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

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

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

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

| Title of Each Class                     |   | Name of Each Exchange on Which Registered |
|-----------------------------------------|--------|-------------------------------------------|
| Common Stock, par value $0.10 per share |   | The NASDAQ Stock Market, LLC              |

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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|                                  |   | At December 31,        |    |
|---------------------------------------|--------|------------------------|---------|
|                                  |   | 2009                   |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                  |   | Amount                 |    |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                                  |   | (Dollars in thousands) |    |
|                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                    |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential       |   | $                      | 151,352 |   |   |   | 46.6 | % |   | $ | 145,329 |   |   |   | 47.6 | % |   | $ | 114,745 |   |   |   | 47.3 | % |   | $ | 102,328 |   |   |   | 51.1 | % |   | $ | 77,738 |   |   |   | 48.8 | % |
| Home equity loans and lines of credit |   |                   | 37,892  |   |   |   | 11.7 |   |   |   | 41,293 |   |   |   | 13.5 |   |   |   | 40,264 |   |   |   | 16.6 |   |   |   | 38,074 |   |   |   | 19.0 |   |   |   | 33,067 |   |   |   | 20.8 |   |
| Multi-family                          |   |                   | 4,108   |   |   |   | 1.3 |   |   |   | 4,942 |   |   |   | 1.6 |   |   |   | 5,609 |   |   |   | 2.3 |   |   |   | 2,492 |   |   |   | 1.2 |   |   |   | 1,676 |   |   |   | 1.1 |   |
| Commercial                            |   |                   | 97,075  |   |   |   | 29.9 |   |   |   | 81,983 |   |   |   | 26.8 |   |   |   | 55,606 |   |   |   | 22.9 |   |   |   | 39,186 |   |   |   | 19.6 |   |   |   | 31,392 |   |   |   | 19.7 |   |
| Construction                          |   |                   | 14,093  |   |   |   | 4.3 |   |   |   | 12,223 |   |   |   | 4.0 |   |   |   | 10,137 |   |   |   | 4.2 |   |   |   | 8,371 |   |   |   | 4.2 |   |   |   | 6,267 |   |   |   | 3.9 |   |
| Commercial                            |   |                   | 17,864  |   |   |   | 5.5 |   |   |   | 17,177 |   |   |   | 5.6 |   |   |   | 12,600 |   |   |   | 5.2 |   |   |   | 7,337 |   |   |   | 3.7 |   |   |   | 6,880 |   |   |   | 4.3 |   |
| Consumer and other                    |   |                   | 2,223   |   |   |   | 0.7 |   |   |   | 2,616 |   |   |   | 0.9 |   |   |   | 3,752 |   |   |   | 1.5 |   |   |   | 2,427 |   |   |   | 1.2 |   |   |   | 2,258 |   |   |   | 1.4 |   |
|                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans receivable                |   |                   | 324,607 |   |   |   | 100.0 | % |   |   | 305,563 |   |   |   | 100.0 | % |   |   | 242,713 |   |   |   | 100.0 | % |   |   | 200,215 |   |   |   | 100.0 | % |   |   | 159,278 |   |   |   | 100.0 | % |
| Deferred loan fees                    |   |                   | (394    | ) |   |   |   |   |   |   | (307 | ) |   |   |   |   |   |   | (281 | ) |   |   |   |   |   |   | (323 | ) |   |   |   |   |   |   | (336 | ) |   |   |   |   |
| Allowance for loan losses             |   |                   | (2,606  | ) |   |   |   |   |   |   | (2,105 | ) |   |   |   |   |   |   | (1,392 | ) |   |   |   |   |   |   | (1,373 | ) |   |   |   |   |   |   | (1,168 | ) |   |   |   |   |
|                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans receivable, net           |   | $                      | 321,607 |   |   |   |   |   |   | $ | 303,151 |   |   |   |   |   |   | $ | 241,040 |   |   |   |   |   |   | $ | 198,519 |   |   |   |   |   |   | $ | 157,774 |   |   |   |   |   |

----

|                                                                                                                                                                                    |   | One- to Four-FamilyResidential |    |                      | Home Equity Loans andLines of Credit |   |   | Multi-Family |                      |   | Commercial Real Estate |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|---------------------------|--------------------------------------|--------|--------|--------------|---------------------------|--------|------------------------|--------|
|                                                                                                                                                                                    |   | Amount                         |    |  WeightedAverageRate |                                 |   | Amount |         |  WeightedAverageRate |   |                   | Amount |   |  WeightedAverageRate |   |   | Amount |   |  WeightedAverageRate |   |
|                                                                                                                                                                                    |   | (Dollars in thousands)         |    |
| Due During the YearsEnding December 31,                                                                                                                                                 |   |                           |    |                      |                                 |   |   |         |                      |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2010                                        |   | $                              | 3,086   |                      |                                 |   | 5.18   | %            |                      | $      | 6,663                  |   |   |   | 3.85 | % |   | $ | 3,397 |   |   |   | 6.34 | % |   | $ | 14,248 |   |   |   | 5.81 | % |
| 2011                                        |   |                           | 590     |                      |                                 |   | 7.29   | %            |                      |   | 1,746                  |   |   |   | 5.17 | % |   |   | — |   |   |   | — | % |   |   | 4,912 |   |   |   | 4.82 | % |
| 2012                                        |   |                           | 3,942   |                      |                                 |   | 7.21   | %            |                      |   | 1,840                  |   |   |   | 6.29 | % |   |   | — |   |   |   | — | % |   |   | 6,507 |   |   |   | 6.76 | % |
| 2013 to 2014                                |   |                           | 11,461  |                      |                                 |   | 6.13   | %            |                      |   | 10,347                 |   |   |   | 5.62 | % |   |   | 30 |   |   |   | 8.08 | % |   |   | 41,682 |   |   |   | 5.94 | % |
| 2015 to 2019                                |   |                           | 10,668  |                      |                                 |   | 5.14   | %            |                      |   | 5,522                  |   |   |   | 5.21 | % |   |   | 214 |   |   |   | 6.99 | % |   |   | 20,206 |   |   |   | 6.09 | % |
| 2020 to 2024                                |   |                           | 13,174  |                      |                                 |   | 5.35   | %            |                      |   | 10,956                 |   |   |   | 5.85 | % |   |   | — |   |   |   | — | % |   |   | 7,029 |   |   |   | 6.17 | % |
| 2024 and beyond                             |   |                           | 108,431 |                      |                                 |   | 5.90   | %            |                      |   | 818                    |   |   |   | 3.11 | % |   |   | 467 |   |   |   | 5.61 | % |   |   | 2,491 |   |   |   | 8.08 | % |
|                                                                                                                                                                                    |   |                           |    |                      |                                 |   |   |         |                      |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                         |   | $                              | 151,352 |                      |                                 |   | 5.84   | %            |                      | $      | 37,892                 |   |   |   | 5.27 | % |   | $ | 4,108 |   |   |   | 6.30 | % |   | $ | 97,075 |   |   |   | 5.97 | % |

|                                                                                                                                                                                    |   | Construction           |    |                      | Commercial |   |    | Consumer and Other |                      |   | Total   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|---------------------------|------------|--------|---------|--------------------|---------------------------|--------|---------|--------|
|                                                                                                                                                                                    |   | Amount                 |    |  WeightedAverageRate |       |   | Amount  |               |  WeightedAverageRate |   |    | Amount |   |  WeightedAverageRate |   |   | Amount |   |  WeightedAverageRate |   |
|                                                                                                                                                                                    |   | (Dollars in thousands) |    |
| Due During the YearsEnding December 31,                                                                                                                                                 |   |                   |    |                      |       |   |    |               |                      |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2010                                        |   | $                      | 14,093  |                      |       |   | 5.52    | %                  |                      | $      | 4,037   |   |   |   | 5.16 | % |   | $ | 226 |   |   |   | 8.45 | % |   | $ | 45,750 |   |   |   | 5.39 | % |
| 2011                                        |   |                   | — |                      |       |   | — | %                  |                      |   | 822     |   |   |   | 5.41 | % |   |   | 323 |   |   |   | 8.86 | % |   |   | 8,393 |   |   |   | 5.28 | % |
| 2012                                        |   |                   | — |                      |       |   | — | %                  |                      |   | 3,296   |   |   |   | 6.03 | % |   |   | 664 |   |   |   | 7.41 | % |   |   | 16,249 |   |   |   | 6.70 | % |
| 2013 to 2014                                |   |                   | — |                      |       |   | — | %                  |                      |   | 6,105   |   |   |   | 5.58 | % |   |   | 579 |   |   |   | 5.74 | % |   |   | 70,204 |   |   |   | 5.89 | % |
| 2015 to 2019                                |   |                   | — |                      |       |   | — | %                  |                      |   | 3,604   |   |   |   | 5.99 | % |   |   | 180 |   |   |   | 5.95 | % |   |   | 40,394 |   |   |   | 5.72 | % |
| 2020 to 2024                                |   |                   | — |                      |       |   | — | %                  |                      |   | — |   |   |   | — | % |   |   | — |   |   |   | — | % |   |   | 31,159 |   |   |   | 5.71 | % |
| 2024 and beyond                             |   |                   | — |                      |       |   | — | %                  |                      |   | — |   |   |   | — | % |   |   | 251 |   |   |   | 7.09 | % |   |   | 112,458 |   |   |   | 5.89 | % |
|                                                                                                                                                                                    |   |                   |    |                      |       |   |    |               |                      |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                         |   | $                      | 14,093  |                      |       |   | 5.52    | %                  |                      | $      | 17,864  |   |   |   | 5.64 | % |   | $ | 2,223 |   |   |   | % |   | $ | 324,607 |   |   |   | 5.81 | % |

|   |                                  |   | Due After December 31, 2010 |    |
|--------|---------------------------------------|--------|-----------------------------|---------|
|   |                                  |   | Fixed                       |    |   | Adjustable |   |   | Total |   |
|   |                                  |   | (In thousands)              |    |
|   | Real estate loans:                    |   |                        |    |   |   |   |   |   |   |
|   | One- to four-family residential       |   | $                           | 130,590 |   |   | $ | 17,676 |   |   | $ | 148,266 |   |
|   | Home equity loans and lines of credit |   |                        | 31,229  |   |   |   | — |   |   |   | 31,229 |   |
|   | Multi-family                          |   |                        | 711     |   |   |   | — |   |   |   | 711 |   |
|   | Commercial                            |   |                        | 82,827  |   |   |   | — |   |   |   | 82,827 |   |
|   | Commercial                            |   |                        | 13,827  |   |   |   | — |   |   |   | 13,827 |   |
|   | Consumer and other                    |   |                        | 1,997   |   |   |   | — |   |   |   | 1,997 |   |
|   |                                  |   |                        |    |   |   |   |   |   |   |   |   |   |
|   | Total loans                           |   | $                           | 261,181 |   |   | $ | 17,676 |   |   | $ | 278,857 |   |

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|                                                                                                                                                                                                   |   | Loans Delinquent For   |    |   |             |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|------------------|--------|
|                                                                                                                                                                                                   |   | 30-89 Days             |    |   | 90 Days and Over |   |   | Total |   |
|                                                                                                                                                                                                   |   | Number                 |    |   | Amount           |   |   | Number |   |   | Amount |   |   | Number |   |   | Amount |   |
|                                                                                                                                                                                                   |   | (Dollars in thousands) |    |
|                                                                                                                                                                                                   |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2009                                                                                                                                                                                   |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                                                                                                                                                                     |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                                                                                                                                                        |   |                   | 9       |   |             | $      | 1,085 |   |   |   | 23 |   |   | $ | 4,023 |   |   |   | 32 |   |   | $ | 5,108 |   |
| Home equity loans and lines of credit                                                                                                                                                                  |   |                   | 5       |   |             |   | 193 |   |   |   | 5 |   |   |   | 215 |   |   |   | 10 |   |   |   | 408 |   |
| Multi-family                                                                                                                                                                                           |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                                                                                                                                                             |   |                   | 8       |   |             |   | 1,384 |   |   |   | 4 |   |   |   | 535 |   |   |   | 12 |   |   |   | 1,919 |   |
| Construction                                                                                                                                                                                           |   |                   | — |   |             |   | — |   |   |   | 2 |   |   |   | 487 |   |   |   | 2 |   |   |   | 487 |   |
| Commercial                                                                                                                                                                                             |   |                   | — |   |             |   | — |   |   |   | 1 |   |   |   | 15 |   |   |   | 1 |   |   |   | 15 |   |
| Consumer and other                                                                                                                                                                                     |   |                   | 17      |   |             |   | 113 |   |   |   | 1 |   |   |   | 2 |   |   |   | 18 |   |   |   | 115 |   |
| Total                                                                                                                                                                                                  |   |                   | 39      |   |             | $      | 2,775 |   |   |   | 36 |   |   | $ | 5,277 |   |   |   | 75 |   |   | $ | 8,052 |   |
|                                                                                                                                                                                                   |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2008                                                                                                                                                                                   |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                                                                                                                                                                     |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                                                                                                                                                        |   |                   | 10      |   |             | $      | 1,574 |   |   |   | 1 |   |   | $ | 382 |   |   |   | 11 |   |   | $ | 1,956 |   |
| Home equity loans and lines of credit                                                                                                                                                                  |   |                   | 5       |   |             |   | 117 |   |   |   | 4 |   |   |   | 290 |   |   |   | 9 |   |   |   | 407 |   |
| Multi-family                                                                                                                                                                                           |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                                                                                                                                                             |   |                   | 3       |   |             |   | 753 |   |   |   | 4 |   |   |   | 511 |   |   |   | 7 |   |   |   | 1,264 |   |
| Construction                                                                                                                                                                                           |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                                                                                                                                                             |   |                   | — |   |             |   | — |   |   |   | 2 |   |   |   | 13 |   |   |   | 2 |   |   |   | 13 |   |
| Consumer and other                                                                                                                                                                                     |   |                   | 15      |   |             |   | 80 |   |   |   | 2 |   |   |   | 73 |   |   |   | 17 |   |   |   | 153 |   |
| Total                                                                                                                                                                                                  |   |                   | 33      |   |             | $      | 2,524 |   |   |   | 13 |   |   | $ | 1,269 |   |   |   | 46 |   |   | $ | 3,793 |   |
|                                                                                                                                                                                                   |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2007                                                                                                                                                                                   |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                                                                                                                                                                     |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                                                                                                                                                        |   |                   | 1       |   |             | $      | 82 |   |   |   | 4 |   |   | $ | 682 |   |   |   | 5 |   |   | $ | 764 |   |
| Home equity loans and lines of credit                                                                                                                                                                  |   |                   | 4       |   |             |   | 78 |   |   |   | 1 |   |   |   | 10 |   |   |   | 5 |   |   |   | 88 |   |
| Multi-family                                                                                                                                                                                           |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                                                                                                                                                             |   |                   | — |   |             |   | — |   |   |   | 1 |   |   |   | 252 |   |   |   | 1 |   |   |   | 252 |   |
| Construction                                                                                                                                                                                           |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                                                                                                                                                             |   |                   | 2       |   |             |   | 197 |   |   |   | 3 |   |   |   | 118 |   |   |   | 5 |   |   |   | 315 |   |
| Consumer and other                                                                                                                                                                                     |   |                   | 7       |   |             |   | 18 |   |   |   | 2 |   |   |   | 22 |   |   |   | 9 |   |   |   | 40 |   |
| Total                                                                                                                                                                                                  |   |                   | 14      |   |             | $      | 375 |   |   |   | 11 |   |   | $ | 1,084 |   |   |   | 25 |   |   | $ | 1,459 |   |
|                                                                                                                                                                                                   |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2006                                                                                                                                                                                   |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                                                                                                                                                                     |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                                                                                                                                                        |   |                   | 1       |   |             | $      | 52 |   |   |   | 2 |   |   | $ | 167 |   |   |   | 3 |   |   | $ | 219 |   |
| Home equity loans and lines of credit                                                                                                                                                                  |   |                   | 5       |   |             |   | 253 |   |   |   | 2 |   |   |   | 22 |   |   |   | 7 |   |   |   | 275 |   |
| Multi-family                                                                                                                                                                                           |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                                                                                                                                                             |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Construction                                                                                                                                                                                           |   |                   | — |   |             |   | — |   |   |   | 1 |   |   |   | 44 |   |   |   | 1 |   |   |   | 44 |   |
| Commercial                                                                                                                                                                                             |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Consumer and other                                                                                                                                                                                     |   |                   | 7       |   |             |   | 115 |   |   |   | — |   |   |   | — |   |   |   | 7 |   |   |   | 115 |   |
| Total                                                                                                                                                                                                  |   |                   | 13      |   |             | $      | 420 |   |   |   | 5 |   |   | $ | 233 |   |   |   | 18 |   |   | $ | 653 |   |
|                                                                                                                                                                                                   |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2005                                                                                                                                                                                   |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                                                                                                                                                                     |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                                                                                                                                                        |   |                   | 1       |   |             | $      | 41 |   |   |   | 2 |   |   | $ | 37 |   |   |   | 3 |   |   | $ | 78 |   |
| Home equity loans and lines of credit                                                                                                                                                                  |   |                   | 4       |   |             |   | 147 |   |   |   | 1 |   |   |   | 39 |   |   |   | 5 |   |   |   | 186 |   |
| Multi-family                                |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                  |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Construction                                |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                                                                                                                                                             |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Consumer and other                                                                                                                                                                                     |   |                   | 11      |   |             |   | 209 |   |   |   | 1 |   |   |   | 4 |   |   |   | 12 |   |   |   | 213 |   |
| Total                                       |   |                   | 16      |   |             | $      | 397 |   |   |   | 4 |   |   | $ | 80 |   |   |   | 20 |   |   | $ | 477 |   |

----

|                                                                                                                                                                                                                                                                                                                        |   | At December 31,        |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                                                                                                                                                                                                                                        |   | 2009                   |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                                                                                                                                                                                                                                                        |   | (Dollars in thousands) |    |
|                                                                                                                                                                                                                                                                                                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-accrual loans:                                                                                                                                                                                                                                                                                                          |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                                                                                                                                                                                                                                                                                          |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                                                                                                                                                                                                                                                                             |   | $                      | 4,023   |   |   | $ | 1,015 |   |   | $ | 764 |   |   | $ | 167 |   |   | $ | 37 |   |
| Home equity loans and lines of credit                                                                                                                                                                                                                                                                                       |   |                   | 215     |   |   |   | 290 |   |   |   | 10 |   |   |   | 22 |   |   |   | 39 |   |
| Multi-family                                                                                                                                                                                                                                                                                                                |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                                                                                                                                                                                                                                                                                  |   |                   | 535     |   |   |   | 511 |   |   |   | 252 |   |   |   | — |   |   |   | — |   |
| Construction                                                                                                                                                                                                                                                                                                                |   |                   | 487     |   |   |   | — |   |   |   | — |   |   |   | 44 |   |   |   | — |   |
| Commercial                                                                                                                                                                                                                                                                                                                  |   |                   | 15      |   |   |   | 13 |   |   |   | 118 |   |   |   | — |   |   |   | — |   |
| Consumer and other                                                                                                                                                                                                                                                                                                          |   |                   | 2       |   |   |   | 73 |   |   |   | 22 |   |   |   | — |   |   |   | 4 |   |
| Total                                                                                                |   |                   | 5,277   |   |   |   | 1,902 |   |   |   | 1,166 |   |   |   | 233 |   |   |   | 80 |   |
|                                                                                                                                                                                                                                                                                                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accruing loans 90 days or more past due:                                                                                                                                                                                                                                                                                    |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                                                                                                                                                                                                                                                                                          |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                                                                                                                                                                                                                                                                             |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Home equity loans and lines of credit                                                                                                                                                                                                                                                                                       |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Multi-family                                                                                                                                                                                                                                                                                                                |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                                                                                                                                                                                                                                                                                  |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Construction                                                                                                                                                                                                                                                                                                                |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                                                                                                                                                                                                                                                                                  |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Consumer and other                                                                                                                                                                                                                                                                                                          |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Total accruing loans 90 days or more past due                                                                                                                                                                                                                                                                               |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing loans                                                                                                                                                                                                                                                                                                  |   |                   | 5,277   |   |   |   | 1,902 |   |   |   | 1,166 |   |   |   | 233 |   |   |   | 80 |   |
|                                                                                                                                                                                                                                                                                                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreclosed real estate                                                      |   |                   | — |   |   |   | 113 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Other non-performing assets                                                 |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing assets                                                 |   | $                      | 5,277   |   |   | $ | 2,015 |   |   | $ | 1,166 |   |   | $ | 233 |   |   | $ | 80 |   |
|                                                                                                                                                                                                                                                                                                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                                                                                                                                                                                                                                                                                                     |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing loans to total loans                                                                                                                                                                                                                                                                                   |   |                   | 1.63    | % |   |   | 0.62 | % |   |   | 0.48 | % |   |   | 0.12 | % |   |   | 0.05 | % |
| Total non-performing loans to total assets                                                                                                                                                                                                                                                                                  |   |                   | 0.93    | % |   |   | 0.36 | % |   |   | 0.25 | % |   |   | 0.06 | % |   |   | 0.02 | % |
| Total non-performing assets to total assets                                                                                                                                                                                                                                                                                 |   |                   | 0.93    | % |   |   | 0.38 | % |   |   | 0.25 | % |   |   | 0.06 | % |   |   | 0.02 | % |

----

|                                                                                                                                                                                                                                                                                    |   |            |    |   |   |   |    |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|---------|--------|--------|--------|---------|--------|
|                                                                                                                                                                                                                                                                                    |   | At December 31, |    |
|                                                                                                                                                                                                                                                                                    |   | 2009            |    |   | 2008   |   |
|                                                                                                                                                                                                                                                                                    |   | (In thousands)  |    |
| Classified assets:                                                                                                                                                                                                                                                                      |   |            |    |   |   |   |    |   |
| Substandard                                                           |   | $               | 10,746  |   |   | $      | 1,984   |   |
| Doubtful                                                              |   |            | — |   |   |   | — |   |
| Loss                                                                  |   |            | — |   |   |   | — |   |
| Total classified assets                                                              |   | $               | 10,746  |   |   | $      | 1,984   |   |
| Special mention                                             |   | $               | 11,660  |   |   | $      | 8,479   |   |

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

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

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

----

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

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

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

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

----

|                                                             |   | At or For the Years Ended December 31, |    |
|------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                             |   | 2009                                   |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                             |   | (Dollars in thousands)                 |    |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of year                                     |   | $                                      | 2,105   |   |   | $ | 1,392 |   |   | $ | 1,373 |   |   | $ | 1,168 |   |   | $ | 990 |   |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Charge-offs:                                                     |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                               |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                  |   |                                   | — |   |   |   | (11 | ) |   |   | — |   |   |   | — |   |   |   | — |   |
| Home equity loans and lines of credit                            |   |                                   | (34     | ) |   |   | (2 | ) |   |   | — |   |   |   | — |   |   |   | — |   |
| Multi-family                                                     |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                       |   |                                   | — |   |   |   | (5 | ) |   |   | (62 | ) |   |   | — |   |   |   | — |   |
| Construction                                                     |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                       |   |                                   | (9      | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Consumer and other                                               |   |                                   | (74     | ) |   |   | (32 | ) |   |   | (6 | ) |   |   | (10 | ) |   |   | (31 | ) |
| Total charge-offs                                                |   |                                   | (117    | ) |   |   | (50 | ) |   |   | (68 | ) |   |   | (10 | ) |   |   | (31 | ) |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries:                                                      |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans:                                               |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                  |   |                                   | — |   |   |   | 3 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Home equity loans and lines of credit                            |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | 15 |   |   |   | — |   |
| Multi-family                                                     |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                       |   |                                   | — |   |   |   | 4 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Construction                                                     |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                                                       |   |                                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Consumer and other                                               |   |                                   | 3       |   |   |   | — |   |   |   | 3 |   |   |   | 21 |   |   |   | 5 |   |
| Total recoveries                                                 |   |                                   | 3       |   |   |   | 7 |   |   |   | 3 |   |   |   | 36 |   |   |   | 5 |   |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net recoveries (charge-offs)                                     |   |                                   | (114    | ) |   |   | (43 | ) |   |   | (65 | ) |   |   | 26 |   |   |   | (26 | ) |
| Provision for loan losses                                        |   |                                   | 615     |   |   |   | 756 |   |   |   | 84 |   |   |   | 179 |   |   |   | 204 |   |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at end of year                                           |   | $                                      | 2,606   |   |   | $ | 2,105 |   |   | $ | 1,392 |   |   | $ | 1,373 |   |   | $ | 1,168 |   |
|                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                                          |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net recoveries (charge-offs) to average loans outstanding        |   |                                   | (0.04   | )% |   |   | (0.02 | )% |   |   | (0.03 | )% |   |   | 0.01 | % |   |   | (0.03 | )% |
| Allowance for loan losses to non-performing loans at end of year |   |                                   | 49.38   | % |   |   | 110.67 | % |   |   | 119.38 | % |   |   | 589.27 | % |   |   | 1,460.00 | % |
| Allowance for loan losses to total loans at end of year          |   |                                   | 0.81    | % |   |   | 0.69 | % |   |   | 0.57 | % |   |   | 0.69 | % |   |   | 0.73 | % |

----

|                                  |   | At December 31,        |   |
|---------------------------------------|--------|------------------------|--------|
|                                  |   | 2009                   |   |   | 2008 |   |   | 2007 |   |
|                                  |   | Amount                 |   |   | Percent ofAllowance toTotalAllowance |   |   | Percent ofLoans inCategory toTotal Loans |   |   | Amount |   |   | Percent ofAllowance toTotalAllowance |   |   | Percent ofLoans inCategory toTotal Loans |   |   | Amount |   |   | Percent ofAllowance toTotalAllowance |   |   | Percent ofLoans inCategory toTotal Loans |   |
|                                  |   | (Dollars in thousands) |   |
| Real estate loans:                    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential       |   | $                      | 418    |   |   |   | 16.0 | % |   |   | 46.6 | % |   | $ | 273 |   |   |   | 13.0 | % |   |   | 47.6 | % |   | $ | 115 |   |   |   | 8.3 | % |   |   | 47.3 | % |
| Home equity loans and lines of credit |   |                   | 42     |   |   |   | 1.6 |   |   |   | 11.7 |   |   |   | 57 |   |   |   | 2.7 |   |   |   | 13.5 |   |   |   | 40 |   |   |   | 2.9 |   |   |   | 16.6 |   |
| Multi-family                          |   |                   | 10     |   |   |   | 0.4 |   |   |   | 1.3 |   |   |   | 16 |   |   |   | 0.7 |   |   |   | 1.6 |   |   |   | 70 |   |   |   | 5.0 |   |   |   | 2.3 |   |
| Commercial                            |   |                   | 1,010  |   |   |   | 38.8 |   |   |   | 29.9 |   |   |   | 863 |   |   |   | 41.0 |   |   |   | 26.8 |   |   |   | 825 |   |   |   | 59.3 |   |   |   | 22.9 |   |
| Construction                          |   |                   | 157    |   |   |   | 6.0 |   |   |   | 4.3 |   |   |   | 63 |   |   |   | 3.0 |   |   |   | 4.0 |   |   |   | 71 |   |   |   | 5.1 |   |   |   | 4.2 |   |
| Commercial                            |   |                   | 283    |   |   |   | 10.9 |   |   |   | 5.5 |   |   |   | 271 |   |   |   | 12.9 |   |   |   | 5.6 |   |   |   | 158 |   |   |   | 11.3 |   |   |   | 5.2 |   |
| Consumer and other                    |   |                   | 164    |   |   |   | 6.3 |   |   |   | 0.7 |   |   |   | 212 |   |   |   | 10.1 |   |   |   | 0.9 |   |   |   | 113 |   |   |   | 8.1 |   |   |   | 1.5 |   |
| Unallocated                           |   |                   | 522    |   |   |   | 20.0 |   |   |   | — |   |   |   | 350 |   |   |   | 16.6 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                  |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total allowance for loan losses       |   | $                      | 2,606  |   |   |   | 100.0 | % |   |   | 100.0 | % |   | $ | 2,105 |   |   |   | 100.0 | % |   |   | 100.00 | % |   | $ | 1,392 |   |   |   | 100.0 | % |   |   | 100.0 | % |

|                                  |   | At December 31,        |    |
|---------------------------------------|--------|------------------------|---------|
|                                  |   | 2006                   |    |   | 2005 |   |
|                                  |   | Amount                 |    |   | Percent ofAllowance toTotalAllowance |   |   | Percent ofLoans inCategory toTotal Loans |   |   | Amount |   |   | Percent ofAllowance toTotalAllowance |   |   | Percent ofLoans inCategory toTotal Loans |   |
|                                  |   | (Dollars in thousands) |    |
| Real estate loans:                    |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential       |   | $                      | 265     |   |   |   | 19.3 | % |   |   | 51.1 | % |   | $ | 205 |   |   |   | 17.5 | % |   |   | 48.8 | % |
| Home equity loans and lines of credit |   |                   | 95      |   |   |   | 6.9 |   |   |   | 19.0 |   |   |   | 83 |   |   |   | 7.1 |   |   |   | 20.8 |   |
| Multi-family                          |   |                   | — |   |   |   | — |   |   |   | 1.2 |   |   |   | — |   |   |   | — |   |   |   | 1.1 |   |
| Commercial                            |   |                   | 695     |   |   |   | 50.6 |   |   |   | 19.6 |   |   |   | 640 |   |   |   | 54.8 |   |   |   | 19.7 |   |
| Construction                          |   |                   | — |   |   |   | — |   |   |   | 4.2 |   |   |   | — |   |   |   | — |   |   |   | 3.9 |   |
| Commercial                            |   |                   | 220     |   |   |   | 16.0 |   |   |   | 3.7 |   |   |   | 155 |   |   |   | 13.3 |   |   |   | 4.3 |   |
| Consumer and other                    |   |                   | 98      |   |   |   | 7.2 |   |   |   | 1.2 |   |   |   | 85 |   |   |   | 7.3 |   |   |   | 1.4 |   |
| Unallocated                           |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total allowance for loan losses       |   | $                      | 1,373   |   |   |   | 100.0 | % |   |   | 100.0 | % |   | $ | 1,168 |   |   |   | 100.0 | % |   |   | 100.0 | % |

----

----

----

|                                |   | At December 31, |    |
|-------------------------------------|--------|-----------------|---------|
|                                |   | 2009            |    |   | 2008 |   |   | 2007 |   |
|                                |   | AmortizedCost   |    |   | Fair Value |   |   | AmortizedCost |   |   | Fair Value |   |   | AmortizedCost |   |   | Fair Value |   |
|                                |   | (In thousands)  |    |
| Securities available-for-sale:      |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities          |   | $               | 112,262 |   |   | $ | 116,888 |   |   | $ | 115,245 |   |   | $ | 117,010 |   |   | $ | 79,085 |   |   | $ | 79,454 |   |
| U.S. Government obligations         |   |            | 28,973  |   |   |   | 29,142 |   |   |   | 21,963 |   |   |   | 22,245 |   |   |   | 44,052 |   |   |   | 44,275 |   |
| Corporate debt obligations          |   |            | 10,563  |   |   |   | 10,672 |   |   |   | 15,249 |   |   |   | 13,483 |   |   |   | 12,880 |   |   |   | 12,267 |   |
| Mutual funds (1)                    |   |            | 1,561   |   |   |   | 1,625 |   |   |   | 2,643 |   |   |   | 2,643 |   |   |   | 14,385 |   |   |   | 14,385 |   |
| Municipal debt obligations          |   |            | 2,817   |   |   |   | 2,830 |   |   |   | 3,659 |   |   |   | 3,632 |   |   |   | 5,402 |   |   |   | 5,504 |   |
| SBA pools                           |   |            | 5,231   |   |   |   | 5,221 |   |   |   | 6,453 |   |   |   | 6,449 |   |   |   | 7,614 |   |   |   | 7,664 |   |
| Total securities available-for-sale |   | $               | 161,407 |   |   | $ | 166,378 |   |   | $ | 165,212 |   |   | $ | 165,462 |   |   | $ | 163,418 |   |   | $ | 163,549 |   |
|                                |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held-to-maturity:        |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities          |   | $               | 2,650   |   |   | $ | 2,803 |   |   | $ | 3,143 |   |   | $ | 3,256 |   |   | $ | 3,766 |   |   | $ | 3,863 |   |
| U.S. Government obligations         |   |            | — |   |   |   | — |   |   |   | 932 |   |   |   | 970 |   |   |   | 1,420 |   |   |   | 1,442 |   |
| Corporate debt obligations          |   |            | 5,209   |   |   |   | 5,292 |   |   |   | 3,969 |   |   |   | 3,259 |   |   |   | 2,173 |   |   |   | 2,317 |   |
| Municipal debt obligations          |   |            | 33,173  |   |   |   | 33,300 |   |   |   | 8,853 |   |   |   | 8,847 |   |   |   | 9,854 |   |   |   | 10,354 |   |
| Total securities held-to-maturity   |   | $               | 41,032  |   |   | $ | 41,395 |   |   | $ | 16,897 |   |   | $ | 16,332 |   |   | $ | 17,213 |   |   | $ | 17,976 |   |

----

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

----

|                                                                                                                                                                                                                  |   | At December 31, 2009 |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|---------|
|                                                                                                                                                                                                                  |   | Less than 12 months  |    |   | 12 months or more |   |   | Total |   |
|                                                                                                                                                                                                                  |   | Fair Value           |    |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
|                                                                                                                                                                                                                  |   | (In thousands)       |    |
|                                                                                                                                                                                                                  |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate debt obligations                                                                                                                                                                                            |   | $                    | 766     |   |   | $ | 16 |   |   |   | 1,357 |   |   | $ | 107 |   |   | $ | 2,123 |   |   | $ | 123 |   |
| Municipal debt obligations                                                                                                                                                                                            |   |                 | 846     |   |   |   | 36 |   |   |   | — |   |   |   | — |   |   |   | 846 |   |   |   | 36 |   |
| SBA pools                                   |   |                 | — |   |   |   | — |   |   |   | 2,278 |   |   |   | 39 |   |   |   | 2,278 |   |   |   | 39 |   |
| Mortgage-backed securities                                                                                                                                                                                            |   |                 | 1,350   |   |   |   | 15 |   |   |   | 2,064 |   |   |   | 2 |   |   |   | 3,414 |   |   |   | 17 |   |
| Total                                                                |   | $                    | 2,962   |   |   | $ | 67 |   |   | $ | 5,699 |   |   | $ | 148 |   |   | $ | 8,661 |   |   | $ | 215 |   |

|                                                                                                                                                                                                                        |   | At December 31, 2008 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|
|                                                                                                                                                                                                                        |   | Less than 12 months  |   |   | 12 months or more |   |   | Total |   |
|                                                                                                                                                                                                                        |   | Fair Value           |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
|                                                                                                                                                                                                                        |   | (In thousands)       |   |
|                                                                                                                                                                                                                        |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U. S. Government obligations                                                                                                                                                                                                |   | $                    | 451    |   |   | $ | 13 |   |   | $ | 1,931 |   |   | $ | 36 |   |   | $ | 2,382 |   |   | $ | 49 |   |
| Corporate debt obligations                                                                                                                                                                                                  |   |                 | 8,889  |   |   |   | 1,157 |   |   |   | 2,748 |   |   |   | 676 |   |   |   | 11,637 |   |   |   | 1,833 |   |
| Municipal debt obligations                                                                                                                                                                                                  |   |                 | 1,373  |   |   |   | 76 |   |   |   | — |   |   |   | — |   |   |   | 1,373 |   |   |   | 76 |   |
| SBA pools                                    |   |                 | 1,609  |   |   |   | 38 |   |   |   | 1,316 |   |   |   | 24 |   |   |   | 2,925 |   |   |   | 62 |   |
| Mortgage-backed securities                                                                                                                                                                                                  |   |                 | 31,136 |   |   |   | 357 |   |   |   | 2,046 |   |   |   | 50 |   |   |   | 33,182 |   |   |   | 407 |   |
| Total                                                                 |   | $                    | 43,458 |   |   | $ | 1,641 |   |   | $ | 8,041 |   |   | $ | 786 |   |   | $ | 51,499 |   |   | $ | 2,427 |   |

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

|                       |   | At December 31, 2008 |   |
|----------------------------|--------|----------------------|--------|
|                       |   | Less than 12 months  |   |   | Less than 12 months |   |   | Less than 12 months |   |
|                       |   | Fair Value           |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
|                       |   | (In thousands)       |   |
|                       |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate debt obligations |   | $                    | 1,474  |   |   | $ | 351 |   |   | $ | 605 |   |   | $ | 378 |   |   | $ | 2,079 |   |   | $ | 729 |   |
| Municipal debt obligations |   |                 | 2,367  |   |   |   | 223 |   |   |   | — |   |   |   | — |   |   |   | 2,367 |   |   |   | 223 |   |
| Total                      |   | $                    | 3,841  |   |   | $ | 574 |   |   | $ | 605 |   |   | $ | 378 |   |   | $ | 4,446 |   |   | $ | 952 |   |

----

----

|                                |   | One Year or Less       |    |                       | More than One Yearthrough Five Years |   |          | More than Five Yearsthrough Ten Years |                 |   | More than Ten Years |          |   | Total Securities     |    |
|-------------------------------------|--------|------------------------|---------|----------------------------|--------------------------------------|--------|---------------|---------------------------------------|----------------------|--------|---------------------|---------------|--------|----------------------|---------|
|                                |   | AmortizedCost          |    |  WeightedAverageYield |                                 |   | AmortizedCost |                                  | WeightedAverageYield |   |                | AmortizedCost |   | WeightedAverageYield |    |   | AmortizedCost |   |  WeightedAverageYield |   |   | AmortizedCost |   |   | Fair Value |   | WeightedAverageYield |   |
|                                |   | (Dollars in thousands) |    |
|                                |   |                   |    |                       |                                 |   |          |                                  |                 |   |                |          |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities available for sale:      |   |                   |    |                       |                                 |   |          |                                  |                 |   |                |          |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities          |   | $                      | 1,936   |                       |                                 |   | 1.60          | %                                     |                 | $      | 9,973               |          |   |                 | 2.29    | % |   | $ | 8,932 |   |   |   | 3.55 | % |   | $ | 91,421 |   |   |   | 4.75 | % |   | $ | 112,262 |   |   | $ | 116,888 |   |   |   | 4.38 | % |
| U.S. government obligations         |   |                   | 5,006   |                       |                                 |   | 1.49          |                                  |                 |   | 21,990              |          |   |                 | 1.81    |   |   |   | 500 |   |   |   | 5.05 |   |   |   | 1,477 |   |   |   | 5.00 |   |   |   | 28,973 |   |   |   | 29,142 |   |   |   | 1.97 |   |
| Corporate debt obligations          |   |                   | 999     |                       |                                 |   | 2.83          |                                  |                 |   | 5,827               |          |   |                 | 5.21    |   |   |   | 3,237 |   |   |   | 4.09 |   |   |   | 500 |   |   |   | 4.00 |   |   |   | 10,563 |   |   |   | 10,672 |   |   |   | 4.58 |   |
| Mutual funds                        |   |                   | 1,561   |                       |                                 |   | 3.67          |                                  |                 |   | —             |          |   |                 | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 1,561 |   |   |   | 1,625 |   |   |   | 3.67 |   |
| Municipal debt obligations          |   |                   | — |                       |                                 |   | —       |                                  |                 |   | 352                 |          |   |                 | 6.14    |   |   |   | 1,269 |   |   |   | 6.79 |   |   |   | 1,196 |   |   |   | 6.53 |   |   |   | 2,817 |   |   |   | 2,830 |   |   |   | 6.65 |   |
| SBA pools                           |   |                   | — |                       |                                 |   | —       |                                  |                 |   | 2,779               |          |   |                 | 3.79    |   |   |   | — |   |   |   | — |   |   |   | 2,452 |   |   |   | 1.56 |   |   |   | 5,231 |   |   |   | 5,221 |   |   |   | 2.74 |   |
| Total securities available for sale |   | $                      | 9,502   |                       |                                 |   | 2.02          | %                                     |                 | $      | 40,921              |          |   |                 | 2.58    | % |   | $ | 13,938 |   |   |   | 4.03 | % |   | $ | 97,046 |   |   |   | 4.69 | % |   | $ | 161,407 |   |   | $ | 166,378 |   |   |   | 3.94 | % |
|                                |   |                   |    |                       |                                 |   |          |                                  |                 |   |                |          |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held to maturity:        |   |                   |    |                       |                                 |   |          |                                  |                 |   |                |          |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities          |   | $                      | 6       |                       |                                 |   | 7.00          | %                                     |                 | $      | 628                 |          |   |                 | 6.04    | % |   | $ | 187 |   |   |   | 6.93 | % |   | $ | 1,829 |   |   |   | 5.98 | % |   | $ | 2,650 |   |   | $ | 2,803 |   |   |   | 6.06 | % |
| Corporate debt obligations          |   |                   | 2,012   |                       |                                 |   | 2.57          |                                  |                 |   | 538                 |          |   |                 | 9.38    |   |   |   | 2,463 |   |   |   | 4.78 |   |   |   | 196 |   |   |   | 6.44 |   |   |   | 5,209 |   |   |   | 5,292 |   |   |   | 4.46 |   |
| Municipal debt obligations          |   |                   | 27,181  |                       |                                 |   | 2.77          |                                  |                 |   | 306                 |          |   |                 | 6.97    |   |   |   | 1,446 |   |   |   | 8.15 |   |   |   | 4,240 |   |   |   | 7.88 |   |   |   | 33,173 |   |   |   | 33,300 |   |   |   | 3.70 |   |
| Total securities held to maturity   |   | $                      | 29,199  |                       |                                 |   | 2.76          | %                                     |                 | $      | 1,472               |          |   |                 | 7.45    | % |   | $ | 4,096 |   |   |   | 6.07 | % |   | $ | 6,265 |   |   |   | 7.28 | % |   | $ | 41,032 |   |   | $ | 41,395 |   |   |   | 3.95 | % |

----

|                        |   | At December 31,        |    |
|-----------------------------|--------|------------------------|---------|
|                        |   | 2009                   |    |   | 2008 |   |   | 2007 |   |
|                        |   | Balance                |    |   | Percent |   |   | WeightedAverageRate |   |   | Balance |   |   | Percent |   |   | WeightedAverageRate |   |   | Balance |   |   | Percent |   |   | WeightedAverageRate |   |
|                        |   | (Dollars in thousands) |    |
| Deposit type:               |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing demand |   | $                      | 21,111  |   |   |   | 4.22 | % |   |   | — | % |   | $ | 18,146 |   |   |   | 3.97 | % |   |   | — | % |   | $ | 15,141 |   |   |   | 4.08 | % |   |   | — | % |
| Savings                     |   |                   | 90,957  |   |   |   | 18.18 |   |   |   | 2.63 |   |   |   | 81,050 |   |   |   | 17.73 |   |   |   | 2.76 |   |   |   | 55,716 |   |   |   | 15.00 |   |   |   | 2.18 |   |
| NOW accounts                |   |                   | 98,810  |   |   |   | 19.74 |   |   |   | 0.85 |   |   |   | 55,439 |   |   |   | 12.12 |   |   |   | 0.72 |   |   |   | 45,255 |   |   |   | 12.19 |   |   |   | 2.12 |   |
| Super NOW accounts          |   |                   | 19,755  |   |   |   | 3.95 |   |   |   | 1.47 |   |   |   | 15,532 |   |   |   | 3.40 |   |   |   | 1.75 |   |   |   | 16,520 |   |   |   | 4.45 |   |   |   | 1.77 |   |
| Money market deposit        |   |                   | 63,005  |   |   |   | 12.59 |   |   |   | 1.63 |   |   |   | 45,404 |   |   |   | 9.93 |   |   |   | 3.26 |   |   |   | 20,670 |   |   |   | 5.56 |   |   |   | 3.72 |   |
| Total transaction accounts  |   |                   | 293,638 |   |   |   | 58.68 |   |   |   | 1.55 |   |   |   | 215,571 |   |   |   | 47.15 |   |   |   | 2.03 |   |   |   | 153,302 |   |   |   | 41.28 |   |   |   | 2.11 |   |
|                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Certificates of deposit     |   |                   | 206,728 |   |   |   | 41.32 |   |   |   | 2.91 |   |   |   | 241,660 |   |   |   | 52.85 |   |   |   | 3.97 |   |   |   | 218,080 |   |   |   | 58.72 |   |   |   | 4.86 |   |
|                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total deposits              |   | $                      | 500,366 |   |   |   | 100.00 | % |   |   | 2.11 | % |   | $ | 457,231 |   |   |   | 100.0 | % |   |   | 3.06 | % |   | $ | 371,382 |   |   |   | 100.00 | % |   |   | 3.72 | % |

|   |                                                                                                                                                                                                                                                                    |   | AtDecember 31, 2009 |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|
|   |                                                                                                                                                                                                                                                                    |   | (In thousands)      |   |
|   |                                                                                                                                                                                                                                                                    |   |                |   |
|   | Three months or less                                                                                                                                                                                                                                                    |   | $                   | 28,421 |   |
|   | Over three months through six months                                                                                                                                                                                                                                    |   |                | 12,170 |   |
|   | Over six months through one year                                                                                                                                                                                                                                        |   |                | 23,109 |   |
|   | Over one year to three years                                                                                                                                                                                                                                            |   |                | 32,448 |   |
|   | Over three years                                                                                                                                                                                                                                                        |   |                | 2,520  |   |
|   |                                                                                                                                                                                                                                                                    |   |                |   |   |
|   | Total                                            |   | $                   | 98,668 |   |

----

|                                                |   | Year Ended December 31, |    |
|-----------------------------------------------------|--------|-------------------------|---------|
|                                                |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
|                                                |   | (In thousands)          |    |
|                                                |   |                    |    |   |   |   |   |   |   |
| Beginning balance                                   |   | $                       | 439,085 |   |   | $ | 356,241 |   |   | $ | 319,199 |   |
| Net deposits (withdrawals) before interest credited |   |                    | 27,762  |   |   |   | 68,789 |   |   |   | 23,410 |   |
| Interest credited                                   |   |                    | 12,408  |   |   |   | 14,055 |   |   |   | 13,632 |   |
| Ending balance                                      |   | $                       | 479,255 |   |   | $ | 439,085 |   |   | $ | 356,241 |   |

|                                          |   | At or For the Year Ended December 31, |   |
|-----------------------------------------------|--------|---------------------------------------|--------|
|                                          |   | 2009                                  |   |   | 2008 |   |   | 2007 |   |
|                                          |   | (Dollars in thousands)                |   |
|                                          |   |                                  |   |   |   |   |   |   |   |
| Balance at end of year                        |   | $                                     | 21,300 |   |   | $ | 31,227 |   |   | $ | 45,939 |   |
| Average balance during year                   |   | $                                     | 28,226 |   |   | $ | 41,140 |   |   | $ | 17,605 |   |
| Maximum outstanding at any month end          |   | $                                     | 41,490 |   |   | $ | 58,998 |   |   | $ | 45,939 |   |
| Weighted average interest rate at end of year |   |                                  | 2.49   | % |   |   | 4.46 | % |   |   | 4.33 | % |
| Average interest rate during year             |   |                                  | 3.92   | % |   |   | 3.99 | % |   |   | 4.54 | % |

----

----

----

----

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

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

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

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

| ● | the association would be undercapitalized following the distribution; |
|---------|-----------------------------------------------------------------------|

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

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

----

----

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

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

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

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

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

----

----

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

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

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

----

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

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

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

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

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

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

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

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

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

----

| (i) | investing in the stock of a savings bank; |
|-----|-------------------------------------------|

| (ii) | acquiring a mutual association through the merger of such association into a savings bank subsidiary of such holding company or an interim savings bank subsidiary of such holding company; |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | merging with or acquiring another holding company, one of whose subsidiaries is a savings bank; |
|-------|-------------------------------------------------------------------------------------------------|

| (iv) | investing in a corporation, the capital stock of which is available for purchase by a savings bank under federal law or under the law of any state where the subsidiary savings bank or associations share their home offices; |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (v) | furnishing or performing management services for a savings bank subsidiary of such company; |
|-----|---------------------------------------------------------------------------------------------|

| (vi) | holding, managing or liquidating assets owned or acquired from a savings subsidiary of such company; |
|------|------------------------------------------------------------------------------------------------------|

| (vii) | holding or managing properties used or occupied by a savings bank subsidiary of such company; |
|-------|-----------------------------------------------------------------------------------------------|

| (viii) | acting as trustee under deeds of trust; |
|--------|-----------------------------------------|

| (ix) | any other activity: |
|------|---------------------|

| (A)           | that the Federal Reserve Board, by regulation, has determined to be permissible for bank holding companies under Section 4(c) of the Bank Holding Company Act of 1956, unless the Director, by regulation, prohibits or limits any such activity for savings and loan holding companies; or |
|-----------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B)            | in which multiple savings and loan holding companies were authorized (by regulation) to directly engage on March 5, 1987; |
|-----------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|

| (x) | any activity permissible for financial holding companies under Section 4(k) of the Bank Holding Company Act, including securities and insurance underwriting; and |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (xi) | purchasing, holding, or disposing of stock acquired in connection with a qualified stock issuance if the purchase of such stock by such savings and loan holding company is approved by the Director.  If a mutual holding company acquires or merges with another holding company, the holding company acquired or the holding company resulting from such merger or acquisition may only invest in assets and engage in activities listed in (i) through (x) above, and has a period of two years to cease any nonconforming activities and divest any nonconforming investments. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (i)  | the approval of interstate supervisory acquisitions by savings and loan holding companies; and |
|-----------|------------------------------------------------------------------------------------------------|

| (ii)   | the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit such acquisitions.  The states vary in the extent to which they permit interstate savings and loan holding company acquisitions. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | the waiver would not be detrimental to the safe and sound operation of the subsidiary savings association; and |
|--------|-----|----------------------------------------------------------------------------------------------------------------|

|   | (ii) | the mutual holding company’s Board of Directors determines that such waiver is consistent with such directors’ fiduciary duties to the mutual holding company’s members. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Location                                                            |   | Owned or Leased |   | Net Book Value of RealProperty |   |
|---------------------------------------------------------------------|--------|-----------------|--------|--------------------------------|--------|
|                                                                |   |            |   | (In thousands)                 |   |
| Main Office:                                                        |   |            |   |                           |   |
| 2745 S. Delsea DriveVineland, New Jersey 08360                      |   | Owned           |   | $                              | 5,722  |   |
|                                                                |   |            |   |                           |   |   |
| Branch Offices:                                                     |   |            |   |                           |   |   |
| 85 West Broad StreetBridgeton, New Jersey 08302                     |   | Owned           |   | $                              | 452    |   |
|                                                                |   |            |   |                           |   |   |
| 339 Main StreetCedarville, New Jersey 08311                         |   | Owned           |   | $                              | 420    |   |
|                                                                |   |            |   |                           |   |   |
| 1107 North High StreetMillville, New Jersey 08332                   |   | Owned           |   | $                              | 290    |   |
|                                                                |   |            |   |                           |   |   |
| 227 Bridgeton PikeMantua, New Jersey 08051                          |   | Owned           |   | $                              | 492    |   |
|                                                                |   |            |   |                           |   |   |
| 271 Lambs RoadSewell, New Jersey 08080                              |   | Owned           |   | $                              | 326    |   |
|                                                                |   |            |   |                           |   |   |
| Route 77 and Big Oak RoadUpper Deerfield Township, New Jersey 08302 |   | Owned           |   | $                              | 371    |   |
|                                                                |   |            |   |                           |   |   |
| 1771 South Lincoln AvenueVineland, New Jersey 08361                 |   | Owned           |   | $                              | 324    |   |
|                                                                |   |            |   |                           |   |   |
| 125 West Landis AvenueVineland, New Jersey 08360                    |   | Owned           |   | $                              | 512    |   |

----

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

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

----

|                                                                                                                                                                                                                                                           |   | At December 31, |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|---------|
|                                                                                                                                                                                                                                                           |   | 2009            |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                                                                                                                                                                                           |   | (In thousands)  |    |
| Selected Financial Condition Data:                                                                                                                                                                                                                             |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                           |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                     |   | $               | 568,541 |   |   | $ | 530,576 |   |   | $ | 457,860 |   |   | $ | 383,597 |   |   | $ | 336,852 |   |
| Cash and amounts due from banks                                                                                                                                                                                                                                |   |            | 15,882  |   |   |   | 23,407 |   |   |   | 15,978 |   |   |   | 13,257 |   |   |   | 10,669 |   |
| Investment securities held to maturity                                                                                                                                                                                                                         |   |            | 41,032  |   |   |   | 16,897 |   |   |   | 17,213 |   |   |   | 18,722 |   |   |   | 17,474 |   |
| Investment securities available for sale                                                                                                                                                                                                                       |   |            | 166,378 |   |   |   | 165,462 |   |   |   | 163,549 |   |   |   | 136,925 |   |   |   | 139,256 |   |
| Loans receivable, net                                            |   |            | 321,607 |   |   |   | 303,151 |   |   |   | 241,040 |   |   |   | 198,519 |   |   |   | 157,774 |   |
| Deposits                                                         |   |            | 500,366 |   |   |   | 457,231 |   |   |   | 371,382 |   |   |   | 337,254 |   |   |   | 284,725 |   |
| Borrowings                                                       |   |            | 21,300  |   |   |   | 31,227 |   |   |   | 45,939 |   |   |   | 8,324 |   |   |   | 15,415 |   |
| Stockholders’ equity                                       |   |            | 45,517  |   |   |   | 40,630 |   |   |   | 39,028 |   |   |   | 36,663 |   |   |   | 35,861 |   |

|                                                                                                                                                                                                                                                     |   | For the Years Ended December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                                                                                                                                                                                                     |   | 2009                             |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                                                                                                                                                                                     |   | (In thousands)                   |   |
| Selected Operating Data:                                                                                                                                                                                                                                 |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                     |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                            |   | $                                | 27,355 |   |   | $ | 27,151 |   |   | $ | 23,045 |   |   | $ | 18,509 |   |   | $ | 14,706 |   |
| Interest expense                                           |   |                             | 13,514 |   |   |   | 15,696 |   |   |   | 14,432 |   |   |   | 10,208 |   |   |   | 6,623 |   |
| Net interest income                                                  |   |                             | 13,841 |   |   |   | 11,455 |   |   |   | 8,613 |   |   |   | 8,301 |   |   |   | 8,083 |   |
| Provision for loan losses                                                                                                                                                                                                                                |   |                             | 615    |   |   |   | 756 |   |   |   | 84 |   |   |   | 179 |   |   |   | 204 |   |
| Net interest income afterprovision for loan losses                                                                                                                                                                                                       |   |                             | 13,226 |   |   |   | 10,699 |   |   |   | 8,529 |   |   |   | 8,122 |   |   |   | 7,879 |   |
| Non-interest income                                        |   |                             | 267    |   |   |   | 628 |   |   |   | 1,114 |   |   |   | 1,043 |   |   |   | 956 |   |
| Non-interest expense                                       |   |                             | 11,661 |   |   |   | 9,629 |   |   |   | 8,866 |   |   |   | 7,430 |   |   |   | 6,567 |   |
| Income before income taxes                                                                                                                                                                                                                               |   |                             | 1,832  |   |   |   | 1,698 |   |   |   | 777 |   |   |   | 1,735 |   |   |   | 2,268 |   |
| Income tax expense (benefit)                                                                                                                                                                                                                             |   |                             | 392    |   |   |   | 353 |   |   |   | (454 | ) |   |   | 124 |   |   |   | 499 |   |
| Net income                                                           |   | $                                | 1,440  |   |   | $ | 1,345 |   |   | $ | 1,231 |   |   | $ | 1,611 |   |   | $ | 1,769 |   |

----

|                                                                    |   | At or For the Years Ended December 31, |    |
|-------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                    |   | 2009                                   |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Selected Financial Ratios and Other Data:                               |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Performance Ratios:                                                     |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average assets                                                |   |                                   | 0.26    | % |   |   | 0.27 | % |   |   | 0.29 | % |   |   | 0.45 | % |   |   | 0.57 | % |
| Return on average equity                                                |   |                                   | 3.34    | % |   |   | 3.44 | % |   |   | 3.33 | % |   |   | 4.49 | % |   |   | 6.69 | % |
| Interest rate spread (1)                                                |   |                                   | 2.52    | % |   |   | 2.27 | % |   |   | 1.95 | % |   |   | 2.17 | % |   |   | 2.65 | % |
| Net interest margin (2)                                                 |   |                                   | 2.71    | % |   |   | 2.50 | % |   |   | 2.20 | % |   |   | 2.47 | % |   |   | 2.80 | % |
| Efficiency ratio (3)                                                    |   |                                   | 82.66   | % |   |   | 79.69 | % |   |   | 91.15 | % |   |   | 79.52 | % |   |   | 72.65 | % |
| Noninterest expense to average total assets                             |   |                                   | 2.12    | % |   |   | 1.92 | % |   |   | 2.09 | % |   |   | 2.07 | % |   |   | 2.10 | % |
| Average interest-earning assets to average interest-bearing liabilities |   |                                   | 107.28  | % |   |   | 106.49 | % |   |   | 106.73 | % |   |   | 109.99 | % |   |   | 106.70 | % |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset Quality Ratios:                                                   |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing assets as a percent of total assets                      |   |                                   | 0.93    | % |   |   | 0.38 | % |   |   | 0.25 | % |   |   | 0.06 | % |   |   | 0.02 | % |
| Non-performing loans as a percent of total loans                        |   |                                   | 1.63    | % |   |   | 0.62 | % |   |   | 0.48 | % |   |   | 0.12 | % |   |   | 0.05 | % |
| Allowance for loan losses as a percent of non-performing loans          |   |                                   | 49.38   | % |   |   | 110.67 | % |   |   | 119.38 | % |   |   | 589.27 | % |   |   | 1460.00 | % |
| Allowance for loan losses as a percent of total loans                   |   |                                   | 0.81    | % |   |   | 0.69 | % |   |   | 0.57 | % |   |   | 0.69 | % |   |   | 0.73 | % |
| Net recoveries (charge-offs) to average loans outstanding               |   |                                   | (0.04   | )% |   |   | (0.02 | )% |   |   | (0.03 | )% |   |   | 0.01 | % |   |   | (0.03 | )% |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital Ratios:                                                         |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total risk-based capital (to risk weighted assets)                      |   |                                   | 12.60   | % |   |   | 13.06 | % |   |   | 14.96 | % |   |   | 18.26 | % |   |   | 20.20 | % |
| Tier 1 risk-based capital (to risk weighted assets)                     |   |                                   | 11.94   | % |   |   | 12.42 | % |   |   | 14.42 | % |   |   | 17.57 | % |   |   | 19.53 | % |
| Tangible capital (to tangible assets)                                   |   |                                   | 7.17    | % |   |   | 7.27 | % |   |   | 8.03 | % |   |   | 9.09 | % |   |   | 9.85 | % |
| Tier 1 leverage (core) capital (to adjusted tangible assets)            |   |                                   | 7.17    | % |   |   | 7.27 | % |   |   | 8.03 | % |   |   | 9.09 | % |   |   | 9.85 | % |
| Equity to total assets                                                  |   |                                   | 8.01    | % |   |   | 7.66 | % |   |   | 8.52 | % |   |   | 9.56 | % |   |   | 10.65 | % |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Data:                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number of full service offices                                          |   |                                   | 9       |   |   |   | 8 |   |   |   | 7 |   |   |   | 6 |   |   |   | 6 |   |
| Dividends declared per share                                            |   | $                                      | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                                                     |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted (4)                                                   |   | $                                      | 0.34    |   |   | $ | 0.31 |   |   | $ | 0.29 |   |   | $ | 0.37 |   |   | $ | 0.20 |   |
|                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   |     |
|--------|-----|
|   | (1) | Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the year. |
|   | (2) | The net interest margin represents net interest income as a percent of average interest-earning assets for the year. |
|   | (3) | The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income. |
|   | (4) | For 2005, represents earnings per share for the six-month period from June 30, 2005 (date of public offering) to December 31, 2005. |

----

----

----

----

|                                                                   |   | For the Years Ended December 31, |    |
|------------------------------------------------------------------------|--------|----------------------------------|---------|
|                                                                   |   |                             |    |   |   |   |   |   |   |
|                                                                   |   |  2009                       |    |   |   2008 |   |   |   2007 |   |
|                                                                   |   |   Average Balance      |    |   | InterestIncome/Expense |   |   |   Yield/Cost |   |   |   Average Balance |   |   | InterestIncome/Expense |   |   |   Yield/Cost |   |   |   Average Balance |   |   | InterestIncome/Expense |   |   |   Yield/Cost |   |
|                                                                   |   |  (Dollars in thousands)     |    |
|                                                                   |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                               |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                  |   | $                                | 311,585 |   |   | $ | 18,677 |   |   |   | 5.99 | % |   | $ | 273,905 |   |   | $ | 16,946 |   |   |   | 6.19 | % |   | $ | 221,179 |   |   | $ | 14,034 |   |   |   | 6.35 | % |
| Securities                                                             |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                |   |                             | 175,034 |   |   |   | 7,959 |   |   |   | 4.55 | % |   |   | 172,209 |   |   |   | 9,630 |   |   |   | 5.59 | % |   |   | 139,533 |   |   |   | 7,689 |   |   |   | 5.51 | % |
| Tax-exempt                                                             |   |                             | 24,048  |   |   |   | 719 |   |   |   | 2.99 | % |   |   | 12,283 |   |   |   | 575 |   |   |   | 4.68 | % |   |   | 30,460 |   |   |   | 1,322 |   |   |   | 4.34 | % |
| Total interest-earning assets                                          |   |                             | 510,667 |   |   |   | 27,355 |   |   |   | 5.36 | % |   |   | 458,397 |   |   |   | 27,151 |   |   |   | 5.92 | % |   |   | 391,172 |   |   |   | 23,045 |   |   |   | 5.89 | % |
| Noninterest-earning assets                                             |   |                             | 42,233  |   |   |   |   |   |   |   |   |   |   |   | 42,530 |   |   |   |   |   |   |   |   |   |   |   | 32,395 |   |   |   |   |   |   |   |   |   |
| Total assets                                                           |   | $                                | 552,900 |   |   |   |   |   |   |   |   |   |   | $ | 500,927 |   |   |   |   |   |   |   |   |   |   | $ | 423,567 |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                          |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                                                       |   | $                                | 85,752  |   |   |   | 2,241 |   |   |   | 2.61 | % |   | $ | 80,384 |   |   |   | 2,232 |   |   |   | 2.78 | % |   | $ | 56,576 |   |   |   | 1,188 |   |   |   | 2.10 | % |
| NOW accounts                                                           |   |                             | 79,947  |   |   |   | 799 |   |   |   | 1.00 | % |   |   | 52,940 |   |   |   | 861 |   |   |   | 1.63 | % |   |   | 57,521 |   |   |   | 1,299 |   |   |   | 2.26 | % |
| Money market deposits                                                  |   |                             | 53,949  |   |   |   | 1,123 |   |   |   | 2.08 | % |   |   | 31,109 |   |   |   | 1,029 |   |   |   | 3.31 | % |   |   | 19,316 |   |   |   | 678 |   |   |   | 3.51 | % |
| Certificates of deposit                                                |   |                             | 228,158 |   |   |   | 8,245 |   |   |   | 3.61 | % |   |   | 224,900 |   |   |   | 9,933 |   |   |   | 4.42 | % |   |   | 215,480 |   |   |   | 10,467 |   |   |   | 4.86 | % |
| Total interest-bearing deposits                                        |   |                             | 447,806 |   |   |   | 12,408 |   |   |   | 2.77 | % |   |   | 389,333 |   |   |   | 14,055 |   |   |   | 3.61 | % |   |   | 348,893 |   |   |   | 13,632 |   |   |   | 3.91 | % |
| Borrowings                                                             |   |                             | 28,226  |   |   |   | 1,106 |   |   |   | 3.92 | % |   |   | 41,140 |   |   |   | 1,641 |   |   |   | 3.99 | % |   |   | 17,605 |   |   |   | 800 |   |   |   | 4.54 | % |
| Total interest-bearing liabilities                                     |   |                             | 476,032 |   |   |   | 13,514 |   |   |   | 2.84 | % |   |   | 430,473 |   |   |   | 15,696 |   |   |   | 3.65 | % |   |   | 366,498 |   |   |   | 14,432 |   |   |   | 3.94 | % |
| Noninterest-bearing liabilities                                        |   |                             | 33,789  |   |   |   |   |   |   |   |   |   |   |   | 31,308 |   |   |   |   |   |   |   |   |   |   |   | 20,110 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                      |   |                             | 509,821 |   |   |   |   |   |   |   |   |   |   |   | 461,781 |   |   |   |   |   |   |   |   |   |   |   | 386,608 |   |   |   |   |   |   |   |   |   |
| Equity                                                                 |   |                             | 43,079  |   |   |   |   |   |   |   |   |   |   |   | 39,146 |   |   |   |   |   |   |   |   |   |   |   | 36,959 |   |   |   |   |   |   |   |   |   |
| Total liabilities and equity                                           |   | $                                | 552,900 |   |   |   |   |   |   |   |   |   |   | $ | 500,927 |   |   |   |   |   |   |   |   |   |   | $ | 423,567 |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                    |   |                             |    |   |   | $ | 13,841 |   |   |   |   |   |   |   |   |   |   | $ | 11,455 |   |   |   |   |   |   |   |   |   |   | $ | 8,613 |   |   |   |   |   |
| Interest ratespread (1)                                                |   |                             |    |   |   |   |   |   |   |   | 2.52 | % |   |   |   |   |   |   |   |   |   |   | 2.27 | % |   |   |   |   |   |   |   |   |   |   | 1.95 | % |
| Net interest-earningassets (2)                                         |   | $                                | 34,635  |   |   |   |   |   |   |   |   |   |   | $ | 27,924 |   |   |   |   |   |   |   |   |   |   | $ | 24,674 |   |   |   |   |   |   |   |   |   |
| Net interestMargin (3)                                                 |   |                             |    |   |   |   |   |   |   |   | 2.71 | % |   |   |   |   |   |   |   |   |   |   | 2.50 | % |   |   |   |   |   |   |   |   |   |   | 2.20 | % |
| Average interest-earningassets to average interest-bearing liabilities |   |                             | 107.28  | % |   |   |   |   |   |   |   |   |   |   | 106.49 | % |   |   |   |   |   |   |   |   |   |   | 106.73 | % |   |   |   |   |   |   |   |   |

----

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

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

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

----

|                               |   | Years Ended December 31,2009 vs. 2008 |   |   | Years Ended December 31,2008 vs. 2007 |   |
|------------------------------------|--------|---------------------------------------|--------|--------|---------------------------------------|--------|
|                               |   | Increase (Decrease) Due to            |   |   | Net                                   |   |   | Increase (Decrease) Due to |   |   | Net |   |
|                               |   | Volume                                |   |   | Rate                                  |   |   | Volume |   |   | Rate |   |
|                               |   | (In thousands)                        |   |
|                               |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:           |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                              |   | $                                     | 2,238  |   |                                  | $      | (507 | ) |   | $ | 1,731 |   |   | $ | 3,252 |   |   | $ | (340 | ) |   | $ | 2,912 |   |
| Securities                         |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                            |   |                                  | 162    |   |                                  |   | (1,833 | ) |   |   | (1,671 | ) |   |   | 1,827 |   |   |   | 114 |   |   |   | 1,941 |   |
| Tax-exempt                         |   |                                  | 231    |   |                                  |   | (87 | ) |   |   | 144 |   |   |   | (860 | ) |   |   | 113 |   |   |   | (747 | ) |
| Total interest-earning assets      |   |                                  | 2,631  |   |                                  |   | (2,427 | ) |   |   | 204 |   |   |   | 4,219 |   |   |   | (113 | ) |   |   | 4,106 |   |
|                               |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:      |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                   |   |                                  | 112    |   |                                  |   | (103 | ) |   |   | 9 |   |   |   | 590 |   |   |   | 454 |   |   |   | 1,044 |   |
| NOW accounts                       |   |                                  | (257   | )      |                                  |   | 195 |   |   |   | (62 | ) |   |   | (98 | ) |   |   | (340 | ) |   |   | (438 | ) |
| Money market deposit               |   |                                  | 191    |   |                                  |   | (97 | ) |   |   | 94 |   |   |   | 388 |   |   |   | (37 | ) |   |   | 351 |   |
| Certificates of deposit            |   |                                  | 145    |   |                                  |   | (1,833 | ) |   |   | (1,688 | ) |   |   | 499 |   |   |   | (1,033 | ) |   |   | (534 | ) |
| Total interest-bearing deposits    |   |                                  | 191    |   |                                  |   | (1,838 | ) |   |   | (1,647 | ) |   |   | 1,379 |   |   |   | (956 | ) |   |   | 423 |   |
| Borrowings                         |   |                                  | (506   | )      |                                  |   | (29 | ) |   |   | (535 | ) |   |   | 925 |   |   |   | (84 | ) |   |   | 841 |   |
| Total interest-bearing liabilities |   |                                  | (315   | )      |                                  |   | (1,867 | ) |   |   | (2,182 | ) |   |   | 2,304 |   |   |   | (1,040 | ) |   |   | 1,264 |   |
|                               |   |                                  |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net change in interest income      |   | $                                     | 2,946  |   |                                  | $      | (560 | ) |   | $ | 2,386 |   |   | $ | 1,915 |   |   | $ | 927 |   |   | $ | 2,842 |   |

----

----

----

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

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

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

----

|                     |    |   |                   |   |   |                                   |   |   |  NPV as a Percentage of Present Value of Assets (3) |   |
|--------------------------|---------|--------|------------------------|--------|--------|----------------------------------------|--------|--------|----------------------------------------------------------|--------|
|  Change in Interest |    |   |                   |   |   |  Estimated Increase (Decrease) in |   |   |                                                     |   |   |  Increase |   |
|  Rates (basis       |    |   |  Estimated        |   |   |  NPV                              |   |   |  NPV                                                |   |   |  (Decrease) |   |
|  points) (1)        |    |   |  NPV (2)          |   |   |  Amount                           |   |   |  Percent                                            |   |   |  Ratio (4) |   |   |  (basis points) |   |
|                     |    |   | (Dollars in thousands) |   |   |                                   |   |   |                                                     |   |   |   |   |
|                     | +300    |   |                   | $      | 41,434 |                                   |   | $      | (25,807                                                  | )      |   |   | (38 | )% |   |   | 7.34 | % |   |   | (391 | ) |
|                     | +200    |   |                   |   | 51,468 |                                   |   |   | (15,773                                                  | )      |   |   | (23 | )% |   |   | 8.93 | % |   |   | (233 | ) |
|                     | +100    |   |                   |   | 60,741 |                                   |   |   | (6,500                                                   | )      |   |   | (10 | )% |   |   | 10.33 | % |   |   | (93 | ) |
|                     | +50     |   |                   |   | 64,134 |                                   |   |   | (3,108                                                   | )      |   |   | (5 | )% |   |   | 10.82 | % |   |   | (44 | ) |
|                     | — |   |                   |   | 67,241 |                                   |   |   | —                                                  |   |   |   | — |   |   |   | 11.26 | % |   |   | — |   |
|                     | -50     |   |                   |   | 69,499 |                                   |   |   | 2,258                                                    |   |   |   | 3 | % |   |   | 11.56 | % |   |   | 31 |   |
|                     | -100    |   |                   |   | 71,570 |                                   |   |   | 4,329                                                    |   |   |   | 6 | % |   |   | 11.85 | % |   |   | 59 |   |

----

|   | (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.                                                     |

----

----

----

----

| ● | A subsidiary or group of assets that is a business or nonprofit activity; |
|---------|---------------------------------------------------------------------------|

| ● | A subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture; and |
|---------|------------------------------------------------------------------------------------------------------------------------------|

| ● | An exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture). |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | The valuation techniques used to measure the fair value of any retained investment; |
|---------|-------------------------------------------------------------------------------------|

| ● | The nature of any continuing involvement with the subsidiary or entity acquiring the group of assets; and |
|---------|-----------------------------------------------------------------------------------------------------------|

----

| ● | Whether the transaction that resulted in the deconsolidation or derecognition was with a related party or whether the former subsidiary or entity acquiring the assets will become a related party after the transaction. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | A reporting entity to disclose separately the amount of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; and |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | In the reconciliation for fair value measurements using significant unobservable inputs, a reporting entity should present separately information about purchases, sales, issuances, and settlements. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |
|--------|

|                                                    |   | Page No. |
|---------------------------------------------------------|--------|----------|
|                                                    |   |     |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |   | 57       |
|                                                    |   |     |
| CONSOLIDATED FINANCIAL STATEMENTS:                      |   |     |
|                                                    |   |     |
| Consolidated Statements of Financial Condition          |   | 58       |
|                                                    |   |     |
| Consolidated Statements of Income                       |   | 59       |
|                                                    |   |     |
| Consolidated Statements of Stockholders’ Equity   |   | 60       |
|                                                    |   |     |
| Consolidated Statements of Cash Flows                   |   | 61       |
|                                                    |   |     |
| Notes to Consolidated Financial Statements              |   | 62       |

----

----

|   |
|--------|

|                                                                                                                                                |   | December 31,                                           |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|---------|
|                                                                                                                                                |   | 2009                                                   |    |   | 2008 |   |
|                                                                                                                                                |   |                                                   |    |   |   |   |
|                                                                                                                                                |   | (Dollars In Thousands, ExceptShare and Per Share Data) |    |
|                                                                                                                                                |   |                                                   |    |   |   |   |
| Assets                                                                                                                                              |   |                                                   |    |   |   |   |
|                                                                                                                                                |   |                                                   |    |   |   |   |
| Cash and amounts due from banks                                                                                                                     |   | $                                                      | 15,882  |   |   | $ | 23,407 |   |
| Investment securities available for sale                                                                                                            |   |                                                   | 166,378 |   |   |   | 165,462 |   |
| Investment securities held to maturity (fair value 2009 - $41,395; 2008 - $16,332)                                                                  |   |                                                   | 41,032  |   |   |   | 16,897 |   |
| Loans receivable (net of allowance for loan losses 2009 - $2,606; 2008 - $2,105)                                                                    |   |                                                   | 321,607 |   |   |   | 303,151 |   |
| Real estate owned                                                                                                                                   |   |                                                   | — |   |   |   | 113 |   |
| Federal Home Loan Bank stock, at cost                                                                                                               |   |                                                   | 1,731   |   |   |   | 1,991 |   |
| Office properties and equipment, net                                                                                                                |   |                                                   | 11,387  |   |   |   | 11,563 |   |
| Bank-owned life insurance                                                                                                                           |   |                                                   | 2,777   |   |   |   | 2,674 |   |
| Accrued interest receivable                                                                                                                         |   |                                                   | 2,272   |   |   |   | 2,298 |   |
| Deferred taxes                                                                                                                                      |   |                                                   | 910     |   |   |   | 1,752 |   |
| Other assets                                                                                                                                        |   |                                                   | 4,565   |   |   |   | 1,268 |   |
|                                                                                                                                                |   |                                                   |    |   |   |   |   |   |
| Total Assets                                                                                                                                        |   | $                                                      | 568,541 |   |   | $ | 530,576 |   |
|                                                                                                                                                |   |                                                   |    |   |   |   |   |   |
| Liabilities and Stockholders’ Equity                                                                                                          |   |                                                   |    |   |   |   |   |   |
|                                                                                                                                                |   |                                                   |    |   |   |   |   |   |
| Liabilities                                                                                                                                         |   |                                                   |    |   |   |   |   |   |
|                                                                                                                                                |   |                                                   |    |   |   |   |   |   |
| Deposits:                                                                                                                                           |   |                                                   |    |   |   |   |   |   |
| Non-interest-bearing                                                                                                                                |   | $                                                      | 21,111  |   |   | $ | 18,146 |   |
| Interest-bearing                                                                                                                                    |   |                                                   | 479,255 |   |   |   | 439,085 |   |
|             Total deposits                                                              |   |                                                   | 500,366 |   |   |   | 457,231 |   |
| Federal Home Loan Bank short-term borrowings                                                                                                        |   |                                                   | 7,300   |   |   |   | 3,000 |   |
| Federal Home Loan Bank long-term borrowings                                                                                                         |   |                                                   | 14,000  |   |   |   | 28,227 |   |
| Advances from borrowers for taxes and insurance                                                                                                     |   |                                                   | 661     |   |   |   | 620 |   |
| Other liabilities                                                                                                                                   |   |                                                   | 697     |   |   |   | 868 |   |
| Total Liabilities                                                                                                                                   |   |                                                   | 523,024 |   |   |   | 489,946 |   |
|                                                                                                                                                |   |                                                   |    |   |   |   |   |   |
| Commitments and contingencies                                                                                                                       |   |                                                   |    |   |   |   |   |   |
|                                                                                                                                                |   |                                                   |    |   |   |   |   |   |
| Stockholders’ Equity                                                                                                                          |   |                                                   |    |   |   |   |   |   |
|                                                                                                                                                |   |                                                   |    |   |   |   |   |   |
| Preferred stock, 1,000,000 shares authorized and unissued                                                                                           |   |                                                   | — |   |   |   | — |   |
| Common stock, par value $0.10 per share; authorized 10,000,000 shares;issued 4,521,696 shares; outstanding: 4,440,246 in 2009 and 4,428,021 in 2008 |   |                                                   | 452     |   |   |   | 452 |   |
| Additional paid-in capital                                                                                                                          |   |                                                   | 20,628  |   |   |   | 20,290 |   |
| Unearned shares held by Employee Stock Ownership Plan (ESOP)                                                                                        |   |                                                   | (1,084  | ) |   |   | (1,200 | ) |
| Treasury stock, at cost, (2009 - 134,625 shares; 2008 – 129,125 shares)                                                                       |   |                                                   | (1,596  | ) |   |   | (1,559 | ) |
| Retained earnings                                                                                                                                   |   |                                                   | 23,879  |   |   |   | 22,439 |   |
| Accumulated other comprehensive income                                                                                                              |   |                                                   | 3,238   |   |   |   | 208 |   |
| Total Stockholders’ Equity                                                                                                                    |   |                                                   | 45,517  |   |   |   | 40,630 |   |
|                                                                                                                                                |   |                                                   |    |   |   |   |   |   |
| Total Liabilities and Stockholders’ Equity                                                                                                    |   | $                                                      | 568,541 |   |   | $ | 530,576 |   |

| See notes to consolidated financial statements |
|------------------------------------------------|

----

|   |
|--------|

|                                                                    |   | Year Ended December 31,                      |   |
|-------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                    |   | 2009                                         |   |   | 2008 |   |
|                                                                    |   | (Dollars in Thousands,Except Per Share Data) |   |
| Interest Income                                                         |   |                                         |   |   |   |   |
| Loans, including fees                                                   |   | $                                            | 18,677 |   |   | $ | 16,946 |   |
| Mortgage-backed securities                                              |   |                                         | 5,722  |   |   |   | 5,513 |   |
| Securities:                                                             |   |                                         |   |   |   |   |   |   |
| Taxable                                                                 |   |                                         | 2,237  |   |   |   | 4,117 |   |
| Tax-exempt                                                              |   |                                         | 719    |   |   |   | 575 |   |
| Total Interest Income                                                   |   |                                         | 27,355 |   |   |   | 27,151 |   |
| Interest Expense                                                        |   |                                         |   |   |   |   |   |   |
| Deposits                                                                |   |                                         | 12,408 |   |   |   | 14,055 |   |
| Borrowings                                                              |   |                                         | 1,106  |   |   |   | 1,641 |   |
| Total Interest Expense                                                  |   |                                         | 13,514 |   |   |   | 15,696 |   |
| Net Interest Income                                                     |   |                                         | 13,841 |   |   |   | 11,455 |   |
| Provision for Loan Losses                                               |   |                                         | 615    |   |   |   | 756 |   |
| Net Interest Income after Provision for Loan Losses                     |   |                                         | 13,226 |   |   |   | 10,699 |   |
| Non-Interest Income                                                     |   |                                         |   |   |   |   |   |   |
| Fees and service charges                                                |   |                                         | 1,225  |   |   |   | 1,125 |   |
| Gain on sale of loans                                                   |   |                                         | 56     |   |   |   | 7 |   |
| Loss on sale of real estate owned                                       |   |                                         | (5     | ) |   |   | - |   |
| Net gain on sales and calls of securities                               |   |                                         | 14     |   |   |   | 561 |   |
|                                                                    |   |                                         |   |   |   |   |   |   |
| Impairment charge on investment securities                              |   |                                         | (1,126 | ) |   |   | (1,161 | ) |
| Portion of loss recognized in other comprehensive income (before taxes) |   |                                         | -      |   |   |   | - |   |
| Net impairment losses recognized in earnings                            |   |                                         | (1,126 | ) |   |   | (1,161 | ) |
|                                                                    |   |                                         |   |   |   |   |   |   |
| Earnings on bank-owned life insurance                                   |   |                                         | 103    |   |   |   | 96 |   |
| Total Non-Interest Income                                               |   |                                         | 267    |   |   |   | 628 |   |
| Non-Interest Expenses                                                   |   |                                         |   |   |   |   |   |   |
| Compensation and benefits                                               |   |                                         | 5,779  |   |   |   | 5,434 |   |
| Occupancy and equipment                                                 |   |                                         | 1,621  |   |   |   | 1,364 |   |
| Data processing                                                         |   |                                         | 837    |   |   |   | 799 |   |
| FDIC insurance premiums                                                 |   |                                         | 964    |   |   |   | 322 |   |
| Office supplies                                                         |   |                                         | 181    |   |   |   | 165 |   |
| Professional fees                                                       |   |                                         | 443    |   |   |   | 378 |   |
| Advertising                                                             |   |                                         | 208    |   |   |   | 204 |   |
| Prepayment penalty on payoff of FHLB borrowing                          |   |                                         | 459    |   |   |   | - |   |
| Other                                                                   |   |                                         | 1,169  |   |   |   | 963 |   |
| Total Non-Interest Expenses                                             |   |                                         | 11,661 |   |   |   | 9,629 |   |
| Income before Income Tax Expense                                        |   |                                         | 1,832  |   |   |   | 1,698 |   |
| Income Tax expense                                                      |   |                                         | 392    |   |   |   | 353 |   |
| Net Income                                                              |   | $                                            | 1,440  |   |   | $ | 1,345 |   |
|                                                                    |   |                                         |   |   |   |   |   |   |
| Per Share Data (Note 3):                                                |   |                                         |   |   |   |   |   |   |
| Earnings per share – basic                                        |   | $                                            | 0.34   |   |   | $ | 0.31 |   |
| Earnings per share – diluted                                      |   | $                                            | 0.34   |   |   | $ | 0.31 |   |

| See notes to consolidated financial statements |
|------------------------------------------------|

----

|   |
|--------|

|                                                                                                                                     |   | CommonStock |   |   | AdditionalPaid-inCapital |   |   | UnearnedSharesHeld byESOP |   |   | RetainedEarnings |   |   | TreasuryStock |   |   | Accumu-latedOtherCompre-hensiveIncome |   |   | TotalStock-holders’Equity |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|--------------------------|--------|--------|---------------------------|--------|--------|------------------|--------|--------|---------------|--------|--------|---------------------------------------|--------|--------|---------------------------------|--------|
| (Dollars in thousands)                                                                                                                   |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |
|                                                                                                                                     |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
| Balance, January 1, 2008                                                                                                                 |   | $           | 452    |   |                     | $      | 19,922 |                      |   | $      | (1,316           | )      |   | $             | 21,094 |   |                                  | $      | (1,189 | )                               |   | $ | 65 |   |   | $ | 39,028 |   |
| Comprehensive income:                                                                                                                    |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
|                                                                                                                                     |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
| Net income                                                                                                                               |   |        | -      |   |                     |   | -      |                      |   |   | -                |   |   |          | 1,345  |   |                                  |   | -      |                            |   |   | - |   |   |   | 1,345 |   |
| Net change in unrealized gain on investment securities available for sale, net of reclassification adjustments and tax benefit of $24    |   |        | -      |   |                     |   | -      |                      |   |   | -                |   |   |          | -      |   |                                  |   | -      |                            |   |   | 143 |   |   |   | 143 |   |
| Total Comprehensive Income                                                                                                               |   |        | -      |   |                     |   | -      |                      |   |   | -                |   |   |          | -      |   |                                  |   | -      |                            |   |   | - |   |   | $ | 1,488 |   |
|                                                                                                                                     |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
| ESOP shares committed to be released                                                                                                     |   |        | -      |   |                     |   | (2     | )                         |   |   | 116              |   |   |          | -      |   |                                  |   | -      |                            |   |   | - |   |   |   | 114 |   |
| Purchase of treasury stock – 40,500 shares                                                                                         |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   | (370   | )                               |   |   |   |   |   |   | (370 | ) |
| Stock-based compensation expense (restricted stock awards)                                                                               |   |        | -      |   |                     |   | 222    |                      |   |   | -                |   |   |          | -      |   |                                  |   | -      |                            |   |   | - |   |   |   | 222 |   |
| Stock-based compensation expense (stock options)                                                                                         |   |        | -      |   |                     |   | 148    |                      |   |   | -                |   |   |          | -      |   |                                  |   | -      |                            |   |   | - |   |   |   | 148 |   |
|                                                                                                                                     |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008                                                                                                               |   |        | 452    |   |                     |   | 20,290 |                      |   |   | (1,200           | )      |   |          | 22,439 |   |                                  |   | (1,559 | )                               |   |   | 208 |   |   |   | 40,630 |   |
|                                                                                                                                     |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                                                                    |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
|                                                                                                                                     |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
| Net income                                                                                                                               |   |        | -      |   |                     |   | -      |                      |   |   | -                |   |   |          | 1,440  |   |                                  |   | -      |                            |   |   | - |   |   |   | 1,440 |   |
| Net change in unrealized gain on investment securities available for sale, net of reclassification adjustments and tax expense of $1,691 |   |        | -      |   |                     |   | -      |                      |   |   | -                |   |   |          | -      |   |                                  |   | -      |                            |   |   | 3,030 |   |   |   | 3,030 |   |
|                                                                                                                                     |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
| Total Comprehensive Income                                                                                                               |   |        | -      |   |                     |   | -      |                      |   |   | -                |   |   |          | -      |   |                                  |   | -      |                            |   |   | - |   |   | $ | 4,470 |   |
|                                                                                                                                     |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
| ESOP shares committed to be released                                                                                                     |   |        | -      |   |                     |   | (32    | )                         |   |   | 116              |   |   |          | -      |   |                                  |   | -      |                            |   |   | - |   |   |   | 84 |   |
| Purchase of treasury stock – 5,500 shares                                                                                          |   |        | -      |   |                     |   | -      |                      |   |   | -                |   |   |          | -      |   |                                  |   | (37    | )                               |   |   | - |   |   |   | (37 | ) |
| Stock-based compensation expense (restricted stock awards)                                                                               |   |        | -      |   |                     |   | 222    |                      |   |   | -                |   |   |          | -      |   |                                  |   | -      |                            |   |   | - |   |   |   | 222 |   |
| Stock-based compensation expense (stock options)                                                                                         |   |        | -      |   |                     |   | 148    |                      |   |   | -                |   |   |          | -      |   |                                  |   | -      |                            |   |   | - |   |   |   | 148 |   |
|                                                                                                                                     |   |        |   |   |                     |   |   |                      |   |   |             |   |   |          |   |   |                                  |   |   |                            |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                                                                                               |   | $           | 452    |   |                     | $      | 20,628 |                      |   | $      | (1,084           | )      |   | $             | 23,879 |   |                                  | $      | (1,596 | )                               |   | $ | 3,238 |   |   | $ | 45,517 |   |

| See notes to consolidated financial statements |
|------------------------------------------------|

----

|   |
|--------|

|                                                                                        |   | Years Ended December 31, |    |
|---------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                        |   | 2009                     |    |   | 2008 |   |
| Cash Flows from Operating Activities:                                                       |   | (In thousands)           |    |
| Net income                                                                                  |   | $                        | 1,440   |   |   | $ | 1,345 |   |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |   |                     |    |   |   |   |   |   |
| Provision for loan losses                                                                   |   |                     | 615     |   |   |   | 756 |   |
| Depreciation expense                                                                        |   |                     | 665     |   |   |   | 593 |   |
| ESOP expense                                                                                |   |                     | 84      |   |   |   | 114 |   |
| Stock-based compensation expense                                                            |   |                     | 370     |   |   |   | 370 |   |
| Impairment charge on investment securities                                                  |   |                     | 1,126   |   |   |   | 1,161 |   |
| Deferred income taxes                                                                       |   |                     | (848    | ) |   |   | (670 | ) |
| Net earnings on bank-owned life insurance                                                   |   |                     | (103    | ) |   |   | (96 | ) |
| Net gain on sales and calls of investment securities                                        |   |                     | (14     | ) |   |   | (561 | ) |
| Loans originated for sale                                                                   |   |                     | (4,128  | ) |   |   | (331 | ) |
| Proceeds from sale of loans                                                                 |   |                     | 4,184   |   |   |   | 338 |   |
| Gain on sale of loans                                                                       |   |                     | (56     | ) |   |   | (7 | ) |
| Loss on sale of real estate owned                                                           |   |                     | 5       |   |   |   | - |   |
| Net amortization of loan fees                                                               |   |                     | 88      |   |   |   | 25 |   |
| Accretion of premium and discount on investment securities, net                             |   |                     | (483    | ) |   |   | (504 | ) |
| Decrease (increase) in accrued interest receivable                                          |   |                     | 26      |   |   |   | (113 | ) |
| Increase in other assets                                                                    |   |                     | (3,297  | ) |   |   | (35 | ) |
| Decrease in other liabilities                                                               |   |                     | (171    | ) |   |   | (62 | ) |
| Net cash provided by (used in) operating activities                                         |   |                     | (497    | ) |   |   | 2,323 |   |
| Cash Flows from Investing Activities:                                                       |   |                     |    |   |   |   |   |   |
| Proceeds from sales of investment securities available for sale                             |   |                     | 5,085   |   |   |   | 22,120 |   |
| Proceeds from sales of mortgage-backed securities available for sale                        |   |                     | 1,674   |   |   |   | 13,937 |   |
| Proceeds from calls and maturities of investment securities available for sale              |   |                     | 44,128  |   |   |   | 35,190 |   |
| Proceeds from calls and maturities of investment securities held to maturity                |   |                     | 17,728  |   |   |   | 3,680 |   |
| Purchase of investment securities available for sale                                        |   |                     | (49,751 | ) |   |   | (23,972 | ) |
| Purchase if investment securities held to maturity                                          |   |                     | (42,947 | ) |   |   | (3,712 | ) |
| Purchase of mortgage-backed securities available for sale                                   |   |                     | (26,972 | ) |   |   | (65,488 | ) |
| Purchase of office properties and equipment                                                 |   |                     | (489    | ) |   |   | (1,883 | ) |
| Principal repayments from investment securities                                             |   |                     | 1,121   |   |   |   | 547 |   |
| Principal repayments from mortgage-backed securities                                        |   |                     | 28,974  |   |   |   | 16,124 |   |
| Net decrease in Federal Home Loan Bank stock                                                |   |                     | 260     |   |   |   | 554 |   |
| Maturity of interest-bearing time deposits                                                  |   |                     | -       |   |   |   | 208 |   |
| Proceeds from the sale of foreclosed real estate                                            |   |                     | 108     |   |   |   | - |   |
| Net increase in loans receivable                                                            |   |                     | (19,159 | ) |   |   | (63,005 | ) |
| Net cash used for investing activities                                                      |   |                     | (40,240 | ) |   |   | (65,700 | ) |
| Cash Flows from Financing Activities:                                                       |   |                     |    |   |   |   |   |   |
| Net increase in deposits                                                                    |   |                     | 43,135  |   |   |   | 85,849 |   |
| (Decrease) increase in Federal Home Loan Bank short-term borrowings                         |   |                     | 4,300   |   |   |   | (20,380 | ) |
| Proceeds from Federal Home Loan Bank long-term borrowings                                   |   |                     | 4,000   |   |   |   | 6,000 |   |
| Repayment of Federal Home Loan Bank long-term borrowings                                    |   |                     | (18,227 | ) |   |   | (332 | ) |
| Increase in advances from borrowers for taxes and insurance                                 |   |                     | 41      |   |   |   | 39 |   |
| Acquisition of treasury stock                                                               |   |                     | (37     | ) |   |   | (370 | ) |
| Net cash provided by financing activities                                                   |   |                     | 33,212  |   |   |   | 70,806 |   |
| Increase (decrease) in cash and cash equivalents                                            |   |                     | (7,525  | ) |   |   | 7,429 |   |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                            |   |                     | 23,407  |   |   |   | 15,978 |   |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                  |   | $                        | 15,882  |   |   | $ | 23,407 |   |
| Supplemental Cash Flow Disclosures:                                                         |   |                     |    |   |   |   |   |   |
| Cash paid:                                                                                  |   |                     |    |   |   |   |   |   |
| Interest                                                                                    |   | $                        | 13,779  |   |   | $ | 15,909 |   |
| Income taxes                                                                                |   | $                        | 1,086   |   |   | $ | 1,017 |   |
| Supplemental Schedule of Noncash Investing and Financing Activities:                        |   |                     |    |   |   |   |   |   |
| Other real estate acquired in settlement of loans                                           |   | $                        | -       |   |   | $ | 113 |   |

| See notes to consolidated financial statements |
|------------------------------------------------|

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|                                                                         |   | Years Ended December 31, |   |
|------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                         |   | 2009                     |   |   | 2008 |   |
|                                                                         |   | (In Thousands)           |   |
| Unrealized holding gains (losses) on available for sale securities           |   | $                        | 3,609  |   |   | $ | (481 | ) |
| Reclassification adjustment for net (gains) on sales and calls of securities |   |                     | (14    | ) |   |   | (561 | ) |
| Impairment charge on investment securities                                   |   |                     | 1,126  |   |   |   | 1,161 |   |
| Net unrealized gains                                                         |   |                     | 4,721  |   |   |   | 119 |   |
|                                                                         |   |                     |   |   |   |   |   |   |
| Income tax expense (benefit)                                                 |   |                     | 1,691  |   |   |   | (24 | ) |
| Net of tax amount                                                            |   | $                        | 3,030  |   |   | $ | 143 |   |

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|--------|

|   |    |                                                                                                                                                                                  |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | A subsidiary or group of assets that is a business or nonprofit activity;                                                                                                             |
|   | ● | A subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture; and                                                          |
|   | ● | An exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture). |

|   |    |                                                                                                                                                                                                                      |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | The valuation techniques used to measure the fair value of any retained investment;                                                                                                                                       |
|   | ● | The nature of any continuing involvement with the subsidiary or entity acquiring the group of assets; and                                                                                                                 |
|   | ● | Whether the transaction that resulted in the deconsolidation or derecognition was with a related party or whether the former subsidiary or entity acquiring the assets will become a related party after the transaction. |

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|   |    |                                                                                                                                                                                                  |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | A reporting entity to disclose separately the amount of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; and               |
|   | ● | In the reconciliation for fair value measurements using significant unobservable inputs, a reporting entity should present separately information about purchases, sales, issuances, and settlements. |

|   |    |                                                                                                                                                                                                      |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and |
|   | ● | A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements.                           |

|                                                               |   | December 31, |      |
|--------------------------------------------------------------------|--------|--------------|-----------|
|                                                               |   | 2009         |      |   | 2008 |   |
| Net Income                                                         |   | $            | 1,440,000 |   |   | $ | 1,345,000 |   |
|                                                               |   |         |      |   |   |   |   |   |
| Weighted average common shares outstanding                         |   |         | 4,521,696 |   |   |   | 4,521,696 |   |
| Average unearned ESOP shares                                       |   |         | (119,954  | ) |   |   | (131,557 | ) |
| Average treasury stock shares                                      |   |         | (133,065  | ) |   |   | (100,778 | ) |
| Weighted average common shares outstanding - basic                 |   |         | 4,268,677 |   |   |   | 4,289,361 |   |
| Effect of dilutive non-vested shares and stock options outstanding |   |         | -         |   |   |   | - |   |
| Weighted average common shares outstanding - diluted               |   |         | 4,268,677 |   |   |   | 4,289,361 |   |
| Earnings per share-basic                                           |   | $            | 0.34      |   |   | $ | 0.31 |   |
| Earnings per share-diluted                                         |   | $            | 0.34      |   |   | $ | 0.31 |   |

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|--------|

|                         |   | AmortizedCost  |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | Fair Value |   |
|------------------------------|--------|----------------|---------|--------|----------------------|--------|--------|-----------------------|--------|--------|------------|--------|
|                         |   | (In thousands) |    |
| Available for Sale:          |   |           |    |   |                 |   |   |                  |   |   |       |   |
| December 31, 2009            |   |           |    |   |                 |   |   |                  |   |   |       |   |
| U. S. Government obligations |   | $              | 28,973  |   |                 | $      | 169    |                  |   | $      | -          |   |   | $ | 29,142 |   |
| Corporate debt obligations   |   |           | 10,563  |   |                 |   | 232    |                  |   |   | (123       | )      |   |   | 10,672 |   |
| Mutual funds                 |   |           | 1,561   |   |                 |   | 64     |                  |   |   | -          |   |   |   | 1,625 |   |
| Municipal debt obligations   |   |           | 2,817   |   |                 |   | 49     |                  |   |   | (36        | )      |   |   | 2,830 |   |
| SBA pools                    |   |           | 5,231   |   |                 |   | 29     |                  |   |   | (39        | )      |   |   | 5,221 |   |
| Mortgage-backed securities   |   |           | 112,262 |   |                 |   | 4,643  |                  |   |   | (17        | )      |   |   | 116,888 |   |
|                         |   | $              | 161,407 |   |                 | $      | 5,186  |                  |   | $      | (215       | )      |   | $ | 166,378 |   |

| December 31, 2008            |   |   |    |   |   |   |   |   |   |   |   |   |
|------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| U. S. Government obligations |   | $      | 21,963  |   |   | $      | 331    |   |   | $      | (49    | )      |   | $ | 22,245 |   |
| Corporate debt obligations   |   |   | 15,249  |   |   |   | 67     |   |   |   | (1,833 | )      |   |   | 13,483 |   |
| Mutual funds                 |   |   | 2,643   |   |   |   | -      |   |   |   | -      |   |   |   | 2,643 |   |
| Municipal debt obligations   |   |   | 3,659   |   |   |   | 49     |   |   |   | (76    | )      |   |   | 3,632 |   |
| SBA pools                    |   |   | 6,453   |   |   |   | 58     |   |   |   | (62    | )      |   |   | 6,449 |   |
| Mortgage-backed securities   |   |   | 115,245 |   |   |   | 2,172  |   |   |   | (407   | )      |   |   | 117,010 |   |
|                         |   | $      | 165,212 |   |   | $      | 2,677  |   |   | $      | (2,427 | )      |   | $ | 165,462 |   |
|                         |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to Maturity:            |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009            |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate debt obligations   |   |   | 5,209   |   |   |   | 90     |   |   |   | (7     | )      |   |   | 5,292 |   |
| Municipal debt obligations   |   |   | 33,173  |   |   |   | 220    |   |   |   | (93    | )      |   |   | 33,300 |   |
| Mortgage-backed securities   |   |   | 2,650   |   |   |   | 153    |   |   |   | -      |   |   |   | 2,803 |   |
|                         |   | $      | 41,032  |   |   | $      | 463    |   |   | $      | (100   | )      |   | $ | 41,395 |   |
|                         |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008            |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U. S. Government obligations |   | $      | 932     |   |   | $      | 38     |   |   | $      | -      |   |   | $ | 970 |   |
| Corporate debt obligations   |   |   | 3,969   |   |   |   | 19     |   |   |   | (729   | )      |   |   | 3,259 |   |
| Municipal debt obligations   |   |   | 8,853   |   |   |   | 217    |   |   |   | (223   | )      |   |   | 8,847 |   |
| Mortgage-backed securities   |   |   | 3,143   |   |   |   | 113    |   |   |   | -      |   |   |   | 3,256 |   |
|                         |   | $      | 16,897  |   |   | $      | 387    |   |   | $      | (952   | )      |   | $ | 16,332 |   |

----

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|--------|

|   |                                  |   | Held to Maturity |   |   | Available for Sale |   |
|--------|---------------------------------------|--------|------------------|--------|--------|--------------------|--------|
|   |                                  |   | AmortizedCost    |   |   | Fair Value         |   |   | AmortizedCost |   |   | Fair Value |   |
|   |                                  |   | (In thousands)   |   |
|   | Due in one year or less               |   | $                | 29,199 |   |               | $      | 29,221 |   |   | $ | 9,502 |   |   | $ | 9,622 |   |
|   | Due after one year through five years |   |             | 1,472  |   |               |   | 1,526 |   |   |   | 40,921 |   |   |   | 41,320 |   |
|   | Due after five year through ten years |   |             | 4,096  |   |               |   | 4,224 |   |   |   | 13,938 |   |   |   | 14,182 |   |
|   | Due thereafter                        |   |             | 6,265  |   |               |   | 6,424 |   |   |   | 97,046 |   |   |   | 101,254 |   |
|   |                                  |   | $                | 41,032 |   |               | $      | 41,395 |   |   | $ | 161,407 |   |   | $ | 166,378 |   |

|   | At December 31, 2009       |   | Less than 12 months |   |   | 12 months or more |   |   | Total     |   |
|--------|----------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|-----------|--------|
|   |                       |   | Fair Value          |   |   | UnrealizedLosses  |   |   | FairValue |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
|   |                       |   | (In thousands)      |   |
|   | Corporate debt obligations |   | $                   | 766    |   |              | $      | 16     |      |   |   | 1,357 |   |   | $ | 107 |   |   | $ | 2,123 |   |   | $ | 123 |   |
|   | Municipal debt obligations |   |                | 846    |   |              |   | 36     |      |   |   | - |   |   |   | - |   |   |   | 846 |   |   |   | 36 |   |
|   | SBA pools                  |   |                | -      |   |              |   | -      |      |   |   | 2,278 |   |   |   | 39 |   |   |   | 2,278 |   |   |   | 39 |   |
|   | Mortgage-backed securities |   |                | 1,350  |   |              |   | 15     |      |   |   | 2,064 |   |   |   | 2 |   |   |   | 3,414 |   |   |   | 17 |   |
|   | Total                      |   | $                   | 2,962  |   |              | $      | 67     |      |   | $ | 5,699 |   |   | $ | 148 |   |   | $ | 8,661 |   |   | $ | 215 |   |

----

|   |
|--------|

|   | At December 31, 2008         |   | Less than 12 months  |   |   | 12 months or more       |   |   | Total           |   |
|--------|------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|--------|-----------------|--------|
|   |                         |   | Fair Value           |   |   | Unrealized Losses  |   |   | FairValue  |   |   | UnrealizedLosses |   |   | FairValue |   |   | UnrealizedLosses |   |
|   |                         |   | (In thousands)            |   |
|   | U. S. Government obligations |   | $                         | 451    |   |                    | $      | 13     |            |   | $ | 1,931 |   |   | $ | 36 |   |   | $ | 2,382 |   |   | $ | 49 |   |
|   | Corporate debt obligations   |   |                      | 8,889  |   |                    |   | 1,157  |            |   |   | 2,748 |   |   |   | 676 |   |   |   | 11,637 |   |   |   | 1,833 |   |
|   | Municipal debt obligations   |   |                      | 1,373  |   |                    |   | 76     |            |   |   | - |   |   |   | - |   |   |   | 1,373 |   |   |   | 76 |   |
|   | SBA pools                    |   |                      | 1,609  |   |                    |   | 38     |            |   |   | 1,316 |   |   |   | 24 |   |   |   | 2,925 |   |   |   | 62 |   |
|   | Mortgage-backed securities   |   |                      | 31,136 |   |                    |   | 357    |            |   |   | 2,046 |   |   |   | 50 |   |   |   | 33,182 |   |   |   | 407 |   |
|   |                         |   |                      |   |   |                    |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Total                        |   | $                         | 43,458 |   |                    | $      | 1,641  |            |   | $ | 8,041 |   |   | $ | 786 |   |   | $ | 51,499 |   |   | $ | 2,427 |   |

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

|   | At December 31, 2008       |   | Less than 12 months |   |   | 12 months or more |   |   | Total     |   |
|--------|----------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|-----------|--------|
|   |                       |   | Fair Value          |   |   | UnrealizedLosses  |   |   | FairValue |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
|   |                       |   | (In thousands)      |   |
|   | Corporate debt obligations |   | $                   | 1,474  |   |              | $      | 351    |      |   | $ | 605 |   |   | $ | 378 |   |   | $ | 2,079 |   |   | $ | 729 |   |
|   | Municipal debt obligations |   |                | 2,367  |   |              |   | 223    |      |   |   | - |   |   |   | - |   |   |   | 2,367 |   |   |   | 223 |   |
|   |                       |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Total                      |   | $                   | 3,841  |   |              | $      | 574    |      |   | $ | 605 |   |   | $ | 378 |   |   | $ | 4,446 |   |   | $ | 952 |   |

----

|   |
|--------|

----

|   |
|--------|

|                               |   | 2009           |    |   | 2008   |   |
|------------------------------------|--------|----------------|---------|--------|--------|--------|
|                               |   | (In Thousands) |    |
| Mortgage loans:                    |   |           |    |   |   |   |
| One-to-four family                 |   | $              | 151,352 |   |   | $      | 145,329 |   |
| Multi-family                       |   |           | 4,108   |   |   |   | 4,942 |   |
| Commercial                         |   |           | 97,075  |   |   |   | 81,983 |   |
| Construction                       |   |           | 14,093  |   |   |   | 12,223 |   |
| Home equity loans and credit lines |   |           | 37,892  |   |   |   | 41,293 |   |
| Commercial loans                   |   |           | 17,864  |   |   |   | 17,177 |   |
| Consumer and other loans           |   |           | 2,223   |   |   |   | 2,616 |   |
|                               |   |           | 324,607 |   |   |   | 305,563 |   |
| Deferred loan fees                 |   |           | (394    | )      |   |   | (307 | ) |
| Allowance for loan losses          |   |           | (2,606  | )      |   |   | (2,105 | ) |
|                               |   | $              | 321,607 |   |   | $      | 303,151 |   |

|   |   | BalanceJanuary 1, |   |   | Additions |   |   | AmountsCollected |   |   | BalanceDecember 31, |   |
|--------|--------|-------------------|--------|--------|-----------|--------|--------|------------------|--------|--------|---------------------|--------|
| 2009   |   | $                 | 6,405  |   |      | $      | 579    |             |   | $      | 1,863               |   |   | $ | 5,121 |   |

----

|   |
|--------|

|                            |   | 2009           |   |   | 2008   |   |
|---------------------------------|--------|----------------|--------|--------|--------|--------|
|                            |   | (In thousands) |   |
| Balance, beginning of year      |   | $              | 2,105  |   |   | $      | 1,392 |   |
| Provision charged to operations |   |           | 615    |   |   |   | 756 |   |
| Charge-offs                     |   |           | (117   | )      |   |   | (50 | ) |
| Recoveries                      |   |           | 3      |   |   |   | 7 |   |
| Balance, end of year            |   | $              | 2,606  |   |   | $      | 2,105 |   |

|                              |   | Estimated UsefulLife in Years |   |   | 2009           |   |   | 2008   |   |
|-----------------------------------|--------|-------------------------------|--------|--------|----------------|--------|--------|--------|--------|
|                              |   |                          |   |   | (In thousands) |   |
| Land                              |   | Indefinite                    |   |   | $              | 4,105  |   |   | $      | 4,017 |   |
| Buildings                         |   | 25                            |   |   |           | 8,302  |   |   |   | 8,190 |   |
| Furniture, Fixtures and equipment |   | 3 – 7                   |   |   |           | 3,126  |   |   |   | 2,927 |   |
|                              |   |                          |   |   |           |   | 15,533 |   |   |   | 15,134 |   |
| Accumulated depreciation          |   |                          |   |   |           |   | (4,146 | )      |   |   | (3,571 | ) |
|                              |   |                          |   |   |           | $      | 11,387 |   |   | $ | 11,563 |   |

----

|   |
|--------|

|                          |   |   | 2009   |    |    | 2008        |   |
|-------------------------------|--------|--------|--------|---------|---------|-------------|--------|
|                          |   |   | Amount |    |    | AverageRate |   |   | Amount |   |   | AverageRate |   |
|                          |   |   |   |    |    |        |   |   |   |   |   |   |   |
| Certificates of deposit:      |   |   |   |    |    |        |   |   |   |   |   |   |   |
| 0.00% - 2.00%                 |   |   | $      | 58,082  |    |        | $      | 1.25 | % |   | $ | - |   |   | $ | - | % |
| 2.01% - 4.00%                 |   |   |   | 87,718  |    |        |   | 2.74 |   |   |   | 178,445 |   |   |   | 3.58 |   |
| 4.01% - 6.00%                 |   |   |   | 60,928  |    |        |   | 4.75 |   |   |   | 63,215 |   |   |   | 5.06 |   |
| 6.01% - 8.00%                 |   |   |   | -       |    |        |   | - |   |   |   | - |   |   |   | - |   |
| More than 8.00%               |   |   |   | -       |    |        |   | - |   |   |   | - |   |   |   | - |   |
| Total certificates of deposit |   |   |   | 206,728 |    |        |   | 2.91 |   |   |   | 241,660 |   |   |   | 3.97 |   |
|                          |   |   |   |    |    |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing demand   |   |   |   | 21,111  |    |        |   | - |   |   |   | 18,146 |   |   |   | - |   |
| NOW                           |   |   |   | 98,810  |    |        |   | .85 |   |   |   | 55,439 |   |   |   | .72 |   |
| Super NOW                     |   |   |   | 19,755  |    |        |   | 1.47 |   |   |   | 15,532 |   |   |   | 1.75 |   |
| Savings                       |   |   |   | 90,957  |    |        |   | 2.63 |   |   |   | 81,050 |   |   |   | 2.76 |   |
| Money market deposit          |   |   |   | 63,005  |    |        |   | 1.63 |   |   |   | 45,404 |   |   |   | 3.26 |   |
|                          |   |   |   | $       | 500,366 |        |   |   | 2.11 | % |   | $ | 457,231 |   |   |   | 3.06 | % |

|   | 2010       |   | $      | 127,448 |   |
|--------|------------|--------|--------|---------|--------|
|   | 2011       |   |   | 60,424  |   |
|   | 2012       |   |   | 8,446   |   |
|   | 2013       |   |   | 3,278   |   |
|   | 2014       |   |   | 4,767   |   |
|   | Thereafter |   |   | 2,365   |   |
|   |       |   | $      | 206,728 |   |

|   |                    |   | 2009                                                                                                                                         |   |   | 2008   |   |
|--------|-------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
|   |                    |   |                      (In thousands) |   |
|   | NOW and Super NOW       |   | $                                                                                                                                            | 799    |   |   | $      | 862 |   |
|   | Savings                 |   |                                                                                                                                         | 2,241  |   |   |   | 2,232 |   |
|   | Money market demand     |   |                                                                                                                                         | 1,123  |   |   |   | 1,029 |   |
|   | Certificates of deposit |   |                                                                                                                                         | 8,245  |   |   |   | 9,932 |   |
|   |                    |   | $                                                                                                                                            | 12,408 |   |   | $      | 14,055 |   |

----

|   |
|--------|

| Maturity          |   | Interest Rate |   |   | 2009           |   | 2008   |   |
|-------------------|--------|---------------|--------|--------|----------------|--------|--------|--------|
|              |   |          |   |   | (In thousands) |   |
| June 23, 2009     |   |          | 3.35   | %      |           | $      | -      |   |   |   | 3,000 |   |
| October 19, 2009  |   |          | 4.65   | %      |           |   | -      |   |   |   | 4,000 |   |
| November 20, 2009 |   |          | 4.23   | %      |           |   | -      |   |   |   | 4,000 |   |
| December 03, 2009 |   |          | 3.89   | %      |           |   | -      |   |   |   | 4,000 |   |
| January 04, 2010  |   |          | 0.32   | %      |           |   | 5,300  |   |   |   | - |   |
| June 03, 2010     |   |          | 0.59   | %      |           |   | 2,000  |   |   |   | - |   |
| June 23, 2010     |   |          | 3.88   | %      |           |   | 3,000  |   |   |   | 3,000 |   |
| October 18, 2010  |   |          | 4.70   | %      |           |   | 4,000  |   |   |   | 4,000 |   |
| April 20, 2011    |   |          | 1.22   | %      |           |   | 2,000  |   |   |   | - |   |
| June 23, 2011     |   |          | 4.31   | %      |           |   | 3,000  |   |   |   | 3,000 |   |
| October 22, 2012  |   |          | 2.12   | %      |           |   | 2,000  |   |   |   | - |   |
| June 30, 2021     |   |          | 5.57   | %      |           |   | -      |   |   |   | 6,227 |   |
|              |   |          |   |   |           | $      | 21,300 |   |   | $ | 31,227 |   |

|                                                                                         |   | 2009           |   |   | 2008   |   |
|----------------------------------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                                                         |   | (In thousands) |   |
| Current:                                                                                     |   |           |   |   |   |   |
|         Federal                                           |   | $              | 1,240  |   |   | $      | 1,023 |   |
|             State                     |   |           | -      |   |   |   | - |   |
| T             Total current |   | $              | 1,240  |   |   |   | 1,023 |   |
|             Deferred                  |   |           |   |   |   |   |   |   |
| Def  D                                                                                  |   |           | (848   | )      |   |   | (670 | ) |
| Total                                                                                        |   | $              | 392    |   |   | $      | 353 |   |

----

|   |
|--------|

|                                 |   | 2009   |   |   | 2008              |   |
|--------------------------------------|--------|--------|--------|--------|-------------------|--------|
|                                 |   | Amount |   |   | % of PretaxIncome |   |   | Amount |   |   | % of PretaxIncome |   |
| Federal income tax at statutory rate |   | $      | 623    |   |              |   | 34.0 | % |   | $ | 578 |   |   |   | 34.0 | % |
| State tax, net of federal benefit    |   |   | (108   | )      |              |   | (5.9 | ) % |   |   | (85 | ) |   |   | (5.0 | ) % |
| Tax exempt income                    |   |   | (244   | )      |              |   | (13.3 | ) % |   |   | (196 | ) |   |   | (11.5 | ) % |
| Life insurance income                |   |   | (35    | )      |              |   | (1.9 | ) % |   |   | (33 | ) |   |   | (1.9 | ) % |
| Other                                |   |   | 156    |   |              |   | 8.5 | % |   |   | 89 |   |   |   | 5.2 | % |
| Total                                |   | $      | 392    |   |              |   | 21.4 | % |   | $ | 353 |   |   |   | 20.8 | % |

|                                                 |   | December 31,   |   |
|------------------------------------------------------|--------|----------------|--------|
|                                                 |   | 2009           |   |   | 2008 |   |
|                                                 |   | (In thousands) |   |
| Deferred tax assets:                                 |   |           |   |   |   |   |
| Deferred loan fees                                   |   | $              | 158    |   |   | $ | 122 |   |
| Allowance for loan losses                            |   |           | 1,407  |   |   |   | 841 |   |
| Securities impairment                                |   |           | 299    |   |   |   | 351 |   |
| State net operating loss carryforwards               |   |           | 662    |   |   |   | 682 |   |
| Capital loss carryforwards                           |   |           | 380    |   |   |   | - |   |
| Stock-based compensation                             |   |           | 277    |   |   |   | 204 |   |
| Nonaccrual interest adjustment                       |   |           | 61     |   |   |   | - |   |
| AMT credit carryforward                              |   |           | -      |   |   |   | 88 |   |
| Prepaid expenses                                     |   |           | -      |   |   |   | 4 |   |
| Depreciation                                         |   |           | -      |   |   |   | 44 |   |
| Total deferred tax assets                            |   |           | 3,244  |   |   |   | 2,336 |   |
|                                                 |   |           |   |   |   |   |   |   |
| Valuation  allowance                       |   |           | (585   | ) |   |   | (542 | ) |
|                                                 |   |           |   |   |   |   |   |   |
| Deferred tax liabilities:                            |   |           |   |   |   |   |   |   |
| Prepaid expenses                                     |   |           | (17    | ) |   |   | - |   |
| Net unrealized gain on securities available for sale |   |           | (1,732 | ) |   |   | (42 | ) |
| Total deferred tax liabilities                       |   |           | (1,749 | ) |   |   | (42 | ) |
| Net Deferred Tax Asset                               |   | $              | 910    |   |   | $ | 1,752 |   |

----

|   |
|--------|

|                            |   | December 31, |    |
|---------------------------------|--------|--------------|---------|
|                            |   | 2009         |    |   | 2008 |   |
| Shares released for allocation  |   |         | 58,015  |   |   |   | 46,412 |   |
| Unreleased shares               |   |         | 108,383 |   |   |   | 119,986 |   |
| Total ESOP shares               |   |         | 166,398 |   |   |   | 166,398 |   |
| Fair value of unreleased shares |   | $            | 786,861 |   |   | $ | 941,890 |   |

----

|   |
|--------|

|                                |   | Number ofshares |   |   | WeightedAverageGrant DateFair Value |   |
|-------------------------------------|--------|-----------------|--------|--------|-------------------------------------|--------|
| Restricted stock, beginning of year |   |            | 53,175 |   |                                | $      | 12.47 |   |
| Granted                             |   |            | -      |   |                                |   | - |   |
| Forfeited                           |   |            | -      |   |                                |   | - |   |
| Vested                              |   |            | 17,725 |   |                                |   | 12.47 |   |
| Restricted stock, end of year       |   |            | 35,450 |   |                                | $      | 12.47 |   |

|                                      |   | Options |    |   | WeightedAverageExercisePrice |   |
|-------------------------------------------|--------|---------|---------|--------|------------------------------|--------|
| Outstanding at January 1, 2009 and 2008   |   |    | 196,468 |   |                         | $      | 12.47 |   |
| Granted during 2009 and 2008              |   |    | -       |   |                         |   | - |   |
| Exercised                                 |   |    | -       |   |                         |   | - |   |
| Forfeitures                               |   |    | -       |   |                         |   | - |   |
| Outstanding at December 31, 2009 and 2008 |   |    | 196,468 |   |                         | $      | 12.47 |   |
| Exercisable at December 31, 2009          |   |    | 117,882 |   |                         | $      | 12.47 |   |

----

|   |
|--------|

|                                       |   | 2009           |   |   | 2008   |   |
|--------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                       |   | (In thousands) |   |
| Commitments to grant loans                 |   | $              | 13,365 |   |   | $      | 9,361 |   |
| Unfunded commitments under lines of credit |   |           | 21,078 |   |   |   | 21,986 |   |
| Standby letters of credit                  |   |           | 4,429  |   |   |   | 3,424 |   |
|                                       |   | $              | 38,872 |   |   | $      | 34,771 |   |

----

|   |
|--------|

|                                        |   | Actual         |   |   | For Capital AdequacyPurposes |   |   | To be Well Capitalized underPrompt Corrective ActionProvisions |        |
|---------------------------------------------|--------|----------------|--------|--------|------------------------------|--------|--------|----------------------------------------------------------------|-------------|
|                                        |   | Amount         |   |   | Ratio                        |   |   | Amount                                                         |        |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                        |   | (In Thousands) |   |
| As of December 31, 2009:                    |   |           |   |   |                         |   |   |                                                           |        |   |   |   |   |   |   |   |   |   |
| Tangible Capital (to Adjusted Total Assets) | $      | 40,398         |   |   |                         | 7.17   | %      |                                                           | $ >8,450 |   |   | >1.50% |   |   |   | N/A |   |   |   | N/A |   |
| Core Capital (to Adjusted Total Assets)     |   | 40,398         |   |   |                         | 7.17   | %      |                                                           | >22,533  |   |   | >4.00% |   |   | $>28,166 |   |   | >5.00% |   |
| Tier 1 Capital (to Risk-Weighted Assets)    |   | 40,398         |   |   |                         | 11.94  | %      |                                                           |        | N/A |   |   |   | N/A |   |   | >20,307 |   |   | >6.00% |   |
| Total Capital (to Risk-Weighted Assets)     |   | 42,645         |   |   |                         | 12.60  | %      |                                                           | >27,076  |   |   | >8.00% |   |   | >33,845 |   |   | >10.00% |   |
|                                        |   |           |   |   |                         |   |   |                                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2008:                    |   |           |   |   |                         |   |   |                                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tangible Capital (to Adjusted Total Assets) | $      | 38,524         |   |   |                         | 7.27   | %      |                                                           | $ >7,951 |   |   | >1.50% |   |   |   | N/A |   |   |   | N/A |   |
| Core Capital (to Adjusted Total Assets)     |   | 38,524         |   |   |                         | 7.27   | %      |                                                           | >21,203  |   |   | >4.00% |   |   | $>26,503 |   |   | >5.00% |   |
| Tier 1 Capital (to Risk-Weighted Assets)    |   | 38,524         |   |   |                         | 12.42  | %      |                                                           |        | N/A |   |   |   | N/A |   |   | >18,616 |   |   | >6.00% |   |
| Total Capital (to Risk-Weighted Assets)     |   | 40,528         |   |   |                         | 13.06  | %      |                                                           | >24,822  |   |   | >8.00% |   |   | >31,027 |   |   | >10.00% |   |

----

|   |
|--------|

|                                                                    |   | December 31, |   |
|-------------------------------------------------------------------------|--------|--------------|--------|
|                                                                    |   | 2009         |   |   | 2008 |   |
|                                                                    |   |         |   |   |   |   |
| Total equity capital                                                    |   | $            | 43,636 |   |   | $ | 38,732 |   |
| Less:                                                                   |   |         |   |   |   |   |   |   |
| Net unrealized gain on available-for-sale securities                    |   |         | 3,238  |   |   |   | 208 |   |
| Tier I Capital                                                          |   | $            | 40,398 |   |   | $ | 38,524 |   |
|                                                                    |   |         |   |   |   |   |   |   |
| Allowance for loan losses includable in Tier 2 capital                  |   |         | 2,218  |   |   |   | 2,005 |   |
| Unrealized gains on available-for-sale mutual funds (equity securities) |   |         | 29     |   |   |   | - |   |
| Total risk-based capital                                                |   | $            | 42,645 |   |   | $ | 40,528 |   |

|   | Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |
|--------|

|                          |   | December31, 2009 |    |   | (Level 1) QuotedPrices in ActiveMarkets forIdentical Assets |   |   | (Level 2)SignificantObservableOther Inputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|-------------------------------|--------|------------------|---------|--------|-------------------------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|----------------------------------------|--------|
| Securities available-for-sale |   | $                | 166,378 |   |                                                        | $      | 1,625  |                                            |   | $      | 164,753                                |   |   | $ | - |   |

|                          |   | December31, 2008 |    |   | (Level 1) QuotedPrices in ActiveMarkets forIdentical Assets |   |   | (Level 2)SignificantObservableOther Inputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|-------------------------------|--------|------------------|---------|--------|-------------------------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|----------------------------------------|--------|
| Securities available-for-sale |   | $                | 165,462 |   |                                                        | $      | 2,643  |                                            |   | $      | 162,819                                |   |   | $ | - |   |

|           |   | December31, 2009 |   |   | (Level 1) QuotedPrices in ActiveMarkets forIdentical Assets |   |   | (Level 2)SignificantObservableOther Inputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|----------------|--------|------------------|--------|--------|-------------------------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|----------------------------------------|--------|
| Impaired loans |   | $                | 172    |   |                                                        | $      | -      |                                            |   | $      | -                                      |   |   | $ | 172 |   |

|              |   | December31, 2008 |   |   | (Level 1) QuotedPrices in ActiveMarkets forIdentical Assets |   |   | (Level 2)SignificantObservableOther Inputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|-------------------|--------|------------------|--------|--------|-------------------------------------------------------------|--------|--------|-------------------------------------------------|--------|--------|----------------------------------------|--------|
| Impaired loans    |   | $                | 164    |   |                                                        | $      | -      |                                            |   | $      | -                                      |   |   | $ | 164 |   |
| Real estate owned |   | $                | 113    |   |                                                        | $      | -      |                                            |   | $      | -                                      |   |   | $ | 113 |   |

----

|   |
|--------|

----

|   |
|--------|

|                                               |   | 2009           |    |   | 2008       |   |
|----------------------------------------------------|--------|----------------|---------|--------|------------|--------|
|                                               |   | CarryingAmount |    |   | Fair Value |   |   | CarryingAmount |   |   | Fair Value |   |
|                                               |   | (In thousands) |    |
|                                               |   |           |    |   |       |   |   |   |   |   |   |   |
| Assets:                                            |   |           |    |   |       |   |   |   |   |   |   |   |
| Cash and amounts due from banks                    |   | $              | 15,882  |   |       | $      | 15,882 |   |   | $ | 23,407 |   |   | $ | 23,407 |   |
| Investment securities available-for-sale           |   |           | 166,378 |   |       |   | 166,378 |   |   |   | 165,462 |   |   |   | 165,462 |   |
| Investment securities held-to-maturity             |   |           | 41,032  |   |       |   | 41,395 |   |   |   | 16,897 |   |   |   | 16,332 |   |
| Federal Home Loan Bank stock                       |   |           | 1,731   |   |       |   | 1,731 |   |   |   | 1,991 |   |   |   | 1,991 |   |
| Loans receivable, net                              |   |           | 321,607 |   |       |   | 334,147 |   |   |   | 303,151 |   |   |   | 311,796 |   |
| Accrued interest receivable                        |   |           | 2,272   |   |       |   | 2,272 |   |   |   | 2,298 |   |   |   | 2,298 |   |
|                                               |   |           |    |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                       |   |           |    |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                           |   |           | 500,366 |   |       |   | 505,687 |   |   |   | 457,231 |   |   |   | 467,070 |   |
| Federal Home Loan Bank short-term borrowings       |   |           | 7,300   |   |       |   | 7,300 |   |   |   | 3,000 |   |   |   | 3,000 |   |
| Federal Home Loan Bank long-term borrowings        |   |           | 14,000  |   |       |   | 14,237 |   |   |   | 28,227 |   |   |   | 30,896 |   |
| Accrued interest payable                           |   |           | 168     |   |       |   | 168 |   |   |   | 433 |   |   |   | 433 |   |
|                                               |   |           |    |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance sheet financial instruments:           |   |           |    |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Commitments to extend credit and letters of credit |   |           | -       |   |       |   | - |   |   |   | - |   |   |   | - |   |

----

|   |
|--------|

|                                             |   | December 31,   |   |
|--------------------------------------------------|--------|----------------|--------|
|                                             |   | 2009           |   |   | 2008 |   |
| ASSETS                                           |   | (In thousands) |   |
|                                             |   |           |   |   |   |   |
| Cash and cash equivalents                        |   | $              | 435    |   |   | $ | 361 |   |
| Equity investment in Colonial Bank, FSB          |   |           | 43,640 |   |   |   | 38,737 |   |
| Loan receivable – ESOP                     |   |           | 1,198  |   |   |   | 1,292 |   |
| Other assets                                     |   |           | 244    |   |   |   | 240 |   |
|                                             |   |           |   |   |   |   |   |   |
| Total Assets                                     |   | $              | 45,517 |   |   | $ | 40,630 |   |
|                                             |   |           |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY       |   |           |   |   |   |   |   |   |
|                                             |   |           |   |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                       |   |           |   |   |   |   |   |   |
|                                             |   |           |   |   |   |   |   |   |
| Total Stockholders’ Equity                 |   | $              | 45,517 |   |   | $ | 40,630 |   |
|                                             |   |           |   |   |   |   |   |   |
| Total Liabilities and Stockholders’ Equity |   | $              | 45,517 |   |   | $ | 40,630 |   |

|   |                                       |   | Years Ended December 31, |   |
|--------|--------------------------------------------|--------|--------------------------|--------|
|   |                                       |   | 2009                     |   |   | 2008 |   |
|   |                                       |   | (In thousands)           |   |
|   |                                       |   |                     |   |   |   |   |
|   | Interest income                            |   | $                        | 78     |   |   | $ | 89 |   |
|   | Equity in earnings of Colonial Bank, FSB   |   |                     | 1,789  |   |   |   | 1,684 |   |
|   | Total income                               |   |                     | 1,867  |   |   |   | 1,773 |   |
|   |                                       |   |                     |   |   |   |   |   |   |
|   | General, administrative and other expenses |   |                     | 427    |   |   |   | 428 |   |
|   |                                       |   |                     |   |   |   |   |   |   |
|   | Net income                                 |   | $                        | 1,440  |   |   | $ | 1,345 |   |

----

|   |
|--------|

|                                                 |   | Years Ended December 31, |   |
|------------------------------------------------------|--------|--------------------------|--------|
|                                                 |   | 2009                     |   |   | 2008 |   |
|                                                 |   | (In thousands)           |   |
|                                                 |   |                     |   |   |   |   |
| Cash flows from operating activities:                |   |                     |   |   |   |   |
| Net income                                           |   | $                        | 1,440  |   |   | $ | 1,345 |   |
| Share-based compensation expense                     |   |                     | 370    |   |   |   | 370 |   |
| Equity in undistributed earnings Colonial Bank, FSB  |   |                     | (1,789 | ) |   |   | (1,684 | ) |
| Increase in cash from ESOP loan repayment            |   |                     | 94     |   |   |   | 88 |   |
| Increase in other assets                             |   |                     | (4     | ) |   |   | (231 | ) |
|                                                 |   |                     |   |   |   |   |   |   |
| Net cash from operating activities                   |   |                     | 111    |   |   |   | (112 | ) |
|                                                 |   |                     |   |   |   |   |   |   |
| Cash flows from financing activities:                |   |                     |   |   |   |   |   |   |
| Acquisition of treasury stock                        |   |                     | (37    | ) |   |   | (370 | ) |
|                                                 |   |                     |   |   |   |   |   |   |
| Net cash (used in) financing activities              |   |                     | (37    | ) |   |   | (370 | ) |
|                                                 |   |                     |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents |   |                     | 74     |   |   |   | (482 | ) |
|                                                 |   |                     |   |   |   |   |   |   |
| Cash and cash equivalents at beginning of period     |   |                     | 361    |   |   |   | 843 |   |
|                                                 |   |                     |   |   |   |   |   |   |
| Cash and cash equivalents at end of period           |   | $                        | 435    |   |   | $ | 361 |   |

----

| Three Months Ended:                                 |   | December 31,                                  |   |   | September 30, |   |   | June 30, |   |   | March 31, |   |
|-----------------------------------------------------|--------|-----------------------------------------------|--------|--------|---------------|--------|--------|----------|--------|--------|-----------|--------|
|                                                |   |                                          |   |
|                                                |   | (Dollars in thousands, except per share data) |   |
| 2009                                                |   |                                          |   |   |          |   |   |     |   |   |      |   |
| Total interest income                               |   | $                                             | 6,916  |   |          | $      | 6,819  |     |   | $      | 6,791     |   |   | $ | 6,829 |   |
| Total interest expense                              |   |                                          | 3,037  |   |          |   | 3,347  |     |   |   | 3,523     |   |   |   | 3,607 |   |
| Net interest income                                 |   |                                          | 3,879  |   |          |   | 3,472  |     |   |   | 3,268     |   |   |   | 3,222 |   |
| Provision for loan losses                           |   |                                          | 320    |   |          |   | 100    |     |   |   | -         |   |   |   | 195 |   |
| Net interest income after provision for loan losses |   |                                          | 3,559  |   |          |   | 3,372  |     |   |   | 3,268     |   |   |   | 3,027 |   |
| Total non-interest income                           |   |                                          | (154   | )      |          |   | (211   | )        |   |   | 256       |   |   |   | 376 |   |
| Total non-interest expense                          |   |                                          | 2.825  |   |          |   | 2,751  |     |   |   | 3,289     |   |   |   | 2,796 |   |
| Income before income taxes                          |   |                                          | 580    |   |          |   | 410    |     |   |   | 235       |   |   |   | 607 |   |
| Income taxes (benefit)                              |   |                                          | 118    |   |          |   | 80     |     |   |   | 30        |   |   |   | 164 |   |
| Net income (loss)                                   |   | $                                             | 462    |   |          | $      | 330    |     |   | $      | 205       |   |   | $ | 443 |   |
| Basic earnings (loss) per share                     |   | $                                             | 0.11   |   |          | $      | 0.08   |     |   | $      | 0.05      |   |   | $ | 0.10 |   |
| Diluted earnings (loss) per share                   |   | $                                             | 0.11   |   |          | $      | 0.08   |     |   | $      | 0.05      |   |   | $ | 0.10 |   |

| Three Months Ended:                                 |   | December 31,                                  |   |   | September 30, |   |   | June 30, |   |   | March 31, |   |
|-----------------------------------------------------|--------|-----------------------------------------------|--------|--------|---------------|--------|--------|----------|--------|--------|-----------|--------|
|                                                |   |                                          |   |
|                                                |   | (Dollars in thousands, except per share data) |   |
| 2008                                                |   |                                          |   |   |          |   |   |     |   |   |      |   |
| Total interest income                               |   | $                                             | 7,118  |   |          | $      | 6,976  |     |   | $      | 6,587     |   |   | $ | 6,470 |   |
| Total interest expense                              |   |                                          | 3,903  |   |          |   | 3,977  |     |   |   | 3,878     |   |   |   | 3,938 |   |
| Net interest income                                 |   |                                          | 3,215  |   |          |   | 2,999  |     |   |   | 2,709     |   |   |   | 2,532 |   |
| Provision for loan losses                           |   |                                          | 608    |   |          |   | 148    |     |   |   | -         |   |   |   | - |   |
| Net interest income after provision for loan losses |   |                                          | 2,607  |   |          |   | 2,851  |     |   |   | 2,709     |   |   |   | 2,532 |   |
| Total non-interest income                           |   |                                          | 301    |   |          |   | 22     |     |   |   | 183       |   |   |   | 122 |   |
| Total non-interest expense                          |   |                                          | 2,452  |   |          |   | 2,503  |     |   |   | 2,393     |   |   |   | 2,281 |   |
| Income before income taxes                          |   |                                          | 456    |   |          |   | 370    |     |   |   | 499       |   |   |   | 373 |   |
| Income taxes (benefit)                              |   |                                          | 86     |   |          |   | 86     |     |   |   | 112       |   |   |   | 69 |   |
| Net income (loss)                                   |   | $                                             | 370    |   |          | $      | 284    |     |   | $      | 387       |   |   | $ | 304 |   |
| Basic earnings (loss) per share                     |   | $                                             | 0.09   |   |          | $      | 0.07   |     |   | $      | 0.09      |   |   | $ | 0.07 |   |
| Diluted earnings (loss) per share                   |   | $                                             | 0.09   |   |          | $      | 0.07   |     |   | $      | 0.09      |   |   | $ | 0.07 |   |

----

| (a) | Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.  There has been no change in the Company’s internal control over financial reporting during the Company’s fourth quarter of fiscal year 2009 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

----

| Name                                                         |                                                  | Position(s) Held WithColonial Bankshares, Inc. |   | Age    |   |   | DirectorSince (1) |   |   | CurrentTermExpires |   |    | SharesBeneficiallyOwned |   |   | Percent ofClass |       |
|--------------------------------------------------------------|-------------------------------------------------------|------------------------------------------------|--------|--------|--------|--------|-------------------|--------|--------|--------------------|--------|---------|-------------------------|--------|--------|-----------------|------------|
|                                                         |                                                  |                                           |   |   |   |   |              |   |   |               |   |    |                    |   |   |            |
| DIRECTORS                                                    |                                                  |
|                                                         |                                                  |                                           |   |   |   |   |              |   |   |               |   |    |                    |   |   |            |       |   |   |   |   |
| Edward J. Geletka                                            | President, Chief Executive Officer and Director       |                                           |   | 48     |   |   |              | 2001   |   |               |   | 2010    |                    |   |   | 71,335          |  (2)  |   |   | 1.4 | % |
| Richard S. Allen (12)                                        | Director                                              |                                           |   | 53     |   |   |              | 2001   |   |               |   | 2010    |                    |   |   | 25,998          |  (3)  |   |   |   | * |
| James Quinn (12)                                             | Director                                              |                                           |   | 64     |   |   |              | 1998   |   |               |   | 2010    |                    |   |   | 30,998          |  (4)  |   |   |   | * |
| Frank M. Hankins, Jr.                                        | Director                                              |                                           |   | 92     |   |   |              | 1947   |   |               |   | 2012    |                    |   |   | 63,697          |  (5)  |   |   | 1.4 | % |
| Albert A. Fralinger, Jr.                                     | Chairman of the Board                                 |                                           |   | 77     |   |   |              | 1971   |   |               |   | 2011    |                    |   |   | 62,358          |  (6)  |   |   | 1.3 | % |
| Gregory J. Facemyer, CPA                                     | Vice Chairman of the Board                            |                                           |   | 55     |   |   |              | 1994   |   |               |   | 2012    |                    |   |   | 44,998          |  (7)  |   |   |   | * |
| John Fitzpatrick, CPA                                        | Director                                              |                                           |   | 47     |   |   |              | 2005   |   |               |   | 2011    |                    |   |   | 11,298          |  (8)  |   |   |   | * |
|                                                         |                                                  |                                           |   |   |   |   |              |   |   |               |   |    |                    |   |   |            |       |   |   |   |   |
| EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS                |                                                  |
|                                                         |                                                  |                                           |   |   |   |   |              |   |   |               |   |    |                    |   |   |            |       |   |   |   |   |
| L. Joseph Stella, III                                        | Executive Vice President and Chief Financial Officer  |                                           |   | 52     |   |   |              | N/A    |   |               |   | N/A     |                    |   |   | 36,604          |  (9)  |   |   |   | * |
| William F. Whelan                                            | Executive Vice President and Chief Operations Officer |                                           |   | 57     |   |   |              | N/A    |   |               |   | N/A     |                    |   |   | 19,324          |  (10) |   |   |   | * |
| Richard W. Dapp                                              | Senior Vice President and Chief Credit Officer   |                                           |   | 56     |   |   |              | N/A    |   |               |   | N/A     |                    |   |   | 31,980          |  (11) |   |   |   | * |
|                                                         |                                                  |                                           |   |   |   |   |              |   |   |               |   |    |                    |   |   |            |       |   |   |   |   |
| All Directors and Executive Officers as a Group (10 persons) |                                                  |                                           |   |   |   |   |              |   |   |               |   | 398,590 |                    |   |   | 8.0             | %          |

----

| *    | Less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)  | Includes service with Colonial Bank, FSB and Colonial Bankshares, Inc.                                                                                                                                                                                                                                                                                                                                                                                      |
| (2)  | Includes 9,827 shares held in Mr. Geletka’s account in Colonial Bank, FSB’s 401(k) Plan, 3,771 shares allocated to Mr. Geletka under Colonial Bank, FSB’s employee stock ownership plan, 3,195 shares held by Mr. Geletka’s spouse, 10,200 unvested shares awarded under the Company’s 2006 Stock-based Incentive Plan as to which he has voting but not dispositive power and exercisable options to purchase 26,700 shares. |
| (3)  | Includes 15,000 shares held jointly with Mr. Allen’s spouse, 1,740 unvested shares awarded under our 2006 Stock-based Incentive Plan as to which he has voting but not dispositive power and exercisable options to purchase 6,640 shares.                                                                                                                                                                                                            |
| (4)  | Includes 10,000 shares held by Mr. Quinn’s spouse, 1,740 unvested shares awarded under our 2006 Stock-based Incentive Plan as to which he has voting but not dispositive power and exercisable options to purchase 6,640 shares.                                                                                                                                                                                                                      |
| (5)  | Includes 15,350 shares held in trust for Mr. Hankins’ grandchildren, 1,740 unvested shares awarded under our 2006 Stock-based Incentive Plan as to which he has voting but not dispositive power and exercisable options to purchase 6,640 shares.                                                                                                                                                                                                    |
| (6)  | Includes 10,000 shares held by Mr. Fralinger’s spouse, 1,740 unvested shares awarded under our 2006 Stock-based Incentive Plan as to which he has voting but not dispositive power and exercisable options to purchase 6,640 shares.                                                                                                                                                                                                                  |
| (7)  | Includes 10,000 shares held in Mr. Facemyer’s profit sharing plan, 1,740 unvested shares awarded under our 2006 Stock-based Incentive Plan as to which he has voting but not dispositive power and exercisable options to purchase 6,640 shares.                                                                                                                                                                                                      |
| (8)  | Includes 1,740 unvested shares awarded under our 2006 Stock-based Incentive Plan as to which he has voting but not dispositive power and exercisable options to purchase 6,640 shares.                                                                                                                                                                                                                                                                      |
| (9)  | Includes 10,539 shares held in Mr. Stella’s account in Colonial Bank, FSB’s 401(k) plan, 3,011 shares allocated to Mr. Stella under Colonial Bank, FSB’s employee stock ownership plan, 900 shares held jointly with Mr. Stella’s spouse, 3,400 unvested shares awarded under our 2006 Stock-based Incentive Plan as to which he has voting but not dispositive power and exercisable options to purchase 13,200 shares.            |
| (10) | Includes 3,661 shares held in Mr. Whelan’s account in Colonial Bank, FSB’s 401(k) plan, 1,711 shares allocated to Mr. Whelan under Colonial Bank, FSB’s employee stock ownership plan, 2,400 unvested shares awarded under our 2006 Stock-based Incentive Plan as to which he has voting but not dispositive power and exercisable options to purchase 7,200 shares.                                                                      |
| (11) | Includes 20 shares held in Mr. Dapp’s account in Colonial Bank, FSB’s 401(k) plan, 1,574 shares allocated to Mr. Dapp under Colonial Bank, FSB’s employee stock ownership plan, 2,400 unvested shares awarded under our 2006 Stock-based Incentive Plan as to which he has voting but not dispositive power and exercisable options to purchase 7,200 shares.                                                                             |
| (12) | Directors’ terms for Messrs. Allen and Quinn will expire at the 2010 annual meeting of stockholders of Colonial Bankshares, Inc.                                                                                                                                                                                                                                                                                                                      |

----

----

----

|   SUMMARY COMPENSATION TABLE |   |
|-----------------------------------|--------|
|                              |   |   |   |   |   |   |   |   |   | Non-equity |   |   | Nonqualified |   |   |   |   |   |   |   |
|                              |   |   |   |   |   |   |   |   |   | incentive plan |   |   | deferred |   |   | All other |   |   |   |   |
| Name and principal                |   |   |   |   |   |   |   |   |   | compensation |   |   | compensation |   |   | compensation |   |   |   |   |
| position                          |   | Year |   | Salary ($) |   |   | Bonus ($) |   |   | ($) |   |   | earnings ($) |   |   | ($) (1) |   |   | Total ($) |   |
| Edward J. Geletka                 |   | 2009 |   |   | 196,500 |   |   |   | 19,581 |   |   |   | — |   |   |   | — |   |   |   | 21,916 |   |   |   | 237,997 |   |
| President, Chief                  |   | 2008 |   |   | 189,082 |   |   |   | 3,706 |   |   |   | — |   |   |   | — |   |   |   | 22,893 |   |   |   | 215,681 |   |
| Executive Officer and             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Director                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| L. Joseph Stella, III             |   | 2009 |   |   | 136,228 |   |   |   | 13,575 |   |   |   | — |   |   |   | — |   |   |   | 11,768 |   |   |   | 161,571 |   |
| Executive Vice President          |   | 2008 |   |   | 131,085 |   |   |   | 2,569 |   |   |   | — |   |   |   | — |   |   |   | 12,247 |   |   |   | 145,901 |   |
| and Chief Financial               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Officer                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| William F. Whelan                 |   | 2009 |   |   | 127,660 |   |   |   | 12,831 |   |   |   | — |   |   |   | — |   |   |   | 11,456 |   |   |   | 151,947 |   |
| Executive Vice President          |   | 2008 |   |   | 122,841 |   |   |   | 4,815 |   |   |   | — |   |   |   | — |   |   |   | 12,043 |   |   |   | 139,699 |   |
| and Operations Officer            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (1) | For 2009, includes: employer matching contributions of $6,073, $4,133 and $3,946 allocated to the accounts of Messrs. Geletka, Stella and Whelan, respectively, under the Colonial Bank, FSB 401(k) plan; the fair market value at December 31, 2009 of the shares of common stock allocated pursuant to the Colonial Bank, FSB employee stock ownership plan in 2009, representing $5,280, $3,297 and $3,279 for each of Messrs. Geletka, Stella and Whelan, respectively; unused sick pay in the amount of $5,934, $4,114 and $3,855 paid to Messrs. Geletka, Stella and Whelan, respectively; and life insurance premiums in the amount of $250, $224 and $376 paid on behalf of Messrs. Geletka, Stella and Whelan, respectively.  Also includes an automobile allowance of $4,379 for Mr. Geletka. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (1)  | the failure to elect or reelect or to appoint or reappoint the executive to his executive position; |
|--------|-----------|-----------------------------------------------------------------------------------------------------|

|   | (2)  | a material change in the executive’s functions, duties, or responsibilities, which change would cause the executive’s position to become one of lesser responsibility, importance or scope; |
|--------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3)  | the liquidation or dissolution of Colonial Bankshares, Inc. or Colonial Bank, FSB; |
|--------|-----------|------------------------------------------------------------------------------------|

|   | (4)  | a material reduction in the executive’s base salary or a relocation of the executive’s principal place of employment by more than 25 miles from its location as of the date of the employment agreement; or |
|--------|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                               |   |                                                           |   |   |                                                             |   |   |                                                                                   |   |   |                    |   |                 |   |   |                                                    |       |   |                                                               |   |   |                                                                                              |   |   |                                                                                                           |   |   |    |   |   |   |    |   |
|----------------------------------------------------|--------|----------------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------|--------|--------|-------------------------|--------|----------------------|--------|--------|---------------------------------------------------------|------------|--------|--------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
| OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2009 (1) |   |
|                                               |   | Option awards                                                  |   |   | Stock awards                                                     |   |   |
|                                               |   |                                                           |   |   |                                                             |   |   |                                                                                   |   |   |                    |   |                 |   |   |                                                    |       |   |                                                               |   |   |                                                                                              |   |   |                                                                                                           |   |
| Name                                               |   | Number ofsecuritiesunderlyingunexercisedoptions (#)exercisable |   |   | Number ofsecuritiesunderlyingunexercisedoptions (#)unexercisable |   |   | Equityincentive planawards:number ofsecuritiesunderlyingunexercisedunearnedoptions (#) |   |   | Optionexerciseprice ($) |   | Optionexpirationdate |   |   | Number ofshares or unitsof stock thathave notvested (#) |       |   | Market value ofshares or units ofstock that have notvested ($) (2) |   |   | Equity incentiveplan awards:number ofunearned shares,units or otherrights that havenot vested (#) |   |   | Equityincentive planawards:market orpayout valueof unearnedshares, unitsor other rightsthat have notvested ($) |   |
| Edward J. Geletka                                  |   |                                                           | 26,700 |   |                                                             |   | 17,800 |                                                                                   |   |   | —                 |   |                 |   | 12.47  |                                                    | 10/19/2016 |   |                                                               | 6,800  |   |                                                                                              |   | 49,368 |                                                                                                           |   |   | — |   |   |   | — |   |
|                                               |   |                                                           |   |   |                                                             |   |   |                                                                                   |   |   |                    |   |                 |   |   |                                                    |       |   |                                                               |   |   |                                                                                              |   |   |                                                                                                           |   |   |    |   |   |   |    |   |
| L. Joseph Stella, III                              |   |                                                           | 13,200 |   |                                                             |   | 8,800  |                                                                                   |   |   | —                 |   |                 |   | 12.47  |                                                    | 10/19/2016 |   |                                                               | 3,400  |   |                                                                                              |   | 24,684 |                                                                                                           |   |   | — |   |   |   | — |   |
|                                               |   |                                                           |   |   |                                                             |   |   |                                                                                   |   |   |                    |   |                 |   |   |                                                    |       |   |                                                               |   |   |                                                                                              |   |   |                                                                                                           |   |   |    |   |   |   |    |   |
| William F. Whelan                                  |   |                                                           | 7,200  |   |                                                             |   | 4,800  |                                                                                   |   |   | —                 |   |                 |   | 12.47  |                                                    | 10/19/2016 |   |                                                               | 2,400  |   |                                                                                              |   | 17,424 |                                                                                                           |   |   | — |   |   |   | — |   |

----

| (1)   | All equity awards noted in this table were granted pursuant to the Colonial Bankshares, Inc. 2006 Stock-based Incentive Plan, which was approved by stockholders on July 19, 2006, and represent all awards held at December 31, 2009 by the Named Executive Officers.  On October 19, 2006, the Named Executive Officers were granted shares of restricted stock and stock options.  Shares of restricted stock vest at a rate of 20% per year commencing on October 19, 2007.  Stock options vest at a rate of 20% per year commencing on October 19, 2007, have an exercise price of $12.47, the closing price on the date of grant, and expire ten years from the date of grant. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Based on the closing stock price of $7.26 per share on December 31, 2009 as reported by the NASDAQ Stock Market. |
|-----------------|------------------------------------------------------------------------------------------------------------------|

----

----

| DIRECTOR COMPENSATION TABLE FOR THE YEAR ENDED DECEMBER 31, 2009 |   |
|------------------------------------------------------------------|--------|
| Name                                                             |   | Fees earned or paid in cash ($) |   |   | Stock awards($) (1) |   |   | Option awards ($) (2) |   |   | All othercompensation ($) |   |   | Total ($) |   |
| Richard S. Allen (3)                                             |   |   | 27,434 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 27,434 |   |
| Gregory J. Facemyer                                              |   |   | 35,464 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 35,464 |   |
| Albert A. Fralinger, Jr.                                         |   |   | 35,500 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 35,500 |   |
| Frank M. Hankins, Jr.                                            |   |   | 28,930 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 28,930 |   |
| James Quinn (3)                                                  |   |   | 25,184 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 25,184 |   |
| John Fitzpatrick                                                 |   |   | 30,134 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 30,134 |   |

----

| (1) | Each director received an award of 4,350 shares of restricted stock granted on October 19, 2006 with a grant date fair value of $54,245 (based on a grant date fair value of $12.47 per share).  Awards vest in five equal annual installments beginning on the first anniversary of the date of grant.  As of December 31, 2009, each director had 1,740 unvested shares of restricted stock. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Each director received an award of 11,078 stock options on October 19, 2006 with a grant date fair value of $41,986 (based on a grant date fair value of $3.79 per stock option).  Each option has an exercise price of $12.47, the closing price of our common stock on the date of grant.  Options vest in five equal annual installments beginning on the first anniversary of the date of grant.  As of December 31, 2009, each director held 6,648 vested stock options and unexercised stock options. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Directors’ terms for Messrs. Allen and Quinn will expire at the 2010 annual meeting of stockholders of Colonial Bankshares, Inc. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

----

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

|                                                       |   |                                                                                    |    |   |                                                                     |   |   |                                                                                                                                        |   |   |   |   |
|------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|---------|--------|--------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| EQUITY COMPENSATION PLAN INFORMATION                       |   |
|                                                       |   | Number of securitiesto be issued uponexercise ofoutstanding options,warrants and rights |    |   | Weighted-averageexercise price ofoutstanding options,warrants and rights |   |   | Number of securitiesremaining availablefor future issuanceunder stock-basedcompensation plans(excluding securitiesreflected in firstcolumn) |   |
| Equity compensation plans approved by security holders     |   |                                                                                    | 285,093 |   |                                                                     | $      | 12.47  |                                                                                                                                        |   |   | 25,095 |   |
| Equity compensation plans not approved by security holders |   |                                                                                    | N/A     |   |                                                                     |   | N/A    |                                                                                                                                        |   |   | N/A    |   |
| Total                                                      |   |                                                                                    | 285,093 |   |                                                                     | $      | 12.47  |                                                                                                                                        |   |   | 25,095 |   |

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

| Name of Beneficial Owner                                                      |   | Total Shares Beneficially Owned |      |   | Percent of All CommonStock Outstanding |   |
|-------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|----------------------------------------|--------|
|                                                                          |   |                            |      |   |                                   |   |
| Colonial Bankshares, MHC2745 S. Delsea DriveVineland, New Jersey 08360        |   |                            | 2,441,716 |   |                                   |   | 55.0 | % |
|                                                                          |   |                            |      |   |                                   |   |   |   |
| Colonial Bankshares, MHC and all directors and executive officers as a group  |   |                            | 2,840,306 |   |                                   |   | 64.0 | % |
|                                                                          |   |                            |      |   |                                   |   |   |   |
| Grace and White, Inc.515 Madison Ave., Suite 1700New York, New York 10022 (1) |   |                            | 346,000   |   |                                   |   | 7.1 | % |

----

| * | Less than 1%. |
|---|---------------|

| (1) | Based on information contained in a Schedule 13G/A filed on February 1, 2010 with information as of December 31, 2009. |
|-----|------------------------------------------------------------------------------------------------------------------------|

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

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

----

----

|   | 3.1 | Charter of Colonial Bankshares, Inc. (1) |
|--------|-----|------------------------------------------|

|   | 3.2 | Bylaws of Colonial Bankshares, Inc. (1) |
|--------|-----|-----------------------------------------|

|   | 4 | Form of Common Stock Certificate of Colonial Bankshares, Inc. (1) |
|--------|---|-------------------------------------------------------------------|

|   | 10.1 | Form of Employee Stock Ownership Plan (1) |
|--------|------|-------------------------------------------|

|   | 10.2 | Colonial Bankshares, Inc. 2006 Stock-Based Incentive Plan (2) |
|--------|------|---------------------------------------------------------------|

|   | 10.3 | Form of Colonial Bankshares, Inc. 2006 Stock-Based Incentive Plan Stock Option Agreement (Outside Directors) (3) |
|--------|------|------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | Form of Colonial Bankshares, Inc. 2006 stock-Based Incentive Plan Stock Option Agreement (Employees) (3) |
|--------|------|----------------------------------------------------------------------------------------------------------|

|   | 10.5 | Form of Colonial Bankshares, Inc. 2006 Stock-Based Incentive Plan Restricted Stock Award Notice (Outside Directors) (3) |
|--------|------|-------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | Form of Colonial Bankshares, Inc. 2006 Stock-Based Incentive Plan Restricted Stock Award Notice (Employees) (3) |
|--------|------|-----------------------------------------------------------------------------------------------------------------|

|   | 10.7 | Employment Agreement By and Between Colonial Bank, FSB and Edward J. Geletka (4) |
|--------|------|----------------------------------------------------------------------------------|

|   | 10.8 | Employment Agreement By and Between Colonial Bank, FSB and L. Joseph Stella, III (5) |
|--------|------|--------------------------------------------------------------------------------------|

|   | 10.9 | Employment Agreement By and Between Colonial Bank, FSB and William F. Whelan (6) |
|--------|------|----------------------------------------------------------------------------------|

|   | 10.10 | Amended and Restated Employment Agreement with Edward J. Geletka (7) |
|--------|-------|----------------------------------------------------------------------|

|   | 10.11 | Amended and Restated Employment Agreement with L. Joseph Stella, III (8) |
|--------|-------|--------------------------------------------------------------------------|

----

|   | 10.12 | Amended and Restated Employment Agreement with William F. Whelan (9) |
|--------|-------|----------------------------------------------------------------------|

|   | 10.13 | Bonus Plan, including amendments (10) |
|--------|-------|---------------------------------------|

|   | 14 | Code of Ethics (11) |
|--------|----|---------------------|

|   | 21 | Subsidiaries of Registrant |
|--------|----|----------------------------|

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

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

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

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

----

| (1) | Incorporated by reference to the Registration Statement on Form SB-2 of Colonial Bankshares (File no. 333-123583), originally filed with the Securities and Exchange Commission on March 25, 2005. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Incorporated by reference to the Definitive Proxy Statement for the Annual Meeting of Stockholders of Colonial Bankshares held July 20, 2006 (File no. 000-51385), filed with the Securities and Exchange Commission on June 15, 2006. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Incorporated by reference to the Current Report on Form 8-K of Colonial Bankshares, Inc. (File no. 000-51385), filed with the Securities and Exchange Commission on October 23, 2006. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on November 14, 2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on November 14, 2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on November 14, 2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K for the year ended December 31, 2008 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on March 31, 2009. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K for the year ended December 31, 2008 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on March 31, 2009. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Incorporated by reference to Exhibit 10.12 to the Annual Report on Form 10-K for the year ended December 31, 2008 of Colonial Bankshares (File no. 000-51385), filed with the Securities and Exchange Commission on March 31, 2009. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| (11) | Incorporated by reference to Exhibit 14 to the Annual Report on Form 10-KSB for the year ended December 31, 2005 of Colonial Bankshares (File no. 000-51385), originally filed with the Securities and Exchange Commission on March 30, 2006. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                 | COLONIAL BANKSHARES, INC.                       |                  |
|----------------------|-------------------------------------------------|-----------------------|
|                 |                                            |                  |   |
| Date: March 30, 2010 | By:                                             | /s/ Edward J. Geletka |   |
|                 | Edward J. Geletka                               |                  |
|                 | President, Chief Executive Officer and Director |                  |
|                 | (Duly Authorized Representative)                |                  |

|                            | Signatures |                                                 |   |           | Title |   |   |   | Date |   |
|---------------------------------|------------|------------------------------------------------------|--------|----------------|-------|--------|--------|--------|------|--------|
|                            |       |                                                 |   |           |
| /s/ Edward J. Geletka           |       | President, Chief Executive Officer and Director      |   | March 30, 2010 |
| Edward J. Geletka               |       | (Principal Executive Officer)                        |   |           |
|                            |       |                                                 |   |           |
| /s/ L. Joseph Stella, III       |       | Executive Vice President and Chief Financial Officer |   | March 30, 2010 |
| L. Joseph Stella, III           |       | (Principal Financial and Accounting Officer)         |   |           |
|                            |       |                                                 |   |           |
| /s/ Albert A. Fralinger, Jr.    |       | Chairman of the Board                                |   | March 30, 2010 |
| Albert A. Fralinger, Jr.        |       |                                                 |   |           |
|                            |       |                                                 |   |           |
| /s/ Gregory J. Facemyer         |       | Vice Chairman of the Board                           |   | March 30, 2010 |
| Gregory J. Facemyer             |       |                                                 |   |           |
|                            |       |                                                 |   |           |
| /s/ Richard S. Allen       |       | Director                                             |   | March 30, 2010 |
| Richard S. Allen           |       |                                                 |   |           |
|                            |       |                                                 |   |           |
| /s/ John Fitzpatrick       |       | Director                                             |   | March 30, 2010 |
| John Fitzpatrick           |       |                                                 |   |           |
|                            |       |                                                 |   |           |
| /s/ Frank M. Hankins, Jr.  |       | Director                                             |   | March 30, 2010 |
| Frank M. Hankins, Jr.      |       |                                                 |   |           |
|                            |       |                                                 |   |           |
| /s/ James Quinn                 |       | Director                                             |   | March 30, 2010 |
| James Quinn                |       |                                                 |   |           |