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

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

| United States                                                  | 02-0783010                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

----

d

|                                     |                                                                                                                    | Page No. |
|------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|----------|
|                                     |                                                                                                                    |     |
| PART I.  FINANCIAL INFORMATION |                                                                                                                    |
|                                     |                                                                                                                    |     |
| Item 1.                                  | Financial Statements                                                                                                    |     |
|                                     |                                                                                                                    |     |
|                                     | Consolidated Balance Sheets at September 30, 2010 and December 31, 2009 (Unaudited)                                     | 2        |
|                                     |                                                                                                                    |     |
|                                     | Consolidated Statements of Income for the three and nine months ended September 30, 2010 and 2009 (Unaudited)           | 3        |
|                                     |                                                                                                                    |     |
|                                     | Consolidated Statements of Stockholders’ Equity for the nine months ended September 30, 2010 and 2009 (Unaudited) | 4        |
|                                     |                                                                                                                    |     |
|                                     | Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2009 (Unaudited)                 | 5        |
|                                     |                                                                                                                    |     |
|                                     | Notes to Unaudited Consolidated Financial Statements                                                                    | 6        |
|                                     |                                                                                                                    |     |
| Item 2.                                  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                             | 14       |
|                                     |                                                                                                                    |     |
| Item 3.                                  | Quantitative and Qualitative Disclosures About Market Risk                                                              | 24       |
|                                     |                                                                                                                    |     |
| Item 4T.                                 | Controls and Procedures                                                                                                 | 24       |
|                                     |                                                                                                                    |     |
| PART II.  OTHER INFORMATION    |                                                                                                                    |
|                                     |                                                                                                                    |     |
| Item 1.                                  | Legal Proceedings                                                                                                       | 25       |
|                                     |                                                                                                                    |     |
| Item 1A.                                 | Risk Factors                                                                                                            | 25       |
|                                     |                                                                                                                    |     |
| Item 2.                                  | Unregistered Sales of Equity Securities and Use of Proceeds                                                             | 25       |
|                                     |                                                                                                                    |     |
| Item 3.                                  | Defaults upon Senior Securities                                                                                         | 25       |
|                                     |                                                                                                                    |     |
| Item 4.                                  | Removed and Reserved                                                                                                    | 25       |
|                                     |                                                                                                                    |     |
| Item 5.                                  | Other Information                                                                                                       | 25       |
|                                     |                                                                                                                    |     |
| Item 6.                                  | Exhibits                                                                                                                | 25       |
|                                     |                                                                                                                    |     |
| Signatures                               |                                                                                                                    |     |

----

Index

T

s

C

|                                                                                                               |   | September 30,                            |    |   | December 31, |   |
|--------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|--------|--------------|--------|
|                                                                                                               |   | 2010                                     |    |   | 2009         |   |
|                                                                                                               |   | (Dollars in Thousands,Except Share Data) |    |
| Assets                                                                                                             |   |
| Cash and due from banks                                                                                            |   | $                                        | 2,724   |   |         | $      | 6,458 |   |
| Interest earning demand deposits with banks                                                                        |   |                                     | 296     |   |         |   | 1,654 |   |
| Cash and cash equivalents                                                                                          |   |                                     | 3,020   |   |         |   | 8,112 |   |
|                                                                                                               |   |                                     |    |   |         |   |   |   |
| Certificates of deposit                                                                                            |   |                                     | 25      |   |         |   | - |   |
| Securities held to maturity (fair value at September 30, 2010 $1,184; and at December 31, 2009 $1,323)             |   |                                     | 1,160   |   |         |   | 1,290 |   |
| Loans held for sale                                                                                                |   |                                     | 2,430   |   |         |   | 1,175 |   |
| Loans receivable, net of allowance for loan losses (at September 30, 2010 $2,116; and at December 31, 2009 $1,918) |   |                                     | 138,928 |   |         |   | 136,793 |   |
| Premises and equipment, net                                                                                        |   |                                     | 3,955   |   |         |   | 4,103 |   |
| Restricted investments in bank stock, at cost                                                                      |   |                                     | 696     |   |         |   | 491 |   |
| Other real estate owned                                                                                            |   |                                     | 1,742   |   |         |   | 1,435 |   |
| Accrued interest receivable and other assets                                                                       |   |                                     | 3,373   |   |         |   | 2,868 |   |
|                                                                                                               |   |                                     |    |   |         |   |   |   |
| Total Assets                                                                                                       |   | $                                        | 155,329 |   |         | $      | 156,267 |   |

| Liabilities                                                                           |   |   |    |   |   |   |
|---------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Deposits:                                                                             |   |   |    |   |   |   |
| Non-interest bearing                                                                  |   | $      | 19,335  |   |   | $      | 19,770 |   |
| Interest bearing                                                                      |   |   | 107,917 |   |   |   | 111,978 |   |
| Total Deposits                                                                        |   |   | 127,252 |   |   |   | 131,748 |   |
|                                                                                  |   |   |    |   |   |   |   |   |
| Federal Home Loan Bank advances                                                       |   |   | 4,000   |   |   |   | 3,000 |   |
| Advances from borrowers for taxes and insurance                                       |   |   | 330     |   |   |   | 736 |   |
| Accrued interest payable                                                              |   |   | 27      |   |   |   | 33 |   |
| Other liabilities                                                                     |   |   | 4,012   |   |   |   | 1,461 |   |
| Total Liabilities                                                                     |   |   | 135,621 |   |   |   | 136,978 |   |
|                                                                                  |   |   |    |   |   |   |   |   |
| Commitments and Contingencies                                                         |   |   | -       |   |   |   | - |   |
|                                                                                  |   |   |    |   |   |   |   |   |
| Stockholders’ Equity                                                            |   |   |    |   |   |   |   |   |
| Preferred stock, $0.01 par value; 3,000,000 shares authorized and unissued            |   |   | -       |   |   |   | - |   |
| Common stock, $0.01 par value; 7,000,000 shares authorized; 2,380,500 shares issued   |   |   | 24      |   |   |   | 24 |   |
| Paid-in capital                                                                       |   |   | 10,072  |   |   |   | 10,088 |   |
| Retained earnings                                                                     |   |   | 10,683  |   |   |   | 10,285 |   |
| Unearned ESOP shares, at cost                                                         |   |   | (758    | )      |   |   | (793 | ) |
| Treasury stock, at cost, 53,561 shares at September 30, 2010 and at December 31, 2009 |   |   | (311    | )      |   |   | (311 | ) |
| Accumulated other comprehensive loss                                                  |   |   | (2      | )      |   |   | (4 | ) |
| Total Stockholders’ Equity                                                      |   |   | 19,708  |   |   |   | 19,289 |   |
|                                                                                  |   |   |    |   |   |   |   |   |
| Total Liabilities and Stockholders’ Equity                                      |   | $      | 155,329 |   |   | $      | 156,267 |   |

----

----

Index

e

|                                                |   | Three Months Ended September 30,              |   |   | Nine Months Ended September 30, |   |
|-----------------------------------------------------|--------|-----------------------------------------------|--------|--------|--------------------------------------|--------|
|                                                |   | 2010                                          |   |   | 2009                                 |   |   | 2010 |   |   | 2009 |   |
|                                                |   | (Dollars in thousands, except per share data) |   |
| Interest Income                                     |   |                                          |   |   |                                 |   |   |   |   |   |   |   |
| Loans receivable, including fees                    |   | $                                             | 1,943  |   |                                 | $      | 2,010 |   |   | $ | 5,860 |   |   | $ | 6,183 |   |
| Securities                                          |   |                                          | 9      |   |                                 |   | 14 |   |   |   | 34 |   |   |   | 53 |   |
| Other                                               |   |                                          | 7      |   |                                 |   | 6 |   |   |   | 21 |   |   |   | 17 |   |
| Total Interest Income                               |   |                                          | 1,959  |   |                                 |   | 2,030 |   |   |   | 5,915 |   |   |   | 6,253 |   |
|                                                |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense                                    |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                            |   |                                          | 268    |   |                                 |   | 442 |   |   |   | 874 |   |   |   | 1,533 |   |
| Federal Home Loan Bank advances                     |   |                                          | 3      |   |                                 |   | 2 |   |   |   | 14 |   |   |   | 22 |   |
| Total Interest Expense                              |   |                                          | 271    |   |                                 |   | 444 |   |   |   | 888 |   |   |   | 1,555 |   |
|                                                |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Income                                 |   |                                          | 1,688  |   |                                 |   | 1,586 |   |   |   | 5,027 |   |   |   | 4,698 |   |
|                                                |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Provision for Loan Losses                           |   |                                          | 160    |   |                                 |   | 111 |   |   |   | 548 |   |   |   | 429 |   |
|                                                |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Income after Provision for Loan Losses |   |                                          | 1,528  |   |                                 |   | 1,475 |   |   |   | 4,479 |   |   |   | 4,269 |   |
|                                                |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest Income                                 |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Banking fees and service charges                    |   |                                          | 236    |   |                                 |   | 273 |   |   |   | 737 |   |   |   | 791 |   |
| Mortgage banking income, net                        |   |                                          | 247    |   |                                 |   | 192 |   |   |   | 514 |   |   |   | 753 |   |
| Investment brokerage fees                           |   |                                          | 14     |   |                                 |   | 21 |   |   |   | 52 |   |   |   | 55 |   |
| Realized loss on sale of other real estate owned    |   |                                          | (2     | )      |                                 |   | (19 | ) |   |   | (2 | ) |   |   | (19 | ) |
| Other                                               |   |                                          | 25     |   |                                 |   | 31 |   |   |   | 36 |   |   |   | 79 |   |
| Total Non-interest Income                           |   |                                          | 520    |   |                                 |   | 498 |   |   |   | 1,337 |   |   |   | 1,659 |   |
|                                                |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest Expenses                               |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                      |   |                                          | 994    |   |                                 |   | 1,022 |   |   |   | 2,946 |   |   |   | 3,040 |   |
| Occupancy and equipment                             |   |                                          | 177    |   |                                 |   | 176 |   |   |   | 546 |   |   |   | 558 |   |
| Professional fees                                   |   |                                          | 70     |   |                                 |   | 97 |   |   |   | 200 |   |   |   | 258 |   |
| Advertising and marketing                           |   |                                          | 24     |   |                                 |   | 34 |   |   |   | 86 |   |   |   | 89 |   |
| Data processing                                     |   |                                          | 158    |   |                                 |   | 166 |   |   |   | 474 |   |   |   | 456 |   |
| Telephone and postage                               |   |                                          | 33     |   |                                 |   | 45 |   |   |   | 111 |   |   |   | 148 |   |
| FDIC premium                                        |   |                                          | 56     |   |                                 |   | 61 |   |   |   | 166 |   |   |   | 280 |   |
| Other real estate owned expense                     |   |                                          | 49     |   |                                 |   | 6 |   |   |   | 172 |   |   |   | 30 |   |
| Other                                               |   |                                          | 135    |   |                                 |   | 131 |   |   |   | 366 |   |   |   | 417 |   |
| Total Non-interest Expenses                         |   |                                          | 1,696  |   |                                 |   | 1,738 |   |   |   | 5,067 |   |   |   | 5,276 |   |
|                                                |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Income before Income Taxes                          |   |                                          | 352    |   |                                 |   | 235 |   |   |   | 749 |   |   |   | 652 |   |
|                                                |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Income Tax Expense                                  |   |                                          | 136    |   |                                 |   | 90 |   |   |   | 290 |   |   |   | 252 |   |
|                                                |   |                                          |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                          |   | $                                             | 216    |   |                                 | $      | 145 |   |   | $ | 459 |   |   | $ | 400 |   |

| Net Income per common share- basic                                 |   | $      | 0.10  |   |   | $      | 0.06  |   |   | $      | 0.20  |   |   | $      | 0.18  |   |
|--------------------------------------------------------------------|--------|--------|-------|--------|--------|--------|-------|--------|--------|--------|-------|--------|--------|--------|-------|--------|
| Weighted average number of common shares outstanding – basic |   |   | 2,250 |   |   |   | 2,245 |   |   |   | 2,249 |   |   |   | 2,246 |   |
| Dividends per share                                                |   | $      | 0.02  |   |   | $      | 0.02  |   |   | $      | 0.06  |   |   | $      | 0.04  |   |

----

----

Index

n

|                                                |   | CommonStock |   |   | Paid-InCapital |   |   | RetainedEarnings |   |   | UnearnedESOPShares |   |   | Treasury Stock |   |   | AccumulatedOtherComprehensiveLoss |   |   | Total  |   |
|-----------------------------------------------------|--------|-------------|--------|--------|----------------|--------|--------|------------------|--------|--------|--------------------|--------|--------|----------------|--------|--------|-----------------------------------|--------|--------|--------|--------|
| Balance - December 31, 2008                         |   | $           | 24     |   |           | $      | 10,112 |             |   | $      | 9,787              |   |   | $              | (840   | )      |                              | $      | (284   | )      |   | $ | (5 | ) |   | $ | 18,794 |   |
|                                                |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                               |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                          |   |        | -      |   |           |   | -      |             |   |   | 400                |   |   |           | -      |   |                              |   | -      |   |   |   | - |   |   |   | 400 |   |
| Other comprehensive loss                            |   |        | -      |   |           |   | -      |             |   |   | -                  |   |   |           | -      |   |                              |   | -      |   |   |   | 3 |   |   |   | 3 |   |
| Total Comprehensive Income                          |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   | 403 |   |
|                                                |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Treasury stock purchase (7,061 shares)              |   |        | -      |   |           |   | -      |             |   |   | -                  |   |   |           | -      |   |                              |   | (27    | )      |   |   | - |   |   |   | (27 | ) |
| Cash dividends declared ($0.04 per share)           |   |        | -      |   |           |   | -      |             |   |   | (67                | )      |   |           | -      |   |                              |   | -      |   |   |   | - |   |   |   | (67 | ) |
| ESOP shares committed to be released (3,500 shares) |   |        | -      |   |           |   | (18    | )                |   |   | -                  |   |   |           | 35     |   |                              |   | -      |   |   |   | - |   |   |   | 17 |   |
|                                                |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Balance - September 30, 2009                        |   | $           | 24     |   |           | $      | 10,094 |             |   | $      | 10,120             |   |   | $              | (805   | )      |                              | $      | (311   | )      |   | $ | (2 | ) |   | $ | 19,120 |   |
|                                                |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2009                         |   | $           | 24     |   |           | $      | 10,088 |             |   | $      | 10,285             |   |   | $              | (793   | )      |                              | $      | (311   | )      |   | $ | (4 | ) |   | $ | 19,289 |   |
|                                                |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                               |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                          |   |        | -      |   |           |   | -      |             |   |   | 459                |   |   |           | -      |   |                              |   | -      |   |   |   | - |   |   |   | 459 |   |
| Other comprehensive income                          |   |        | -      |   |           |   | -      |             |   |   | -                  |   |   |           | -      |   |                              |   | -      |   |   |   | 2 |   |   |   | 2 |   |
| Total Comprehensive Income                          |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   | 461 |   |
|                                                |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends declared ($0.06 per share)           |   |        | -      |   |           |   | -      |             |   |   | (61                | )      |   |           | -      |   |                              |   | -      |   |   |   | - |   |   |   | (61 | ) |
| ESOP shares committed to be released (3,500 shares) |   |        | -      |   |           |   | (16    | )                |   |   | -                  |   |   |           | 35     |   |                              |   | -      |   |   |   | - |   |   |   | 19 |   |
|                                                |   |        |   |   |           |   |   |             |   |   |               |   |   |           |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Balance - September 30, 2010                        |   | $           | 24     |   |           | $      | 10,072 |             |   | $      | 10,683             |   |   | $              | (758   | )      |                              | $      | (311   | )      |   | $ | (2 | ) |   | $ | 19,708 |   |

----

Index

t

|                                                                              |   | Nine Months Ended September 30, |    |
|-----------------------------------------------------------------------------------|--------|---------------------------------|---------|
|                                                                              |   | 2010                            |    |   | 2009 |   |
|                                                                              |   | (In Thousands)                  |    |
|                                                                              |   |                            |    |   |   |   |
| Cash Flows from Operating Activities                                              |   |                            |    |   |   |   |
| Net income                                                                        |   | $                               | 459     |   |   | $ | 400 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                            |    |   |   |   |   |   |
| Depreciation and amortization expense                                             |   |                            | 189     |   |   |   | 193 |   |
| Provision for loan losses                                                         |   |                            | 548     |   |   |   | 429 |   |
| Amortization of mortgage servicing rights                                         |   |                            | 105     |   |   |   | 135 |   |
| Net accretion of securities premiums and discounts                                |   |                            | (3      | ) |   |   | (4 | ) |
| Net gain on sale of loans                                                         |   |                            | (292    | ) |   |   | (488 | ) |
| Loans originated for sale                                                         |   |                            | (15,945 | ) |   |   | (35,404 | ) |
| Proceeds from sale of loans                                                       |   |                            | 14,982  |   |   |   | 35,551 |   |
|      Loss on other real estate owned                     |   |                            | 2       |   |   |   | 19 |   |
|      ESOP expense                                        |   |                            | 19      |   |   |   | 17 |   |
|      Valuation write-down of other real estate owned     |   |                            | 58      |   |   |   | - |   |
| Increase in accrued interest receivable and other assets                          |   |                            | (321    | ) |   |   | (469 | ) |
| Increase in accrued interest payable and other liabilities                        |   |                            | 2,545   |   |   |   | 1,124 |   |
| Net Cash Provided by Operating Activities                                         |   |                            | 2,346   |   |   |   | 1,503 |   |

| Cash Flows from Investing Activities |
|--------------------------------------|

| Purchases of certificates of deposit                             |   |   | (25    | )      |   |   | -      |   |
|------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Activity in available for sale securities:                       |   |   |   |   |   |   |   |   |
|      Purchases                          |   |   | (1,000 | )      |   |   | -      |   |
|  Maturities, calls and principal repayments                 |   |   | 1,000  |   |   |   | -      |   |
| Activity in held to maturity securities:                         |   |   |   |   |   |   |   |   |
|      Purchases                          |   |   | (750   | )      |   |   | (750   | )      |
| Maturities, calls and principal repayments                       |   |   | 883    |   |   |   | 921    |   |
| Net increase in loans receivable                                 |   |   | (3,612 | )      |   |   | (2,572 | )      |
|     Proceeds from sale of other real estate owned |   |   | 275    |   |   |   | -      |   |
| Net increase in restricted investment in bank stock              |   |   | (205   | )      |   |   | -      |   |
| Purchases of bank premises and equipment                         |   |   | (41    | )      |   |   | (193   | )      |
| Net Cash Used in Investing Activities                            |   |   | (3,475 | )      |   |   | (2,594 | )      |

| Cash Flows from Financing Activities |
|--------------------------------------|

| Net (decrease) increase in deposits                         |   |   | (4,496 | )      |   |   | 6,408  |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Net increase (decrease) in Federal Home Loan Bank advances  |   |   | 1,000  |   |   |   | (3,375 | )      |
| Decrease in advances from borrowers for taxes and insurance |   |   | (406   | )      |   |   | (346   | )      |
| Dividends paid                                              |   |   | (61    | )      |   |   | (67    | )      |
| Treasury stock purchased                                    |   |   | -      |   |   |   | (27    | )      |
|                                                        |   |   |   |   |   |   |   |   |
| Net Cash Provided (Used) by Financing Activities            |   |   | (3,963 | )      |   |   | 2,593  |   |
|                                                        |   |   |   |   |   |   |   |   |
| Net Increase (Decrease) in Cash and Cash Equivalents        |   |   | (5,092 | )      |   |   | 1,502  |   |
|                                                        |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents - Beginning                       |   |   | 8,112  |   |   |   | 3,203  |   |

| Cash and Cash Equivalents - Ending |   | $ | 3,020 |   |   | $ | 4,705 |   |
|------------------------------------|--------|---|-------|--------|--------|---|-------|--------|

| Supplementary Cash Flows Information |
|--------------------------------------|

| Interest paid                                               |   | $      | 894    |   |   | $      | 1,664  |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                        |   |   |   |   |   |   |   |   |
| Income taxes paid                                           |   | $      | 446    |   |   | $      | 604    |   |
|                                                        |   |   |   |   |   |   |   |   |
| Supplemental Schedule of Noncash Investing Activities       |   |   |   |   |   |   |   |   |
| Loans transferred to foreclosed real estate                 |   | $      | 642    |   |   | $      | 949    |   |
| Debenture collateral acquired in partial settlement of loan |   | $      | 287    |   |   | $      | -      |   |

----

Index

U

|                                   |   | 2010   |   |   | 2009   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|
| Service cost                           |   | $      | 40     |   |   | $      | 36 |   |
| Interest cost                          |   |   | 7      |   |   |   | 5 |   |
| Amortization of past service liability |   |   | 4      |   |   |   | 4 |   |
| Net periodic pension expense           |   | $      | 51     |   |   | $      | 45 |   |

----

Index

|                                                                                                                                                                              |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                                                                                                                                                              |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                                                                                                                                                                              |   | (In Thousands)                  |   |
| Unrealized holding gain (loss) on securities available for sale                                                                                                                   |   | $                               | (1     | )      |                           | $      | (2 | ) |   | $ | - |   |   | $ | 1 |   |
|                                                                                                                                                                              |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|        Reclassification adjustment for Directors’ retirement plan pension gains and past service liability recognized in pension expense |   |                            | 1      |   |                           |   | 1 |   |   |   | 4 |   |   |   | 4 |   |
|                                                                                                                                                                              |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|        Other comprehensive income before tax                                                                                                   |   |                            | -      |   |                           |   | (1 | ) |   |   | 4 |   |   |   | 5 |   |
|                                                                                                                                                                              |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|        Income tax effect                                                                                                                       |   |                            | -      |   |                           |   | - |   |   |   | (2 | ) |   |   | (2 | ) |
|                                                                                                                                                                              |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net of Tax Amount                                                                                                                                                                 |   | $                               | -      |   |                           | $      | (1 | ) |   | $ | 2 |   |   | $ | 3 |   |

|                                                                                                                  |   | September 30, 2010 |   |   | December 31, 2009 |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                                                                                  |   | (In Thousands)     |   |
| Unrealized gain on securities available for sale (net of tax effect 2010 $0; 2009 $0)                                 |   | $                  | -      |   |              | $      | - |   |
|                                                                                                                  |   |               |   |   |              |   |   |   |
| Net losses and past service liability for the Directors’ retirement plan (net of tax benefits 2010 $2; 2009 $2) |   |               | (2     | )      |              |   | (4 | ) |
|                                                                                                                  |   |               |   |   |              |   |   |   |
|                                                                                                                  |   | $                  | (2     | )      |              | $      | (4 | ) |

----

Index

|   | · | A reporting entity to disclose separately the amounts 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. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

|                                        |   | Amortized Cost |   |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | FairValue |   |
|---------------------------------------------|--------|----------------|--------|--------|-----------------------------|--------|--------|------------------------------|--------|--------|-----------|--------|
|                                        |   | (In Thousands) |   |
| Held to Maturity:                           |   |           |   |   |                        |   |   |                         |   |   |      |   |
| September 30, 2010:                         |   |           |   |   |                        |   |   |                         |   |   |      |   |
| U.S. Government agencies                    |   | $              | 750    |   |                        | $      | 1      |                         |   | $      | -         |   |   | $ | 751 |   |
| GNMA & FHLMC mortgage-backed securities |   |           | 410    |   |                        |   | 23     |                         |   |   | -         |   |   |   | 433 |   |
|                                        |   | $              | 1,160  |   |                        | $      | 24     |                         |   | $      | -         |   |   | $ | 1,184 |   |

| December 31, 2009:                     |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| U.S. Government agencies                    |   | $      | 750    |   |   | $      | 2      |   |   | $      | -      |   |   | $ | 752 |   |
| GNMA & FHLMC mortgage-backed securities |   |   | 540    |   |   |   | 31     |   |   |   | -      |   |   |   | 571 |   |
|                                        |   | $      | 1,290  |   |   | $      | 33     |   |   | $      | -      |   |   | $ | 1,323 |   |

|                                        |   |  Available for Sale        |   |   |  Held to Maturity     |   |
|---------------------------------------------|--------|---------------------------------|--------|--------|----------------------------|--------|
|                                        |   |  Amortized Cost  |   |   | Fair Value       |   |   | AmortizedCost  |   |   | Fair  |   |
|                                        |   |  (In Thousands)       |   |   |  (In Thousands)  |   |
| Due in one year or less                     |   | $                               | -      |   |                       | $      | - |   |   | $ | - |   |   | $ | - |   |
| Due after one year through five years       |   |                            | -      |   |                       |   | - |   |   |   | 750 |   |   |   | 751 |   |
| Due after five years through ten years      |   |                            | -      |   |                       |   | - |   |   |   | - |   |   |   | - |   |
| Due after ten years                         |   |                            | -      |   |                       |   | - |   |   |   | - |   |   |   | - |   |
| GNMA & FHLMC mortgage-backed securities |   |                            | -      |   |                       |   | - |   |   |   | 410 |   |   |   | 433 |   |
|                                        |   | $                               | -      |   |                       | $      | - |   |   | $ | 1,160 |   |   | $ | 1,184 |   |

----

Index

|                          |   | Nine Months Ended September 30, 2010 |   |   | Nine Months Ended September 30, 2009 |   |
|-------------------------------|--------|------------------------------------------------|--------|--------|-------------------------------------------|--------|
|                          |   | (In Thousands)                                 |   |
| Balance, beginning            |   | $                                              | 397    |   |                                      | $      | 310 |   |
| Capitalized during the period |   |                                           | 150    |   |                                      |   | 224 |   |
| Amortization                  |   |                                           | (105   | )      |                                      |   | (135 | ) |
| Balance, ending               |   | $                                              | 442    |   |                                      | $      | 399 |   |

|   | 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). |
|--------|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

| Description            |   | Carrying Value |   |   | (Level 1)Quoted Prices in Active Markets for Identical Assets |   |   | (Level 2)SignificantOtherObservableInputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|------------------------|--------|----------------|--------|--------|-------------------------------------------------------------------------|--------|--------|-------------------------------------------|--------|--------|----------------------------------------|--------|
|                   |   | (In Thousands) |   |
| Forward sales contract |   | $              | 56     |   |                                                                    | $      | -      |                                      |   | $      | 56                                     |   |   | $ | - |   |

| Description            |   | Carrying Value |   |   | (Level 1)Quoted Prices in Active Markets for Identical Assets |   |   | (Level 2)SignificantOtherObservableInputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|------------------------|--------|----------------|--------|--------|-------------------------------------------------------------------------|--------|--------|-------------------------------------------|--------|--------|----------------------------------------|--------|
|                   |   | (In Thousands) |   |
| Forward sales contract |   | $              | 6      |   |                                                                    | $      | -      |                                      |   | $      | 6                                      |   |   | $ | - |   |

| Description    |   | Carrying Value |   |   | (Level 1) Quoted Prices in Active Markets for Identical Assets |   |   | (Level 2) Significant Other Observable Inputs |   |   | (Level 3)SignificantUnobservable Inputs |   |
|----------------|--------|----------------|--------|--------|--------------------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|----------------------------------------------|--------|
|           |   | (In Thousands) |   |
|           |   |           |   |   |                                                                     |   |   |                                          |   |   |                                         |   |
| Impaired loans |   | $              | 1,724  |   |                                                                     | $      | -      |                                          |   | $      | -                                            |   |   | $ | 1,724 |   |

----

Index

| Description    |   | Carrying Value |   |   | (Level 1) Quoted Prices in Active Markets for Identical Assets |   |   | (Level 2) Significant Other Observable Inputs |   |   | (Level 3)SignificantUnobservable Inputs |   |
|----------------|--------|----------------|--------|--------|---------------------------------------------------------------------|--------|--------|----------------------------------------------------|--------|--------|-----------------------------------------|--------|
|           |   | (In Thousands) |   |
|           |   |           |   |   |                                                                |   |   |                                               |   |   |                                    |   |
| Impaired loans |   | $              | 1,695  |   |                                                                | $      | -      |                                               |   | $      | -                                       |   |   | $ | 1,695 |   |

----

Index

----

Index

|                                                           |   | September 30,        |    | December 31, |      |
|----------------------------------------------------------------|--------|----------------------|---------|-------------------|-----------|
|                                                           |   | 2010                 |    |              | 2009      |   |
|                                                           |   | Carrying Amount |    |              | FairValue |   |   | Carrying Amount |   |   | FairValue |   |
|                                                           |   | (In Thousands)       |    |
|                                                           |   |                 |    |              |      |   |   |   |   |   |   |   |
| Financial assets:                                              |   |                 |    |              |      |   |   |   |   |   |   |   |
| Cash and cash equivalents                                      |   | $                    | 3,020   |              |      | $ | 3,020 |   |   | $ | 8,112 |   |   | $ | 8,112 |   |
| Certificates of deposit                                        |   |                 | 25      |              |      |   | 25 |   |   |   | - |   |   |   | - |   |
| Securities held to maturity                                    |   |                 | 1,160   |              |      |   | 1,184 |   |   |   | 1,290 |   |   |   | 1,323 |   |
|         Loans held for sale |   |                 | 2,430   |              |      |   | 2,430 |   |   |   | 1,175 |   |   |   | 1,175 |   |
| Loans receivable, net                                          |   |                 | 138,928 |              |      |   | 145,076 |   |   |   | 136,793 |   |   |   | 141,703 |   |
| Restricted investments in bank stock                           |   |                 | 696     |              |      |   | 696 |   |   |   | 491 |   |   |   | 491 |   |
| Accrued interest receivable                                    |   |                 | 602     |              |      |   | 602 |   |   |   | 613 |   |   |   | 613 |   |
| Mortgage servicing rights                                      |   |                 | 442     |              |      |   | 553 |   |   |   | 397 |   |   |   | 646 |   |
| Debenture                                                      |   |                 | 289     |              |      |   | 289 |   |   |   | - |   |   |   | - |   |
|                                                           |   |                 |    |              |      |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                                         |   |                 |    |              |      |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing demand accounts                           |   |                 | 19,335  |              |      |   | 19,335 |   |   |   | 19,770 |   |   |   | 19,770 |   |
| NOW accounts                                                   |   |                 | 8,198   |              |      |   | 8,198 |   |   |   | 7,395 |   |   |   | 7,395 |   |
| Money market accounts                                          |   |                 | 10,626  |              |      |   | 10,626 |   |   |   | 10,526 |   |   |   | 10,526 |   |
| Savings accounts                                               |   |                 | 17,482  |              |      |   | 17,482 |   |   |   | 15,868 |   |   |   | 15,868 |   |
| Certificates of deposit                                        |   |                 | 71,611  |              |      |   | 72,109 |   |   |   | 78,189 |   |   |   | 78,790 |   |
| Federal Home Loan Bank advances                                |   |                 | 4,000   |              |      |   | 4,000 |   |   |   | 3,000 |   |   |   | 3,000 |   |
| Accrued interest payable                                       |   |                 | 27      |              |      |   | 27 |   |   |   | 33 |   |   |   | 33 |   |
|                                                           |   |                 |    |              |      |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance sheet financial instruments:                       |   |                 |    |              |      |   |   |   |   |   |   |   |   |   |   |   |
| Commitments to extend credit                                   |   |                 | -       |              |      |   | - |   |   |   | - |   |   |   | - |   |
| Letters of credit                                              |   |                 | -       |              |      |   | - |   |   |   | - |   |   |   | - |   |

m

----

Index

----

Index

----

Index

----

Index

| (Dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | September 30,2010 |    |   | December 31,2009 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|------------------|--------|
| Nonaccrual loans:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |              |    |   |             |   |
|    One- to four-family residential real estate                                                                                                           |   | $                 | 3,508   |   |             | $      | 2,600 |   |
|    Construction                                                                                                                                          |   |              | 924     |   |             |   | 599 |   |
|    Multi-family and commercial real estate                                                                                                               |   |              | 494     |   |             |   | 360 |   |
|    Land                                                                                                                                                  |   |              | 2,062   |   |             |   | 2,004 |   |
|    Commercial                                                                                                                                            |   |              | 143     |   |             |   | — |   |
|    Consumer                                                                                                                                              |   |              | 2       |   |             |   | — |   |
|          Total                                                                                                             |   |              | 7,133   |   |             |   | 5,563 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |              |    |   |             |   |   |   |
| Other real estate owned                                                                                                                                                 |   |              | 1,742   |   |             |   | 1,435 |   |
| Other nonperforming assets                                                                                                                                              |   |              | — |   |             |   | — |   |
|          Total nonperforming assets                                                                                        |   |              | 8,875   |   |             |   | 6,998 |   |
| Troubled debt restructurings                                                                                                                                            |   |              | 3,362   |   |             |   | 1,076 |   |
| Troubled debt restructurings and   total nonperforming assets                                                                                            |   | $                 | 12,237  |   |             | $      | 8,074 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |              |    |   |             |   |   |   |
| Total nonperforming loans to total loans                                                                                                                                |   |              | 5.06    | %      |             |   | 4.01 | % |
| Total nonperforming loans to total assets                                                                                                                               |   |              | 4.59    |   |             |   | 3.56 |   |
| Total nonperforming assets and troubled   debt restructurings to total assets                                                                            |   |              | 7.88    |   |             |   | 5.17 |   |

----

Index

----

Index

|                                                                                                                                                                                                                                                                                                                                                                                                                    | Three Months Ended September 30, |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                    | 2010                             |    | 2009 |   |
| (Dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                  | AverageBalance                   |    |   | InterestandDividends |   |   | Yield/Cost |   | AverageBalance |   |   | InterestandDividends |   |   | Yield/Cost |   |
| Assets:                                                                                                                                                                                                                                                                                                                                                                                                                 |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                                                                                                                                                                                                                                                                                                                                                                |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Loans                                                                                                         | $                                | 139,065 |   |   | $ | 1,943 |   |   |   | 5.59 | % | $ | 137,940 |   |   | $ | 2,010 |   |   |   | 5.83 | % |
|    Investment securities                                                                                                                                                                                                                                                                                                                                                                  |                             | 1,384   |   |   |   | 9 |   |   |   | 2.60 |   |   | 2,356 |   |   |   | 14 |   |   |   | 2.38 |   |
|    Other interest-earning assets                                                                                                                                                                                                                                                                                                                                                          |                             | 1,152   |   |   | 7 |   |   |   | 2.43 |   |   | 1,178 |   |   | 6 |   |   |   | 2.04 |   |
|          Total interest-earning assets                                                                                                                                                                                                                                                                                                                      |                             | 141,601 |   |   |   | 1,959 |   |   |   | 5.53 |   |   | 141,474 |   |   |   | 2,030 |   |   |   | 5.74 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-earning assets                                                                                                                                                                                                                                                                                                                                                                              |                             | 13,670  |   |   |   |   |   |   |   |   |   |   | 13,192 |   |   |   |   |   |   |   |   |   |
|          Total assets                                                              | $                                | 155,271 |   |   |   |   |   |   |   |   |   | $ | 154,666 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and stockholders’ equity:                                                                                                                                                                                                                                                                                                                                                                             |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                                                                                                                                                                                                                                                                                                                           |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Interest-bearing demand deposits                                                                                                                                                                                                                                                                                                                                                       | $                                | 8,441   |   |   |   | 4 |   |   |   | 0.19 |   | $ | 6,330 |   |   |   | 3 |   |   |   | 0.19 |   |
|    Money market accounts                                                                                                                                                                                                                                                                                                                                                                                 |                             | 10,891  |   |   |   | 19 |   |   |   | 0.70 |   |   | 10,936 |   |   |   | 25 |   |   |   | 0.91 |   |
|    Savings accounts                                                                                              |                             | 17,827  |   |   |   | 19 |   |   |   | 0.43 |   |   | 16,248 |   |   |   | 24 |   |   |   | 0.59 |   |
|    Certificates of deposit                                                                                                                                                                                                                                                                                                                                                                          |                             | 74,291  |   |   |   | 226 |   |   |   | 1.22 |   |   | 79,274 |   |   |   | 390 |   |   |   | 1.97 |   |
|    Borrowings                                                                                                    |                             | 1,766   |   |   | 3 |   |   |   | 0.68 |   |   | 542 |   |   | 2 |   |   |   | 1.48 |   |
|       Total interest-bearing liabilities                                                                                                                                                                                                                                                                                                                                             |                             | 113,216 |   |   |   | 271 |   |   |   | 0.96 |   |   | 113,330 |   |   |   | 444 |   |   |   | 1.57 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing demand deposits                                                                                                                                                                                                                                                                                                                                                                                    |                             | 19,579  |   |   |   |   |   |   |   |   |   |   | 19,383 |   |   |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities                                                                                                                                                                                                                                                                                                                                                                                  |                             | 2,756   |   |   |   |   |   |   |   |   |   |   | 2,781 |   |   |   |   |   |   |   |   |   |
|          Total liabilities                                                         |                             | 135,551 |   |   |   |   |   |   |   |   |   |   | 135,494 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                                                                                                      |                             | 19,720  |   |   |   |   |   |   |   |   |   |   | 19,172 |   |   |   |   |   |   |   |   |   |
|       Total liabilities and stockholders’ equity                                                                                                                                                                                                                                                                                                                                    | $                                | 155,271 |   |   |   |   |   |   |   |   |   | $ | 154,666 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net interest income                                                                                           |                             |    |   |   | $ | 1,688 |   |   |   |   |   |   |   |   |   | $ | 1,586 |   |   |   |   |   |
|    Interest rate spread                                                                                          |                             |    |   |   |   |   |   |   |   | 4.57 |   |   |   |   |   |   |   |   |   |   | 4.17 |   |
|    Net interest margin                                                                                           |                             |    |   |   |   |   |   |   |   | 4.77 |   |   |   |   |   |   |   |   |   |   | 4.48 |   |
|    Average interest-earning assets to      average interest-bearing liabilities                                                                                                                                                                                                                                                                                            |                             | 125.07  | % |   |   |   |   |   |   |   |   |   | 124.83 | % |   |   |   |   |   |   |   |   |

----

Index

----

Index

|                                                                                                                                                                                                                                                                                                                                                                                                                    | Nine Months Ended September 30, |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                    | 2010                            |    | 2009 |   |
| (Dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                  | AverageBalance                  |    |   | InterestandDividends |   |   | Yield/Cost |   | AverageBalance |   |   | InterestandDividends |   |   | Yield/Cost |   |
| Assets:                                                                                                                                                                                                                                                                                                                                                                                                                 |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                                                                                                                                                                                                                                                                                                                                                                |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Loans                                                                                                         | $                               | 138,311 |   |   | $ | 5,860 |   |   |   | 5.65 |   | $ | 138,581 |   |   | $ | 6,183 |   |   |   | 5.95 | % |
|    Investment securities                                                                                                                                                                                                                                                                                                                                                                            |                            | 1,826   |   |   |   | 34 |   |   |   | 2.48 |   |   | 2,388 |   |   |   | 53 |   |   |   | 2.96 |   |
|    Other interest-earning assets                                                                                                                                                                                                                                                                                                                                                                    |                            | 1,311   |   |   | 21 |   |   |   | 2.14 |   |   | 1,618 |   |   | 17 |   |   |   | 1.40 |   |
|          Total interest-earning assets                                                                                                                                                                                                                                                                                                                           |                            | 141,448 |   |   |   | 5,915 |   |   |   | 5.58 |   |   | 142,587 |   |   |   | 6,253 |   |   |   | 5.85 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-earning assets                                                                                                                                                                                                                                                                                                                                                                                        |                            | 14,239  |   |   |   |   |   |   |   |   |   |   | 10,134 |   |   |   |   |   |   |   |   |   |
|          Total assets                                                              | $                               | 155,687 |   |   |   |   |   |   |   |   |   | $ | 152,721 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and stockholders’ equity:                                                                                                                                                                                                                                                                                                                                                                             |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                                                                                                                                                                                                                                                                                                                           |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Interest-bearing demand deposits                                                                                                                                                                                                                                                                                                                                                                 | $                               | 7,967   |   |   |   | 12 |   |   |   | 0.20 |   | $ | 6,618 |   |   |   | 11 |   |   |   | 0.22 |   |
|    Money market accounts                                                                                                                                                                                                                                                                                                                                                                                 |                            | 10,850  |   |   |   | 59 |   |   |   | 0.73 |   |   | 10,973 |   |   |   | 81 |   |   |   | 0.98 |   |
|    Savings accounts                                                                                              |                            | 17,402  |   |   |   | 64 |   |   |   | 0.49 |   |   | 15,456 |   |   |   | 68 |   |   |   | 0.59 |   |
|    Certificates of deposit                                                                                                                                                                                                                                                                                                                                                                          |                            | 75,827  |   |   |   | 739 |   |   |   | 1.30 |   |   | 77,583 |   |   |   | 1,373 |   |   |   | 2.36 |   |
|    Borrowings                                                                                                    |                            | 2,452   |   |   | 14 |   |   |   | 0.76 |   |   | 2,495 |   |   | 22 |   |   |   | 1.18 |   |
|       Total interest-bearing liabilities                                                                                                                                                                                                                                                                                                                                                  |                            | 114,498 |   |   |   | 888 |   |   |   | 1.03 |   |   | 113,125 |   |   |   | 1,555 |   |   |   | 1.83 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing demand deposits                                                                                                                                                                                                                                                                                                                                                                                    |                            | 19,334  |   |   |   |   |   |   |   |   |   |   | 18,335 |   |   |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities                                                                                                                                                                                                                                                                                                                                                                                  |                            | 2,203   |   |   |   |   |   |   |   |   |   |   | 2,170 |   |   |   |   |   |   |   |   |   |
|          Total liabilities                                                         |                            | 136,035 |   |   |   |   |   |   |   |   |   |   | 133,630 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                                                                                                      |                            | 19,652  |   |   |   |   |   |   |   |   |   |   | 19,091 |   |   |   |   |   |   |   |   |   |
|       Total liabilities and stockholders’ equity                                                                                                                                                                                                                                                                                                                                    | $                               | 155,687 |   |   |   |   |   |   |   |   |   | $ | 152,721 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net interest income                                                                                           |                            |    |   |   | $ | 5,027 |   |   |   |   |   |   |   |   |   | $ | 4,698 |   |   |   |   |   |
|    Interest rate spread                                                                                          |                            |    |   |   |   |   |   |   |   | 4.55 |   |   |   |   |   |   |   |   |   |   | 4.02 |   |
|    Net interest margin                                                                                           |                            |    |   |   |   |   |   |   |   | 4.74 |   |   |   |   |   |   |   |   |   |   | 4.39 |   |
|    Average interest-earning assets to      average interest-bearing liabilities                                                                                                                                                                                                                                                                                            |                            | 123.54  | % |   |   |   |   |   |   |   |   |   | 126.04 | % |   |   |   |   |   |   |   |   |

----

Index

----

Index

a

u

----

Index

T

| Item 1.                                                                                                                                                                                                                                                                                                                                                                                                      | Legal Proceedings                                                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
| Hometown Bancorp is not involved in any pending legal proceedings.  Walden Federal is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business.  Such routine legal proceedings, in the aggregate, are believed by management to be immaterial to its consolidated financial condition and results of operations. |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
| Item 1A.                                                                                                                                                                                                                                                                                                                                                                                                     | Risk Factors                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | Not applicable because the Company is a smaller reporting company. |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
| Item 2.                                                                                                                                                                                                                                                                                                                                                                                                      | Unregistered Sales of Equity Securities and Use of Proceeds        |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | None                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
| Item 3.                                                                                                                                                                                                                                                                                                                                                                                                      | Defaults upon Senior Securities                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | Not Applicable.                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
| Item 4.                                                                                                                                                                                                                                                                                                                                                                                                      | Removed and Reserved                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
| Item 5.                                                                                                                                                                                                                                                                                                                                                                                                      | Other Information                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | None.                                                              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
| Item 6.                                                                                                                                                                                                                                                                                                                                                                                                      | Exhibits                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                         | 3.1                                                                | Charter of Hometown Bancorp, Inc. (1) |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | 3.2                                                                | Bylaws of Hometown Bancorp, Inc. (2) |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | 4.0                                                                | Stock Certificate of Hometown Bancorp, Inc. (1) |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | 31.1                                                               | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | 31.2                                                               | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | 32.0                                                               | Section 1350 Certification |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | _________________________________                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                         | (1)                                                                | Incorporated by reference into this document from the Exhibits filed with the Securities and Exchange Commission on the Registration Statement on Form SB-2, and any amendments thereto, Registration No. 333-141351. |
|                                                                                                                                                                                                                                                                                                                                                                                                         |                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                         | (2)                                                                | Incorporated by reference into this document from Exhibit 3.2 of the Form 8-K filed with the Securities and Exchange Commission on July 25, 2008 (File No. 000-52674). |

----

Index

R

|                     |                                         |
|--------------------------|----------------------------------------------|
|                     | HOMETOWN BANCORP, INC.                       |
|                     |                                         |
|                     |                                         |
| Dated: November 15, 2010 | By: /s/ Thomas F. Gibney                     |
|                     | Thomas F. Gibney                             |
|                     | President and Chief Executive Officer        |
|                     | (principal executive officer)                |
|                     |                                         |
|                     |                                         |
|                     |                                         |
| Dated: November 15, 2010 | By: /s/ Stephen W. Dederick                  |
|                     | Stephen W. Dederick                          |
|                     | Senior Vice President and                    |
|                     | Chief Financial Officer                      |
|                     | (principal financial and accounting officer) |