities                      |   | $                 | 158,189 |   |   |   | 100.0 | % |   | $ | 166,888 |   |   |   | 100.0 | % |

----

| December 31, 2009:          |   | Less than 12 months |   |   | 12 months or more |   |   | Total  |   |
|-----------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|--------|--------|
|                        |   | Fair                |   |   | Unrealized        |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| (Dollars in thousands)      |   | Value               |   |   | Losses            |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| US Government Agencies      |   | $                   | 1,949  |   |              | $      | 59     |   |   | $ | - |   |   | $ | - |   |   | $ | 1,949 |   |   | $ | 59 |   |
| Corporate bonds             |   |                | -      |   |              |   | -      |   |   |   | 5,208 |   |   |   | 1,787 |   |   |   | 5,208 |   |   |   | 1,787 |   |
| Mortgage-backed securities  |   |                | 3,721  |   |              |   | 538    |   |   |   | 13,851 |   |   |   | 4,687 |   |   |   | 17,572 |   |   |   | 5,225 |   |
| Equity securities           |   |                | -      |   |              |   | -      |   |   |   | 6,307 |   |   |   | 693 |   |   |   | 6,307 |   |   |   | 693 |   |
|                        |   |                |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total investment securities |   | $                   | 5,670  |   |              | $      | 597    |   |   | $ | 25,366 |   |   | $ | 7,167 |   |   | $ | 31,036 |   |   | $ | 7,764 |   |
|                        |   |                |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| June 30, 2009:              |   | Less than 12 months |   |   | 12 months or more |   |   | Total  |   |
|                        |   | Fair                |   |   | Unrealized        |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| (Dollars in thousands)      |   | Value               |   |   | Losses            |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| US Government Agencies      |   | $                   | 984    |   |              | $      | 16     |   |   | $ | - |   |   | $ | - |   |   | $ | 984 |   |   | $ | 16 |   |
| Corporate bonds             |   |                | -      |   |              |   | -      |   |   |   | 5,493 |   |   |   | 2,528 |   |   |   | 5,493 |   |   |   | 2,528 |   |
| Mortgage-backed securities  |   |                | 5,268  |   |              |   | 1,053  |   |   |   | 16,123 |   |   |   | 5,730 |   |   |   | 21,391 |   |   |   | 6,783 |   |
| Equity securities           |   |                | 12,227 |   |              |   | 2,773  |   |   |   | - |   |   |   | - |   |   |   | 12,227 |   |   |   | 2,773 |   |
|                        |   |                |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total investment securities |   | $                   | 18,479 |   |              | $      | 3,842  |   |   | $ | 21,616 |   |   | $ | 8,258 |   |   | $ | 40,095 |   |   | $ | 12,100 |   |

----

----

| Issuer                  |   | Goldman Sachs    |   | Merrill Lynch    |   | Bank of America  |   | Freddie Mac      |   | Freddie Mac      |
|-------------------------|--------|------------------|--------|------------------|--------|------------------|--------|------------------|--------|------------------|
| Par amount              |   |  $3,000,000 |   |  $5,000,000 |   |  $2,000,000 |   |  $2,000,000 |   |  $2,000,000 |
| Book Value              |   |  $3,000,000 |   |  $5,000,000 |   |  $2,000,000 |   |  $23,000    |   |  $23,000    |
| Purchase Date           |   | 12-12-07         |   | 09-04-07         |   | 11-20-07         |   | 11-09-07         |   | 01-03-08         |
| Maturity Date           |   | 08-23-26         |   | 05-28-27         |   | 08-17-47         |   | 06-30-20         |   | 06-30-20         |
| Next Reset Date         |   | 02-19-10         |   | 02-26-10         |   | 02-16-10         |   | 01-08-10         |   | 04-01-10         |
| Reset Frequency         |   | Quarterly        |   | Quarterly        |   | Quarterly        |   | Quarterly        |   | Quarterly        |
| Failed Auction          |   | Yes              |   | Yes              |   | Yes              |   | Yes              |   | Yes              |
| Receiving Default Rates |   | Yes              |   | Yes              |   | Yes              |   | No               |   | No               |
| Current Rate            |   | 4.654%           |   | 4.739%           |   | 4.679%           |   | 0.000%           |   | 0.000%           |
| Dividends Current:      |   | Yes              |   | Yes              |   | Yes              |   | No               |   | No               |

----

|                                       |   | December 31,2009       |    |   | June 30,2009 |   |
|--------------------------------------------|--------|------------------------|---------|--------|--------------|--------|
|                                       |   | Amount                 |    |   | Percent      |   |   | Amount |   |   | Percent |   |
|                                       |   | (Dollars in thousands) |    |
|                                       |   |                   |    |   |         |   |   |   |   |   |   |   |
| Mortgage Loans:                            |   |                   |    |   |         |   |   |   |   |   |   |   |
|    Residential (1)          |   | $                      | 197,880 |   |         |   | 74.37 | % |   | $ | 200,680 |   |   |   | 74.57 | % |
|    Commercial real estate   |   |                   | 57,993  |   |         |   | 21.80 |   |   |   | 56,500 |   |   |   | 20.99 |   |
|    Residential construction |   |                   | 1,760   |   |         |   | 0.66 |   |   |   | 1,887 |   |   |   | 0.70 |   |
| Commercial                                 |   |                   | 7,127   |   |         |   | 2.68 |   |   |   | 8,958 |   |   |   | 3.33 |   |
| Consumer and other                         |   |                   | 1,294   |   |         |   | 0.49 |   |   |   | 1,097 |   |   |   | 0.41 |   |
|                                       |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Total loans                                |   |                   | 266,054 |   |         |   | 100.00 | % |   |   | 269,122 |   |   |   | 100.00 | % |
|                                       |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Unadvanced construction loans              |   |                   | (3,053  | )      |         |   |   |   |   |   | (2,929 | ) |   |   |   |   |
|                                       |   |                   | 263,001 |   |         |   |   |   |   |   | 266,193 |   |   |   |   |   |
| Net deferred loan costs                    |   |                   | 318     |   |         |   |   |   |   |   | 324 |   |   |   |   |   |
| Allowance for loan losses                  |   |                   | (2,207  | )      |         |   |   |   |   |   | (2,200 | ) |   |   |   |   |
|                                       |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Loans, net                                 |   | $                      | 261,112 |   |         |   |   |   |   | $ | 264,317 |   |   |   |   |   |

----

----

|                                                                         |   | At December 31,        |   |   | At June 30, |   |
|------------------------------------------------------------------------------|--------|------------------------|--------|--------|-------------|--------|
|                                                                         |   | 2009                   |   |   | 2009        |   |
|                                                                         |   | (Dollars in thousands) |   |
| Non-accrual loans:                                                           |   |                   |   |   |        |   |
| Residential mortgage loans (1)                                               |   | $                      | 1,364  |   |        | $      | 1,277 |   |
| Commercial real estate                                                       |   |                   | 4,545  |   |        |   | 5,073 |   |
| Residential construction                                                     |   |                   | -      |   |        |   | - |   |
| Commercial                                                                   |   |                   | 215    |   |        |   | 99 |   |
| Consumer and other                                                           |   |                   | -      |   |        |   | - |   |
| Total non-accrual loans                                                      |   |                   | 6,124  |   |        |   | 6,449 |   |
|                                                                         |   |                   |   |   |        |   |   |   |
| Accruing loans past due 90 days or more:                                     |   |                   |   |   |        |   |   |   |
| Residential mortgage loans (1)                                               |   |                   | -      |   |        |   | - |   |
| Commercial real estate                                                       |   |                   | 3,961  |   |        |   | - |   |
| Residential construction                                                     |   |                   | -      |   |        |   | - |   |
| Commercial                                                                   |   |                   | -      |   |        |   | - |   |
| Consumer and other                                                           |   |                   | -      |   |        |   | - |   |
| Total                                                                        |   |                   | 3,961  |   |        |   | - |   |
| Total non-performing loans                                                   |   |                   | 10,085 |   |        |   | 6,449 |   |
|                                                                         |   |                   |   |   |        |   |   |   |
| Other real estate owned                                                      |   |                   | 984    |   |        |   | 1,211 |   |
| Other non-performing assets                                                  |   |                   | 46     |   |        |   | 46 |   |
| Total non-performing assets                                                  |   |                   | 11,115 |   |        |   | 7,706 |   |
|                                                                         |   |                   |   |   |        |   |   |   |
| Troubled debt restructurings in compliance with restructured terms      |   |                   | 310    |   |        |   | 259 |   |
|                                                                         |   | $                      | 11,425 |   |        | $      | 7,965 |   |
|                                                                         |   |                   |   |   |        |   |   |   |
|                                                                         |   |                   |   |   |        |   |   |   |
| Total non-performing loans to total loans                                    |   |                   | 3.79   | %      |        |   | 2.40 | % |
| Total non-performing assets to total assets                                  |   |                   | 2.31   |   |        |   | 1.61 |   |
| Total non-performing assets and troubled debt restructurings to total assets |   |                   | 2.38   |   |        |   | 1.67 |   |

----

----

|                                                          |   | Three Months Ended |   |   | Six Months Ended |   |
|---------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                          |   | December 31,       |   |   | December 31,     |   |
|                                                          |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
|                                                          |   | (in thousands)     |   |   | (in thousands)   |   |
|  Balance, beginning of period                            |   | $                  | 2,128  |   |             | $      | 1,996 |   |   | $ | 2,200 |   |   | $ | 1,758 |   |
|       Provision for loan losses |   |               | 265    |   |             |   | 323 |   |   |   | 507 |   |   |   | 597 |   |
|       Charge offs               |   |               | (201   | )      |             |   | (437 | ) |   |   | (525 | ) |   |   | (487 | ) |
|       Recoveries                |   |               | 15     |   |             |   | 6 |   |   |   | 25 |   |   |   | 20 |   |
|  Balance, end of period                                  |   | $                  | 2,207  |   |             | $      | 1,888 |   |   | $ | 2,207 |   |   | $ | 1,888 |   |

----

|                                                                                |   | December 31,   |   |   | June 30, |   |
|-------------------------------------------------------------------------------------|--------|----------------|--------|--------|----------|--------|
|                                                                                |   | 2009           |   |   | 2009     |   |
|                                                                                |   | (in thousands) |   |
| Balances not subject to amortization:                                               |   |           |   |   |     |   |
|           Goodwill                |   | $              | 6,912  |   |     | $      | 6,912 |   |
| Balances subject to amortization:                                                   |   |           |   |   |     |   |   |   |
|           Core Deposit Intangible |   |           | 562    |   |     |   | 651 |   |
| Total intangible assets                                                             |   | $              | 7,474  |   |     | $      | 7,563 |   |

|                                       |   | (in thousands) |   |
|--------------------------------------------|--------|----------------|--------|
| For the six months ending June 30, 2010    |   | $              | 89     |   |
| For the twelve months ending June 30, 2011 |   |           | 149    |   |
| For the twelve months ending June 30, 2012 |   |           | 121    |   |
| For the twelve months ending June 30, 2013 |   |           | 93     |   |
| For the twelve months ending June 30, 2014 |   |           | 65     |   |
| For the twelve months ending June 30, 2015 |   |           | 37     |   |
| For the twelve months ending June 30, 2016 |   |           | 8      |   |
| Total                                      |   | $              | 562    |   |

----

|                                                                               |   | Three Months EndedDecember 31, |   |   | Six Months EndedDecember 31, |   |
|------------------------------------------------------------------------------------|--------|--------------------------------|--------|--------|------------------------------|--------|
|                                                                               |   | 2009                           |   |   | 2008                         |   |   | 2009 |   |   | 2008 |   |
|                                                                               |   | (in thousands)                 |   |   | (in thousands)               |   |
|                                                                               |   |                           |   |   |                         |   |
| Net Income (Loss)                                                                  |   | $                              | 528    |   |                         | $      | 1,969 |   |   | $ | 931 |   |   | $ | (2,042 | ) |
|                                                                               |   |                           |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss):                                                 |   |                           |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Net unrealized holding gains (losses) on available-for-sale securities        |   |                           | 2,056  |   |                         |   | (9,015 | ) |   |   | 4,664 |   |   |   | (21,479 | ) |
| Reclassification adjustment for loss recognized in net income                 |   |                           | 91     |   |                         |   | 304 |   |   |   | 90 |   |   |   | 5,784 |   |
| Other comprehensive income (loss) before tax (expense) benefit                     |   |                           | 2,147  |   |                         |   | (8,711 | ) |   |   | 4,754 |   |   |   | (15,695 | ) |
| Income tax (expense) benefit related to items of other comprehensive income (loss) |   |                           | (729   | )      |                         |   | 2,959 |   |   |   | (1,617 | ) |   |   | 5,333 |   |
| Other comprehensive income (loss), net of tax                                      |   |                           | 1,418  |   |                         |   | (5,752 | ) |   |   | 3,137 |   |   |   | (10,362 | ) |
| Total comprehensive income (loss)                                                  |   | $                              | 1,946  |   |                         | $      | (3,783 | ) |   | $ | 4,068 |   |   | $ | (12,404 | ) |

----

----

|                                                                            |   | Fair Value Measurements at Reporting Date Using: |    |
|---------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                                            |   |                                             |    |   | Quoted Prices in |   |   |   |   |   |   |   |
|                                                                            |   |                                             |    |   | Active Markets for |   |   | Significant Other |   |   | Significant |   |
|                                                                            |   |                                             |    |   | Identical Assets |   |   |  Observable Inputs |   |   | Unobservable Inputs |   |
|                                                                            |   | December 31, 2009                                |    |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|                                                                            |   |                                             |    |   |   |   |   |   |   |   |   |   |
| Securities available for sale                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |
| U. S. Government agency securities                                              |   | $                                                | 11,659  |   |   | $ | - |   |   | $ | 11,659 |   |   | $ | - |   |
| Corporate securities                                                            |   |                                             | 5,208   |   |   |   | - |   |   |   | 5,208 |   |   |   | - |   |
| Mortgage backed securities insured or guaranteed by U.S. Government enterprises |   |                                             | 75,145  |   |   |   | - |   |   |   | 75,145 |   |   |   | - |   |
| Non-agency mortgage-backed securities                                           |   |                                             | 18,899  |   |   |   | - |   |   |   | 18,899 |   |   |   | - |   |
| Equity securities                                                               |   |                                             | 9,842   |   |   |   | - |   |   |   | - |   |   |   | 9,842 |   |
| Impaired Loans                                                                  |   |                                             | 5,883   |   |   |   | - |   |   |   | 5,883 |   |   |   | - |   |
| Total                                                                           |   | $                                                | 126,636 |   |   | $ | - |   |   | $ | 116,794 |   |   | $ | 9,842 |   |

|                                                                 |   | Fair Value Measurements               |   |
|----------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                 |   | Using Significant Unobservable Inputs |   |
|                                                                 |   | (Level 3)                             |   |
|                                                                 |   | Available-for-sale                    |   |   |   |   |
|                                                                 |   | Securities                            |   |   | Total |   |
| Beginning balance, July 1, 2009                                      |   | $                                     | 7,466  |   |   | $ | 7,466 |   |
|   Total gains or losses                                    |   |                                  |   |   |   |   |   |   |
|      Included in earnings                   |   |                                  | -      |   |   |   | - |   |
|      Included in other comprehensive income |   |                                  | 2,376  |   |   |   | 2,376 |   |
|      Principal payments on securities       |   |                                  | -      |   |   |   | - |   |
|   Amortization of securities, net                          |   |                                  | -      |   |   |   | - |   |
|   Transfers in and/or out of Level 3                       |   |                                  | -      |   |   |   | - |   |
| Ending balance, December 31, 2009                                    |   | $                                     | 9,842  |   |   | $ | 9,842 |   |

----

|                                                                             |   | Fair Value Measurements at June 30, 2009 Using: |    |
|----------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
|                                                                             |   |                                            |    |   | Quoted Prices in |   |   | Significant |   |   | Significant |   |
|                                                                             |   |                                            |    |   | Active Markets for |   |   | Other Observable |   |   | Unobservable |   |
|                                                                             |   |                                            |    |   | Identical Assets |   |   | Inputs |   |   | Inputs |   |
|                                                                             |   | June 30, 2009                                   |    |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
| (In Thousands)                                                                   |   |                                            |    |   |   |   |   |   |   |   |   |   |
| Securities available-for-sale                                                    |   |                                            |    |   |   |   |   |   |   |   |   |   |
| U. S. Government agency securities                                               |   | $                                               | 19,667  |   |   | $ | - |   |   | $ | 19,667 |   |   | $ | - |   |
| Corporate securities                                                             |   |                                            | 9,263   |   |   |   | - |   |   |   | 9,263 |   |   |   | - |   |
| Mortgage-backed securities insured or guaranteed by U. S. Government enterprises |   |                                            | 103,330 |   |   |   | - |   |   |   | 103,330 |   |   |   | - |   |
| Non-agency mortgage-backed securities                                            |   |                                            | 20,266  |   |   |   | - |   |   |   | 20,266 |   |   |   | - |   |
| Equity securities                                                                |   |                                            | 12,362  |   |   |   | - |   |   |   | 4,896 |   |   |   | 7,466 |   |
| Impaired Loans                                                                   |   |                                            | 3,267   |   |   |   | - |   |   |   | 3,267 |   |   |   | - |   |
|    Total                                                          |   | $                                               | 168,155 |   |   | $ | - |   |   | $ | 160,689 |   |   | $ | 7,466 |   |

|                                                               |   | Fair Value Measurements               |    |
|--------------------------------------------------------------------|--------|---------------------------------------|---------|
|                                                               |   | Using Significant Unobservable Inputs |    |
|                                                               |   | (Level 3)                             |    |
|                                                               |   | Available-for-sale                    |    |   |   |   |
| (In Thousands)                                                     |   | Securities                            |    |   | Total |   |
| Beginning balance, July 1, 2008                                    |   | $                                     | 19,000  |   |   | $ | 19,000 |   |
|   Total gains or losses (realized/unrealized)            |   |                                  |    |   |   |   |   |   |
|      Included in earnings                 |   |                                  | (13,472 | ) |   |   | (13,472 | ) |
|      Included in other comprehensive loss |   |                                  | 14,080  |   |   |   | 14,080 |   |
|      Principal payments on securities     |   |                                  | (1,114  | ) |   |   | (1,114 | ) |
|   Accretion of securities, net                           |   |                                  | 1       |   |   |   | 1 |   |
|   Transfers out of Level 3                               |   |                                  | (11,029 | ) |   |   | (11,029 | ) |
| Ending balance, June 30, 2009                                      |   | $                                     | 7,466   |   |   | $ | 7,466 |   |

----

|                   |   | November 7, 2005 |   |   | June 7, 2006 |   |   | May 25, 2007 |   |
|------------------------|--------|------------------|--------|--------|--------------|--------|--------|--------------|--------|
|                   |   | Grant            |   |   | Grant        |   |   | Grant        |   |
| Dividend yield         |   |             | 1.89   | %      |         |   | 2.23   | %            |   |   | 2.24 | % |
| Expected volatility    |   |             | 12.65  | %      |         |   | 12.17  | %            |   |   | 11.04 | % |
| Risk-free rate         |   |             | 4.56   | %      |         |   | 4.95   | %            |   |   | 4.86 | % |
| Expected life in years |   |             | 6.5    |   |         |   | 6.5    |         |   |   | 6.5 |   |
| Fair value             |   | $                | 2.00   |   |         | $      | 1.97   |         |   | $ | 1.84 |   |

----

|                                                                                |   | December 31,   |   |   | June 30, |   |
|-------------------------------------------------------------------------------------|--------|----------------|--------|--------|----------|--------|
|                                                                                |   | 2009           |   |   | 2009     |   |
|                                                                                |   | (in thousands) |   |
| Commitments to extend credit:                                                       |   |           |   |   |     |   |
|      Loan commitments                                      |   | $              | 1,326  |   |     | $      | 4,687 |   |
|      Unadvanced construction loans                         |   |           | 3,053  |   |     |   | 2,929 |   |
|      Unadvanced lines of credit                            |   |           | 16,228 |   |     |   | 16,859 |   |
|      Standby letters of credit                             |   |           | 957    |   |     |   | 898 |   |
|           Outstanding commitments |   | $              | 21,564 |   |     | $      | 25,373 |   |

----

----

----

|                              |   | December 31,           |    |   |  June 30, |   |
|-----------------------------------|--------|------------------------|---------|--------|----------------|--------|
|                              |   | 2009                   |    |   | 2009           |   |
|                              |   | (Dollars in thousands) |    |
| Allowance for loan losses         |   | $                      | 2,207   |   |           | $      | 2,200 |   |
| Gross loans outstanding           |   |                   | 263,319 |   |           |   | 266,517 |   |
| Nonperforming loans               |   |                   | 10,085  |   |           |   | 6,449 |   |
|                              |   |                   |    |   |           |   |   |   |
| Allowance/gross loans outstanding |   |                   | 0.84    | %      |           |   | 0.83 | % |
| Allowance/nonperforming loans     |   |                   | 21.9    | %      |           |   | 34.1 | % |

|                                          |   | December 31,   |   |   | June 30, |   |
|-----------------------------------------------|--------|----------------|--------|--------|----------|--------|
|                                          |   | 2009           |   |   | 2009     |   |
|                                          |   | (in thousands) |   |
|                                          |   |           |   |   |     |   |
| Past due 30 days through 89 days and accruing |   | $              | 5,528  |   |     | $      | 3,445 |   |
|                                          |   |           |   |   |     |   |   |   |
| Past due 90 days or more and accruing         |   | $              | 3,961  |   |     | $      | - |   |
|                                          |   |           |   |   |     |   |   |   |
| Past due 90 days or more and nonaccruing      |   | $              | 6,124  |   |     | $      | 6,449 |   |
|                                          |   |           |   |   |     |   |   |   |

----

----

----

----

|                                                           |   | For the Three Months Ended December 31, |
|----------------------------------------------------------------|--------|-----------------------------------------|
|                                                           |   | 2009                                    |   | 2008 |
|                                                           |   | (Dollars in thousands)                  |   |
|                                                           |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   | Average                                 |   |   | Interest |   |   | Yield/ |   |   | Average |   |   | Interest |   |   | Yield/ |   |
| Interest-earning assets:                                       |   | Balance                                 |   |   | Income/Expense |   |   | Cost |   |   | Balance |   |   | Income/Expense |   |   | Cost |   |
| Investment securities                                          |   | $                                       | 162,290 |   |   | $ | 2,028 |   |   |   | 4.96 | % |   | $ | 196,210 |   |   | $ | 2,791 |   |   |   | 5.64 | % |
| Loans                                                          |   |                                    | 267,109 |   |   |   | 3,754 |   |   |   | 5.58 | % |   |   | 251,708 |   |   |   | 3,745 |   |   |   | 5.90 | % |
| Other earning assets                                           |   |                                    | 13,949 |   |   |   | 1 |   |   |   | 0.03 | % |   |   | 2,183 |   |   |   | 1 |   |   |   | 0.18 | % |
| Total interest-earnings assets                                 |   |                                    | 443,348 |   |   |   | 5,783 |   |   |   | 5.18 | % |   |   | 450,101 |   |   |   | 6,537 |   |   |   | 5.76 | % |
| Non-interest-earning assets                                    |   |                                    | 32,964 |   |   |   |   |   |   |   |   |   |   |   | 32,363 |   |   |   |   |   |   |   |   |   |
| Total assets                                                   |   | $                                       | 476,312 |   |   |   |   |   |   |   |   |   |   | $ | 482,464 |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                  |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW accounts                                                   |   | $                                       | 79,579 |   |   |   | 367 |   |   |   | 1.83 | % |   | $ | 38,205 |   |   |   | 224 |   |   |   | 2.33 | % |
| Savings accounts                                               |   |                                    | 45,669 |   |   |   | 54 |   |   |   | 0.47 | % |   |   | 45,155 |   |   |   | 69 |   |   |   | 0.61 | % |
| Money market accounts                                          |   |                                    | 10,501 |   |   |   | 29 |   |   |   | 1.10 | % |   |   | 11,918 |   |   |   | 50 |   |   |   | 1.66 | % |
| Time deposits                                                  |   |                                    | 148,315 |   |   |   | 1,092 |   |   |   | 2.92 | % |   |   | 153,699 |   |   |   | 1,400 |   |   |   | 3.61 | % |
| Borrowed money                                                 |   |                                    | 109,748 |   |   |   | 1,045 |   |   |   | 3.78 | % |   |   | 153,279 |   |   |   | 1,491 |   |   |   | 3.86 | % |
| Total interest-bearing liabilities                             |   |                                    | 393,812 |   |   |   | 2,587 |   |   |   | 2.61 | % |   |   | 402,256 |   |   |   | 3,234 |   |   |   | 3.19 | % |
| Non-interest-bearing demand deposits                           |   |                                    | 35,384 |   |   |   |   |   |   |   |   |   |   |   | 36,981 |   |   |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities                         |   |                                    | 4,069 |   |   |   |   |   |   |   |   |   |   |   | 4,492 |   |   |   |   |   |   |   |   |   |
| Capital accounts                                               |   |                                    | 43,047 |   |   |   |   |   |   |   |   |   |   |   | 38,735 |   |   |   |   |   |   |   |   |   |
| Total liabilities and capital accounts                         |   | $                                       | 476,312 |   |   |   |   |   |   |   |   |   |   | $ | 482,464 |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                            |   |                                    |   |   |   | $ | 3,196 |   |   |   |   |   |   |   |   |   |   | $ | 3,303 |   |   |   |   |   |
| Interest rate spread                                           |   |                                    |   |   |   |   |   |   |   |   | 2.57 | % |   |   |   |   |   |   |   |   |   |   | 2.57 | % |
| Net interest-earning assets                                    |   | $                                       | 49,536 |   |   |   |   |   |   |   |   |   |   | $ | 47,845 |   |   |   |   |   |   |   |   |   |
| Net interest margin                                            |   |                                    |   |   |   |   |   |   |   |   | 2.86 | % |   |   |   |   |   |   |   |   |   |   | 2.91 | % |
| Average earning assets to average interest-bearing liabilities |   |                                    |   |   |   |   |   |   |   |   | 112.58 | %  |   |   |   |   |   |   |   |   |   |   |  111.89 | % |

----

|                                                           |   | For the Six Months Ended December 31, |
|----------------------------------------------------------------|--------|---------------------------------------|
|                                                           |   | 2009                                  |   | 2008 |
|                                                           |   | (Dollars in thousands)                |
|                                                           |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   | Average                               |   |   | Interest/ |   |   | Yield/ |   |   | Average |   |   | Interest/ |   |   | Yield/ |   |
| Interest-earning assets:                                       |   | Balance                               |   |   | Dividends |   |   | Cost |   |   | Balance |   |   | Dividends |   |   | Cost |   |
| Investment securities                                          |   | $                                     | 166,868 |   |   | $ | 4,299 |   |   |   | 5.11 | % |   | $ | 205,729 |   |   | $ | 5,582 |   |   |   | 5.38 | % |
| Loans                                                          |   |                                  | 267,780 |   |   |   | 7,494 |   |   |   | 5.55 | % |   |   | 249,474 |   |   |   | 7,451 |   |   |   | 5.92 | % |
| Other earning assets                                           |   |                                  | 11,610 |   |   |   | 3 |   |   |   | 0.05 | % |   |   | 2,306 |   |   |   | 13 |   |   |   | 1.12 | % |
| Total interest-earnings assets                                 |   |                                  | 446,258 |   |   |   | 11,796 |   |   |   | 5.24 | % |   |   | 457,509 |   |   |   | 13,046 |   |   |   | 5.66 | % |
| Non-interest-earning assets                                    |   |                                  | 33,451 |   |   |   |   |   |   |   |   |   |   |   | 30,091 |   |   |   |   |   |   |   |   |   |
| Total assets                                                   |   | $                                     | 479,709 |   |   |   |   |   |   |   |   |   |   | $ | 487,600 |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW accounts                                                   |   | $                                     | 71,878 |   |   |   | 687 |   |   |   | 1.90 | % |   | $ | 37,826 |   |   |   | 448 |   |   |   | 2.35 | % |
| Savings accounts                                               |   |                                  | 45,858 |   |   |   | 108 |   |   |   | 0.47 | % |   |   | 45,230 |   |   |   | 137 |   |   |   | 0.60 | % |
| Money market accounts                                          |   |                                  | 10,982 |   |   |   | 61 |   |   |   | 1.10 | % |   |   | 12,174 |   |   |   | 103 |   |   |   | 1.68 | % |
| Time deposits                                                  |   |                                  | 151,350 |   |   |   | 2,301 |   |   |   | 3.02 | % |   |   | 152,370 |   |   |   | 2,817 |   |   |   | 3.67 | % |
| Borrowed money                                                 |   |                                  | 118,368 |   |   |   | 2,297 |   |   |   | 3.85 | % |   |   | 155,825 |   |   |   | 3,063 |   |   |   | 3.90 | % |
| Total interest-bearing liabilities                             |   |                                  | 398,436 |   |   |   | 5,454 |   |   |   | 2.72 | % |   |   | 403,425 |   |   |   | 6,568 |   |   |   | 3.23 | % |
| Non-interest-bearing demand deposits                           |   |                                  | 35,338 |   |   |   |   |   |   |   |   |   |   |   | 36,569 |   |   |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities                         |   |                                  | 4,120 |   |   |   |   |   |   |   |   |   |   |   | 4,171 |   |   |   |   |   |   |   |   |   |
| Capital accounts                                               |   |                                  | 41,815 |   |   |   |   |   |   |   |   |   |   |   | 43,435 |   |   |   |   |   |   |   |   |   |
| Total liabilities and capital accounts                         |   | $                                     | 479,709 |   |   |   |   |   |   |   |   |   |   | $ | 487,600 |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                            |   |                                  |   |   |   | $ | 6,342 |   |   |   |   |   |   |   |   |   |   | $ | 6,478 |   |   |   |   |   |
| Interest rate spread                                           |   |                                  |   |   |   |   |   |   |   |   | 2.53 | % |   |   |   |   |   |   |   |   |   |   | 2.43 | % |
| Net interest-earning assets                                    |   | $                                     | 47,822 |   |   |   |   |   |   |   |   |   |   | $ | 54,084 |   |   |   |   |   |   |   |   |   |
| Net interest margin                                            |   |                                  |   |   |   |   |   |   |   |   | 2.82 | % |   |   |   |   |   |   |   |   |   |   | 2.81 | % |
| Average earning assets to average interest-bearing liabilities |   |                                  |   |   |   |   |   |   |   |   |  112.00 | %  |   |   |   |   |   |   |   |   |   |   |  113.41 | % |

----

|                          | For the Three Months Ended December 31, 2009         |
|-------------------------------|------------------------------------------------------|
|                          |                                                 |   |   |
|                          | Compared to the Three Months Ended December 31, 2008 |
|                          |                                                 | Increase(Decrease) Due to |   |   |   |   |
| INTEREST INCOME               |                                                 | Rate |   |   | Volume |   |   | Net |   |   |
|                          |                                                 |   |   |   |   |   |   |   |   |
| Investment securities         |                                                 | $ | (315 | ) |   | $ | (448 | ) |   | $ | (763 | ) |
| Loans                         |                                                 |   | (860 | ) |   |   | 869 |   |   |   | 9 |   |
| Other interest-earning assets |                                                 |   | (6 | ) |   |   | 6 |   |   |   | (0 | ) |   |
| TOTAL INTEREST INCOME         |                                                 |   | (1,181 | ) |   |   | 427 |   |   |   | (754 | ) |
|                          |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST EXPENSE:             |                                                 |   |   |   |   |   |   |   |   |   |   |   |
|                          |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| NOW accounts                  |                                                 |   | (293 | ) |   |   | 436 |   |   |   | 143 |   |
| Savings accounts              |                                                 |   | (20 | ) |   |   | 5 |   |   |   | (15 | ) |
| Money Market accounts         |                                                 |   | (16 | ) |   |   | (5 | ) |   |   | (21 | ) |
| Time deposits                 |                                                 |   | (260 | ) |   |   | (48 | ) |   |   | (308 | ) |
| Other borrowed money          |                                                 |   | (31 | ) |   |   | (415 | ) |   |   | (446 | ) |   |
| TOTAL INTEREST INCOME         |                                                 |   | (620 | ) |   |   | (27 | ) |   |   | (647 | ) |   |
|                          |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| CHANGE IN NET INTEREST INCOME |                                                 | $ | (561 | ) |   | $ | 454 |   |   | $ | (107 | ) |   |

----

|                          | For the Six Months Ended December 31, 2009               |
|-------------------------------|----------------------------------------------------------|
|                          |                                                     |
|                          |  Compared to the Six Months Ended December 31, 2008 |
|                          |                                                     | Increase(Decrease) Due to |   |   |   |   |
| INTEREST INCOME               |                                                     | Rate |   |   | Volume |   |   | Net |   |   |
|                          |                                                     |   |   |   |   |   |   |   |   |
| Investment securities         |                                                     | $ | (271 | ) |   | $ | (1,012 | ) |   | $ | (1,283 | ) |
| Loans                         |                                                     |   | (982 | ) |   |   | 1,025 |   |   |   | 43 |   |
| Other interest-earning assets |                                                     |   | (42 | ) |   |   | 32 |   |   |   | (10 | ) |   |
| TOTAL INTEREST INCOME         |                                                     |   | (1,295 | ) |   |   | 45 |   |   |   | (1,250 | ) |
|                          |                                                     |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST EXPENSE:             |                                                     |   |   |   |   |   |   |   |   |   |   |   |
|                          |                                                     |   |   |   |   |   |   |   |   |   |   |   |
| NOW accounts                  |                                                     |   | (240 | ) |   |   | 479 |   |   |   | 239 |   |
| Savings accounts              |                                                     |   | (34 | ) |   |   | 5 |   |   |   | (29 | ) |
| Money Market accounts         |                                                     |   | (33 | ) |   |   | (9 | ) |   |   | (42 | ) |
| Time deposits                 |                                                     |   | (497 | ) |   |   | (19 | ) |   |   | (516 | ) |
| Other borrowed money          |                                                     |   | (39 | ) |   |   | (727 | ) |   |   | (766 | ) |   |
| TOTAL INTEREST INCOME         |                                                     |   | (843 | ) |   |   | (271 | ) |   |   | (1,114 | ) |   |
|                          |                                                     |   |   |   |   |   |   |   |   |   |   |   |
| CHANGE IN NET INTEREST INCOME |                                                     | $ | (452 | ) |   | $ | 316 |   |   | $ | (136 | ) |   |

----

| Net Interest Income At-Risk |
|-----------------------------|
|                        |   |   |   |   |
|                        |   | Estimated Increase (Decrease) |   | Estimated Increase (Decrease) |
| Change in Interest Rates    |   | in NII |   | in NII |
| (Basis Points)              |   | September 30, 2009 |   | June 30, 2009 |
|                        |   |   |   |   |
|                        |   |   |   |   |
| + 100                       |   | -0.82% |   | -1.50% |
| + 200                       |   | -2.89% |   | -4.14% |

----

|               |   |      |   |   |                             |   |    |    |   |       | NPV as a Percentage of Present |   |
|--------------------|--------|-----------|--------|--------|----------------------------------|--------|---------|---------|--------|------------|--------------------------------|--------|
|               |   |      |   |   |                             |   |    |    |   |       | Value of Assets (3)            |   |
|               |   |      |   |   | Estimated Increase (Decrease) in |   |    |    |   |       |                           |   |
| Change in          |   |      |   |   | NPV                              |   |    |    |   | Increase   |                           |
| Interest Rates     |   | Estimated |   |   |                             |   |    |    |   |       |                           |   |   | (Decrease) |   |
| (basis points) (1) |   | NPV (2)   |   |   | Amount                           |   |    | Percent |   |       | NPV Ratio (4)                  |   |   | (basis points) |   |
|               |   |      |   |   |                             |   |    |    |   |       |                           |   |   |   |   |
| +300               |   | $         | 30,049 |   |                             | $      | (11,282 | )       |   |  -27% |                           |   |  6.53% |   |   | -201 |   |
| +200               |   | $         | 35,379 |   |                             | $      | (5,951  | )       |   |  -14% |                           |   |  7.53% |   |   | -100 |   |
| +100               |   | $         | 39,207 |   |                             | $      | (2,123  | )       |   |  -5%  |                           |   |  8.21% |   |   | -33 |   |
| 0                  |   | $         | 41,330 |   |                             | $      | -       |    |   |  0%   |                           |   |  8.53% |   |   | 0 |   |
| -100               |   | $         | 41,010 |   |                             | $      | (320    | )       |   |  -1%  |                           |   |  8.39% |   |   | -14 |   |

----

|   | (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. |
|--------|-----|------------------------------------------------------------------|

----

|                                                       |   | Required |   | Actual |
|------------------------------------------------------------|--------|----------|--------|--------|
|                                                       |   |     |   |   |
| Ratio of Tier 1 Capital to total assets                    |   | 4%       |   | 7.05%  |
| Ratio of Total Risk Based Capital to risk-weighted assets  |   | 8%       |   | 12.42% |
| Ratio of Tier 1 Risk Based Capital to risk-weighted assets |   | 4%       |   | 11.59% |
|                                                       |   |     |   |   |

----

| Item 1.  | Legal Proceedings – Not applicable                    |
|----------|-------------------------------------------------------------|
|     |                                                        |
| Item 1A. | Risk Factors – Not applicable                         |
|     |                                                        |
| Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds |
|     |                                                        |
|     | a) Not applicable                                           |
|     |                                                        |
|     | b) Not applicable                                           |
|     |                                                        |
|     | c) Not applicable                                           |
|     |                                                        |
| Item 3.  | Defaults Upon Senior Securities – Not applicable      |
|     |                                                        |
| Item 4.  | Submission of Matters to a Vote of Security Holders         |

|              |   | For    |      |   | Withheld |   |
|-------------------|--------|--------|-----------|--------|----------|--------|
| Thomas A. Borner  |   |   | 5,508,216 |   |     |   | 337,431 |   |
| Richard A. Loomis |   |   | 5,696,071 |   |     |   | 149,576 |   |
| John P. Miller    |   |   | 5,748,013 |   |     |   | 97,634 |   |

|                                              |   | For    |      |   | Against |   |   | Abstain |   |
|---------------------------------------------------|--------|--------|-----------|--------|---------|--------|--------|---------|--------|
| Number of votes                                   |   |   | 5,836,868 |   |    |   | 6,797  |    |   |   | 1,982 |   |
| Percentage of shares voting in person or by proxy |   |   | 89.40     | %      |    |   | 0.10   | %       |   |   | 0.03 | % |

| Item 5. | Other Information |
|---------|-------------------|

|   | a. | Not applicable. |
|--------|----|-----------------|

|   | b. | There were no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors during the period covered by this Form 10-Q. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Item 6. | Exhibits |
|---------|----------|

|   Exhibits  |   |                                                                                                                                      |
|-----------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1                  |   | Chief Executive Officer Certification pursuant to 17 CFR 240.13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2                  |   | Chief Financial Officer Certification pursuant to 17 CFR 240.13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1                  |   | Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350.                                                                 |
| 32.2                  |   | Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350.                                                                 |

----

|       |                     |   |                                             |   |
|------------|--------------------------|--------|--------------------------------------------------|--------|
|       |                     |   | PSB HOLDINGS, INC.                               |   |
|       |                     |   | (Registrant)                                     |   |
|       |                     |   |                                             |   |
| Date       |   February 12, 2010 |   | /s/ Thomas A. Borner                             |   |
|       |                     |   | Thomas A. Borner                                 |   |
|       |                     |   | Chief Executive Officer                          |   |
|       |                     |   |                                             |   |
| Date  |   February 12, 2010 |   | /s/ Robert J. Halloran, Jr.                 |   |
|       |                     |   | Robert J. Halloran, Jr.                          |   |
|       |                     |   | President, Chief Financial Officer and Treasurer |   |