SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                     For the Fiscal Year Ended June 30, 2008

                                       OR

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

                        For the transition period from to

                        Commission File Number: 000-51102

                            Georgetown Bancorp, Inc.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)

                  Federal                                 20-2107839
      ------------------------------                ----------------------
     (State or Other Jurisdiction of                   (I.R.S. Employer
      Incorporation or Organization)                Identification Number)

  2 East Main Street, Georgetown, Massachusetts              01833
  ---------------------------------------------            ----------
     (Address of Principal Executive Office)               (Zip Code)

                                 (978) 352-8600
                 -----------------------------------------------
                 (Issuer's Telephone Number including area code)

           Securities Registered Pursuant to Section 12(b) of the Act:

                                      None
                                      ----

           Securities Registered Pursuant to Section 12(g) of the Act:

                     Common Stock, par value $0.10 per share
                     ---------------------------------------
                                (Title of Class)

      Check  whether  the issuer is not  required  to file  reports  pursuant to
Section 13 or 15(d) of the Exchange Act. |_|

      Check  whether the issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past twelve  months (or for
such shorter  period that the  Registrant  was required to file reports) and (2)
has been subject to such requirements for the past 90 days.

(1)  YES |X|.    NO |_|.

(2)  YES |X|.    NO |_|.

      Check if there is no disclosure  of delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendments to this Form 10-KSB. |_|

      Indicate  by check mark  whether  the  Registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act) Yes |_| No [X]

      The  Registrant's  revenues for the fiscal year ended June 30, 2008 were $
10.2 million.

      As  of  September  25,  2008,  there  were  2,638,387  shares  issued  and
outstanding of the Registrant's  Common Stock,  including 1,527,487 shares owned
by  Georgetown  Bancorp,  MHC. The  aggregate  value of the voting stock held by
non-affiliates of the Registrant,  computed by reference to the closing price of
the Common Stock as of September 25, 2008 was $5.2 million.

                       DOCUMENTS INCORPORATED BY REFERENCE

1.    Portions of Annual Report to Stockholders (Part II)

2.    Proxy Statement for the 2008 Annual Meeting of Stockholders (Part III)

      Transitional Small Business Disclosure Format (check one): Yes |_|  No |X|


<PAGE>

                             Georgetown Bancorp Inc.
                          ANNUAL REPORT ON FORM 10-KSB
                            FOR THE FISCAL YEAR ENDED
                                  JUNE 30, 2008

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
ITEM                                        PART I                                     PAGE
<S>                                                                                     <C>
1        DESCRIPTION OF BUSINESS                                                         2
2        DESCRIPTION OF PROPERTY                                                        33
3        LEGAL PROCEEDINGS                                                              33
4        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                            33

                                            PART II

5        MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
         AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES                       33
6        MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                      34
7        FINANCIAL STATEMENTS                                                           34
8        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE                                                       34
8A(T)    CONTROLS AND PROCEDURES                                                        35
8B       OTHER INFORMATION                                                              35

                                            PART III

9        DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS
         AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF
         THE EXCHANGE ACT                                                               36
10       EXECUTIVE COMPENSATION                                                         36
11       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
         AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                                 36
12       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE      36
13       EXHIBITS                                                                       36
14       PRINCIPAL ACCOUNTANT FEES AND SERVICES                                         38

         SIGNATURES                                                                     39
</TABLE>


<PAGE>

PART I

ITEM 1. Description of Business
-------------------------------

Forward Looking Statements

      This Annual Report contains certain "forward-looking statements" which may
be  identified by the use of words such as  "believe,"  "expect,"  "anticipate,"
"should,"  "planned,"  "estimated" and "potential."  Examples of forward-looking
statements  include,  but are not  limited  to,  estimates  with  respect to our
financial  condition,  results of  operations  and business  that are subject to
various factors which could cause actual results to differ materially from these
estimates and most other  statements  that are not  historical in nature.  These
factors include,  but are not limited to, general and local economic conditions,
changes in interest rates, deposit flows, demand for mortgage,  and other loans,
real estate values, competition,  changes in accounting principles, policies, or
guidelines,   changes  in  legislation  or  regulation,   and  other   economic,
competitive,  governmental,  regulatory, and technological factors affecting our
operations, pricing products and services.

Georgetown Bancorp, MHC

      Georgetown Bancorp,  MHC is the federally chartered mutual holding company
parent of Georgetown Bancorp,  Inc.  Georgetown Bancorp,  MHC has not engaged in
any  business to date,  other than  holding the  majority of the voting stock of
Georgetown  Bancorp,  Inc. The executive office of Georgetown  Bancorp,  MHC, is
located  at 2  East  Main  Street,  Georgetown,  Massachusetts  01833,  and  its
telephone  number is (978)  352-8600.  Georgetown  Bancorp,  MHC is  subject  to
comprehensive  regulation and  examination  by the Office of Thrift  Supervision
(the "OTS").

Georgetown Bancorp, Inc.

      Georgetown  Bancorp,  Inc. (the  "Company") is the mid-tier  stock holding
company for Georgetown Savings Bank. Georgetown Bancorp, Inc. is chartered under
federal law and currently  owns 100% of the common stock of  Georgetown  Savings
Bank. The executive office of Georgetown Bancorp, Inc. is located at 2 East Main
Street,  Georgetown,  Massachusetts  01833,  and its  telephone  number is (978)
352-8600.  Georgetown Bancorp,  Inc. is subject to comprehensive  regulation and
examination by the OTS.

Georgetown Savings Bank

      Georgetown Savings Bank (the "Bank") is a federally chartered savings bank
headquartered  in  Georgetown,   Massachusetts.   Georgetown  Savings  Bank  was
originally  founded in 1868. In  connection  with its  reorganization  and stock
offering,  Georgetown  Savings  Bank  converted  from a  Massachusetts-chartered
savings  bank  to a  federally  chartered  savings  bank  on  January  5,  2005.
Georgetown Savings Bank conducts business from its main office located at 2 East
Main Street in  Georgetown,  Massachusetts,  and its branch  offices  located in
North Andover, Massachusetts and Rowley, Massachusetts.  The telephone number at
its main  office  is (978)  352-8600.  Georgetown  Savings  Bank is  subject  to
comprehensive regulation and examination by the OTS.

General

      Our principal  business has consisted of attracting  retail  deposits from
the general  public in the eastern  Massachusetts  and  southern  New  Hampshire
regions  and  investing  those  deposits,  together  with funds  generated  from
operations,  primarily in one- to four-family residential mortgage loans and, to
a lesser  extent,  home  equity  loans and  lines of  credit,  multi-family  and
commercial real estate loans,  construction  loans,  commercial loans,  consumer
loans,  and  investment  securities.  The  Company's  strategic  plan includes a
greater emphasis on developing commercial business activities,  both deposit and
lending  customer  relationships.  Several  commercial  relationships

                                       2
<PAGE>

have been  developed  outside our primary  market area. The strategic plan calls
for the development of a mortgage banking operation. However, due to concerns in
the mortgage market,  the development of the mortgage banking operation has been
postponed.

      Our  revenues  are  derived   principally   from  interest  on  loans  and
securities.  We also generate  revenues from fees and service  charges and other
income. Our primary sources of funds are deposits,  borrowings and principal and
interest payments on loans and securities.

Risk Factors

      Our loan portfolio  includes loans with a higher risk of loss.  Georgetown
Savings Bank originates commercial and industrial loans,  commercial real estate
loans,  consumer  loans,  and residential  mortgage loans  generally  within our
primary market area. In accordance with the Company's strategic plan, commercial
relationships  have been  developed  outside our existing  primary  market area.
Georgetown  Savings Bank is developing and  implementing a lending strategy that
focuses less on residential real estate lending and more on servicing commercial
customers, including increased emphasis on commercial and industrial lending and
commercial deposit  relationships.  Commercial and industrial loans,  commercial
real estate loans, and consumer loans may expose a lender to greater credit risk
than loans secured by residential  real estate  because the collateral  securing
these loans may not be sold as easily as residential  real estate.  In addition,
commercial  real estate and  commercial  and  industrial  loans may also involve
relatively  large loan balances to individual  borrowers or groups of borrowers.
These loans also have greater credit risk than  residential  real estate for the
following reasons:

      o     Commercial and Industrial  Loans.  Repayment is generally  dependent
            upon the successful operation of the borrower's business.

      o     Commercial Real Estate Loans. Repayment is dependent on income being
            generated in amounts sufficient to cover operating expenses and debt
            service.

      o     Consumer Loans.  Consumer loans are collateralized,  if at all, with
            assets  that may not  provide an  adequate  source of payment of the
            loan due to depreciation, damage or loss.

      Any downturn in the real estate market or local  economy  could  adversely
affect  the value of the  properties  securing  the loans or  revenues  from the
borrower's business, thereby increasing the risk of non-performing loans.

      If our  allowance  for loan losses is not  sufficient to cover actual loan
losses,  our earnings  could  decrease.  Our loan  customers may not repay their
loans according to their terms and the collateral  securing the payment of these
loans may be  insufficient  to pay any remaining loan balance.  We therefore may
experience  significant loan losses,  which could have a material adverse effect
on our operating results.

      Material  additions to our allowance for loan losses also would materially
decrease our net income,  and the  charge-off  of loans may cause us to increase
the   allowance.   We  make  various   assumptions   and  judgments   about  the
collectibility  of our loan  portfolio,  including the  creditworthiness  of our
borrowers  and the  value  of the  real  estate  and  other  assets  serving  as
collateral for the repayment of many of our loans. We rely on our experience and
our evaluation of economic  conditions,  among other factors, in determining the
amount  of the  allowance  for  loan  losses.  If our  assumptions  prove  to be
incorrect,  our  allowance for loan losses may not be sufficient to cover losses
inherent in our loan portfolio, resulting in additions to our allowance.

      Changes in interest rates could adversely affect our results of operations
and financial  condition.  Our  profitability  depends  substantially on our net
interest income,  which is the difference  between the interest income earned on
our   interest-earning   assets   and   the   interest   expense   paid  on  our
interest-bearing  liabilities.  Increases in interest  rates may  decrease  loan
demand and make it more difficult for borrowers to repay  adjustable rate loans.
In addition,  as market interest rates rise, we will have competitive  pressures
to increase the rates we pay on deposits, which will result in a decrease of our
net interest income.

                                       3
<PAGE>

      We also are  subject  to  reinvestment  risk  associated  with  changes in
interest  rates.  Changes in interest rates may affect the average life of loans
and  mortgage-related  securities.  Decreases  in  interest  rates can result in
increased  prepayments of loans and  mortgage-related  securities,  as borrowers
refinance to reduce borrowing costs. Under these  circumstances,  we are subject
to  reinvestment  risk to the  extent  that we are unable to  reinvest  the cash
received  from such  prepayments  at rates that are  comparable  to the rates on
existing loans and securities.

      Our local economy may affect our future growth possibilities.  Our current
primary market area is principally located in Essex County, Massachusetts region
and, to a lesser extent, southern New Hampshire. Our future growth opportunities
depend on the growth and  stability of our  regional  economy and our ability to
expand  our  market  area.  A  downturn  in our local  economy  may limit  funds
available for deposit and may negatively affect our borrowers'  ability to repay
their  loans on a  timely  basis,  both of which  could  have an  impact  on our
profitability.  In accordance  with the  Company's  strategic  plan,  commercial
relationships have been developed outside our existing primary market area.

      We depend on our  executive  officers  and key  personnel  to continue the
implementation  of our  long-term  business  strategy and could be harmed by the
loss of their services.  We believe that our continued growth and future success
will  depend  in  large  part  upon  the  skills  of our  management  team.  The
competition  for  qualified  personnel  in the  financial  services  industry is
intense,  and the loss of our key  personnel  or an  inability  to  continue  to
attract,  retain and motivate key personnel could adversely affect our business.
We cannot  assure you that we will be able to retain our existing key  personnel
or  attract  additional  qualified   personnel.   Although  we  have  employment
agreements  with  our  President  and  Chief  Executive  Officer  and our  Chief
Financial  Officer,  the loss of the  services  of one or more of our  executive
officers and key  personnel  could impair our ability to continue to develop our
business strategy.

      We  operate in a highly  regulated  environment,  and  changes in laws and
regulations  to which  we are  subject  may  adversely  affect  our  results  of
operations.   Georgetown  Savings  Bank  is  subject  to  extensive  regulation,
supervision and examination by the OTS, as its chartering authority,  and by the
Federal  Deposit  Insurance  Corporation  (the  "FDIC")  as the  insurer  of its
deposits up to certain  limits.  In  addition,  the OTS  regulates  and oversees
Georgetown  Bancorp,  Inc. and  Georgetown  Bancorp,  MHC. We also belong to the
Federal Home Loan Bank System and, as a member of such system, we are subject to
certain limited regulations  promulgated by the Federal Home Loan Bank of Boston
(the "FHLB").  This regulation and supervision limits the activities in which we
may engage.  The purpose of regulation  and  supervision is primarily to protect
our  depositors and borrowers  and, in the case of FDIC  regulation,  the FDIC's
insurance fund. Regulatory authorities have extensive discretion in the exercise
of their  supervisory  and  enforcement  powers.  They may,  among other things,
impose   restrictions   on  the   operation  of  a  banking   institution,   the
classification  of assets by such institution and such  institution's  allowance
for loan  losses.  Regulatory  and law  enforcement  authorities  also have wide
discretion and extensive  enforcement  powers under various consumer  protection
and civil  rights laws,  including  the  Truth-in-Lending  Act, the Equal Credit
Opportunity Act, the Fair Housing Act, and the Real Estate Settlement Procedures
Act.  Any  change in the laws or  regulations  applicable  to us, or in  banking
regulators' supervisory policies or examination procedures,  whether by the OTS,
the FDIC, other state or federal regulators, or the United States Congress could
have a material adverse effect on our business,  financial condition, results of
operations and cash flows.

      Competition  in our primary  market area may reduce our ability to attract
and retain deposits and originate loans. We operate in a competitive  market for
both attracting deposits,  which is our primary source of funds, and originating
loans.  Historically,  our most direct competition for savings deposits has come
from  credit  unions,   community  banks,  large  commercial  banks  and  thrift
institutions in our primary market area.  Particularly in times of extremely low
or  extremely  high  interest  rates,  we  have  faced  additional   significant
competition  for  investors'   funds  from  brokerage  firms  and  other  firms'
short-term money market securities and corporate and government securities.  Our
competition for loans comes principally from mortgage brokers, commercial banks,
other thrift  institutions,  and insurance  companies.  Such competition for the
origination  of loans and  deposits  may limit our future  growth  and  earnings
prospects.

      Our charter and bylaws may  prevent a  transaction  you may favor or limit
our growth opportunities, which could cause the market price of our common stock
to  decline.  Certain  provisions  of our  charter  and  bylaws  and  applicable
provisions  of federal  law and  regulations  may  delay,  inhibit or prevent an
organization or person from

                                       4
<PAGE>

gaining  control of Georgetown  Bancorp,  Inc.  though a tender offer,  business
combination,  proxy  context or some other  method,  even though you might be in
favor of the transaction.

      We may  not be able  to pay  dividends  in the  future.  We are  dependent
primarily  upon  Georgetown  Savings  Bank  for our  earnings  and  funds to pay
dividends on our common stock. The payment of dividends also is subject to legal
and regulatory restrictions. Any payment of dividends in the future will depend,
in large part, on Georgetown  Savings  Bank's  earnings,  capital  requirements,
financial  condition  and  other  factors  considered  relevant  by our Board of
Directors.

      Because  Georgetown  Bancorp,  MHC owns a majority  of our  common  stock,
Georgetown  Bancorp,  MHC may  prevent  transactions  you  may  like.  The  same
directors and officers who manage Georgetown Savings Bank also manage Georgetown
Bancorp,  Inc. and Georgetown Bancorp,  MHC. The board of trustees of Georgetown
Bancorp,  MHC  will  control  the  outcome  of  most  matters  put to a vote  of
stockholders of Georgetown Bancorp, Inc. As a federally chartered mutual holding
company,  the board of  Georgetown  Bancorp,  MHC must ensure that  interests of
depositors of Georgetown  Savings Bank are represented and considered in matters
put to a vote of stockholders of Georgetown Bancorp,  Inc. Therefore,  we cannot
assure  you that  the  votes  cast by  Georgetown  Bancorp,  MHC will be in your
personal best interests as a stockholder.

Market Area

      We primarily  serve  communities  located in Essex  County,  Massachusetts
region and, to a lesser extent,  southern New Hampshire. At June 30, 2008, 68.2%
of our total loan portfolio consisted of loans secured by real estate located in
Essex County,  Massachusetts.  In accordance with the Company's  strategic plan,
several  commercial  relationships  have been  developed  outside  our  existing
primary market area.

      Essex County is located in the northeastern  portion of  Massachusetts,  a
largely  suburban area adjacent to the city of Boston.  Georgetown is located 30
miles north of Boston near  Interstate  95, the major  north-south  highway that
runs along the East Coast of the United States.  Consistent  with suburban areas
located  near large  metropolitan  areas in general,  the economy in  Georgetown
Savings   Bank's  primary  market  area  is  based  on  a  mixture  of  service,
manufacturing,  wholesale/retail  trade,  and state and  local  government.  The
primary market area also serves as a bedroom community for individuals  employed
in nearby Boston.  Maintaining  operations near a large metropolitan area serves
as a benefit to Georgetown Savings Bank in periods of economic growth,  while at
the same time fosters  significant  competition for financial  services.  Future
growth  opportunities  for  Georgetown  Savings  Bank depend in part on national
economic growth  factors,  the future economic growth in our primary market area
and the intensity of the competitive environment for financial services.

Competition

      We face intense  competition within our primary market area both in making
loans and attracting deposits.  Our primary market area has a high concentration
of financial  institutions  including  large money  center and  regional  banks,
community banks and credit unions.  Some of our  competitors  offer products and
services  that we  currently  do not offer,  such as trust  services and private
banking.

      Our competition for loans and deposits comes  principally  from commercial
banks, savings and cooperative  institutions,  mortgage banking firms and credit
unions. We face additional competition for deposits from short-term money market
funds, brokerage firms, mutual funds and insurance companies.  Our primary focus
is to build and develop profitable  customer  relationships  across all lines of
business, while maintaining our role as a community bank.

Lending Activities

      Our principal  lending activity has been the origination of first mortgage
loans for the purchase or refinancing of one- to  four-family  residential  real
property. We have historically retained all loans that we originate, although we
will occasionally enter into loan  participations.  The Company's strategic plan
includes a greater emphasis on developing  commercial business activities,  both
deposit  and  lending  customer  relationships.   Several  of

                                       5
<PAGE>

these commercial  relationships have been developed outside our existing primary
market area.  We have been  successful  in executing  this part of our strategic
plan, as total  commercial  loans were 30.4% of total loans as of June 30, 2008,
compared to 16.4% as of June 30,  2007.  The  strategic  plan also calls for the
development of a mortgage  banking  operation.  However,  due to concerns in the
mortgage  market,  the  development of the mortgage  banking  operation has been
postponed.   One-  to  four-family   residential   real  estate  mortgage  loans
represented  $90.0  million,  or 60.0% of our total loan  portfolio  at June 30,
2008.  We also offer home  equity  loans and lines of credit,  multi-family  and
commercial  real estate loans,  construction  loans,  commercial  loans and to a
lesser extent,  consumer  loans. At June 30, 2008,  multi-family  and commercial
real  estate  loans  totaled  $22.9  million,  or 15.3%  of our loan  portfolio,
commercial  construction  mortgage loans totaled $17.0 million,  or 11.4% of our
loan portfolio,  home equity loans and lines of credit totaled $11.6 million, or
7.7% of our loan portfolio,  commercial  loans totaled $5.6 million,  or 3.7% of
our loan portfolio and residential  construction loans totaled $2.3 million,  or
1.6% of our  loan  portfolio.  We also  originate  consumer  loans  that are not
secured by real estate,  including  automobile loans,  deposit account loans and
unsecured personal loans. At June 30, 2008, such loans totaled $486,000, or 0.3%
of our loan portfolio.

      Loan Portfolio Composition. The following table sets forth the composition
of our loan portfolio by type of loan as of the dates indicated.

<TABLE>
<CAPTION>
                                                               At June 30,
                                      -------------------------------------------------------------
                                                  2008                             2007
                                      ---------------------------       ---------------------------
                                        Amount           Percent          Amount           Percent
                                      ---------------------------       ---------------------------
                                                          (Dollars in thousands)
<S>                                   <C>                  <C>          <C>                  <C>
Residential loans:
    One- to four- family              $   89,992            60.01%      $   94,806            73.74%
    Construction                           2,338             1.56            1,589             1.24
    Home equity loans
     and lines of credit                  11,565             7.71           10,304             8.01
                                      ----------       ----------       ----------       ----------
Total residential mortgage loans         103,895            69.28          106,699            82.99

Commercial loans:
    Multi-family
     and commercial real estate           22,934            15.29           14,556            11.32
    Construction                          17,048            11.37            4,398             3.42
    Commercial                             5,607             3.74            2,157             1.68
                                      ----------       ----------       ----------       ----------
Total commercial loans                    45,589            30.40           21,111            16.42

Consumer                                     486             0.32              763             0.59
                                      ----------       ----------       ----------       ----------

Total loans:                             149,970           100.00%         128,573           100.00%
                                                       ==========                        ==========

Other items:
Net deferred loan costs                      151                               165
Allowance for loan losses                 (1,212)                           (1,079)
                                      ----------                        ----------

Total loans, net                      $  148,909                        $  127,659
                                      ==========                        ==========
</TABLE>

                                       6
<PAGE>

      Loan Portfolio  Maturities and Yields.  The following table summarizes the
scheduled repayments of our loan portfolio at June 30, 2008. Demand loans, loans
having no  stated  repayment  schedule  or  maturity,  and  overdraft  loans are
reported as being due in one year or less.


<TABLE>
<CAPTION>
                                                                                           Multi-family and
                                                  Residential       Home Equity Loans         Commercial            Commercial
                       One- to four- family      Construction      and Lines of Credit       Real Estate            Construction
                       --------------------   ------------------   -------------------    --------------------   -------------------

                                  Weighted              Weighted               Weighted               Weighted              Weighted
                                   Average               Average               Average                Average               Average
                         Amount     Rate       Amount     Rate       Amount      Rate      Amount       Rate       Amount     Rate
                        --------- --------    --------  --------   ---------   -------    ---------   --------   ---------  --------
                                                                 (Dollars in thousands)
<S>                     <C>          <C>      <C>         <C>      <C>           <C>      <C>           <C>      <C>           <C>
Due During the Years
Ending June 30,
---------------
2009                    $   1,421    6.88%    $     66    9.25%    $      --       --%    $   1,834     7.55%    $  12,025     6.55%
2010                          232    4.67          300    7.25            36     5.57           543     6.14         5,023     7.02
2011                          157    5.79           --      --            14     6.25         1,486     6.13            --       --
2012-2013                   2,925    5.21           --      --           184     6.39         4,900     7.41            --       --
2014-2018                  11,245    5.23           --      --         1,255     6.68         8,882     6.82            --       --
2019-2023                  11,960    5.29           --      --         2,903     5.87         2,003     6.68            --       --
2024 and beyond            62,052    5.74        1,972    6.23         7,173     5.13         3,286     7.40            --       --
                        ---------             --------             ---------              ---------              ---------

        Total           $  89,992    5.61%    $  2,338    6.45%    $  11,565     5.51%    $  22,934     7.02%    $  17,048     6.69%
                        =========             ========             =========              =========              =========

<CAPTION>
                             Commercial                 Consumer                      Total
                        --------------------     -----------------------      ---------------------
                                    Weighted                    Weighted                   Weighted
                                    Average                      Average                   Average
                         Amount       Rate        Amount          Rate         Amount        Rate
                        --------    --------     --------       --------      --------     --------
                                                 (Dollars in thousands)
<S>                     <C>           <C>        <C>              <C>         <C>             <C>
Due During the Years
Ending June 30,
---------------
2009                    $    729      5.07%      $    107         14.68%      $ 16,182        6.69%
2010                         312      6.66             61          6.18          6,507        6.84
2011                         961      7.83            114          8.21          2,732        6.80
2012-2013                    976      6.60            163          8.06          9,148        6.61
2014-2018                    854      6.42             --            --         22,236        5.99
2019-2023                    447      6.00             --            --         17,313        5.57
2024 and beyond            1,328      5.33             41          4.29         75,852        5.76
                        --------                 --------                     --------

        Total           $  5,607      6.24%      $    486          8.99%      $149,970        5.99%
                        ========                 ========                     ========
</TABLE>

The  following   table  sets  forth  the  scheduled   repayments  of  fixed  and
adjustable-rate loans at June 30, 2008 that are contractually due after June 30,
2009.

                                                   Due After June 30, 2009
                                         ---------------------------------------
                                           Fixed        Adjustable       Total
                                         ---------      ----------     ---------
                                                  (Dollars in thousand)

One-to four- family                      $  62,708      $  25,863      $  88,571
Residential construction                     1,036          1,236          2,272
Home equity loans
 and lines of credit                         4,059          7,506         11,565
Multi-family and
 Commercial real estate                     12,553          8,547         21,100
Commercial construction                      1,312          3,711          5,023
Commercial                                   2,692          2,186          4,878
Consumer                                       268            111            379
                                         ---------      ---------      ---------

        Total loans                      $  84,628      $  49,160      $ 133,788
                                         =========      =========      =========

                                        7
<PAGE>

      One- to Four-Family  Residential  Loans.  Our primary lending activity has
consisted of the origination of one- to four-family  residential mortgage loans,
a majority of which are  secured by  properties  located in our  primary  market
area. At June 30, 2008, $90.0 million, or 60.0% of our loan portfolio, consisted
of  one-  to  four-family  residential  mortgage  loans.  Historically,  we have
generally  retained for our portfolio  all loans that we originate.  However the
Company's  strategic  plan includes a portion of residential  loan  originations
being sold, both on a servicing  retained and servicing  released basis. One- to
four-family  mortgage loan originations are generally  obtained from our outside
and in-house  loan  representatives,  from existing or past  customers,  through
advertising,  and through referrals from local real estate brokers and attorneys
and  are  underwritten  pursuant  to  Georgetown  Savings  Bank's  policies  and
standards.  Generally,  one-  to  four-family  residential  mortgage  loans  are
originated in amounts up to 80% of the lesser of the appraised value or purchase
price of the property,  with private mortgage insurance required on loans with a
loan-to-value  ratio in excess of 80%. Fixed rate mortgage  loans  generally are
originated  for terms of 10, 15, 20, 25, 30 and 40 years.  Generally,  all fixed
rate residential  mortgage loans are underwritten  according to secondary market
policies and procedures.

      We also  offer  adjustable-rate  mortgage  loans  for one- to  four-family
properties,  primarily  with an  interest  rate based on the  one-year  Constant
Maturity Treasury Bill Index, which adjusts annually from the outset of the loan
or which adjusts annually after a three-or  five-year initial fixed rate period.
We originated  $1.2 million of adjustable  rate one- to four-family  residential
loans  during  the  fiscal  year  ended  June 30,  2008,  as  compared  to total
originations  of $8.9 million one- to four-family  residential  loans during the
same period.  Our adjustable rate mortgage loans  generally  provide for maximum
rate adjustments of 2% per adjustment,  with a lifetime maximum adjustment up to
6%,  regardless of the initial rate. Our adjustable rate mortgage loans amortize
over  terms  of up to  30  years.  Generally,  all  adjustable-rate  residential
mortgage  loans are  underwritten  according  to secondary  market  policies and
procedures.

      Adjustable  rate mortgage loans decrease the risk  associated with changes
in market  interest  rates by  periodically  repricing,  but involve other risks
because,  as interest rates  increase,  the underlying  payments by the borrower
increase, thus increasing the potential for default by the borrower. At the same
time, the marketability of the underlying  collateral may be adversely  affected
by higher interest rates. Upward adjustment of the contractual  interest rate is
also  limited by the maximum  periodic and lifetime  interest  rate  adjustments
permitted by our loan documents and, therefore,  the effectiveness of adjustable
rate mortgage loans may be limited  during  periods of rapidly  rising  interest
rates.  At June 30, 2008,  $25.9  million,  or 28.7% of our one- to  four-family
residential loans, had adjustable rates of interest.

      In an effort to provide financing for first-time homebuyers,  we offer our
own first-time  homebuyer loan program.  This program offers one- to four-family
residential  mortgage  loans to qualified  individuals.  These loans are offered
with terms and adjustable and fixed rates of interest  similar to our other one-
to four-family mortgage loan products, except that adjustable rate loans provide
for a maximum rate adjustment of 1% per adjustment. With this program, borrowers
do not  pay any  loan  origination  fees.  Such  loans  must  be  secured  by an
owner-occupied residence.  These loans are originated using similar underwriting
guidelines  as our other  one- to  four-family  mortgage  loans.  Such loans are
originated  in  amounts  of up to 95% of the lower of the  property's  appraised
value or the sale price.  Private mortgage  insurance is required for loans with
loan-to-value ratios of over 80%.

      All  residential  mortgage loans that we originate  include  "due-on-sale"
clauses,  which give us the right to declare a loan  immediately due and payable
in the event that, among other things,  the borrower sells or otherwise disposes
of the  real  property  subject  to the  mortgage  and the  loan is not  repaid.
Regulations  limit the  amount  that a  savings  bank may lend  relative  to the
appraised  value of the real  estate  securing  the loan,  as  determined  by an
appraisal of the property at the time the loan is originated.  All borrowers are
required to obtain title  insurance for the benefit of Georgetown  Savings Bank.
We also require homeowner's insurance and fire and casualty insurance and, where
circumstances warrant, flood insurance on properties securing real estate loans.
Our loan policy provides that we will not originate loans secured by real estate
that contains  underground  fuel storage  tanks.  At June 30, 2008,  our largest
residential  mortgage  loan had a  principal  balance  of $1.3  million  and was
secured  by a  residence  located  in  Salisbury,  Massachusetts.  This loan was
performing in accordance with its repayment terms.

      Home  Equity  Loans and Home  Equity  Lines of Credit.  We also offer home
equity loans and home equity lines of credit,  both of which are secured by one-
to four-family residences.  At June 30, 2008, home equity loans and equity lines
of credit totaled $11.6 million, or 7.7% of total loans.  Additionally,  at June
30, 2008,  the  unadvanced

                                       8
<PAGE>

amounts of home equity lines of credit totaled $10.8 million.  The  underwriting
standards  utilized for home equity  loans and equity lines of credit  include a
determination  of  the  applicant's   credit  history,   an  assessment  of  the
applicant's  ability to meet existing  obligations  and payments on the proposed
loan  and  the  value  of  the  collateral   securing  the  loan.  The  combined
loan-to-value  ratio  for home  equity  loans  and  equity  lines of  credit  is
generally  limited to 80%.  Home equity  loans are  offered  with fixed rates of
interest and with terms of up to 15 years.  Our home equity lines of credit have
adjustable  rates of interest  that are  generally  equal to the prime rate,  as
reported in The Wall Street Journal.

      Multi-Family  and Commercial Real Estate Loans. We originate  multi-family
and commercial real estate loans, including commercial lines of credit, that are
generally  secured by five or more unit apartment  buildings and properties used
for  business  purposes  such as small  office  buildings  or retail  facilities
located in eastern  Massachusetts.  In accordance  with the Company's  strategic
plan, several commercial  relationships have been developed outside our existing
primary market area. At June 30, 2008,  multi-family  and commercial real estate
mortgage  loans totaled $22.9  million,  which amounted to 15.3% of total loans.
Our real estate  underwriting  policies  provide  that such loans may be made in
amounts of up to 80% of the appraised value of the property,  provided such loan
complies  with our  loans-to-one  borrower  limit for these types of loans.  Our
loans-to-one  borrower  limit is 15% of  Georgetown  Savings  Bank's  unimpaired
capital,  which,  at June 30,  2008  was  $2.3  million.  Our  multi-family  and
commercial  real  estate  loans may be made with terms of up to 10 years with an
amortization  of 25 years and are offered with interest  rates that are fixed or
adjust  periodically and are generally indexed to Federal Home Loan Bank advance
rates.  In reaching a decision on whether to make a  multi-family  or commercial
real estate loan,  we consider the net  operating  income of the  property,  the
borrower's expertise and credit history, and the profitability of the underlying
business and the value of the underlying property. In addition,  with respect to
real estate rental  properties,  we will also consider the term of the lease and
the quality of the tenants.  We generally  require that the properties  securing
these real estate loans have debt service coverage ratios (the ratio of earnings
before  debt  service  to debt  service)  of at least 1.2  times.  Environmental
surveys are generally  required for  commercial  real estate  loans.  Generally,
multi-family and commercial real estate loans made to corporations, partnerships
and  other  business  entities  require  the  principals  to  execute  the  loan
agreements in their  individual  capacity,  as well as signing on behalf of such
business entity.

      A commercial  borrower's financial  information is monitored on an ongoing
basis by requiring periodic financial statement updates, payment history reviews
and periodic  face-to-face  meetings  with the borrower.  We require  commercial
borrowers  to provide  annually  updated  financial  statements  and federal tax
returns.  These  requirements  also apply to the  individual  principals  of our
commercial borrowers.  We also require borrowers with rental investment property
to provide an annual report of income and expenses for the property, including a
tenant list and copies of leases,  as applicable.  The largest  multi-family and
commercial real estate loan in our portfolio at June 30, 2008 was a $1.7 million
loan   collateralized   by   commercial   property   located  in  Essex  County,
Massachusetts. This loan was performing according to its terms at June 30, 2008.

      Loans  secured  by   commercial   real  estate,   including   multi-family
properties,  generally  involve larger principal amounts and a greater degree of
risk than one- to four-family  residential  mortgage loans.  Because payments on
loans secured by commercial real estate, including multi-family properties,  are
often  dependent  on  successful  operation  or  management  of the  properties,
repayment of such loans may be affected by adverse conditions in the real estate
market or the economy.

      Construction Loans. We originate construction loans for the development of
one- to  four-family  residential  properties  primarily  located in our primary
market area. Residential construction loans are generally offered to experienced
local developers operating in our primary market area and to individuals for the
construction  of  their  personal  residences.  At June  30,  2008,  residential
construction loans amounted to $2.3 million, or 1.6% of total loans. At June 30,
2008, the unadvanced  portion of these  residential  construction  loans totaled
$708,000.

      Our residential  construction  loans generally  provide for the payment of
interest only during the construction  phase, which is usually 12 months. In the
case of construction  loans to individuals for the construction of their primary
residences,  our policies require that the loan convert to a permanent  mortgage
loan at the end of the construction phase. Residential construction loans can be
made with a  maximum  loan-to-value  ratio of 90%,  provided  that the  borrower
obtains private  mortgage  insurance on the loan if the loan balance exceeds 80%
of the  appraised  value or sales  price,  whichever  is  less,  of the  secured
property. Residential construction loans are

                                       9
<PAGE>

generally made on the same terms as our one- to four-family  mortgage  loans. At
June 30, 2008, the largest outstanding residential  construction loan commitment
was for  $980,000  for the  construction  of a residence  located in  Lexington,
Massachusetts,  $20,000  of which  was  outstanding.  This  loan was  performing
according to its terms at June 30, 2008.  Before  making a commitment  to fund a
residential  construction  loan,  we require an  appraisal on the property by an
independent licensed appraiser.  We also review and inspect each property before
disbursement  of funds during the term of the  construction  loan. Loan proceeds
are disbursed after inspection based on the percentage of completion method.

      We also make construction loans for commercial  development projects.  The
projects include multi-family, apartment, retail and office buildings, and strip
malls. These loans generally have an interest-only phase during construction and
are  indexed  based on the prime rate plus a margin,  as  published  in The Wall
Street Journal.  Disbursement of funds is at our sole discretion and is based on
the progress of construction.  The maximum  loan-to-value ratio limit applicable
to these loans is generally 80%. At June 30, 2008, commercial construction loans
totaled $17.0 million, or 11.4% of total loans. At June 30, 2008, the unadvanced
portion of these commercial construction loans totaled $4.9 million. At June 30,
2008, the largest  commercial  construction loan commitment was for $2.4 million
located in South Boston, Massachusetts,  $993,000 of which was outstanding. This
loan was performing according to its terms at June 30, 2008.

      Construction and development  financing is generally considered to involve
a  higher  degree  of  credit  risk  than   long-term   financing  on  improved,
owner-occupied  real estate. Risk of loss on a construction loan depends largely
upon the  accuracy  of the  initial  estimate  of the value of the  property  at
completion of construction  compared to the estimated cost (including  interest)
of construction  and other  assumptions.  If the estimate of  construction  cost
proves to be  inaccurate,  we may be required to advance funds beyond the amount
originally   committed   in  order  to  protect  the  value  of  the   property.
Additionally,  if the  estimate  of value  proves  to be  inaccurate,  we may be
confronted with a project,  when completed,  having a value that is insufficient
to assure full repayment.

      The   maximum   amount  of  a   construction   loan  is   limited  by  our
loans-to-one-borrower   limit.  Our  loans-to-one   borrower  limit  is  15%  of
Georgetown Savings Bank's unimpaired  capital,  which at June 30, 2008, was $2.3
million.

      Commercial  Loans.  At June 30, 2008,  we had $5.6  million in  commercial
loans, which amounted to 3.7% of total loans. We make commercial  business loans
in our primary market area to a variety of professionals,  sole  proprietorships
and small businesses.  In accordance with the Company's  strategic plan, several
commercial relationships have been developed outside our existing primary market
area.  Commercial  lending  products  include term loans and revolving  lines of
credit.  The  maximum  amount of a  commercial  business  loan is limited by our
loans-to-one-borrower   limit.  Our  loans-to-one   borrower  limit  is  15%  of
Georgetown Savings Bank's unimpaired  capital,  which at June 30, 2008, was $2.3
million.  Such loans are generally used for short and long-term  working capital
purposes such as purchasing inventory, equipment or furniture.  Commercial loans
are made with either adjustable or fixed rates of interest and fixed maturity or
lines of  credit.  Variable  rates are  generally  based on the prime  rate,  as
published in The Wall Street Journal, plus a margin. Fixed rate commercial loans
are set either at a margin above the FHLB  comparable  advance rate or the prime
rate swap curve.  When  making  commercial  loans,  we  consider  the  financial
statements of the  borrower,  our lending  history with the  borrower,  the debt
service  capabilities of the borrower,  the projected cash flows of the business
and the value of the collateral,  if applicable.  Commercial loans are generally
secured by a variety of collateral, primarily accounts receivable, inventory and
equipment,  and we also require the business principals to execute such loans in
their  individual  capacities.  Depending  on the  amount  of the  loan  and the
collateral used to secure the loan,  commercial  loans are made in amounts of up
to 80% of the  value of the  collateral  securing  the  loan.  Commercial  loans
generally  have greater  credit risk than  residential  mortgage  loans.  Unlike
residential  mortgage  loans,  which  generally  are  made on the  basis  of the
borrower's ability to make repayment from his or her employment or other income,
and which are  secured by real  property  whose  value  tends to be more  easily
ascertainable,  commercial  loans  generally  are  made  on  the  basis  of  the
borrower's  ability  to repay  the loan  from  the cash  flow of the  borrower's
business. As a result, the availability of funds for the repayment of commercial
loans may depend  substantially on the success of the business itself.  Further,
any collateral  securing the loans may depreciate over time, may be difficult to
appraise and may fluctuate in value. We seek to minimize these risks through our
underwriting  standards.  At June 30, 2008, our largest  outstanding  commercial
loan was for  $800,000  and was  secured  by stock  certificates.  This loan was
performing according to its terms at June 30, 2008.

                                       10
<PAGE>

      Consumer Loans. We offer a limited range of consumer loans, principally to
Georgetown  Savings  Bank  customers  residing in our  primary  market area with
acceptable credit ratings.  Our consumer loans generally consist of loans on new
and used automobiles,  loans secured by deposit accounts and unsecured  personal
loans.  Consumer loans totaled $486,000,  or 0.3% of our total loan portfolio at
June 30, 2008.

      Origination,  Participation and Servicing of Loans. Lending activities are
conducted  primarily  by our loan  personnel  operating  at our main and  branch
office  locations.  All loans originated by us are underwritten  pursuant to our
policies and procedures. We originate both adjustable rate and fixed rate loans.
Our ability to originate  fixed or adjustable  rate loans is dependent  upon the
relative  customer  demand for such loans,  which is affected by the current and
expected  future  levels of market  interest  rates.  From time to time, we will
participate in loans,  sometimes as the "lead  lender".  Whether we are the lead
lender or not, we underwrite our participation  portion of the loan according to
our own  underwriting  criteria and  procedures.  At June 30, 2008,  we had $2.8
million  in loan  participation  interests  in which  we were the lead  bank and
$731,000 in a loan  participation  interest  in which we were the  participating
bank.

      Historically, we have generally retained in our portfolio and serviced all
loans  that we  originated.  However,  it is  expected  that a portion of future
residential loan  originations may be sold on a servicing  released or servicing
retained basis. Loan servicing includes  collecting and remitting loan payments,
accounting  for  principal  and  interest,   contacting  delinquent  mortgagors,
supervising  foreclosures  and property  dispositions in the event of unremedied
defaults,  making certain  insurance and tax payments on behalf of the borrowers
and  generally  administering  the loans.  During the fiscal year ended June 30,
2008,  we  originated  $8.9  million of fixed rate and  adjustable  rate one- to
four-family loans, all of which loans were retained by us.

      The following table shows our loan  originations and repayment  activities
for the fiscal years indicated.

                                                         Years ended June 30,
                                                      -------------------------
                                                         2008            2007
                                                      ---------       ---------
                                                            (In thousands)
Total Loans at begininng of year                      $ 128,573       $ 129,615
Loans Originated:
      One- to four- family                                8,933           6,121
      Residential construction                            3,365           1,052
      Home equity loans and lines of credit               5,945           3,658
      Multi-family and commercial real estate            10,611           4,817
      Commercial construction                            16,765           6,023
      Commercial                                          6,781           1,963
      Consumer                                              216             625
                                                      ---------       ---------
        Total loans originated                           52,616          24,259
      Loans purchased                                        --              --
      Deduct:
        Principal repayments                            (31,219)        (25,301)
                                                      ---------       ---------
      Net loan activity                                  21,397          (1,042)
                                                      ---------       ---------
      Total loans at end of year                      $ 149,970       $ 128,573
                                                      =========       =========

      Loan Approval Procedures and Authority.  Georgetown Savings Bank's lending
activities follow written,  non-discriminatory  underwriting  standards and loan
origination  procedures  established  by  Georgetown  Savings  Bank's  Board  of
Directors.  The loan  approval  process is  intended  to assess  the  borrower's
ability to repay the loan,  the  viability of the loan,  and the adequacy of the
value of the  collateral  that will  secure the loan.  To assess the  borrower's
ability to repay, we review the employment and credit history and information on
the historical and projected income and expenses of borrowers.

      Georgetown   Savings  Bank's   policies  and  loan  approval   limits  are
established  by the Board of Directors.  The Board of Directors  has  designated
certain  individuals of Georgetown  Savings Bank (ranging from senior

                                       11
<PAGE>

management  to  senior  loan  underwriter)  (the  "Designated  Individuals")  to
consider and approve loans within their designated  authority.  Loans in amounts
above the authorized  limits of the Designated  Individuals and loans outside of
the designated  authority of the Designated  Individuals require the approval of
Georgetown  Savings Bank's Loan  Committee.  The Loan Committee  consists of two
non-employee  directors  and three  employees of Georgetown  Savings  Bank.  All
loans,  which are  approved by the  Designated  Individuals,  are  reviewed  and
ratified by the Loan  Committee  and the full Board of Directors  of  Georgetown
Savings Bank.

      With  regard  to the  lending  authority  of the  Designated  Individuals,
Georgetown  Savings Bank's  President and Chief Executive  Officer,  Senior Vice
President  and Chief Loan  Officer  and Senior  Vice  President  and Senior Loan
Officer each possess  individual  authority to approve all residential  types of
credit in amounts up to $750,000.  Any two of these three Designated Individuals
may also approve all residential types of credits in amounts up to $1 million on
a combined basis. With regard to commercial  lending authority of the Designated
Individuals, Georgetown Savings Bank's President and Chief Executive Officer and
Senior Vice President and Chief Loan Officer each possess  individual  authority
to approve  all  commercial  types of credit in amounts up to  $750,000  and the
Senior Vice President and Senior Loan Officer possesses  individual authority to
approve all  commercial  types of credit in amounts up to  $500,000.  Georgetown
Savings Bank's  President and Chief Executive  Officer and Senior Vice President
and Chief Loan  Officer  may also  approve  all  commercial  types of credits in
amounts up to $1 million on a combined basis.  Georgetown  Savings Bank's senior
loan underwriter  possesses  individual authority to approve one- to four-family
mortgage loans that meet the eligibility  requirements for sale to Fannie Mae on
the secondary mortgage market.

      We typically  require  appraisals  of all real  property  securing  loans,
except for home equity  loans and equity  lines of credit,  in which case we may
use the tax assessed  value of the property  securing such loan.  Appraisals are
performed by independent licensed appraisers. All appraisers are approved by the
Board of Directors annually.  We require fire and extended coverage insurance in
amounts at least equal to the principal amount of the loan.

Non-performing and Problem Assets

      Georgetown  Savings Bank commences  collection efforts when a loan becomes
seven days past due with system  generated  reminder  notices.  Subsequent  late
charge and  delinquent  notices  are issued and the  account is  monitored  on a
regular  basis  thereafter.  Personal,  direct  contact  with  the  borrower  is
attempted  early in the collection  process as a courtesy  reminder and later to
determine the reason for the  delinquency  and to safeguard  Georgetown  Savings
Bank's collateral. When a loan is more than 60 days past due, the credit file is
reviewed  and, if deemed  necessary,  information  is updated or  confirmed  and
collateral  re-evaluated.  We make every  effort to  contact  the  borrower  and
develop a plan of repayment to cure the delinquency.  All loans 30 days past due
are reported to the Loan Committee and the Board of Directors. Upon direction of
the Loan Committee,  if no repayment plan is in process, the file is referred to
counsel for the commencement of foreclosure or other collection efforts.

      Loans are generally  placed on non-accrual  status when they are more than
90 days  delinquent,  unless  the  credit  is well  secured  and in  process  of
collection.  When  loans are  placed on a  non-accrual  status,  unpaid  accrued
interest is fully reserved,  and further income is recognized only to the extent
cash payments are received.

      Non-performing  Loans. At June 30, 2008, $1.4 million or 0.9% of our total
loans were  non-performing  loans.  These  loans  consisted  of six loans to six
individual  borrowers.  All of the loans are secured by real property including,
personal  residence and commercial real estate.  Included in the  non-performing
loan total at June 30, 2008 were three loans  totaling  $879,000  that have been
restructured.  As of  June  30,  2008  the  borrowers  were  not  performing  in
accordance with the restructured terms.

                                       12
<PAGE>

         Non-performing Assets. The table below sets forth the amounts and
categories of our non-performing assets at the dates indicated. Delinquent loans
that are 90 days or more past due are generally considered non-performing
assets.

                                                             At June 30,
                                                     -------------------------
                                                        2008            2007
                                                     ---------       ---------
                                                       (Dollars in thousands)
Non-accrual loans:
     One- to four- family                            $     508       $     517
     Residential construction                               --              --
     Home equity loans and lines of credit                  47              47
     Multi-family and commercial real estate                --              --
     Commercial construction                               612              --
     Commercial                                             --              --
     Consumer                                               --               1
                                                     ---------       ---------
     Total non-accrual loans                             1,167             565
                                                     ---------       ---------

Restructured loans                                         219           1,701

     Total non-performing loans                          1,386           2,266
                                                     ---------       ---------

     Total non-performing assets                     $   1,386       $   2,266
                                                     =========       =========

Ratios:
     Non-performing loans to total loans                  0.92%           1.76%
     Non-performing assets to total assets                0.75%           1.37%

      At June 30, 2008,  non-accrual loans totaled $1.2 million.  For the fiscal
year ended June 30, 2008,  gross  interest  income that would have been recorded
had these  non-accruing  loans been current in  accordance  with their  original
terms  amounted to $146,000.  Interest  income  recognized on such loans for the
fiscal year ended June 30, 2008 was $80,000.

                                       13
<PAGE>

      Delinquent  Loans. The following table sets forth the number and amount of
delinquent loans by type at the dates indicated.

<TABLE>
<CAPTION>
                                                              Loans Delinquent For
                                                ------------------------------------------------
                                                      60-89 Days             90 Days and Over               Total
                                                ----------------------    ----------------------    ----------------------
                                                  Number       Amount       Number      Amount       Number       Amount
                                                ---------    ---------    ---------    ---------    ---------    ---------
                                                                           (Dollars in thousands)
<S>                                                     <C>  <C>                  <C>  <C>                  <C>  <C>
At June 30, 2008
----------------
     One- to four- family                               3    $     273            3    $     508            6    $     781
     Residential construction                          --           --           --           --           --           --
     Home equity loans and lines of credit             --           --            1           47            1           47
     Multi-family and commercial real estate           --           --           --           --           --           --
     Commercial construction                           --           --            1          612            1          612
     Commercial                                        --           --           --           --           --           --
     Consumer                                          --           --           --           --           --           --
                                                ---------    ---------    ---------    ---------    ---------    ---------
       Total                                            3    $     273            5    $   1,167            8    $   1,440
                                                =========    =========    =========    =========    =========    =========

At June 30, 2007
----------------
     One- to four- family                               1    $      75            1    $     517            2    $     592
     Residential construction                          --           --           --           --           --           --
     Home equity loans and lines of credit             --           --            1           47            1           47
     Multi-family and commercial real estate           --           --           --           --           --           --
     Commercial construction                           --           --           --           --           --           --
     Commercial                                        --           --           --           --           --           --
     Consumer                                          --           --            1            1            1            1
                                                ---------    ---------    ---------    ---------    ---------    ---------
       Total                                            1    $      75            3    $     565            4    $     640
                                                =========    =========    =========    =========    =========    =========
</TABLE>

      Potential  problem loans are loans that are currently  performing  and are
not included in  non-accrual  loans above,  but may be  delinquent.  These loans
require an  increased  level of  management  attention  and may be included at a
later  date in  non-accrual  loans,  so they are  considered  by  management  in
assessing the adequacy of the allowance for loan losses.  At June 30, 2008, $1.1
million, or 0.7% of total loans had been identified as potential problem loans.

      Classified Assets. OTS regulations  provide that loans and other assets of
lesser  quality  should be  classified  as  "substandard",  "doubtful" or "loss"
assets. An asset is considered  "substandard" if it is inadequately protected by
the  current net worth and paying  capacity of the obligor or of the  collateral
pledged,  if  any.  "Substandard"  assets  include  those  characterized  by the
"distinct  possibility" that we will sustain "some loss" if the deficiencies are
not  corrected.  Assets  classified  as  "doubtful"  have all of the  weaknesses
inherent in those classified  "substandard," with the added  characteristic that
the weaknesses present make "collection or liquidation in full," on the basis of
currently  existing facts,  conditions,  and values,  "highly  questionable  and
improbable."  Assets  classified as "loss" are those considered  "uncollectible"
and  of  such  little  value  that  their  continuance  as  assets  without  the
establishment of a specific loss reserve is not warranted.  We classify an asset
as  "special  mention"  if the  asset has a  potential  weakness  that  warrants
management's close attention.

      On the basis of  management's  review of our assets,  at June 30, 2008, we
had classified $794,000 of our assets as special mention, which consisted of two
loans to two  separate  borrowers.  At June 30,  2008,  we had  classified  $1.3
million  of our assets as  substandard,  which  consisted  of five loans to five
separate  borrowers,  of which  $1.1  million  of  those  assets  classified  as
substandard  were on  non-accrual  status.  At June 30, 2008, we had  classified
$47,000  of our  assets  as  doubtful,  which  was  reserved  for at 100% and on
non-accrual  status.  At June 30, 2008 we had no loans  classified as loss.  The
loan  portfolio is reviewed on a regular  basis to  determine  whether any loans
require  classification  in  accordance  with  applicable  regulations.  Not all
classified assets constitute non-performing assets.

                                       14
<PAGE>

      Allowance for Loan Losses. The allowance for loan losses is established as
losses are  estimated  to have  occurred  through a  provision  for loan  losses
charged to  earnings.  Loan  losses  are  charged  against  the  allowance  when
management  believes  the  uncollectibility  of a  loan  balance  is  confirmed.
Subsequent recoveries, if any, are credited to the allowance.

      The  allowance  for  loan  losses  is  evaluated  on a  regular  basis  by
management and is based upon management's  periodic review of the collectibility
of the loans in light of known and  inherent  risks in the  nature and volume of
the loan portfolio, adverse situations that may affect the borrower's ability to
repay,  estimated  value of any underlying  collateral  and prevailing  economic
conditions.  This evaluation is inherently  subjective as it requires  estimates
that  are  susceptible  to  significant  revision  as more  information  becomes
available.

      The allowance  consists of specific,  general and unallocated  components.
The specific  component  relates to loans that are  classified as impaired.  For
such loans that are classified as impaired, an allowance is established when the
fair value of the existing  collateral  of the  impaired  loan is lower than the
carrying value of that loan. The general component covers  non-classified  loans
and is based on historical loss experience adjusted for qualitative  factors. An
unallocated  component is  maintained to cover  uncertainties  that could affect
management's estimate of probable losses.

      A loan is  considered  impaired  when,  based on current  information  and
events,  it is probable that the Company will be unable to collect the scheduled
payments of principal or interest when due according to the contractual terms of
the loan agreement.  Factors considered by management in determining  impairment
include  payment  status,  collateral  value,  and the probability of collecting
scheduled  principal  and  interest  payments  when due.  Loans that  experience
insignificant payment delays and payment shortfalls generally are not classified
as impaired.

                                       15
<PAGE>

      Allowance for Loan Losses.  The following table sets forth activity in our
allowance for loan losses for the fiscal years indicated.

                                                         At or For the Years
                                                            Ended June 30,
                                                       ------------------------
                                                          2008           2007
                                                       ---------      ---------
                                                         (Dollars in thousands)

Balance at beginning of period                         $   1,079      $   1,016
                                                       ---------      ---------

Charge-offs:
  One- to four- family                                        --             --
  Reseidential construction                                   --             --
  Home equity loans and lines of credit                       50             31
  Multi-family and commercial real estate                     --             --
  Commercial construction                                     --             --
  Commercial                                                  --             12
  Consumer                                                    10             19
                                                       ---------      ---------
          Total charge-offs                                   60             62
                                                       ---------      ---------

Recoveries:
  One- to four- family                                         9             --
  Reseidential construction                                   --             --
  Home equity loans and lines of credit                       31             --
  Multi-family and commercial real estate                     --             10
  Commercial construction                                     --             --
  Commercial                                                  --              1
  Consumer                                                     1              9
                                                       ---------      ---------
          Total recoveries                                    41             20
                                                       ---------      ---------

Net charge-offs                                              (19)           (42)
Provision for loan losses                                    152            105
                                                       ---------      ---------

Balance at end of year                                 $   1,212      $   1,079
                                                       =========      =========

Ratios:
Net charge-offs to average loans
  outstanding (annualized)                                 -0.01%         -0.03%
Allowance for loan losses to
  non-performing loans at end of period                    87.45%         47.62%
Allowance for loan losses to
  total loans at end of period (1)                          0.81%          0.84%

-------------
(1)   Total loans,  including net deferred loan costs, at June 30, 2008 and 2007
      were $150.1 million and $128.7 million, respectively.

                                       16
<PAGE>

      Allocation  of Allowance for Loan Losses.  The following  table sets forth
the  allowance  for loan  losses  allocated  by loan  category,  the total  loan
balances by category,  and the percent of loans in each  category to total loans
at the dates indicated. The allowance for loan losses allocated to each category
is not  necessarily  indicative of future losses in any particular  category and
does not restrict the use of the allowance to absorb losses in other categories.

<TABLE>
<CAPTION>
                                                                           At June 30,
                           -------------------------------------------------------------------------------------------------------
                                                 2008                                                2007
                           -------------------------------------------------    --------------------------------------------------
                                                            Percent of Loans                                      Percent of Loans
                           Allowance for   Loan Balances    in Each Category    Allowance for    Loan Balances    in Each Category
                            Loan Losses     by Category      to Total Loans      Loan Losses      by Category      to Total Loans
                           -------------   -------------    ----------------    -------------    -------------    ----------------
                                                                     (Dollars in thousands)
<S>                         <C>             <C>                   <C>            <C>               <C>                   <C>
One- to four- family        $      179      $   89,992             60.01%        $      284        $   94,806             73.74%
Residential construction            43           2,338              1.56                 40             1,589              1.24
Home equity loans
  and lines of credit              214          11,565              7.71                180            10,304              8.01
Multi-family and
  commercial real estate           321          22,934             15.29                386            14,556             11.32
Commercial construction            304          17,048             11.37                110             4,398              3.42
Commercial                          93           5,607              3.74                 55             2,157              1.68
Consumer                            58             486              0.32                 24               763              0.59
                            ----------      ----------        ----------         ----------        ----------        ----------

Total                       $    1,212      $  149,970            100.00%        $    1,079        $  128,573            100.00%
                            ==========      ==========        ==========         ==========        ==========        ==========
</TABLE>

      Management  establishes  provisions for loan losses,  which are charged to
operations,  at a level  necessary to absorb known and inherent  losses that are
both probable and reasonably estimable at the date of the financial  statements.
In evaluating the level of the allowance for loan losses  quarterly,  management
analyzes  several  qualitative  loan  portfolio  risk factors  including but not
limited to, charge-off history,  changes in management or underwriting policies,
current economic  conditions,  delinquency  statistics,  geographic and industry
concentrations,  the  adequacy  of  the  underlying  collateral,  the  financial
strength of the borrower and results of internal and external loan reviews. This
evaluation  is  inherently  subjective,   as  it  requires  estimates  that  are
susceptible to significant revision as more information becomes available.

      Historically,  our  loan  portfolio  has  primarily  consisted  of  one-to
four-family  residential  mortgage loans.  The composition of our loan portfolio
has gradually changed in recent years to include more  multi-family,  commercial
real estate and commercial  business  loans. In addition,  our current  business
plan  calls  for  increases  in  these  loans.  Management's  evaluation  of the
allowance for loan losses,  the  composition of the loan portfolio and increased
risk associated with  multi-family,  commercial real estate and commercial loans
(because  they present  larger  non-homogeneous  credits and because they may be
more sensitive to changes in economic conditions) may result in larger additions
to the allowance for loan losses in future periods.

      Although  we  believe  that  we use  the  best  information  available  to
establish the allowance for loan losses,  future  additions to the allowance may
be necessary,  based on estimates that are  susceptible to change as a result of
changes in economic  conditions and other factors.  In addition,  the OTS, as an
integral part of its examination process, will periodically review our allowance
for loan  losses.  Such agency may require us to  recognize  adjustments  to the
allowance,  based on its judgments about information available to it at the time
of its examination.

                                       17
<PAGE>

Investments

      The Investment  Policy is reviewed  annually by management and any changes
to the policy are recommended to and are subject to the approval of our Board of
Directors.  Authority to make investments  under the approved  Investment Policy
guidelines  is delegated  to  appropriate  officers.  While  general  investment
strategies are developed by the Asset/Liability  Committee and authorized by the
Board of Directors,  the execution of specific  actions rests with our President
and  Chief  Executive  Officer  or our  Chief  Financial  Officer,  who  may act
individually  or jointly.  Our President and Chief  Executive  Officer and Chief
Financial  Officer are both  responsible  for ensuring that the  guidelines  and
requirements  included  in the  Investment  Policy  are  followed  and  that all
securities are considered  prudent for investment.  Each of these individuals is
authorized to execute  investment  transactions  (purchases  and sales) up to $2
million per  transaction  without the prior approval of the Executive  Committee
and within the scope of the established  Investment Policy.  Each transaction in
excess of $2 million must receive prior approval of the Executive Committee. All
investment  transactions  are  reviewed at regularly  scheduled  meetings of the
Board of  Directors.  The  Executive  Committee is comprised of our Chairman and
four other non-employee directors.

      Federally  chartered  thrifts have authority to invest in various types of
assets,  including  government-sponsored  enterprises,   securities  of  various
federal agencies, mortgage-backed securities, certain certificates of deposit of
insured financial  institutions,  overnight and short-term loans to other banks,
corporate debt instruments, and Fannie Mae and Freddie Mac equity securities.

      The  Company did not own any equity  investments  in Fannie Mae or Freddie
Mac at June 30, 2008.  Our  investment  portfolio at June 30, 2008, at amortized
cost,  consisted  of  $4.5  million  in  government-sponsored  enterprises  debt
obligations and $3.0 million in FHLB stock. As a member of FHLB, we are required
to  purchase  stock in the FHLB of  Boston,  an  amount of which is based on our
level of outstanding advances. We also invest in mortgage-backed securities, all
of which are  guaranteed by United  States  Government  agencies or  government-
sponsored  enterprises.   At  June  30,  2008,  our  mortgage-backed  securities
portfolio totaled $14.5 million, or 7.9% of total assets, and consisted of $12.4
million in fixed-rate and $2.1 million in adjustable-rate  securities guaranteed
by Fannie Mae or Freddie Mac.  Securities are classified as  held-to-maturity or
available-for-sale at the date of purchase.

      The following  table sets forth the  amortized  cost and fair value of our
securities portfolio at the dates indicated.

<TABLE>
<CAPTION>
                                                              At June 30,
                                      --------------------------------------------------------------
                                                  2008                              2007
                                      ----------------------------      ----------------------------
                                       Amortized          Fair           Amortized          Fair
                                         Cost             Value             Cost            Value
                                      -----------      -----------      -----------      -----------
                                                             (In thousands)
<S>                                   <C>              <C>              <C>              <C>
Securities available for sale:
Government-sponsored enterprises      $     4,500      $     4,491      $     3,000      $     2,978
Mortgage-backed securities                  8,233            8,212            9,973            9,712
                                      -----------      -----------      -----------      -----------

  Total securities
      available for sale              $    12,733      $    12,703      $    12,973      $    12,690
                                      ===========      ===========      ===========      ===========

Securities held to maturity:
Government-sponsored enterprises      $        --      $        --      $       500      $       499
Mortgage-backed securities                  6,274            6,236            7,682            7,469
                                      -----------      -----------      -----------      -----------

  Total securities
      held to maturity                $     6,274      $     6,236      $     8,182      $     7,968
                                      ===========      ===========      ===========      ===========
</TABLE>

                                       18
<PAGE>

         Portfolio Maturities and Yields. The composition and maturities of the
investment securities portfolio at June 30, 2008 are summarized in the following
table. Maturities are based on the final contractual payment dates and do not
reflect the impact of prepayments or early redemptions that may occur.

<TABLE>
<CAPTION>
                                                                        More than One Year through     More than Five Years
                                           One Year or Less                     Five Years               through Ten Years
                                        ----------     ----------       --------------------------    -----------------------
                                                        Weighted                         Weighted                   Weighted
                                        Amortized       Average          Amortized        Average     Amortized      Average
                                           Cost          Yield             Cost            Yield         Cost         Yield
                                        ----------     ----------       ---------       ----------    ----------    ---------
                                                                           (Dollars in thousands)
<S>                                     <C>                  <C>        <C>                   <C>     <C>                <C>
Securities available for sale
-----------------------------

   Government-sponsored enterprises     $       --             --%      $   3,000             4.24%   $    1,500         4.37%
   Mortgage-backed securities                   --             --           1,256             3.50         4,627         4.49
                                        ----------                      ---------                     ----------
       Total securities
           available for sale           $       --             --%      $   4,256             4.02%   $    6,127         4.46
                                        ==========                      =========                     ==========
Securities held to maturity
---------------------------

   Mortgage-backed securities           $        3           6.00%      $      34             6.19%   $    2,432         4.14%
                                        ==========                      =========                     ==========

<CAPTION>

                                             More than Ten Years                    Total Securities
                                           ----------------------       ------------------------------------------
                                                        Weighted                                         Weighted
                                           Amortized     Average        Amortized                        Average
                                              Cost        Yield            Cost         Fair Value         Yield
                                           ----------   ---------       ----------      ----------      ----------
                                                                 (Dollars in thousands)
<S>                                        <C>               <C>        <C>             <C>                   <C>
Securities available for sale
-----------------------------

   Government-sponsored enterprises        $       --          --%      $    4,500      $    4,491            4.28%
   Mortgage-backed securities                   2,350        4.83            8,233           8,212            4.44
                                           ----------                   ----------      ----------
       Total securities
           available for sale              $    2,350        4.83%      $   12,733      $   12,703            4.39%
                                           ==========                   ==========      ==========
Securities held to maturity
---------------------------

   Mortgage-backed securities              $    3,805        4.60%      $    6,274      $    6,236            4.43%
                                           ==========                   ==========      ==========
</TABLE>

                                       19
<PAGE>

Sources of Funds

      General.  Deposits have traditionally been the primary source of funds for
use in lending and investment activities. We also use borrowings, primarily FHLB
advances,  to supplement cash flow needs, lengthen the maturities of liabilities
for interest  rate risk  purposes and to manage the cost of funds.  In addition,
funds are derived from  scheduled  loan payments,  investment  maturities,  loan
prepayments,  retained  earnings and income on earning  assets.  While scheduled
loan  payments and income on earning  assets are  relatively  stable  sources of
funds,  deposit  inflows  and  outflows  can vary widely and are  influenced  by
prevailing interest rates, market conditions and levels of competition.

      Deposits.  Our deposits are generated  primarily from residents within our
primary market area. The Company's strategic plan includes a greater emphasis on
developing  commercial  business  activities,  both deposit and lending customer
relationships.  Several  of  these  commercial  relationships  are  outside  our
existing  primary  market  area.  We  offer a  selection  of  deposit  accounts,
including demand accounts, NOW accounts, money market accounts, savings accounts
and  certificates  of deposit.  Deposit  account terms vary,  with the principal
differences  being the minimum  balance  required,  the amount of time the funds
must remain on deposit and the interest rate. We have used brokered  deposits in
the past and it is anticipated that their future use could increase.  As of June
30, 2008 we had no brokered deposits.

      Interest rates paid, maturity terms, service fees and withdrawal penalties
are established on a periodic basis. Deposit rates and terms are based primarily
on current operating strategies and market rates, liquidity requirements,  rates
paid  by  competitors  and  growth  goals.  Personalized  customer  service  and
long-standing relationships with customers are relied upon to attract and retain
deposits.

      The flow of  deposits  is  influenced  significantly  by general  economic
conditions,  changes in money  market and other  prevailing  interest  rates and
competition. The variety of deposit accounts offered allows us to be competitive
in  obtaining  funds and  responding  to changes in  consumer  demand.  Based on
experience,  we believe that our deposits are relatively  stable.  However,  the
ability to attract and maintain  deposits and the rates paid on these  deposits,
has been and will continue to be significantly affected by market conditions. At
June 30, 2008, $37.7 million, or 35.5% of our deposit accounts were certificates
of deposit, of which $18.6 million had maturities of one year or less.

      The  following  table sets forth the  distribution  of total  deposits  by
account type and related weighted average rates, at the dates indicated.

<TABLE>
<CAPTION>
                                                                                 At June 30,
                                               --------------------------------------------------------------------------------
                                                                2008                                         2007
                                               ------------------------------------      --------------------------------------
                                                                           Weighted                                    Weighted
                                                  Actual                    Average        Actual                       Average
                                                 Balance      Percent        Rate          Balance         Percent       Rate
                                               ----------   ----------     --------      ----------      ----------    --------
                                                                            (Dollars in thousands)
       <S>                                     <C>              <C>           <C>        <C>                 <C>          <C>
       Deposit type:
       -------------
       Demand deposits                         $   14,501        13.64%         --%      $   11,215           11.45%        --%
       NOW deposits                                10,057         9.46        0.14           11,539           11.78       1.61
       Money market deposits                       33,524        31.54        2.29           22,832           23.31       3.68
       Regular and other savings                   10,498         9.88        0.11           11,914           12.16       0.32
                                               ----------   ----------                   ----------      ----------
           Total non-certificate accounts          68,580        64.52                       57,500           58.70

       Certificates of deposit                     37,712        35.48        3.72           40,456           41.30       4.42
                                               ----------   ----------                   ----------      ----------

       Total deposits                          $  106,292       100.00%       2.07%      $   97,956          100.00%      2.91%
                                               ==========   ==========                   ==========      ==========
</TABLE>

                                       20
<PAGE>

      The following table sets forth the deposit activities for the fiscal years
indicated.

                                                   Years Ended June 30,
                                               ----------------------------
                                                   2008             2007
                                               -----------      -----------
                                                    (In thousands)

      Beginning balance                        $    97,956      $    97,709
                                               -----------      -----------
      Net increase (decrease) in deposits
        before interest credited                     5,675           (2,389)
      Interest credited                              2,661            2,636
                                               -----------      -----------
      Net increase in deposits                       8,336              247
                                               -----------      -----------
      Ending balance                           $   106,292      $    97,956
                                               ===========      ===========

      As of June 30, 2008, the aggregate  amount of outstanding  certificates of
deposit in amounts  greater  than or equal to $100,000  was $15.8  million.  The
following table indicates the amount of those certificates of deposit as of June
30, 2008 by time remaining until maturity.

                                                     At
                                               June 30, 2008
                                               -------------
                                               (In thousands)
      Three months or less                      $     5,239
      Over three months through six months            2,488
      Over six months through one year                  623
      Over one year to three years                    7,285
      Over three years                                  181

                                                -----------
      Total                                     $    15,816
                                                ===========

      The following table presents, by rate category, our certificate of deposit
accounts as of the dates indicated.

                                               At June 30,
                                     ----------------------------
                                         2008             2007
                                     -----------      -----------
                                            (In thousands)
      Interest Rate
      -------------
      Less than 2%                   $     1,894      $        49
      2.00%-2.99%                         10,399            1,707
      3.00%-3.99%                          9,817           13,599
      4.00%-4.99%                         10,366           14,648
      5.00%-5.99%                          4,848           10,088
      6.00%-6.99%                            388              365
                                     -----------      -----------
      Total                          $    37,712      $    40,456
                                     ===========      ===========

                                       21
<PAGE>

      The following table sets forth the amount and maturities of certificate of
deposits at June 30, 2008.

<TABLE>
<CAPTION>
                          June 30,       June 30,       June 30,       June 30,   After June 30,
                            2009           2010           2011           2012           2012          Total
                         ---------      ---------      ---------      ---------      ---------      ---------
                                                          (In thousands)
<S>                      <C>            <C>            <C>            <C>            <C>            <C>
      Interest Rate
      -------------
      Less than 2%       $   1,687      $     154      $      30      $      23      $      --      $   1,894
      2.00%-2.99%            3,480          6,532             45             --            342         10,399
      3.00%-3.99%            2,032          6,075            975            499            236          9,817
      4.00%-4.99%            7,479          2,430            192            234             31         10,366
      5.00%-5.99%            3,581            482            785             --             --          4,848
      6.00%-6.99%              388             --             --             --             --            388
                         ------------------------------------------------------------------------------------

      Total              $  18,647      $  15,673      $   2,027      $     756      $     609      $  37,712
                         =========      =========      =========      =========      =========      =========
</TABLE>

      Borrowings. Our borrowings consist primarily of advances from the FHLB. As
of June 30, 2008,  we had FHLB  advances in the amount of $59.3  million,  which
represented  35.3% of total liabilities with a weighted average maturity of 1.74
years.  Georgetown  Savings Bank can currently borrow up to approximately  $73.6
million from the FHLB through its membership.

      The  following  table  sets  forth  information  concerning  balances  and
interest rates on our FHLB advances at the dates and for the periods indicated.

<TABLE>
<CAPTION>
                                                           At or For the Years ended June 30,
                                          -----------------------------------------------------------------
                                              2008              2007              2008              2007
                                          -----------       -----------       -----------       -----------
                                              Long -Term Borrowings             Short -Term Borrowings (1)
                                          -----------------------------       -----------------------------
                                                               (Dollars in thousands)
<S>                                       <C>               <C>               <C>               <C>
Balance at end of year                    $    45,321       $    37,873       $    14,000       $     9,850
Average balance during year                    42,325            34,134             8,737            16,100
Maximum outstanding at any month end           47,839            37,873            14,000            23,075
Weighted average rate at end of year             4.45%             4.71%             2.30%             5.27%
Average interest rate during year                4.70%             4.69%             4.35%             5.22%
</TABLE>

----------------
(1) Represents borrowings with original maturities of less than one year.

      Securities  sold under  agreements to repurchase  are funds  borrowed from
customers  on an  overnight  basis  that  are  secured  by  government-sponsored
enterprises.   The  amount  of  securities  collateralizing  the  agreements  to
repurchase  is  reflected  in  securities   and  the  obligation  to  repurchase
securities sold is reflected as a liability on our consolidated  balance sheets.
The following summarized our repurchase agreements at and for the periods shown.

                                             At or For the Years Ended June 30,
                                             ----------------------------------
                                                 2008                   2007
                                             -----------            -----------
                                                   (Dollars in thousands)

Balance at end of year                       $       552            $       869
Average balance during year                          764                    817
Maximum outstanding at any month end                 965                    898
Weighted average rate at end of year                0.50%                  1.00%
Average interest rate during year                   0.86%                  1.00%

                                       22
<PAGE>

Subsidiary Activities

      Georgetown  Securities   Corporation  is  a  wholly  owned  subsidiary  of
Georgetown  Savings  Bank  established  in  1995 as a  Massachusetts  securities
corporation for the purpose of buying, selling and holding investment securities
on its own behalf.  The income  earned on  Georgetown  Securities  Corporation's
investment securities is subject to a significantly lower rate of state tax than
that assessed on income earned on investment securities maintained at Georgetown
Savings  Bank. At June 30, 2008,  Georgetown  Securities  Corporation  had total
assets of $13.5 million, virtually all of which were in investment securities.

Legal Proceedings

      We are not involved in any pending legal  proceedings as a defendant other
than routine legal proceedings  occurring in the ordinary course of business. At
June 30,  2008,  we were not involved in any legal  proceedings,  the outcome of
which would be material to our financial condition or results of operations.

Expense and Tax Allocation

      Georgetown  Savings  Bank has entered into an  agreement  with  Georgetown
Bancorp,  Inc.  and  Georgetown  Bancorp,  MHC  to  provide  them  with  certain
administrative  support  services for compensation not less than the fair market
value  of the  services  provided.  In  addition,  Georgetown  Savings  Bank and
Georgetown  Bancorp,  Inc.  have entered into an agreement to establish a method
for  allocating  and for  reimbursing  the  payment  of their  consolidated  tax
liability.

Personnel

      As of June 30, 2008,  we had 38  full-time  employees  and five  part-time
employees. Our employees are not represented by any collective bargaining group.
Management believes that we have good relations with our employees.

                           FEDERAL AND STATE TAXATION

Federal Taxation

      General.  Georgetown Bancorp, Inc. and Georgetown Savings Bank are subject
to federal  income  taxation in the same general  manner as other  corporations,
with some  exceptions  discussed  below.  Georgetown  Savings Bank's federal tax
returns are not currently under audit, and have not been audited during the past
five years.  The following  discussion  of federal  taxation is intended only to
summarize   certain   pertinent   federal  income  tax  matters  and  is  not  a
comprehensive  description  of the tax rules  applicable to Georgetown  Bancorp,
Inc. or Georgetown Savings Bank.

      Method of  Accounting.  For  federal  income  tax  purposes,  the  Company
currently  reports its income and expenses on the accrual  method of  accounting
and uses a tax year ending  June 30 for filing its federal and state  income tax
returns.

      Bad Debt  Reserves.  Georgetown  Savings  Bank is permitted to establish a
reserve  for bad  debts  and to make  annual  additions  to the  reserve.  These
additions can, within specified  formula limits,  be deducted in arriving at our
taxable income. Pursuant to the Small Business Protection Act of 1996 (the "1996
Act"),  savings institutions were required to recapture any excess reserves over
those established as of October 31, 1988 (base year reserve).

      Taxable  Distributions  and  Recapture.  Prior to the 1996  Act,  bad debt
reserves  created  prior to  November  1, 1988 were  subject to  recapture  into
taxable income should Georgetown  Savings Bank fail to meet certain thrift asset
and definitional tests.  Federal legislation has eliminated these thrift related
recapture rules.

                                       23
<PAGE>

      At June 30,  2008,  our  total  federal  pre-1988  base year  reserve  was
$723,000. However, under current law, pre-1988 base year reserves remain subject
to  recapture  should   Georgetown   Savings  Bank  make  certain   non-dividend
distributions,  repurchase  any of its  stock,  pay  dividends  in excess of tax
earnings and profits, or cease to maintain a bank charter.

      Alternative  Minimum Tax. The  Internal  Revenue Code of 1986,  as amended
(the "Code")  imposes an  alternative  minimum tax ("AMT") at a rate of 20% on a
base of regular  taxable  income  plus  certain  tax  preferences  ("alternative
minimum taxable  income" or "AMTI").  The AMT is payable to the extent such AMTI
is in excess of an exemption  amount and the AMT exceeds the regular income tax.
Net operating  losses can offset no more than 90% of AMTI.  Certain  payments of
alternative  minimum tax may be used as credits  against regular tax liabilities
in future years. Georgetown Savings Bank has not been subject to the alternative
minimum tax and has no such amounts available as credits for carryover.

      Net Operating Loss Carryovers.  A financial institution may carry back net
operating  losses  to  the  preceding  two  taxable  years  and  forward  to the
succeeding 20 taxable years. At June 30, 2008, Georgetown Savings Bank has a net
operating loss carryover of $590,000, of which $239,000 expires on June 30, 2027
and $351,000  expires on June 30,  2028.  Based on recent  trends and  financial
projections,  management  feels that it is more likely than not, that it will be
able to use the  deferred  tax  asset  associated  with the net  operating  loss
carryover.  Therefore,  no valuation  reserve has been  established  for the net
operating loss carryover.

      Capital Loss  Carryovers.  A financial  institution may carry back capital
losses to the preceding  three taxable years and forward to the succeeding  five
taxable years. At June 30, 2008,  Georgetown  Savings Bank had a $61,000 capital
loss  carryforward for federal income tax purposes,  of which $10,000 expires on
June 30, 2010 and $51,000 expires on June 30, 2011. Management has established a
valuation  reserve of $21,000 for the entire  amount of the  deferred  tax asset
associated with the capital loss carryforward.

      Corporate  Dividends-Received  Deduction.  Georgetown  Bancorp,  Inc.  may
exclude from its income 100% of dividends  received from Georgetown Savings Bank
as a  member  of the  same  affiliated  group  of  corporations.  The  corporate
dividends-received  deduction  is 80% in the  case of  dividends  received  from
corporations  with which a corporate  recipient does not file a consolidated tax
return,  and corporations  which own less than 20% of the stock of a corporation
distributing a dividend may deduct only 70% of dividends  received or accrued on
their behalf.

State Taxation

      For Massachusetts income tax purposes, a consolidated tax return cannot be
filed.  Instead,   Georgetown  Bancorp,   Inc.,  Georgetown  Savings  Bank,  and
Georgetown Savings Bank's  subsidiary,  Georgetown  Securities  Corporation file
separate annual income tax returns. The state tax returns of Georgetown Bancorp,
Inc, Georgetown Savings Bank, as well as Georgetown Securities Corporation,  are
not currently under audit, and have not been audited during the past five years.

      Georgetown Savings Bank files Massachusetts  Financial  Institution income
tax returns and is subject to an annual  Massachusetts tax at a rate of 10.5% of
its net  income.  Massachusetts  net income is defined as gross  income from all
sources without any exclusions,  less the following  deductions:  all deductions
(but not credits) which are allowable under the Code except for those deductions
under the Code relating to (1) dividends received, (2) losses sustained in other
taxable  years,  and (3) income or franchise  taxes  imposed by any state in the
United States or a political subdivision.

      Georgetown  Bancorp,  Inc. is required to file a Massachusetts  income tax
return and is generally subject to a state income tax rate that is the same rate
as the tax  rate  for  financial  institutions  in  Massachusetts.  However,  if
Georgetown Bancorp,  Inc. meets certain  requirements,  it may be eligible to be
taxed as a Massachusetts Securities corporation. Bank holding companies that are
so classified are subject to a state tax rate of 0.33% of their gross income. As
of June  30,  2008,  Georgetown  Bancorp,  Inc.  has not  applied  for  security
corporation status.

      Georgetown Securities  Corporation is taxed as a Massachusetts  securities
corporation, and is subject to a state tax rate of 1.32% of its gross income.

                                       24
<PAGE>

      On July 3, 2008,  Massachusetts  Governor  Patrick  signed into law a bill
entitled "An Act Relative to Tax Fairness and Business  Competitiveness".  Among
the provisions of this Act is a reduction of the financial  institution tax rate
from the  current  10.5% to 10.0% for years  beginning  in 2010,  9.5% for years
beginning in 2011,  and 9.0% for years  beginning in 2012. As a result,  the tax
rate used to compute the  deferred  tax asset may be reduced for the year ending
June 30,  2009.  Management  estimates  the impact to be a reduction  in the net
deferred tax asset of approximately $15,000.

                           SUPERVISION AND REGULATION

General

      Georgetown  Savings  Bank is  examined  and  supervised  by the OTS.  This
regulation and supervision  establishes a comprehensive  framework of activities
in which an institution may engage and is intended  primarily for the protection
of the FDIC's  deposit  insurance  funds and  depositors.  Under this  system of
federal regulation,  financial  institutions are periodically examined to ensure
that they satisfy  applicable  standards with respect to their capital adequacy,
assets,  management,  earnings,  liquidity and  sensitivity  to market  interest
rates. Following completion of its examination, the federal agency critiques the
institution's  operations  and  assigns  its rating  (known as an  institution's
CAMELS  rating).  Under federal law, an institution  may not disclose its CAMELS
rating to the public. Georgetown Savings Bank also is a member of and owns stock
in the FHLB,  which is one of the twelve regional banks in the Federal Home Loan
Bank System. Georgetown Savings Bank also is regulated to a lesser extent by the
Board of  Governors  of the Federal  Reserve  System,  governing  reserves to be
maintained against deposits and other matters.  The OTS examines us and prepares
reports  for the  consideration  of our  Board  of  Directors  on any  operating
deficiencies.  Georgetown  Savings Bank's  relationship  with its depositors and
borrowers  also is regulated to a great extent by federal  laws,  especially  in
matters concerning the ownership of deposit accounts and the form and content of
Georgetown Savings Bank's mortgage documents.

      Any change in these laws or  regulations,  whether by the FDIC, the OTS or
Congress,  could have a material adverse impact on Georgetown Bancorp,  Inc. and
Georgetown Savings Bank and their operations.

Federal Banking Regulation

      Business  Activities.  A federal  savings  bank  derives  its  lending and
investment  powers  from  the  Home  Owners'  Loan  Act,  as  amended,  and  the
regulations of the OTS.  Under these laws and  regulations,  Georgetown  Savings
Bank may invest in mortgage  loans secured by  residential  real estate  without
limitations  as a  percentage  of assets and  non-residential  real estate loans
which may not in the aggregate exceed 400% of capital, commercial business loans
up to 20% of assets in the aggregate  and consumer  loans up to 35% of assets in
the  aggregate,  certain  types of debt  securities  and certain  other  assets.
Georgetown  Savings  Bank also may  establish  subsidiaries  that may  engage in
activities not otherwise permissible for Georgetown Savings Bank, including real
estate investment and securities and insurance brokerage.

      Capital Requirements.  OTS regulations require savings banks to meet three
minimum capital  standards:  a 1.5% tangible  capital ratio, a 4% leverage ratio
(3% for savings banks  receiving the highest rating on the CAMELS rating system)
and an 8% risk-based  capital  ratio.  The prompt  corrective  action  standards
discussed below, in effect, establish a minimum 2% tangible capital standard.

      The risk-based capital standard for savings banks requires the maintenance
of Tier 1 (core)  and  total  capital  (which is  defined  as core  capital  and
supplementary   capital)  to  risk-weighted  assets  of  at  least  4%  and  8%,
respectively.  In determining the amount of  risk-weighted  assets,  all assets,
including  certain  off-balance  sheet assets,  are  multiplied by a risk-weight
factor of 0% to 100%,  assigned by the OTS, based on the risks believed inherent
in the type of asset.  Core  capital is defined as common  stockholders'  equity
(including retained earnings),  certain non-cumulative perpetual preferred stock
and related  surplus and minority  interests in equity  accounts of consolidated
subsidiaries,  less intangibles other than certain mortgage servicing rights and
credit card  relationships.  The components of supplementary  capital  currently
include  cumulative  preferred  stock,   long-term  perpetual

                                       25
<PAGE>

preferred  stock,  mandatory  convertible  securities,   subordinated  debt  and
intermediate preferred stock, the allowance for loan and lease losses limited to
a maximum of 1.25% of risk-weighted assets and up to 46% of net unrealized gains
on  available-for-sale  equity securities with readily  determinable fair market
values.  Overall, the amount of supplementary  capital included as part of total
capital  cannot exceed 100% of core capital.  Additionally,  a savings bank that
retains credit risk in connection with an asset sale may be required to maintain
additional  regulatory capital because of the recourse back to the savings bank.
We do not  typically  engage in asset  sales with  recourse  back to  Georgetown
Saving Bank.

      At June 30, 2008,  Georgetown Savings Bank exceeded all applicable capital
requirements.

      Loans-to-One  Borrower.  A federal  savings bank  generally may not make a
loan or extend credit to a single or related group of borrowers in excess of 15%
of unimpaired capital and surplus. An additional amount may be loaned,  equal to
10% of  unimpaired  capital  and  surplus,  if the loan is  secured  by  readily
marketable collateral,  which generally does not include real estate. As of June
30,  2008,  Georgetown  Savings  Bank was in  compliance  with the  loans-to-one
borrower limitations.

      Qualified  Thrift  Lender  Test.  As a federal  savings  bank,  Georgetown
Savings Bank must satisfy the qualified thrift lender, or "QTL", test. Under the
QTL test,  Georgetown  Savings Bank must maintain at least 65% of its "portfolio
assets" in "qualified  thrift  investments"  in at least nine of the most recent
12-month period.  "Portfolio  assets"  generally means total assets of a savings
institution,  less the sum of specified liquid assets up to 20% of total assets,
goodwill  and other  intangible  assets,  and the value of property  used in the
conduct of the savings bank's business.

      "Qualified  thrift  investments"  include  various types of loans made for
residential  and  housing  purposes,   investments  related  to  such  purposes,
including  certain  mortgage-backed  and  related  securities,   and  loans  for
personal,  family,  household and certain other purposes up to a limit of 20% of
portfolio  assets.  "Qualified  thrift  investments"  also  include  100%  of an
institution's  credit  card loans,  education  loans and small  business  loans.
Georgetown  Savings  Bank  also  may  satisfy  the QTL test by  qualifying  as a
"domestic  building and loan  association"  as defined in the  Internal  Revenue
Code.

      A savings  bank that fails the  qualified  thrift  lender test must either
convert to a bank charter or operate under specified  restrictions.  At June 30,
2008, Georgetown Savings Bank satisfied this test.

      Capital  Distributions.  OTS regulations govern capital distributions by a
federal savings bank, which include cash dividends,  stock repurchases and other
transactions  charged  to the  capital  account.  A  savings  bank  must file an
application for approval of a capital distribution if:

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

      o     the  savings  bank  would  not be at  least  adequately  capitalized
            following the distribution;

      o     the distribution would violate any applicable  statute,  regulation,
            agreement or OTS-imposed condition; or

      o     the savings  bank is not  eligible  for  expedited  treatment of its
            filings.

      Even if an application is not otherwise required,  every savings bank that
is a  subsidiary  of a holding  company must still file a notice with the OTS at
least 30 days  before the Board of  Directors  declares a dividend or approves a
capital distribution.

      The OTS may disapprove a notice or application if:

      o     the   savings   bank  would  be   undercapitalized   following   the
            distribution;

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<PAGE>

      o     the  proposed  capital  distribution  raises  safety  and  soundness
            concerns; or

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

      In addition,  the Federal  Deposit  Insurance Act provides that an insured
depository institution shall not make any capital distribution,  if after making
such distribution the institution would be undercapitalized.

      Liquidity.  A federal  savings  bank is required to maintain a  sufficient
amount of liquid assets to ensure its safe and sound operation.

      Community Reinvestment Act and Fair Lending Laws. All savings banks have a
responsibility  under the Community  Reinvestment Act and related regulations of
the OTS to help meet the credit needs of their  communities,  including low- and
moderate-income  neighborhoods.  In connection with its examination of a federal
savings  bank,  the OTS is  required  to assess  the  savings  bank's  record of
compliance with the Community  Reinvestment  Act. In addition,  the Equal Credit
Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in
their  lending  practices  on the basis of  characteristics  specified  in those
statutes.  A  savings  bank's  failure  to  comply  with the  provisions  of the
Community  Reinvestment  Act could,  at a  minimum,  result in denial of certain
corporate  applications  such as branches or mergers,  or in restrictions on its
activities.  The failure to comply with the Equal Credit Opportunity Act and the
Fair  Housing  Act could  result in  enforcement  actions by the OTS, as well as
other federal  regulatory  agencies and the  Department  of Justice.  Georgetown
Savings Bank received a "satisfactory"  Community Reinvestment Act rating in its
most recent federal examination.

      Branching.  Subject to certain limitations,  the Home Owners' Loan Act and
OTS regulations  permit federally  chartered savings banks to establish branches
in any state of the United  States.  The authority to establish such a branch is
available:  (i) in states that  expressly  authorize  branches of savings  banks
located  in  another  state;  and (ii) to a  savings  bank that  qualifies  as a
"domestic   building  and  loan  association"  under  the  Code,  which  imposes
qualification  requirements similar to those for a qualified thrift lender under
the Home Owners' Loan Act. The authority for a federal savings bank to establish
an interstate  branch network would facilitate a geographic  diversification  of
the savings bank's  activities.  This authority  under the Home Owners' Loan Act
and OTS regulations  preempts any state law purporting to regulate  branching by
federal savings banks.

      Privacy Standards. Effective July 2001, financial institutions,  including
Georgetown  Savings Bank,  became subject to FDIC  regulations  implementing the
privacy protection provisions of the  Gramm-Leach-Bliley  Act. These regulations
require  Georgetown  Savings  Bank to  disclose  its privacy  policy,  including
identifying with whom it shares "non-public personnel  information" to customers
at the time of establishing the customer relationship and annually thereafter.

      The  regulations  also  require  Georgetown  Savings  Bank to provide  its
customers  with initial and annual notices that  accurately  reflect its privacy
policies  and  practices.  In addition,  Georgetown  Savings Bank is required to
provide its customers with the ability to "opt-out" of having Georgetown Savings
Bank share their non-public personal information with unaffiliated third parties
before it can disclose  such  information,  subject to certain  exceptions.  The
implementation  of these  regulations did not have a material  adverse effect on
Georgetown  Savings  Bank.  The  Gramm-Leach-Bliley  Act also  provides  for the
ability of each state to enact legislation that is more protective of consumers'
personal  information.  We cannot predict whether  Massachusetts  may enact such
legislation or what impact, if any, it would have if enacted.

      On February 1, 2001, the FDIC and other federal banking  agencies  adopted
guidelines  establishing  standards for  safeguarding  customer  information  to
implement  certain  provisions  of the  Gramm-Leach-Bliley  Act. The  guidelines
describe  the  agencies'  expectations  for  the  creation,  implementation  and
maintenance   of  an   information   security   program,   which  would  include
administrative,  technical and physical  safeguards  appropriate to the size and
complexity of the institution  and the nature and scope of its  activities.  The
standards  set forth in the  guidelines  are intended to ensure the security and
confidentiality  of  customer  records  and  information,  protect  against  any
anticipated  threats or hazards to the security or integrity of such records and
protect  against  unauthorized

                                       27
<PAGE>

access to or use of such records or information that could result in substantial
harm or inconvenience to any customer.  Georgetown  Savings Bank has implemented
these guidelines and such  implementation did not have a material adverse effect
on our operations.

      Transactions  with Related Parties.  A federal savings bank's authority to
engage in transactions  with its affiliates is limited by OTS regulations and by
Sections 23A and 23B of the Federal Reserve Act and its implementing  Regulation
W. An affiliate is a company that controls, is controlled by, or is under common
control with an insured depository  institution such as Georgetown Savings Bank.
Georgetown Bancorp, Inc. is an affiliate of Georgetown Savings Bank. In general,
loan transactions  between an insured  depository  institution and its affiliate
are subject to certain quantitative and collateral requirements. In this regard,
transactions  between an insured  depository  institution  and its affiliate are
limited to 10% of the institution's  unimpaired  capital and unimpaired  surplus
for  transactions  with any one  affiliate  and 20% of  unimpaired  capital  and
unimpaired  surplus  for  transactions  in the  aggregate  with all  affiliates.
Collateral in specified  amounts  ranging from 100% to 130% of the amount of the
transaction  must usually be provided by  affiliates  in order to receive  loans
from the savings bank. In addition, OTS regulations prohibit a savings bank from
lending to any of its  affiliates  that are engaged in  activities  that are not
permissible for bank holding companies and from purchasing the securities of any
affiliate, other than a subsidiary.  Finally,  transactions with affiliates must
be consistent  with safe and sound banking  practices,  not involve  low-quality
assets and be on terms that are as favorable to the  institution  as  comparable
transactions  with  non-affiliates.  The OTS requires  savings banks to maintain
detailed records of all transactions with affiliates.

      Georgetown  Savings  Bank's  authority to extend credit to its  directors,
executive  officers and 10% shareholders,  as well as to entities  controlled by
such persons,  is currently  governed by the  requirements of Sections 22(g) and
22(h) of the Federal  Reserve Act and Regulation O of the Federal Reserve Board.
Among other  things,  these  provisions  require  that  extensions  of credit to
insiders  (i) be made on terms  that are  substantially  the same as, and follow
credit  underwriting   procedures  that  are  not  less  stringent  than,  those
prevailing for comparable transactions with unaffiliated persons and that do not
involve  more than the normal risk of  repayment  or present  other  unfavorable
features,  and (ii) not  exceed  certain  limitations  on the  amount  of credit
extended to such persons,  individually  and in the aggregate,  which limits are
based, in part, on the amount of Georgetown Savings Bank's capital. In addition,
extensions of credit in excess of certain  limits must be approved by Georgetown
Savings Bank's Board of Directors.

      Enforcement.  The OTS has primary enforcement  responsibility over federal
savings  institutions and has the authority to bring enforcement  action against
all  "institution-affiliated  parties",  including stockholders,  and attorneys,
appraisers and accountants  who knowingly or recklessly  participate in wrongful
action  likely to have an  adverse  effect  on an  insured  institution.  Formal
enforcement action by the OTS may range from the issuance of a capital directive
or cease and desist  order,  to  removal of  officers  and/or  directors  of the
institution and the  appointment of a receiver or  conservator.  Civil penalties
cover a wide range of violations  and actions,  and range up to $25,000 per day,
unless a finding of reckless  disregard is made, in which case  penalties may be
as high as $1 million  per day.  The FDIC also has the  authority  to  terminate
deposit  insurance or to  recommend to the Director of the OTS that  enforcement
action be taken with respect to a particular savings  institution.  If action is
not taken by the Director, the FDIC has authority to take action under specified
circumstances.

      Standards  for Safety and  Soundness.  Federal law  requires  each federal
banking  agency  to  prescribe  certain  standards  for all  insured  depository
institutions.  These standards relate to, among other things, internal controls,
information systems and audit systems, loan documentation,  credit underwriting,
interest rate risk exposure, asset growth,  compensation,  and other operational
and managerial  standards as the agency deems  appropriate.  The federal banking
agencies adopted  Interagency  Guidelines  Prescribing  Standards for Safety and
Soundness to implement the safety and soundness standards required under federal
law.  The  guidelines  set forth the safety  and  soundness  standards  that the
federal  banking  agencies  use to  identify  and  address  problems  at insured
depository  institutions before capital becomes impaired. The guidelines address
internal  controls and  information  systems,  internal  audit  systems,  credit
underwriting,  loan  documentation,  interest rate risk exposure,  asset growth,
compensation,  fees and benefits.  If the  appropriate  federal  banking  agency
determines  that an  institution  fails to meet any standard  prescribed  by the
guidelines,  the agency may require the  institution  to submit to the agency an
acceptable plan to achieve compliance with the standard. If an institution fails
to meet these standards,  the appropriate federal banking agency may require the
institution to submit a compliance plan.

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<PAGE>

      Prompt Corrective Action  Regulations.  Under the prompt corrective action
regulations,  the OTS is required and  authorized  to take  supervisory  actions
against  undercapitalized  savings  banks.  For this purpose,  a savings bank is
placed in one of the  following  five  categories  based on the  savings  bank's
capital:

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

      o     adequately  capitalized  (at least 4%  leverage  capital,  4% Tier 1
            risk-based capital and 8% total risk-based capital);

      o     undercapitalized   (less  than  3%  leverage  capital,   4%  Tier  1
            risk-based capital or 8% total risk-based capital);

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

      o     critically undercapitalized (less than 2% tangible capital).

      Generally,  the  banking  regulator  is  required to appoint a receiver or
conservator  for a savings  bank that is  "critically  undercapitalized"  within
specific time frames.  The regulations  also provide that a capital  restoration
plan  must be filed  with the OTS  within  45 days of the  date a  savings  bank
receives notice that it is "undercapitalized",  "significantly undercapitalized"
or  "critically  undercapitalized".  The  criteria  for  an  acceptable  capital
restoration  plan  include,   among  other  things,  the  establishment  of  the
methodology and assumptions for attaining  adequately  capitalized  status on an
annual basis,  procedures for ensuring  compliance with restrictions  imposed by
applicable  federal  regulations,  the identification of the types and levels of
activities the savings bank will engage in while the capital restoration plan is
in effect, and assurances that the capital restoration plan will not appreciably
increase the current risk profile of the savings bank.  Any holding  company for
the savings bank required to submit a capital  restoration  plan must  guarantee
the lesser of: an amount equal to 5% of the savings bank's assets at the time it
was  notified  or  deemed  to be under  capitalized  by the OTS,  or the  amount
necessary to restore the savings bank to  adequately  capitalized  status.  This
guarantee  remains in place until the OTS  notifies the savings bank that it has
maintained  adequately  capitalized status for each of four consecutive calendar
quarters,  and the OTS has the authority to require  payment and collect payment
under the  guarantee.  Failure  by a holding  company to  provide  the  required
guarantee  will result in certain  operating  restrictions  on the savings bank,
such as restrictions on the ability to declare and pay dividends,  pay executive
compensation and management fees, and increase assets or expand operations.  The
OTS may also  take  any one of a number  of  discretionary  supervisory  actions
against  undercapitalized  savings  banks,  including  the issuance of a capital
directive and the replacement of senior executive officers and directors.

      At June 30,  2008,  Georgetown  Savings  Bank met the  criteria  for being
considered "well-capitalized".

      Insurance of Deposit Accounts. Deposit accounts in Georgetown Savings Bank
are insured by the FDIC,  generally up to a maximum of $100,000  per  separately
insured depositor and up to a maximum of $250,000 for  self-directed  retirement
accounts.  Georgetown  Savings Bank's deposits,  therefore,  are subject to FDIC
deposit  insurance  assessments.  Recent  legislation,  among other things,  has
increased the amount of federal deposit insurance  coverage for certain types of
accounts while  preserving the $100,000  coverage limit for individual  accounts
and municipal deposits. The legislation also gives the FDIC discretion to adjust
insurance coverage for inflation,  beginning in 2010. The legislation also gives
the FDIC  flexibility  to adjust the insurance  fund reserve ratio between 1.15%
and 1.50% of estimated insured deposits, depending on projected losses, economic
changes  and  assessment  ratios at the end of a calendar  year,  and allows for
dividends to insured  institutions  whenever  reserve  ratios  exceed  specified
levels.

      On  November  2, 2006,  the FDIC  adopted  final  regulations  that assess
insurance  premiums based on risk. As a result,  the new regulation  will enable
the FDIC to more  closely tie each  financial  institution's  deposit  insurance
premiums  to the risk it poses to the  deposit  insurance  fund.  Under  the new
risk-based  assessment system, the FDIC will evaluate the risk of each financial
institution  based on its  supervisory  rating,  its financial  ratios,  and its
long-term debt issuer rating for larger  institutions.  The new rates for nearly
all of the financial institutions industry vary

                                       29
<PAGE>

between  five and seven  cents  for every  $100 of  domestic  deposits.  The new
assessment system became effective on January 1, 2007 for the Georgetown Savings
Bank. The new system  created  insurance  assessment  credits for the Georgetown
Savings Bank of $52,000. We utilized $27,000 of these credits in the fiscal year
ended June 30, 2007 and the remaining  balance in fiscal 2008. At the same time,
the FDIC adopted final regulations designating the reserve ratio for the deposit
insurance fund during 2007 at 1.25% of estimated insured deposits.

      Effective  March 31, 2006, the FDIC merged the Bank Insurance Fund ("BIF")
and the Savings  Association  Insurance  Fund ("SAIF") into a single fund called
the Deposit Insurance Fund. As a result of the merger, the BIF and the SAIF were
abolished.  The merger of the BIF and the SAIF into the Deposit  Insurance  Fund
does not affect the  authority of the Financing  Corporation  ("FICO") to impose
and  collect,  with  the  approval  of the  FDIC,  assessments  for  anticipated
payments,  issuance  costs and custodial fees on bonds issued by the FICO in the
1980s to recapitalize the former Federal Savings and Loan Insurance Corporation.
The bonds  issued by the FICO are due to mature in 2017  through  2019.  For the
quarter ended June 30, 2008,  the annualized  FICO  assessment was equal to 1.12
basis points for each $100 in domestic deposits maintained at an institution.

      Prohibitions  Against  Tying  Arrangements.   Federal  savings  banks  are
prohibited, subject to some exceptions, from extending credit to or offering any
other  service,  or fixing or varying the  consideration  for such  extension of
credit or service,  on the condition  that the customer  obtain some  additional
service  from the  institution  or its  affiliates  or not obtain  services of a
competitor of the institution.

      Federal Home Loan Bank System.  Georgetown Savings Bank is a member of the
Federal Home Loan Bank System,  which consists of 12 regional  Federal Home Loan
Banks.  The Federal  Home Loan Bank System  provides a central  credit  facility
primarily for member institutions.  As a member of the FHLB,  Georgetown Savings
Bank is required to acquire and hold shares of capital stock in the FHLB.  While
the required percentages of stock ownership are subject to change by the Federal
Home Loan Bank,  Georgetown Savings Bank was in compliance with this requirement
at June 30, 2008.

Federal Reserve System

      The Federal  Reserve Board  regulations  require savings banks to maintain
noninterest-earning   reserves  against  their  transaction  accounts,  such  as
negotiable order of withdrawal and regular checking accounts.  At June 30, 2008,
Georgetown Savings Bank was in compliance with these reserve requirements.

The USA PATRIOT Act

      The USA  PATRIOT Act gives the  federal  government  new powers to address
terrorist  threats  through  enhanced  domestic  security   measures,   expanded
surveillance  powers,  increased  information  sharing and broadened  anti-money
laundering  requirements.  Certain  provisions  of the  Act  impose  affirmative
obligations on a broad range of financial institutions, including savings banks,
like Georgetown  Savings Bank. These  obligations  include  enhanced  anti-money
laundering programs,  customer  identification programs and regulations relating
to private banking accounts or correspondence  accounts in the United States for
non-United   States  persons  or  their   representatives   (including   foreign
individuals visiting the United States).

      The  federal  banking   agencies  have  begun  to  propose  and  implement
regulations  pursuant  to the  USA  PATRIOT  Act.  These  proposed  and  interim
regulations  would  require  financial  institutions  to adopt the  policies and
procedures contemplated by the USA PATRIOT Act.

Sarbanes-Oxley Act of 2002

      The  Sarbanes-Oxley Act of 2002 was enacted in response to public concerns
regarding  corporate   accountability  in  connection  with  certain  accounting
scandals.  The stated goals of the  Sarbanes-Oxley Act are to increase corporate
responsibility,  to provide for enhanced  penalties for  accounting and auditing
improprieties  at  publicly  traded  companies,  and  to  protect  investors  by
improving the accuracy and reliability of corporate  disclosures pursuant to the
securities laws. The  Sarbanes-Oxley Act generally applies to all companies that
file or

                                       30
<PAGE>

are  required  to  file  periodic  reports  with  the  Securities  and  Exchange
Commission, under the Securities Exchange Act of 1934.

      The  Sarbanes-Oxley  Act  includes  very  specific  additional  disclosure
requirements  and new corporate  governance  rules  requiring the Securities and
Exchange  Commission  and  national  securities  exchanges  to  adopt  extensive
additional  disclosure,  corporate  governance  and  other  related  rules,  and
mandates  further  studies  of certain  issues by the  Securities  and  Exchange
Commission. The Sarbanes-Oxley Act represents significant federal involvement in
matters  traditionally left to state regulatory systems,  such as the regulation
of  the  accounting  profession,  and  to  state  corporate  law,  such  as  the
relationship  between a board of directors and management and between a board of
directors and its committees. As directed by the Sarbanes-Oxley Act of 2002, the
Company's  principal  executive officer and principal financial officer each are
required  to certify  that the  Company's  quarterly  and annual  reports do not
contain any untrue  statement of a material  fact.  The rules adopted by the SEC
under the Sarbanes-Oxley Act of 2002 have several requirements, including having
these officers certify that: they are responsible for establishing,  maintaining
and regularly  evaluating the effectiveness of our internal controls;  they have
made  certain  disclosures  to our auditors  and the Audit  Committee  about our
internal  controls;  and they have  included  information  in our  quarterly and
annual reports about their  evaluation  and whether there have been  significant
changes in our internal  controls or in other  factors that could  significantly
affect internal controls.

Holding Company Regulation

      General.   Georgetown  Bancorp,  MHC  and  Georgetown  Bancorp,  Inc.  are
non-diversified  savings and loan  holding  companies  within the meaning of the
Home Owners' Loan Act. As such,  Georgetown Bancorp, MHC and Georgetown Bancorp,
Inc. are registered with the OTS and subject to OTS  regulations,  examinations,
supervision  and reporting  requirements.  In addition,  the OTS has enforcement
authority over Georgetown Bancorp,  Inc. and Georgetown Bancorp,  MHC, and their
subsidiaries.  Among other things, this authority permits the OTS to restrict or
prohibit  activities  that are determined to be a serious risk to the subsidiary
savings  institution.  As federal  corporations,  Georgetown  Bancorp,  Inc. and
Georgetown Bancorp, MHC are generally not subject to state business organization
laws.

      Permitted  Activities.  Pursuant to Section 10(o) of the Home Owners' Loan
Act and OTS  regulations  and policy,  a mutual holding  company and a federally
chartered mid-tier holding company such as Georgetown  Bancorp,  Inc. may engage
in the following activities:  (i) investing in the stock of a savings bank; (ii)
acquiring a mutual  association  through the merger of such  association  into a
savings  bank  subsidiary  of such  holding  company or an interim  savings bank
subsidiary  of such holding  company;  (iii)  merging with or acquiring  another
holding company,  one of whose subsidiaries is a savings bank; (iv) investing in
a corporation, the capital stock of which is available for purchase by a savings
bank  under  federal  law or under  the law of any state  where  the  subsidiary
savings  bank or  association  share  their  home  offices;  (v)  furnishing  or
performing  management  services for a savings bank  subsidiary of such company;
(vi) holding,  managing or  liquidating  assets owned or acquired from a savings
subsidiary  of such  company;  (vii)  holding  or  managing  properties  used or
occupied by a savings bank subsidiary of such company;  (viii) acting as trustee
under  deeds of trust;  (ix) any other  activity  (A) that the  Federal  Reserve
Board,  by  regulation,  has  determined  to be  permissible  for  bank  holding
companies under Section 4(c) of the Bank Holding Company Act of 1956, unless the
Director,  by regulation,  prohibits or limits any such activity for savings and
loan  holding  companies;  or (B) in which  multiple  savings  and loan  holding
companies were  authorized (by  regulation) to directly engage on March 5, 1987;
(x) any activity  permissible for financial holding companies under Section 4(k)
of  the  Bank  Holding   Company  Act,   including   securities   and  insurance
underwriting;  and (xi) purchasing,  holding,  or disposing of stock acquired in
connection with a qualified stock issuance if the purchase of such stock by such
savings  and loan  holding  company is  approved  by the  Director.  If a mutual
holding  company  acquires or merges with another holding  company,  the holding
company  acquired  or  the  holding  company   resulting  from  such  merger  or
acquisition  may only  invest in assets and engage in  activities  listed in (i)
through  (xi)  above,  and has a period of two years to cease any  nonconforming
activities and divest any nonconforming investments.

      The Home  Owners' Loan Act  prohibits a savings and loan holding  company,
including  Georgetown  Bancorp,  Inc. and Georgetown  Bancorp,  MHC, directly or
indirectly, or through one or more subsidiaries,  from

                                       31
<PAGE>

acquiring  more  than 5% of  another  savings  institution  or  holding  company
thereof,  without  prior  written  approval  of the OTS. It also  prohibits  the
acquisition  or  retention  of,  with  certain  exceptions,  more  than  5% of a
nonsubsidiary  company  engaged in activities  other than those permitted by the
Home Owners' Loan Act, or acquiring or retaining  control of an institution that
is not federally  insured.  In evaluating  applications by holding  companies to
acquire savings institutions, the OTS must consider the financial and managerial
resources,  future prospects of the company and institution involved, the effect
of the  acquisition  on the risk to the  federal  deposit  insurance  fund,  the
convenience and needs of the community and competitive factors.

      The OTS is prohibited from approving any acquisition  that would result in
a multiple savings and loan holding company controlling savings  institutions in
more than one state,  subject to two exceptions:  (i) the approval of interstate
supervisory  acquisitions  by savings and loan holding  companies;  and (ii) the
acquisition  of a savings  institution in another state if the laws of the state
of the target savings  institution  specifically  permit such acquisitions.  The
states  vary in the  extent to which they  permit  interstate  savings  and loan
holding company acquisitions.

      Waivers of Dividends by Georgetown  Bancorp,  MHC. OTS regulations require
Georgetown Bancorp,  MHC to notify the OTS of any proposed waiver of its receipt
of dividends  from  Georgetown  Bancorp,  Inc. The OTS reviews  dividend  waiver
notices on a case-by-case  basis,  and, in general,  does not object to any such
waiver if: (i) the mutual holding  company's Board of Directors  determines that
such waiver is consistent  with such directors'  fiduciary  duties to the mutual
holding company's members;  (ii) the amount of any dividend waived by the mutual
holding  company is available for declaration as a dividend solely to the mutual
holding  company,  and,  in  accordance  with  SFAS 5,  where the  savings  bank
determines  that the payment of such dividend to the mutual  holding  company is
probable, an appropriate dollar amount is recorded as a liability; and (iii) the
amount of any waived  dividend is  considered as having been paid by the savings
bank  in  evaluating  any  proposed  dividend  under  OTS  capital  distribution
regulations. We anticipate that Georgetown Bancorp, MHC will waive any dividends
paid by Georgetown Bancorp, Inc. Under OTS regulations,  our public stockholders
would not be diluted because of any dividends waived by Georgetown Bancorp,  MHC
(and waived  dividends  would not be considered in  determining  an  appropriate
exchange ratio) in the event Georgetown Bancorp, MHC converts to stock form.

Federal Securities Laws

      Georgetown  Bancorp,  Inc.  common stock is registered with the Securities
and Exchange  Commission under the Securities  Exchange Act of 1934.  Georgetown
Bancorp, Inc. is subject to the information, proxy solicitation, insider trading
restrictions and other requirements under the Securities Exchange Act of 1934.

      The  registration  under  the  Securities  Act of 1933 of shares of common
stock issued in the offering did not cover the resale of those shares. Shares of
common stock purchased by persons who are not affiliates of Georgetown  Bancorp,
Inc. may be resold  without  registration.  Shares  purchased by an affiliate of
Georgetown  Bancorp,  Inc.  are subject to the resale  restrictions  of Rule 144
under the Securities Act of 1933. If Georgetown Bancorp,  Inc. meets the current
public  information  requirements  of Rule 144 under the Securities Act of 1933,
each  affiliate  of  Georgetown  Bancorp,  Inc.  that  complies  with the  other
conditions of Rule 144,  including those that require the affiliate's sale to be
aggregated  with  those of other  persons,  would be able to sell in the  public
market,  without  registration,  a  number  of  shares  not  to  exceed,  in any
three-month  period,  the greater of 1% of the outstanding  shares of Georgetown
Bancorp,  Inc., or the average weekly volume of trading in the shares during the
preceding  four calendar  weeks.  In the future,  Georgetown  Bancorp,  Inc. may
permit  affiliates to have their shares registered for sale under the Securities
Act of 1933.

                                       32
<PAGE>

ITEM 2. Description of Property
-------------------------------

      The  following  table  provides  certain  information  with respect to our
properties as of June 30, 2008:

<TABLE>
<CAPTION>
                                        Owned or         Year Acquired or                                Net Book Value of Real
              Location                   Leased               Leased             Square Footage                  Property
---------------------------------    --------------      -----------------     -----------------        -------------------------
                                                                                                              (In thousands)
<S>                                     <C>                   <C>                     <C>                     <C>
Main Office:
2 East Main Street                          Own               2003 (1)                14,400                  $       3,034
Georgetown, MA 01833

Branch Office:
303 Haverhill Street                    Leased (2)              1999                  3,500                   $         515
Rowley, MA 01969

Branch Office:
75 Turnpike Street/Route 114            Leased (3)              2005                  2,437                   $         445
North Andover, MA 01845

Other Property (4):
8 Prospect Street                           Own                 1997                  1,000                   $          92
Georgetown, MA 01833
</TABLE>

----------
(1)   In 2003,  Georgetown  Savings Bank constructed a new main office upon this
      property, which it has owned since 1985.

(2)   Georgetown  Savings Bank owns the building but leases the land.  The lease
      has a term of 40 years with an option to renew for an additional 10 years.

(3)   Georgetown  Savings Bank is leasing the office space. The lease has a term
      of 10 years with an option to renew for an additional 10 years.

(4)   This  property,  which was  acquired  in  foreclosure,  is leased  under a
      tenancy at will agreement and is available for use for banking purposes.

      The net book value of our premises,  land and equipment was  approximately
$4.5 million at June 30, 2008.

ITEM 3. Legal Proceedings
-------------------------

      From time to time,  we are  involved as  plaintiff or defendant in various
legal proceedings arising in the ordinary course of business.  At June 30, 2008,
we were not  involved  in any legal  proceedings,  the outcome of which would be
material to our financial condition or results of operations.

ITEM 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------

      No matters  were  submitted  to a vote of  stockholders  during the fourth
quarter of the year under report.

                                     PART II

ITEM 5. Market for Common Equity, Related Stockholder Matters and Small Business
--------------------------------------------------------------------------------
        Issuer Purchases of Securities
        ------------------------------

      (a) Our common stock is traded on the OTC Electronic  Bulletin Board under
the symbol "GTWN".  Georgetown  Bancorp,  MHC owns 1,527,487 shares, or 57.9% of
our outstanding  common stock.  The  approximate

                                       33
<PAGE>

number of holders of record of  Georgetown  Bancorp,  Inc.'s  common stock as of
September 10, 2008 was 290. Certain shares of Georgetown Bancorp,  Inc. are held
in "nominee" or "street" name and accordingly,  the number of beneficial  owners
of such shares is not known or included in the foregoing number.

         The following table presents quarterly market information for
Georgetown Bancorp, Inc.'s common stock during the periods indicated. The
following information was based on data received from the OTC Bulletin Board and
represents the actual high and low sales prices for the periods indicated.

                 Fiscal 2008                  High        Low     Dividends
       -----------------------------------------------------------------------
       Quarter ended September 30, 2007       $8.05      $6.56       $0.00
       Quarter ended December 31, 2007        $7.50      $6.60       $0.00
       Quarter ended March 31, 2008           $6.95      $6.00       $0.00
       Quarter ended June 30, 2008            $7.10      $5.60       $0.00

                 Fiscal 2007                  High        Low     Dividends
       -----------------------------------------------------------------------
       Quarter ended September 30, 2006       $9.88      $8.00       $0.00
       Quarter ended December 31, 2006        $9.50      $8.65       $0.00
       Quarter ended March 31, 2007           $9.30      $8.15       $0.00
       Quarter ended June 30, 2007            $8.50      $7.40       $0.00

      Dividend payments by Georgetown  Bancorp,  Inc. are dependent primarily on
dividends it receives from Georgetown Savings Bank, because Georgetown  Bancorp,
Inc. has no source of funding other than dividends from Georgetown Savings Bank,
interest  payments  with  respect  to  Georgetown  Bancorp,  Inc.'s  loan to the
Employee  Stock  Ownership  Plan and any cash  balances  available at Georgetown
Bancorp, Inc.

      At June 30,  2008,  there were no  compensation  plans under which  equity
securities of Georgetown Bancorp, Inc. were authorized for issuance.

      The Company has sold no  securities  within the past three years that were
not registered under the Securities Act of 1933.

      (b) Not applicable

      (c) The Company did not  repurchase  any shares  during the quarter  ended
June 30, 2008.

ITEM 6. Management's Discussion and Analysis or Plan of Operation
-----------------------------------------------------------------

      The  "Management's  Discussion  and  Analysis of Financial  Condition  and
Results of Operations" section of Georgetown Bancorp,  Inc.'s 2008 Annual Report
to Stockholders (Exhibit 13 hereto) is incorporated herein by reference.

ITEM 7. Financial Statements
----------------------------

        The consolidated  financial  statements  included in Georgetown Bancorp,
Inc.'s 2008 Annual Report to Stockholders  (Exhibit 13) are incorporated  herein
by reference.

ITEM  8.  Changes  In and  Disagreements  with  Accountants  on  Accounting  and
--------------------------------------------------------------------------------
          Financial Disclosure
          --------------------

      None.

                                       34
<PAGE>

ITEM 8A.(T) Controls and Procedures
-----------------------------------

      Under  the  supervision  and with  the  participation  of our  management,
including our Chief Executive Officer and Chief Financial Officer,  we evaluated
the  effectiveness  of the design and operation of our  disclosure  controls and
procedures  (as defined in Rule 13a-15(e)  under the Securities  Exchange Act of
1934) as of the end of the  period  covered  by this  report.  Based  upon  that
evaluation,  the Chief Executive  Officer and Chief Financial  Officer concluded
that,  as of the end of the  period  covered  by  this  report,  our  disclosure
controls and procedures were effective to ensure that information required to be
disclosed in the reports that the Company files or submits under the  Securities
Exchange Act of 1934, is recorded,  processed,  summarized and reported,  within
the time  periods  specified  in the SEC's  rules and  forms.  There has been no
change in the Company's  internal  control over financial  reporting  during the
Company's fourth quarter of fiscal year 2008 that has materially affected, or is
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

      The  management  of  the  Company  is  responsible  for  establishing  and
maintaining  adequate  internal control over financial  reporting.  The internal
control  process has been designed under our  supervision to provide  reasonable
assurance  regarding the reliability of financial  reporting and the preparation
of the  Company's  financial  statements  for  external  reporting  purposes  in
accordance with accounting principles generally accepted in the United States of
America.

      Management  conducted an assessment of the  effectiveness of the Company's
internal  control over  financial  reporting as of June 30, 2008,  utilizing the
framework  established in Internal Control -- Integrated Framework issued by the
Committee of Sponsoring  Organizations of the Treadway Commission (COSO).  Based
on this  assessment,  management  has  determined  that the  Company's  internal
control over financial reporting as of June 30, 2008 is effective.

      Our  internal  control  over  financial  reporting  includes  policies and
procedures that pertain to the maintenance of records that accurately and fairly
reflect,  in reasonable  detail,  transactions and  dispositions of assets;  and
provide  reasonable  assurances that: (1) transactions are recorded as necessary
to permit  preparation  of financial  statements in accordance  with  accounting
principles  generally accepted in the United States of America; (2) receipts and
expenditures are being made only in accordance with authorizations of management
and the directors of the Company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition,  use, or disposition
of the  Company's  assets  that could have a  material  effect on the  Company's
financial statements.

      All internal control systems,  no matter how well designed,  have inherent
limitations.  Therefore,  even those  systems  determined  to be  effective  can
provide  only   reasonable   assurance  with  respect  to  financial   statement
preparation   and   presentation.   Also,   projections  of  any  evaluation  of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

      This annual report does not include an attestation report of the Company's
registered  public  accounting  firm regarding  internal  control over financial
reporting.  Management's  report was not subject to attestation by the Company's
registered  public accounting firm pursuant to temporary rules of the Securities
and Exchange  Commission  that permit the Company to provide  only  management's
report in this annual report.

ITEM 8B. Other Information
--------------------------

      None.

                                       35
<PAGE>

                                    PART III

ITEM 9. Directors,  Executive Officers, Promoters, Control Persons and Corporate
--------------------------------------------------------------------------------
        Governance; Compliance with Section 16(a) of the Exchange Act
        -------------------------------------------------------------

      Georgetown  Bancorp,  Inc.  has adopted a Code of Ethics  that  applies to
Georgetown  Bancorp,  Inc.'s principal  executive officer,  principal  financial
officer,  principal  accounting  officer or  controller  or  persons  performing
similar  functions.  The Code of Ethics may be  accessed on  Georgetown  Savings
Bank's website at www.georgetownsb.com.

      Information  concerning  directors  and  executive  officers of Georgetown
Bancorp,  Inc. is  incorporated  herein by reference from our  definitive  Proxy
Statement (the "Proxy Statement"),  specifically the section captioned "Proposal
I--Election of Directors."

ITEM 10. Executive Compensation
-------------------------------

      Information  concerning  executive  compensation is incorporated herein by
reference from our Proxy Statement, specifically the section captioned "Proposal
I -- Election of Directors."

ITEM 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
--------------------------------------------------------------------------------
          Related Stockholder Matters
          ---------------------------

      Information concerning security ownership of certain owners and management
is incorporated  herein by reference from our Proxy Statement,  specifically the
sections  captioned  "Voting  Securities  and  Principal  Holders  Thereof"  and
"Proposal I -- Election of Directors."

ITEM 12.   Certain   Relationships  and  Related   Transactions,   and  Director
--------------------------------------------------------------------------------
           Independence
           ------------

      Information  concerning  relationships  and  transactions  is incorporated
herein by reference from our Proxy Statement, specifically the section captioned
"Transactions with Certain Related Persons".

ITEM 13. Exhibits
-----------------

(a)   Financial Statements
      --------------------

The  exhibits and  financial  statement  schedules  filed as a part of this Form
10-KSB  are as  follows,  all of which  are  included  in the  Annual  Report to
Shareholders (Exhibit 13):

      (A)   Report of Independent Registered Public Accounting Firm (page F-2)

      (B)   Consolidated Balance Sheets (page F-3)

      (C)   Consolidated Statements of Operations (page F-4)

      (D)   Consolidated  Statements  of Changes In  Stockholders'  Equity (page
            F-5)

      (E)   Consolidated Statements of Cash Flows (page F-6 to page F-7)

      (F)   Notes to Consolidated Financial Statements (page F-8 to page F-41)

                                       36
<PAGE>

(b)   Financial Statement Schedules
      -----------------------------

All financial statement schedules have been omitted as the required  information
is  inapplicable  or has been  included in the Notes to  Consolidated  Financial
Statements.  The  remaining  information  appearing  in  the  Annual  Report  to
Shareholders  for the year ended June 30, 2008 is not deemed to be filed as part
of this report except as expressly provided herein.

(c)   Exhibits.
      ---------

3.1   Charter of Georgetown Bancorp, Inc. (1)
3.2   Bylaws of Georgetown Bancorp, Inc. (2)
4     Form of Common Stock Certificate of Georgetown Bancorp, Inc. (1)
10.1  Employee Stock Ownership Plan (1)
10.2  SBERA Defined Contribution Plan and Nonstandardized Adoption Agreement (1)
10.3  Change In Control  Agreement  by and between  Georgetown  Savings Bank and
      Charles R. Shediac (3)
10.4  Georgetown Savings Bank 2007 Incentive Compensation Plan (4)
10.5  Employment  Agreement by and between Georgetown Savings Bank and Robert E.
      Balletto, effective July 1, 2008 (6)
10.6  Employment  Agreement by and between Georgetown Savings Bank and Joseph W.
      Kennedy, effective July 1, 2008 (7)
10.7  Supplemental  Retirement Plan for Senior  Executives,  dated June 23, 2008
      (8)
10.8  Endorsement   Split-Dollar   Life  Insurance   Agreement  by  and  between
      Georgetown Savings Bank and Robert E. Balletto, dated June 23, 2008 (9)
10.9  Endorsement   Split-Dollar   Life  Insurance   Agreement  by  and  between
      Georgetown  Savings Bank and Joseph W.  Kennedy,  dated June 23, 2008 (10)
10.10 Annually  Defined Goals for payouts under  Georgetown  Savings Bank
      2007 Incentive Compensation Plan for certain officers (11)
13    Annual Report to Stockholders
14    Code of Ethics (5)
21    Subsidiaries of Registrant (1)
31.1  Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the
      Securities  Exchange  Act of 1934,  as  amended,  as adopted  pursuant  to
      Section 302 of the Sarbanes-Oxley Act of 2002
31.2  Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the
      Securities  Exchange  Act of 1934,  as  amended,  as adopted  pursuant  to
      Section 302 of the Sarbanes-Oxley Act of 2002
32    Certification  of Chief  Executive  Officer  and Chief  Financial  Officer
      pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002

                                       37
<PAGE>

--------------
(1)   Incorporated  by reference to the  Registration  Statement on Form SB-2 of
      Georgetown Bancorp, Inc. (file no. 333-119007),  originally filed with the
      Securities and Exchange Commission on September 15, 2004.
(2)   Incorporated  by reference  to the Form 8-K of  Georgetown  Bancorp,  Inc.
      filed with the Securities and Exchange Commission on September 27, 2006.
(3)   Incorporated by reference to the Form 10-QSB of Georgetown  Bancorp,  Inc.
      filed with the Securities and Exchange Commission on May 15, 2007.
(4)   Incorporated by reference to the Form 10-KSB of Georgetown  Bancorp,  Inc.
      filed with the Securities and Exchange Commission on September 28, 2007.
(5)   Incorporated by reference to the Form 10-KSB of Georgetown  Bancorp,  Inc.
      filed with the Securities and Exchange Commission on September 28, 2006.
(6)   Incorporated  by reference  to the Form 8-K of  Georgetown  Bancorp,  Inc.
      Exhibit 10.1 filed with the Securities and Exchange Commission on June 27,
      2008.
(7)   Incorporated  by reference  to the Form 8-K of  Georgetown  Bancorp,  Inc.
      Exhibit 10.2 filed with the Securities and Exchange Commission on June 27,
      2008.
(8)   Incorporated  by reference  to the Form 8-K of  Georgetown  Bancorp,  Inc.
      Exhibit 10.3 filed with the Securities and Exchange Commission on June 27,
      2008.
(9)   Incorporated  by reference  to the Form 8-K of  Georgetown  Bancorp,  Inc.
      Exhibit 10.4 filed with the Securities and Exchange Commission on June 27,
      2008.
(10)  Incorporated  by reference  to the Form 8-K of  Georgetown  Bancorp,  Inc.
      Exhibit 10.5 filed with the Securities and Exchange Commission on June 27,
      2008.
(11)  Incorporated  by reference  to the Form 8-K of  Georgetown  Bancorp,  Inc.
      filed with the Securities and Exchange Commission on September 26, 2008.

ITEM 14. Principal Accountant Fees and Services
-----------------------------------------------

      Information   concerning   principal   accountant  fees  and  services  is
incorporated  herein by reference  from our Proxy  Statement,  specifically  the
section  captioned  "Proposal  II-Ratification  of  Appointment  of  Independent
Registered Public Accounting Firm".

                                       38
<PAGE>

SIGNATURES

      Pursuant to the requirements of Section 13 of the Securities  Exchange Act
of 1934,  the  Company has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                 GEORGETOWN BANCORP, INC.

Date: September 22, 2008     By: \s\  Robert E. Balletto
                                 -----------------------------
                                 Robert E. Balletto
                                 President, Chief Executive Officer and Director
                                 (Duly Authorized Representative)

      Pursuant to the  requirements  of the  Securities  Exchange of 1934,  this
report has been signed by the following  persons on behalf of the Registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
        Signatures                                  Title                               Date
        ----------                                  -----                               ----
<S>                                   <C>                                        <C>
\s\ Robert E. Balletto                President, Chief Executive Officer         September 22, 2008
----------------------------          and Director (Principal Executive
Robert E. Balletto                    Officer)

\s\ Joseph W. Kennedy                 Senior Vice President, Chief               September 22, 2008
----------------------------          Financial Officer and Treasurer
Joseph W. Kennedy                     (Principal Financial and Accounting
                                      Officer)

\s\ Richard F. Spencer                Chairman of the Board                      September 22, 2008
---------------------------
Richard F. Spencer

                                      Vice Chairman of the Board
---------------------------
Mary L. Williams

\s\ David H. Condon                   Director                                   September 22, 2008
---------------------------
David H. Condon

\s\ Keith N. Congdon                  Director                                   September 24, 2008
---------------------------
Keith N. Congdon.

\s\ Anthony S. Conte, Jr.             Director                                   September 22, 2008
---------------------------
Anthony S. Conte, Jr.

\s\ Stephen L. Flynn                  Director                                   September 22, 2008
---------------------------
Stephen L. Flynn

\s\ Thomas L. Hamelin                 Director                                   September 22, 2008
---------------------------
Thomas L. Hamelin
</TABLE>

                                       39
<PAGE>

<TABLE>
<S>                                   <C>                                        <C>
\s\ Marybeth McInnis                  Director                                   September 22, 2008
---------------------------
Marybeth McInnis

\s\ Kathleen R. Sachs                 Director                                   September 22, 2008
---------------------------
Kathleen R. Sachs


\s\ David A. Splaine                  Director                                   September 22, 2008
---------------------------
David A. Splaine

                                      Director
---------------------------
Robert T. Wyman

\s\ John H. Yeaton                    Director                                   September 22, 2008
---------------------------
John H. Yeaton
</TABLE>
                                       40