----

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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) |

----

| PSB Holdings, Inc. |
|--------------------|
|               |
| Table of Contents  |

|       |                                                                                                                                     |   |     |
|------------|------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
|       |                                                                                                                                     |   |     |
|       |                                                                                                                                     |   | Page No. |
|       |                                                                                                                                     |   |     |
| Part I.    | FINANCIAL INFORMATION                                                                                                                    |   |     |
|       |                                                                                                                                     |   |     |
| Item 1.    | Financial Statements                                                                                                                     |   |     |
|       |                                                                                                                                     |   |     |
|       | Condensed Consolidated Balance Sheets at March 31, 2010 (Unaudited) and June 30, 2009 (Audited)                                          |   | 1        |
|       |                                                                                                                                     |   |     |
|       | Condensed Consolidated Statements of Income (Loss) for the Three and Nine Months Ended March 31, 2010 and 2009 (Unaudited)               |   | 2        |
|       |                                                                                                                                     |   |     |
|       | Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended March 31, 2010 and 2009 (Unaudited) |   | 3        |
|       |                                                                                                                                     |   |     |
|       | Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2010 and 2009 (Unaudited)                            |   | 4        |
|       |                                                                                                                                     |   |     |
|       | Notes to Consolidated Financial Statements (Unaudited)                                                                                   |   | 5        |
|       |                                                                                                                                     |   |     |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                              |   | 21       |
|       |                                                                                                                                     |   |     |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                                                               |   | 34       |
|       |                                                                                                                                     |   |     |
| Item 4.    | Controls and Procedures                                                                                                                  |   | 34       |
|       |                                                                                                                                     |   |     |
| Item 4T.   | Controls and Procedures                                                                                                                  |   | 34       |
|       |                                                                                                                                     |   |     |
| Part II.   | OTHER INFORMATION                                                                                                                        |   |     |
|       |                                                                                                                                     |   |     |
| Item 1.    | Legal Proceedings                                                                                                                        |   | 35       |
|       |                                                                                                                                     |   |     |
| Item 1A.   | Risk Factors                                                                                                                             |   | 35       |
|       |                                                                                                                                     |   |     |
| Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                                                                              |   | 35       |
|       |                                                                                                                                     |   |     |
| Item 3.    | Defaults Upon Senior Securities                                                                                                          |   | 35       |
|       |                                                                                                                                     |   |     |
| Item 4.    | [Reserved]                                                                                                                               |   | 35       |
|       |                                                                                                                                     |   |     |
| Item 5.    | Other Information                                                                                                                        |   | 35       |
|       |                                                                                                                                     |   |     |
| Item 6.    | Exhibits                                                                                                                                 |   | 35       |
|       |                                                                                                                                     |   |     |
| SIGNATURES |                                                                                                                                     | 36     |

----

----

|                                                                                                     |   | March 31,                        |    |   | June 30,  |   |
|----------------------------------------------------------------------------------------------------------|--------|----------------------------------|---------|--------|-----------|--------|
|                                                                                                     |   | 2010                             |    |   | 2009      |   |
|                                                                                                     |   | (Unaudited)                      |    |   | (Audited) |   |
|                                                                                                     |   | (in thousands except share data) |    |
| ASSETS                                                                                                   |   |                             |    |   |      |   |
| Cash and due from depository institutions                                                                |   | $                                | 27,265  |   |      | $      | 5,509 |   |
| Federal funds sold                                                                                       |   |                             | -       |   |      |   | 550 |   |
|      Total cash and cash equivalents                                            |   |                             | 27,265  |   |      |   | 6,059 |   |
| Securities available for sale (at fair value)                                                            |   |                             | 103,363 |   |      |   | 164,888 |   |
| Securities held-to-maturity (fair value of $66,285 as of                                                 |   |                             |    |   |      |   |   |   |
|     March 31, 2010 and $1,945 as of June 30, 2009)                                   |   |                             | 66,244  |   |      |   | 2,000 |   |
| Federal Home Loan Bank stock, at cost                                                                    |   |                             | 8,056   |   |      |   | 8,056 |   |
| Loans held-for-sale                                                                                      |   |                             | 125     |   |      |   | 1,200 |   |
| Loans                                                                                                    |   |                             | 260,734 |   |      |   | 266,517 |   |
|      Allowance for loan losses                                                  |   |                             | (2,407  | )      |      |   | (2,200 | ) |
|                Net loans      |   |                             | 258,327 |   |      |   | 264,317 |   |
| Premises and equipment                                                                                   |   |                             | 5,353   |   |      |   | 5,159 |   |
| Accrued interest receivable                                                                              |   |                             | 1,652   |   |      |   | 1,891 |   |
| Other real estate owned                                                                                  |   |                             | 1,120   |   |      |   | 1,211 |   |
| Goodwill                                                                                                 |   |                             | 6,912   |   |      |   | 6,912 |   |
| Intangible assets                                                                                        |   |                             | 518     |   |      |   | 651 |   |
| Bank owned life insurance                                                                                |   |                             | 6,120   |   |      |   | 5,912 |   |
| Other assets                                                                                             |   |                             | 10,088  |   |      |   | 9,093 |   |
|                                                                                                     |   |                             |    |   |      |   |   |   |
|    Total assets                                                                                |   | $                                | 495,143 |   |      | $      | 477,349 |   |
|                                                                                                     |   |                             |    |   |      |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                               |   |                             |    |   |      |   |   |   |
| Liabilities                                                                                              |   |                             |    |   |      |   |   |   |
| Deposits                                                                                                 |   |                             |    |   |      |   |   |   |
|      Noninterest-bearing                                                        |   | $                                | 34,263  |   |      | $      | 35,246 |   |
|      Interest-bearing                                                           |   |                             | 293,281 |   |      |   | 272,853 |   |
|                Total deposits |   |                             | 327,544 |   |      |   | 308,099 |   |
| Mortgagors’ escrow accounts                                                                        |   |                             | 933     |   |      |   | 1,564 |   |
| Federal Home Loan Bank advances                                                                          |   |                             | 102,500 |   |      |   | 120,500 |   |
|     Securities sold under agreements to repurchase                                   |   |                             | 12,635  |   |      |   | 4,471 |   |
|     Due to broker                                                                    |   |                             | 4,996   |   |      |   | - |   |
| Other liabilities                                                                                        |   |                             | 2,237   |   |      |   | 2,819 |   |
| Total liabilities                                                                                        |   |                             | 450,845 |   |      |   | 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 March 31, 2010 and June 30, 2009                                                    |   |                             | 694     |   |      |   | 694 |   |
| Additional paid-in capital                                                                               |   |                             | 30,723  |   |      |   | 30,656 |   |
| Retained earnings                                                                                        |   |                             | 21,470  |   |      |   | 20,383 |   |
| Accumulated other comprehensive loss                                                                     |   |                             | (2,205  | )      |      |   | (5,277 | ) |
| Unearned ESOP shares                                                                                     |   |                             | (1,940  | )      |      |   | (1,940 | ) |
| Unearned stock awards                                                                                    |   |                             | (233    | )      |      |   | (409 | ) |
| Treasury stock, at cost (413,916 shares at                                                               |   |                             |    |   |      |   |   |   |
|    March 31, 2010 and June 30, 2009)                                                      |   |                             | (4,211  | )      |      |   | (4,211 | ) |
| Total stockholders’ equity                                                                         |   |                             | 44,298  |   |      |   | 39,896 |   |
|                                                                                                     |   |                             |    |   |      |   |   |   |
| Total liabilities and stockholders’ equity                                                         |   | $                                | 495,143 |   |      | $      | 477,349 |   |

----

|                                                                                   |   | Three Months Ended                |   |   | Nine Months Ended                 |   |
|----------------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|-----------------------------------|--------|
|                                                                                   |   | March 31,                         |   |   | March 31,                         |   |
|                                                                                   |   | 2010                              |   |   | 2009                              |   |   | 2010 |   |   | 2009 |   |
|                                                                                   |   | (in thousands, except share data) |   |   | (in thousands, except share data) |   |
| Interest and dividend income:                                                          |   |                              |   |   |                              |   |   |   |   |   |   |   |
|    Interest on loans                                                    |   | $                                 | 3,602  |   |                              | $      | 3,588 |   |   | $ | 11,096 |   |   | $ | 11,039 |   |
|    Interest and dividends on investments                                |   |                              | 1,815  |   |                              |   | 2,603 |   |   |   | 6,117 |   |   |   | 8,199 |   |
| Total interest and dividend income                                                     |   |                              | 5,417  |   |                              |   | 6,191 |   |   |   | 17,213 |   |   |   | 19,238 |   |
|                                                                                   |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                                                      |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
|    Deposits and escrow                                                  |   |                              | 1,377  |   |                              |   | 1,703 |   |   |   | 4,533 |   |   |   | 5,209 |   |
|    Borrowed funds                                                       |   |                              | 1,011  |   |                              |   | 1,383 |   |   |   | 3,308 |   |   |   | 4,446 |   |
| Total interest expense                                                                 |   |                              | 2,388  |   |                              |   | 3,086 |   |   |   | 7,841 |   |   |   | 9,655 |   |
| Net interest and dividend income                                                       |   |                              | 3,029  |   |                              |   | 3,105 |   |   |   | 9,372 |   |   |   | 9,583 |   |
|                                                                                   |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                                                              |   |                              | 257    |   |                              |   | 157 |   |   |   | 764 |   |   |   | 754 |   |
| Net interest and dividend income after provision                                       |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
|    for loan losses                                                      |   |                              | 2,772  |   |                              |   | 2,948 |   |   |   | 8,608 |   |   |   | 8,829 |   |
|                                                                                   |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest income (charge):                                                           |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
|     Fees for services                                              |   |                              | 532    |   |                              |   | 543 |   |   |   | 1,725 |   |   |   | 1,767 |   |
|     Mortgage banking activities                                    |   |                              | 53     |   |                              |   | 38 |   |   |   | 185 |   |   |   | 84 |   |
|     Net commissions from brokerage service                         |   |                              | 26     |   |                              |   | 33 |   |   |   | 63 |   |   |   | 111 |   |
|     Other than temporary impairment losses on investments          |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
|        Gross impairment losses                      |   |                              | (2,741 | )      |                              |   | (75 | ) |   |   | (5,271 | ) |   |   | (5,859 | ) |
|        Less: Impairments recognized in OCI          |   |                              | 1,803  |   |                              |   | - |   |   |   | 3,400 |   |   |   | - |   |
|        Net impairment losses recognized in earnings |   |                              | (938   | )      |                              |   | (75 | ) |   |   | (1,871 | ) |   |   | (5,859 | ) |
|     Gain on sale of securities                                     |   |                              | 570    |   |                              |   | 86 |   |   |   | 1,412 |   |   |   | 86 |   |
|     Other income                                                   |   |                              | 107    |   |                              |   | 102 |   |   |   | 317 |   |   |   | 475 |   |
| Total noninterest income (charge)                                                      |   |                              | 350    |   |                              |   | 727 |   |   |   | 1,831 |   |   |   | (3,336 | ) |
|                                                                                   |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest expense:                                                                   |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
|    Compensation and benefits                                            |   |                              | 1,483  |   |                              |   | 1,466 |   |   |   | 4,504 |   |   |   | 4,428 |   |
|    Occupancy and equipment                                              |   |                              | 313    |   |                              |   | 319 |   |   |   | 919 |   |   |   | 862 |   |
|    Data processing                                                      |   |                              | 187    |   |                              |   | 162 |   |   |   | 577 |   |   |   | 522 |   |
|    Advertising and marketing                                            |   |                              | 56     |   |                              |   | 88 |   |   |   | 202 |   |   |   | 270 |   |
|    Prepayment penalties on borrowings                                   |   |                              | -      |   |                              |   | - |   |   |   | 172 |   |   |   | - |   |
|    FDIC deposit insurance                                               |   |                              | 205    |   |                              |   | 58 |   |   |   | 557 |   |   |   | 159 |   |
|    Writedown of other real estate owned                                 |   |                              | -      |   |                              |   | - |   |   |   | 321 |   |   |   | - |   |
|    Other noninterest expense                                            |   |                              | 575    |   |                              |   | 544 |   |   |   | 1,657 |   |   |   | 1,579 |   |
| Total noninterest expense                                                              |   |                              | 2,819  |   |                              |   | 2,637 |   |   |   | 8,909 |   |   |   | 7,820 |   |
| Income (loss) before income tax expense (benefit)                                      |   |                              | 303    |   |                              |   | 1,038 |   |   |   | 1,530 |   |   |   | (2,327 | ) |
|                                                                                   |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)                                                           |   |                              | 52     |   |                              |   | 326 |   |   |   | 348 |   |   |   | (998 | ) |
| NET INCOME (LOSS)                                                                      |   | $                                 | 251    |   |                              | $      | 712 |   |   | $ | 1,182 |   |   | $ | (1,329 | ) |
|                                                                                   |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) per common share                                                       |   |                              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
|    Basic                                                                |   | $                                 | 0.04   |   |                              | $      | 0.11 |   |   | $ | 0.19 |   |   | $ | (0.21 | ) |
|    Diluted                                                              |   | $                                 | 0.04   |   |                              | $      | 0.11 |   |   | $ | 0.19 |   |   | $ | (0.21 | ) |

----

|                                                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |
|------------------------------------------------------------|--------|----------------|--------|--------|----------------------------|--------|--------|-------------------|--------|--------|--------------------------------------|--------|--------|----------------------|---------|--------|-----------------------|--------|--------|----------------|--------|--------|----------------------------------|--------|
|                                                       |   | Common Stock   |   |   | Additional Paid-in Capital |   |   | Retained Earnings |   |   | Accumulated Other Comprehensive Loss |   |   | Unearned ESOP Shares |    |   | Unearned Stock Awards |   |   | Treasury Stock |   |   | Total Stockholders’ Equity |   |
|                                                       |   |           |   |
|                                                       |   | (in thousands) |   |
|                                                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |
| Balances at June 30, 2008                                  |   | $              | 694    |   |                       | $      | 30,795 |              |   | $      | 28,663                               |   |   | $                    | (3,816  | )      |                  | $      | (2,089 | )              |   | $      | (605                             | )      |   | $ | (4,205 | ) |   | $ | 49,437 |   |
|                                                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
| Dividends declared                                         |   |           | -      |   |                       |   | -      |              |   |   | (1,140                               | )      |   |                 | -       |   |                  |   | -      |           |   |   | -                                |   |   |   | - |   |   |   | (1,140 | ) |
| Stock-based compensation                                   |   |           | -      |   |                       |   | (24    | )                 |   |   | -                                    |   |   |                 | -       |   |                  |   | -      |           |   |   | 176                              |   |   |   | - |   |   |   | 152 |   |
|                                                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
| Comprehensive loss:                                        |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
|   Net loss                                       |   |           | -      |   |                       |   | -      |              |   |   | (1,329                               | )      |   |                 | -       |   |                  |   | -      |           |   |   | -                                |   |   |   | - |   |   |   | - |   |
|   Net change in unrealized                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
|      holding losses on available- |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
|      for-sale securities,         |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
|      net of tax effect            |   |           | -      |   |                       |   | -      |              |   |   | -                                    |   |   |                 | (11,316 | )      |                  |   | -      |           |   |   | -                                |   |   |   | - |   |   |   |   |   |
| Comprehensive loss                                         |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   | (12,645 | ) |
|                                                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
| Balances at March 31, 2009                                 |   | $              | 694    |   |                       | $      | 30,771 |              |   | $      | 26,194                               |   |   | $                    | (15,132 | )      |                  | $      | (2,089 | )              |   | $      | (429                             | )      |   | $ | (4,205 | ) |   | $ | 35,804 |   |
|                                                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
|                                                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
| 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                                   |   |           | -      |   |                       |   | 67     |              |   |   | -                                    |   |   |                 | -       |   |                  |   | -      |           |   |   | 176                              |   |   |   | - |   |   |   | 243 |   |
|                                                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                                      |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
|   Net income                                     |   |           | -      |   |                       |   | -      |              |   |   | 1,182                                |   |   |                 | -       |   |                  |   | -      |           |   |   | -                                |   |   |   | - |   |   |   | - |   |
|   Net change in unrealized                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
|      holding losses on available- |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
|      for-sale securities,         |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
|      net of tax effect            |   |           | -      |   |                       |   | -      |              |   |   | -                                    |   |   |                 | 3,072   |   |                  |   | -      |           |   |   | -                                |   |   |   | - |   |   |   |   |   |
| Comprehensive income                                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   | 4,254 |   |
|                                                       |   |           |   |   |                       |   |   |              |   |   |                                 |   |   |                 |    |   |                  |   |   |           |   |   |                             |   |   |   |   |   |   |   |   |   |
| Balances at March 31, 2010                                 |   | $              | 694    |   |                       | $      | 30,723 |              |   | $      | 21,470                               |   |   | $                    | (2,205  | )      |                  | $      | (1,940 | )              |   | $      | (233                             | )      |   | $ | (4,211 | ) |   | $ | 44,298 |   |

----

|                                                                     |   | For the Nine Months |    |
|--------------------------------------------------------------------------|--------|---------------------|---------|
|                                                                     |   | Ended March 31,     |    |
|                                                                     |   | 2010                |    |   | 2009 |   |
|                                                                     |   | (in thousands)      |    |
| Cash flows from operating activities                                     |   |                |    |   |   |   |
| Net income (loss)                                                        |   | $                   | 1,182   |   |   | $ | (1,329 | ) |
| Adjustments to reconcile net income (loss) to net cash                   |   |                |    |   |   |   |   |   |
| provided by operating activities:                                        |   |                |    |   |   |   |   |   |
| Amortization of securities, net                                          |   |                | 256     |   |   |   | 63 |   |
|     Gain on sales and calls of securities, net       |   |                | (1,412  | ) |   |   | (86 | ) |
|     Write down of securities                         |   |                | 1,871   |   |   |   | 5,859 |   |
|     Net decrease in loans held-for-sale              |   |                | 1,075   |   |   |   | 405 |   |
|     Change in deferred loan costs, net               |   |                | 24      |   |   |   | (24 | ) |
| Provision for loan losses                                                |   |                | 764     |   |   |   | 754 |   |
|     Loss on sale of other real estate owned          |   |                | 30      |   |   |   | - |   |
|     Writedown of other real esate owned              |   |                | 321     |   |   |   | - |   |
| Depreciation and amortization                                            |   |                | 401     |   |   |   | 292 |   |
| Amortization of core deposit intangible                                  |   |                | 133     |   |   |   | 155 |   |
| Increase in accrued interest receivable and other assets                 |   |                | (2,366  | ) |   |   | (1,613 | ) |
| Increase in cash surrender value of bank owned life insurance            |   |                | (208    | ) |   |   | (196 | ) |
| Bank owned life insurance death benefit income                           |   |                | -       |   |   |   | (162 | ) |
| (Decrease) increase in other liabilities                                 |   |                | (452    | ) |   |   | 1,649 |   |
| Stock-based compensation                                                 |   |                | 214     |   |   |   | 124 |   |
| Net cash provided by operating activities                                |   |                | 1,833   |   |   |   | 5,891 |   |
| Cash flows from investing activities                                     |   |                |    |   |   |   |   |   |
| Purchase of available-for-sale securities                                |   |                | (1,000  | ) |   |   | (7,103 | ) |
| Proceeds from sales of available-for-sale securities                     |   |                | 32,705  |   |   |   | 4,629 |   |
| Proceeds from maturities of available-for-sale securities                |   |                | 33,888  |   |   |   | 22,815 |   |
| Purchase of held-to-maturity securities                                  |   |                | (62,459 | ) |   |   | - |   |
| Proceeds from maturities of held-to-maturity securities                  |   |                | 3,081   |   |   |   | - |   |
| Loan originations net of principal collections                           |   |                | 4,257   |   |   |   | (18,610 | ) |
| Recoveries of loans previously charged off                               |   |                | 61      |   |   |   | 37 |   |
| Proceeds from sale of other real estate owned                            |   |                | 680     |   |   |   | - |   |
| Proceeds from the surrender of bank owned life insurance policy          |   |                | -       |   |   |   | 345 |   |
| Capital expenditures - premises and equipment                            |   |                | (566    | ) |   |   | (1,056 | ) |
| Capital expenditures - other real estate owned                           |   |                | (16     | ) |   |   | - |   |
| Net cash provided by investing activities                                |   |                | 10,631  |   |   |   | 1,057 |   |
| Cash flows from financing activities                                     |   |                |    |   |   |   |   |   |
| Net increase in savings, demand deposits and NOW accounts                |   |                | 32,306  |   |   |   | 7,127 |   |
| Net (decrease) increase in time deposit accounts                         |   |                | (12,861 | ) |   |   | 10,707 |   |
| Net decrease in mortgagors’ escrow account                         |   |                | (631    | ) |   |   | (563 | ) |
| Net change in short term Federal Home Loan Bank advances                 |   |                | (14,000 | ) |   |   | (13,000 | ) |
| Proceeds from Federal Home Loan Bank advances                            |   |                | 7,000   |   |   |   | 24,000 |   |
| Repayments of Federal Home Loans Bank advances                           |   |                | (11,000 | ) |   |   | (30,715 | ) |
| Net increase (decrease) in securities sold under agreement to repurchase |   |                | 8,164   |   |   |   | (2,998 | ) |
| Dividends paid                                                           |   |                | (236    | ) |   |   | (1,092 | ) |
| Net cash used by financing activities                                    |   |                | 8,742   |   |   |   | (6,534 | ) |
| Increase in cash and cash equivalents                                    |   |                | 21,206  |   |   |   | 414 |   |
| Cash and cash equivalents at beginning of year                           |   |                | 6,059   |   |   |   | 8,146 |   |
| Cash and cash equivalents at end of period                               |   | $                   | 27,265  |   |   | $ | 8,560 |   |
| Supplemental disclosures                                                 |   |                |    |   |   |   |   |   |
| Cash paid during the period for:                                         |   |                |    |   |   |   |   |   |
| Interest                                                                 |   | $                   | 7,905   |   |   | $ | 9,671 |   |
| Income taxes paid                                                        |   | $                   | 395     |   |   | $ | 217 |   |
| Loans transferred to other real estate owned                             |   | $                   | 1,598   |   |   | $ | 1,289 |   |
| Increase in due to broker                                                |   | $                   | 4,996   |   |   | $ | - |   |
| Deferred gain on sale of other real estate owned                         |   | $                   | 40      |   |   | $ | - |   |
| Loans originated to finance sale of other real estate owned              |   | $                   | 714     |   |   | $ | - |   |

----

----

----

|                                                  |   | Three Months Ended |      |   | Three Months Ended |   |      | Nine Months Ended |   |   | Nine Months Ended |   |
|-------------------------------------------------------|--------|--------------------|-----------|--------|--------------------|--------|-----------|-------------------|--------|--------|-------------------|--------|
|                                                  |   | March 31, 2010     |      |   | March 31, 2009     |   |      | March 31, 2010    |   |   | March 31, 2009    |   |
| Net income (loss)                                     |   | $                  | 251,000   |   |               | $      | 712,000   |              |   | $      | 1,182,000         |   |   | $ | (1,329,000 | ) |
| Dividends and undistributed earnings (loss) allocated |   |               |      |   |               |   |      |              |   |   |              |   |   |   |   |   |
|    to unvested shares of stock awards  |   |               | 867       |   |               |   | 4,933     |              |   |   | 5,983             |   |   |   | (10,817 | ) |
| Net income (loss) available to common shareholders    |   |               | 250,133   |   |               |   | 707,067   |              |   |   | 1,176,017         |   |   |   | (1,318,183 | ) |
| Average basic common shares                           |   |               | 6,319,928 |   |               |   | 6,286,951 |              |   |   | 6,308,353         |   |   |   | 6,275,800 |   |
| Dilutive effect of stock options                      |   |               | 0         |   |               |   | 0         |              |   |   | 0                 |   |   |   | 0 |   |
| Average diluted common shares                         |   |               | 6,319,928 |   |               |   | 6,286,951 |              |   |   | 6,308,353         |   |   |   | 6,275,800 |   |
|                                                  |   |               |      |   |               |   |      |              |   |   |              |   |   |   |   |   |
| Basic EPS:                                            |   | $                  | 0.04      |   |               | $      | 0.11      |              |   | $      | 0.19              |   |   | $ | (0.21 | ) |
| Diluted EPS:                                          |   | $                  | 0.04      |   |               | $      | 0.11      |              |   | $      | 0.19              |   |   | $ | (0.21 | ) |

----

|                                             |   | Carrying Value at |    |
|--------------------------------------------------|--------|-------------------|---------|
|                                             |   | March 31, 2010    |    |   | June 30, 2009 |   |
|                                             |   |              |    |   | Percent |   |   |   |   |   | Percent |   |
|                                             |   | Balance           |    |   | of total |   |   | Balance |   |   | of total |   |
| (Dollars in thousands)                           |   |              |    |   |   |   |   |   |   |   |   |   |
| Securities, available-for-sale:                  |   |              |    |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency securities            |   | $                 | 12,584  |   |   |   | 7.4 | % |   | $ | 19,667 |   |   |   | 11.8 | % |
| Corporate bonds and other securities             |   |              | 5,364   |   |   |   | 3.2 | % |   |   | 9,263 |   |   |   | 5.6 | % |
| Mortgage-backed securities                       |   |              | 75,282  |   |   |   | 44.4 | % |   |   | 123,596 |   |   |   | 74.0 | % |
| Equity securities                                |   |              | 10,133  |   |   |   | 6.0 | % |   |   | 12,362 |   |   |   | 7.4 | % |
|   Total securities, available-for-sale |   |              | 103,363 |   |   |   | 61.0 | % |   |   | 164,888 |   |   |   | 98.8 | % |
| Securities, held-to-maturity:                    |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency securities            |   |              | 47,239  |   |   |   | 27.8 | % |   |   | 2,000 |   |   |   | 1.2 | % |
| Mortgage-backed securities                       |   |              | 19,005  |   |   |   | 11.2 | % |   |   | - |   |   |   | 0.0 | % |
|   Total securities, held-to-maturity   |   |              | 66,244  |   |   |   | 39.0 | % |   |   | 2,000 |   |   |   | 1.2 | % |
|    Total securities               |   | $                 | 169,607 |   |   |   | 100.0 | % |   | $ | 166,888 |   |   |   | 100.0 | % |

----

| March 31, 2010:                                         |   | 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                                  |   | $                   | -      |   |              | $      | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Corporate bonds                                         |   |                | -      |   |              |   | -      |   |   |   | 5,363 |   |   |   | 1,633 |   |   |   | 5,363 |   |   |   | 1,633 |   |
| Mortgage-backed securities                              |   |                | -      |   |              |   | -      |   |   |   | 1,014 |   |   |   | 221 |   |   |   | 1,014 |   |   |   | 221 |   |
| Equity securities                                       |   |                | -      |   |              |   | -      |   |   |   | 6,633 |   |   |   | 367 |   |   |   | 6,633 |   |   |   | 367 |   |
|    Total temporarily impaired securities |   |                | -      |   |              |   | -      |   |   |   | 13,010 |   |   |   | 2,221 |   |   |   | 13,010 |   |   |   | 2,221 |   |
| Other-than-temporarily impaired debt                    |   |                |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                                              |   |                |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-Agency CMOs                                         |   |                | 320    |   |              |   | 284    |   |   |   | 14,839 |   |   |   | 4,056 |   |   |   | 15,159 |   |   |   | 4,340 |   |
|                                                    |   |                |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total temporarily-impaired and                          |   |                |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| other-than-temporarily impaired securities              |   | $                   | 320    |   |              | $      | 284    |   |   | $ | 27,849 |   |   | $ | 6,277 |   |   | $ | 28,169 |   |   | $ | 6,561 |   |
|                                                    |   |                |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 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         |   |          | 05-21-10   |   |          |   | 05-27-10   |            |   |   | 05-14-10    |   |   |        | 04-09-10   |   |   |   | 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            |   | 4.489%        |       |   | 4.741%        |   |       | 4.679%          |   |   | 0.000%      |   |   | 0.000%      |       |
| Dividends Current:      |   | Yes           |       |   | Yes           |   |       | Yes             |   |   | No          |   |   | No          |       |

----

|                                       |   | March 31,              |    |   | June 30, |   |
|--------------------------------------------|--------|------------------------|---------|--------|----------|--------|
|                                       |   | 2010                   |    |   | 2009     |   |
|                                       |   | Amount                 |    |   | Percent  |   |   | Amount |   |   | Percent |   |
|                                       |   | (Dollars in thousands) |    |
|                                       |   |                   |    |   |     |   |   |   |   |   |   |   |
| Mortgage Loans:                            |   |                   |    |   |     |   |   |   |   |   |   |   |
|    Residential (1)          |   | $                      | 196,119 |   |     |   | 74.80 | % |   | $ | 200,680 |   |   |   | 74.57 | % |
|    Commercial real estate   |   |                   | 56,135  |   |     |   | 21.41 |   |   |   | 56,500 |   |   |   | 20.99 |   |
|    Residential construction |   |                   | 1,284   |   |     |   | 0.49 |   |   |   | 1,887 |   |   |   | 0.70 |   |
| Commercial                                 |   |                   | 7,501   |   |     |   | 2.86 |   |   |   | 8,958 |   |   |   | 3.33 |   |
| Consumer and other                         |   |                   | 1,142   |   |     |   | 0.44 |   |   |   | 1,097 |   |   |   | 0.41 |   |
|                                       |   |                   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Total loans                                |   |                   | 262,181 |   |     |   | 100.00 | % |   |   | 269,122 |   |   |   | 100.00 | % |
|                                       |   |                   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Unadvanced construction loans              |   |                   | (1,746  | )      |     |   |   |   |   |   | (2,929 | ) |   |   |   |   |
|                                       |   |                   | 260,435 |   |     |   |   |   |   |   | 266,193 |   |   |   |   |   |
| Net deferred loan costs                    |   |                   | 299     |   |     |   |   |   |   |   | 324 |   |   |   |   |   |
| Allowance for loan losses                  |   |                   | (2,407  | )      |     |   |   |   |   |   | (2,200 | ) |   |   |   |   |
|                                       |   |                   |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Loans, net                                 |   | $                      | 258,327 |   |     |   |   |   |   | $ | 264,317 |   |   |   |   |   |

----

----

|                                                  |   | At March 31,           |   |   | At June 30, |   |
|-------------------------------------------------------|--------|------------------------|--------|--------|-------------|--------|
|                                                  |   | 2010                   |   |   | 2009        |   |
|                                                  |   | (Dollars in thousands) |   |
| Non-accrual loans:                                    |   |                   |   |   |        |   |
| Residential mortgage loans (1)                        |   | $                      | 1,332  |   |        | $      | 1,277 |   |
| Commercial real estate                                |   |                   | 3,870  |   |        |   | 5,073 |   |
| Residential construction                              |   |                   | -      |   |        |   | - |   |
| Commercial                                            |   |                   | 215    |   |        |   | 99 |   |
| Consumer and other                                    |   |                   | 2      |   |        |   | - |   |
| Total non-accrual loans                               |   |                   | 5,419  |   |        |   | 6,449 |   |
|                                                  |   |                   |   |   |        |   |   |   |
| Accruing loans past due 90 days or more:              |   |                   |   |   |        |   |   |   |
| Residential mortgage loans (1)                        |   |                   | -      |   |        |   | - |   |
| Commercial real estate                                |   |                   | 6,226  |   |        |   | - |   |
| Residential construction                              |   |                   | -      |   |        |   | - |   |
| Commercial                                            |   |                   | -      |   |        |   | - |   |
| Consumer and other                                    |   |                   | -      |   |        |   | - |   |
| Total                                                 |   |                   | 6,226  |   |        |   | - |   |
| Total non-performing loans                            |   |                   | 11,645 |   |        |   | 6,449 |   |
|                                                  |   |                   |   |   |        |   |   |   |
| Other real estate owned                               |   |                   | 1,120  |   |        |   | 1,211 |   |
| Other non-performing assets                           |   |                   | 46     |   |        |   | 46 |   |
| Total non-performing assets                           |   |                   | 12,811 |   |        |   | 7,706 |   |
|                                                  |   |                   |   |   |        |   |   |   |
| Troubled debt restructurings in compliance with       |   |                   |   |   |        |   |   |   |
|    restructured terms                  |   |                   | 200    |   |        |   | 259 |   |
|                                                  |   | $                      | 13,011 |   |        | $      | 7,965 |   |
|                                                  |   |                   |   |   |        |   |   |   |
| Total non-performing loans to total loans             |   |                   | 4.44   | %      |        |   | 2.40 | % |
| Total non-performing assets to total assets           |   |                   | 2.59   |   |        |   | 1.61 |   |
| Total non-performing assets and troubled              |   |                   |   |   |        |   |   |   |
|    debt restructurings to total assets |   |                   | 2.63   |   |        |   | 1.67 |   |

----

----

|                                                          |   | Three Months Ended |   |   | Nine Months Ended |   |
|---------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                          |   | March 31,          |   |   | March 31,         |   |
|                                                          |   | 2010               |   |   | 2009              |   |   | 2010 |   |   | 2009 |   |
|                                                          |   | (in thousands)     |   |   | (in thousands)    |   |
|  Balance, beginning of period                            |   | $                  | 2,207  |   |              | $      | 1,888 |   |   | $ | 2,200 |   |   | $ | 1,758 |   |
|       Provision for loan losses |   |               | 257    |   |              |   | 157 |   |   |   | 764 |   |   |   | 754 |   |
|       Charge offs               |   |               | (93    | )      |              |   | (42 | ) |   |   | (618 | ) |   |   | (529 | ) |
|       Recoveries                |   |               | 36     |   |              |   | 17 |   |   |   | 61 |   |   |   | 37 |   |
|  Balance, end of period                                  |   | $                  | 2,407  |   |              | $      | 2,020 |   |   | $ | 2,407 |   |   | $ | 2,020 |   |

----

|                                                                                |   | March 31,      |   |   | June 30, |   |
|-------------------------------------------------------------------------------------|--------|----------------|--------|--------|----------|--------|
|                                                                                |   | 2010           |   |   | 2009     |   |
|                                                                                |   | (in thousands) |   |
| Balances not subject to amortization:                                               |   |           |   |   |     |   |
|           Goodwill                |   | $              | 6,912  |   |     | $      | 6,912 |   |
| Balances subject to amortization:                                                   |   |           |   |   |     |   |   |   |
|           Core Deposit Intangible |   |           | 518    |   |     |   | 651 |   |
| Total intangible assets                                                             |   | $              | 7,430  |   |     | $      | 7,563 |   |

|                                       |   | (in thousands) |   |
|--------------------------------------------|--------|----------------|--------|
| For the three months ending June 30, 2010  |   | $              | 45     |   |
| 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                                |   | $              | 518    |   |

----

|                                                           |   | Three Months Ended |   |   | Nine Months Ended |   |
|----------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                           |   | March 31,          |   |   | March 31,         |   |
|                                                           |   | 2010               |   |   | 2009              |   |   | 2010 |   |   | 2009 |   |
|                                                           |   | (in thousands)     |   |   | (in thousands)    |   |
| Net Income (Loss)                                              |   | $                  | 251    |   |              | $      | 712 |   |   | $ | 1,182 |   |   | $ | (1,329 | ) |
|                                                           |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss):                             |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net unrealized holding (losses) gains on                       |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|    available-for-sale securities                |   |               | (469   | )      |              |   | (1,433 | ) |   |   | 4,194 |   |   |   | (22,913 | ) |
| Reclassification adjustment for loss (gain)                    |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|    recognized in net income                     |   |               | 368    |   |              |   | (11 | ) |   |   | 459 |   |   |   | 5,773 |   |
| Other comprehensive (loss) income before tax (expense) benefit |   |               | (101   | )      |              |   | (1,444 | ) |   |   | 4,653 |   |   |   | (17,140 | ) |
| Income tax (expense) benefit related to items of other         |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|    comprehensive income (loss)                  |   |               | 36     |   |              |   | 490 |   |   |   | (1,581 | ) |   |   | 5,824 |   |
| Other comprehensive (loss) income, net of tax                  |   |               | (65    | )      |              |   | (954 | ) |   |   | 3,072 |   |   |   | (11,316 | ) |
| Total comprehensive income (loss)                              |   | $                  | 186    |   |              | $      | (242 | ) |   | $ | 4,254 |   |   | $ | (12,645 | ) |

----

----

|                                                   |   | Fair Value Measurements at Reporting Date Using: |    |
|--------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                   |   |                                             |    |   | Quoted Prices in |   |   | Significant Other |   |   | Significant |   |
|                                                   |   |                                             |    |   | Active Markets for |   |   | Observable Inputs |   |   | Unobservable Inputs |   |
|                                                   |   |                                             |    |   | Identical Assets |   |   |   |   |   |   |   |
|                                                   |   | March 31, 2010                                   |    |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |
| Securities available for sale                          |   |                                             |    |   |   |   |   |   |   |   |   |   |
| U. S. Government agency securities                     |   |                                             | 12,584  |   |   | $ | - |   |   | $ | 12,584 |   |   | $ | - |   |
| Corporate securities                                   |   |                                             | 5,364   |   |   |   | - |   |   |   | 5,364 |   |   |   | - |   |
| Mortgage backed securities insured or guaranteed       |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     by U.S. Government enterprises |   |                                             | 58,326  |   |   |   | - |   |   |   | 58,326 |   |   |   | - |   |
| Non-agency mortgage-backed securities                  |   |                                             | 16,956  |   |   |   | - |   |   |   | 16,956 |   |   |   | - |   |
| Equity securities                                      |   |                                             | 10,133  |   |   |   | - |   |   |   | - |   |   |   | 10,133 |   |
| Impaired Loans                                         |   |                                             | 5,991   |   |   |   | - |   |   |   | 5,991 |   |   |   | - |   |
|    Total                                |   | $                                                | 109,354 |   |   | $ | - |   |   | $ | 99,221 |   |   | $ | 10,133 |   |

|                                                                     |   | 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     |   |                                  | 2,667  |   |   |   | 2,667 |   |
|      Principal payments on securities           |   |                                  | -      |   |   |   | - |   |
|   Amortization of securities, net                              |   |                                  | -      |   |   |   | - |   |
|   Transfers in and/or out of Level 3                           |   |                                  | -      |   |   |   | - |   |
| Ending balance, March 31, 2010                                           |   | $                                     | 10,133 |   |   | $ | 10,133 |   |
|                                                                     |   |                                  |   |   |   |   |   |   |
| The amount of total gains or losses for the period included in           |   |                                  |   |   |   |   |   |   |
| earnings (or changes in net assets) attributable to the change           |   |                                  |   |   |   |   |   |   |
|  in unrealized gains or losses relating to assets still held at the |   |                                  |   |   |   |   |   |   |
|  reporting date for trading securities                              |   | $                                     | -      |   |   | $ | - |   |

----

|                                                                             |   | 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 |   |
|                                                                             |   |                                            |    |   |   |   |   |   |   |   |   |   |
| 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                    |    |   |   |   |   |
|                                                               |   | 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 |   |
|                                                               |   |                                  |    |   |   |   |   |   |
| The amount of total gains or losses for the period included in     |   |                                  |    |   |   |   |   |   |
| earnings attributable to the change in unrealized gains or         |   |                                  |    |   |   |   |   |   |
| losses relating to assets still held at the reporting date         |   | $                                     | -       |   |   | $ | - |   |

----

|                   |   | 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 |   |

----

|                                                                                |   | March 31,      |   |   | June 30, |   |
|-------------------------------------------------------------------------------------|--------|----------------|--------|--------|----------|--------|
|                                                                                |   | 2010           |   |   | 2009     |   |
|                                                                                |   | (in thousands) |   |
| Commitments to extend credit:                                                       |   |           |   |   |     |   |
|      Loan commitments                                      |   | $              | 1,894  |   |     | $      | 4,687 |   |
|      Unadvanced construction loans                         |   |           | 1,746  |   |     |   | 2,929 |   |
|      Unadvanced lines of credit                            |   |           | 15,718 |   |     |   | 16,859 |   |
|      Standby letters of credit                             |   |           | 957    |   |     |   | 898 |   |
|           Outstanding commitments |   | $              | 20,315 |   |     | $      | 25,373 |   |

----

----

----

|                              |   | March 31,              |    |   | June 30, |   |
|-----------------------------------|--------|------------------------|---------|--------|----------|--------|
|                              |   | 2010                   |    |   | 2009     |   |
|                              |   | (Dollars in thousands) |    |
| Allowance for loan losses         |   | $                      | 2,407   |   |     | $      | 2,200 |   |
| Gross loans outstanding           |   |                   | 260,734 |   |     |   | 266,517 |   |
| Nonperforming loans               |   |                   | 11,645  |   |     |   | 6,449 |   |
|                              |   |                   |    |   |     |   |   |   |
| Allowance/gross loans outstanding |   |                   | 0.92    | %      |     |   | 0.83 | % |
| Allowance/nonperforming loans     |   |                   | 20.7    | %      |     |   | 34.1 | % |

|                                          |   | March 31,      |   |   | June 30, |   |
|-----------------------------------------------|--------|----------------|--------|--------|----------|--------|
|                                          |   | 2010           |   |   | 2009     |   |
|                                          |   | (in thousands) |   |
|                                          |   |           |   |   |     |   |
| Past due 30 days through 89 days and accruing |   | $              | 4,902  |   |     | $      | 3,445 |   |
|                                          |   |           |   |   |     |   |   |   |
| Past due 90 days or more and accruing         |   | $              | 6,226  |   |     | $      | - |   |
|                                          |   |           |   |   |     |   |   |   |
| Past due 90 days or more and nonaccruing      |   | $              | 5,419  |   |     | $      | 6,449 |   |

----

----

----

----

|                                                         |   | For the Three Months Ended March 31, |    |
|--------------------------------------------------------------|--------|--------------------------------------|---------|
|                                                         |   | 2010                                 |    |   | 2009 |   |
|                                                         |   | (Dollars in thousands)               |    |
|                                                         |   |                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   | Average                              |    |   | Interest |   |   | Yield/ |   |   | Average |   |   | Interest |   |   | Yield/ |   |
|  Interest-earning assets:                               |   | Balance                              |    |   | Income/Expense |   |   | Cost |   |   | Balance |   |   | Income/Expense |   |   | Cost |   |
|  Investment securities                                  |   | $                                    | 164,176 |   |   | $ | 1,812 |   |   |   | 4.48 | % |   | $ | 183,022 |   |   | $ | 2,602 |   |   |   | 5.77 | % |
|  Loans                                                  |   |                                 | 263,402 |   |   |   | 3,602 |   |   |   | 5.55 | % |   |   | 254,668 |   |   |   | 3,588 |   |   |   | 5.71 | % |
|  Other earning assets                                   |   |                                 | 23,112  |   |   |   | 3 |   |   |   | 0.05 | % |   |   | 4,577 |   |   |   | 1 |   |   |   | 0.09 | % |
|  Total interest-earnings assets                         |   |                                 | 450,690 |   |   |   | 5,417 |   |   |   | 4.87 | % |   |   | 442,267 |   |   |   | 6,191 |   |   |   | 5.68 | % |
|  Non-interest-earning assets                            |   |                                 | 33,015  |   |   |   |   |   |   |   |   |   |   |   | 35,383 |   |   |   |   |   |   |   |   |   |
|  Total assets                                           |   | $                                    | 483,705 |   |   |   |   |   |   |   |   |   |   | $ | 477,650 |   |   |   |   |   |   |   |   |   |
|                                                         |   |                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest-bearing liabilities:                          |   |                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  NOW accounts                                           |   | $                                    | 87,083  |   |   |   | 342 |   |   |   | 1.59 | % |   | $ | 42,607 |   |   |   | 222 |   |   |   | 2.11 | % |
|  Savings accounts                                       |   |                                 | 46,300  |   |   |   | 45 |   |   |   | 0.39 | % |   |   | 45,249 |   |   |   | 57 |   |   |   | 0.51 | % |
|  Money market accounts                                  |   |                                 | 11,248  |   |   |   | 27 |   |   |   | 0.97 | % |   |   | 12,443 |   |   |   | 50 |   |   |   | 1.63 | % |
|  Time deposits                                          |   |                                 | 144,200 |   |   |   | 963 |   |   |   | 2.71 | % |   |   | 159,656 |   |   |   | 1,374 |   |   |   | 3.49 | % |
|  Borrowed money                                         |   |                                 | 114,501 |   |   |   | 1,011 |   |   |   | 3.58 | % |   |   | 140,589 |   |   |   | 1,383 |   |   |   | 3.99 | % |
|  Total interest-bearing liabilities                     |   |                                 | 403,332 |   |   |   | 2,388 |   |   |   | 2.40 | % |   |   | 400,544 |   |   |   | 3,086 |   |   |   | 3.12 | % |
|  Non-interest-bearing demand deposits                   |   |                                 | 34,243  |   |   |   |   |   |   |   |   |   |   |   | 35,412 |   |   |   |   |   |   |   |   |   |
|  Other non-interest-bearing liabilities                 |   |                                 | 1,974   |   |   |   |   |   |   |   |   |   |   |   | 5,398 |   |   |   |   |   |   |   |   |   |
|  Capital accounts                                       |   |                                 | 44,156  |   |   |   |   |   |   |   |   |   |   |   | 36,296 |   |   |   |   |   |   |   |   |   |
|  Total liabilities and capital accounts                 |   | $                                    | 483,705 |   |   |   |   |   |   |   |   |   |   | $ | 477,650 |   |   |   |   |   |   |   |   |   |
|                                                         |   |                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net interest income                                    |   |                                 |    |   |   | $ | 3,029 |   |   |   |   |   |   |   |   |   |   | $ | 3,105 |   |   |   |   |   |
|  Interest rate spread                                   |   |                                 |    |   |   |   |   |   |   |   | 2.47 | % |   |   |   |   |   |   |   |   |   |   | 2.56 | % |
|  Net interest-earning assets                            |   | $                                    | 47,358  |   |   |   |   |   |   |   |   |   |   | $ | 41,723 |   |   |   |   |   |   |   |   |   |
|  Net interest margin                                    |   |                                 |    |   |   |   |   |   |   |   | 2.73 | % |   |   |   |   |   |   |   |   |   |   | 2.85 | % |
|  Average earning assets to                              |   |                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     average interest-bearing liabilities |   |                                 |    |   |   |   |   |   |   |   | 111.74 | % |   |   |   |   |   |   |   |   |   |   | 110.42 | % |

----

|                                                         |   | For the Nine Months Ended March 31, |    |
|--------------------------------------------------------------|--------|-------------------------------------|---------|
|                                                         |   | 2010                                |    |   | 2009 |   |
|                                                         |   | (Dollars in thousands)              |    |
|                                                         |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   | Average                             |    |   | Interest/ |   |   | Yield/ |   |   | Average |   |   | Interest/ |   |   | Yield/ |   |
|  Interest-earning assets:                               |   | Balance                             |    |   | Dividends |   |   | Cost |   |   | Balance |   |   | Dividends |   |   | Cost |   |
|  Investment securities                                  |   | $                                   | 165,984 |   |   | $ | 6,111 |   |   |   | 4.90 | % |   | $ | 198,270 |   |   | $ | 8,185 |   |   |   | 5.50 | % |
|  Loans                                                  |   |                                | 266,342 |   |   |   | 11,096 |   |   |   | 5.55 | % |   |   | 251,180 |   |   |   | 11,039 |   |   |   | 5.85 | % |
|  Other earning assets                                   |   |                                | 15,388  |   |   |   | 6 |   |   |   | 0.05 | % |   |   | 3,318 |   |   |   | 14 |   |   |   | 0.56 | % |
|  Total interest-earnings assets                         |   |                                | 447,714 |   |   |   | 17,213 |   |   |   | 5.12 | % |   |   | 452,768 |   |   |   | 19,238 |   |   |   | 5.66 | % |
|  Non-interest-earning assets                            |   |                                | 32,182  |   |   |   |   |   |   |   |   |   |   |   | 31,564 |   |   |   |   |   |   |   |   |   |
|  Total assets                                           |   | $                                   | 479,896 |   |   |   |   |   |   |   |   |   |   | $ | 484,332 |   |   |   |   |   |   |   |   |   |
|                                                         |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest-bearing liabilities:                          |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  NOW accounts                                           |   | $                                   | 76,873  |   |   |   | 1,029 |   |   |   | 1.78 | % |   | $ | 39,397 |   |   |   | 670 |   |   |   | 2.27 | % |
|  Savings accounts                                       |   |                                | 46,003  |   |   |   | 153 |   |   |   | 0.44 | % |   |   | 45,236 |   |   |   | 194 |   |   |   | 0.57 | % |
|  Money market accounts                                  |   |                                | 11,069  |   |   |   | 87 |   |   |   | 1.05 | % |   |   | 12,262 |   |   |   | 153 |   |   |   | 1.66 | % |
|  Time deposits                                          |   |                                | 149,001 |   |   |   | 3,264 |   |   |   | 2.92 | % |   |   | 154,763 |   |   |   | 4,192 |   |   |   | 3.61 | % |
|  Borrowed money                                         |   |                                | 117,098 |   |   |   | 3,308 |   |   |   | 3.76 | % |   |   | 150,821 |   |   |   | 4,446 |   |   |   | 3.93 | % |
|  Total interest-bearing liabilities                     |   |                                | 400,044 |   |   |   | 7,841 |   |   |   | 2.61 | % |   |   | 402,479 |   |   |   | 9,655 |   |   |   | 3.20 | % |
|  Non-interest-bearing demand deposits                   |   |                                | 34,979  |   |   |   |   |   |   |   |   |   |   |   | 36,189 |   |   |   |   |   |   |   |   |   |
|  Other non-interest-bearing liabilities                 |   |                                | 2,289   |   |   |   |   |   |   |   |   |   |   |   | 4,574 |   |   |   |   |   |   |   |   |   |
|  Capital accounts                                       |   |                                | 42,584  |   |   |   |   |   |   |   |   |   |   |   | 41,090 |   |   |   |   |   |   |   |   |   |
|  Total liabilities and capital accounts                 |   | $                                   | 479,896 |   |   |   |   |   |   |   |   |   |   | $ | 484,332 |   |   |   |   |   |   |   |   |   |
|                                                         |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net interest income                                    |   |                                |    |   |   | $ | 9,372 |   |   |   |   |   |   |   |   |   |   | $ | 9,583 |   |   |   |   |   |
|  Interest rate spread                                   |   |                                |    |   |   |   |   |   |   |   | 2.51 | % |   |   |   |   |   |   |   |   |   |   | 2.46 | % |
|  Net interest-earning assets                            |   | $                                   | 47,670  |   |   |   |   |   |   |   |   |   |   | $ | 50,289 |   |   |   |   |   |   |   |   |   |
|  Net interest margin                                    |   |                                |    |   |   |   |   |   |   |   | 2.79 | % |   |   |   |   |   |   |   |   |   |   | 2.82 | % |
|  Average earning assets to                              |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     average interest-bearing liabilities |   |                                |    |   |   |   |   |   |   |   | 111.92 | % |   |   |   |   |   |   |   |   |   |   | 112.49 | % |

----

|                                |   | For the Three Months Ended March 31, 2010         |   |
|-------------------------------------|--------|---------------------------------------------------|--------|
|                                |   | Compared to the Three Months Ended March 31, 2009 |   |
|                                |   | Increase(Decrease) Due to                         |   |   |   |   |
|                                |   | Rate                                              |   |   | Volume |   |   | Net |   |
|  INTEREST INCOME               |   |                                              |   |   |   |   |   |   |   |
|                                |   |                                              |   |   |   |   |   |   |   |
|  Investment securities         |   | $                                                 | (541   | ) |   | $ | (249 | ) |   | $ | (790 | ) |
|  Loans                         |   |                                              | (454   | ) |   |   | 468 |   |   |   | 14 |   |
|  Other interest-earning assets |   |                                              | (3     | ) |   |   | 5 |   |   |   | 2 |   |
|  TOTAL INTEREST INCOME         |   |                                              | (998   | ) |   |   | 224 |   |   |   | (774 | ) |
|                                |   |                                              |   |   |   |   |   |   |   |   |   |   |
|  INTEREST EXPENSE:             |   |                                              |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                              |   |   |   |   |   |   |   |   |   |   |
|  NOW accounts                  |   |                                              | (336   | ) |   |   | 456 |   |   |   | 120 |   |
|  Savings accounts              |   |                                              | (21    | ) |   |   | 9 |   |   |   | (12 | ) |
|  Money Market accounts         |   |                                              | (19    | ) |   |   | (4 | ) |   |   | (23 | ) |
|  Time deposits                 |   |                                              | (287   | ) |   |   | (124 | ) |   |   | (411 | ) |
|  Other borrowed money          |   |                                              | (132   | ) |   |   | (240 | ) |   |   | (372 | ) |
|  TOTAL INTEREST INCOME         |   |                                              | (795   | ) |   |   | 97 |   |   |   | (698 | ) |
|                                |   |                                              |   |   |   |   |   |   |   |   |   |   |
|  CHANGE IN NET INTEREST INCOME |   | $                                                 | (203   | ) |   | $ | 127 |   |   | $ | (76 | ) |

----

|                                |   | For the Nine Months Ended March 31, 2010         |   |
|-------------------------------------|--------|--------------------------------------------------|--------|
|                                |   | Compared to the Nine Months Ended March 31, 2009 |   |
|                                |   | Increase(Decrease) Due to                        |   |   |   |   |
|                                |   | Rate                                             |   |   | Volume |   |   | Net |   |
|  INTEREST INCOME               |   |                                             |   |   |   |   |   |   |   |
|                                |   |                                             |   |   |   |   |   |   |   |
|  Investment securities         |   | $                                                | (828   | ) |   | $ | (1,246 | ) |   | $ | (2,074 | ) |
|  Loans                         |   |                                             | (796   | ) |   |   | 853 |   |   |   | 57 |   |
|  Other interest-earning assets |   |                                             | (29    | ) |   |   | 21 |   |   |   | (8 | ) |
|  TOTAL INTEREST INCOME         |   |                                             | (1,653 | ) |   |   | (372 | ) |   |   | (2,025 | ) |
|                                |   |                                             |   |   |   |   |   |   |   |   |   |   |
|  INTEREST EXPENSE:             |   |                                             |   |   |   |   |   |   |   |   |   |   |
|                                |   |                                             |   |   |   |   |   |   |   |   |   |   |
|  NOW accounts                  |   |                                             | (245   | ) |   |   | 604 |   |   |   | 359 |   |
|  Savings accounts              |   |                                             | (46    | ) |   |   | 5 |   |   |   | (41 | ) |
|  Money Market accounts         |   |                                             | (52    | ) |   |   | (14 | ) |   |   | (66 | ) |
|  Time deposits                 |   |                                             | (777   | ) |   |   | (151 | ) |   |   | (928 | ) |
|  Other borrowed money          |   |                                             | (179   | ) |   |   | (959 | ) |   |   | (1,138 | ) |
|  TOTAL INTEREST INCOME         |   |                                             | (1,299 | ) |   |   | (515 | ) |   |   | (1,814 | ) |
|                                |   |                                             |   |   |   |   |   |   |   |   |   |   |
|  CHANGE IN NET INTEREST INCOME |   | $                                                | (354   | ) |   | $ | 143 |   |   | $ | (211 | ) |

----

| Net Interest Income At-Risk |   |
|-----------------------------|--------|
|                        |   |   |   |   |   |   |
|                        |   | Estimated Increase (Decrease) |   |   | Estimated Increase (Decrease) |   |
| Change in Interest Rates    |   | in NII |   |   | in NII |   |
| (Basis Points)              |   | December 31, 2009 |   |   | June 30, 2009 |   |
|                        |   |   |   |   |   |   |
|                        |   |   |   |   |   |   |
| + 100                       |   |  -0.89% |   |   |  -1.50% |   |
| + 200                       |   |  -3.06% |   |   |  -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                             |   | $         | 27,433 |   |                             | $      | (15,844 | )       |   |   | -37                            | %      |   |   | 5.91 | % |   |   | -290 |   |
| +200                             |   | $         | 34,420 |   |                             | $      | (8,857  | )       |   |   | -20                            | %      |   |   | 7.25 | % |   |   | -155 |   |
| +100                             |   | $         | 39,840 |   |                             | $      | (3,436  | )       |   |   | -8                             | %      |   |   | 8.23 | % |   |   | -57 |   |
|       0 |   | $         | 43,277 |   |                             | $      | -       |    |   |   | 0                              | %      |   |   | 8.80 | % |   |   | 0 |   |
| -100                             |   | $         | 44,588 |   |                             | $      | 1,311   |    |   |   | 3                              | %      |   |   | 8.97 | % |   |   | 16 |   |

----

| (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      | %      |   |   | 6.91 | % |
| Ratio of Total Risk Based Capital to risk-weighted assets  |   |     | 8      | %      |   |   | 12.87 | % |
| Ratio of Tier 1 Risk Based Capital to risk-weighted assets |   |     | 4      | %      |   |   | 11.95 | % |
|                                                       |   |     |   |   |   |   |   |   |

----

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

| 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  May 17, 2010 |   | /s/  Thomas A. Borner                  |   |
|                    |   | Thomas A. Borner                                 |   |
|                    |   | Chief Executive Officer                          |   |
|                    |   |                                             |   |
| Date  May 17, 2010 |   | /s/  Robert J. Halloran, Jr.           |   |
|                    |   | Robert J. Halloran, Jr.                          |   |
|                    |   | President, Chief Financial Officer and Treasurer |   |
|                    |   |                                             |   |