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, 2006

                                       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. |X|

      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, 2006 were $
8.6 million.

      As  of  September  25,  2006,  there  were  2,699,250  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, 2006 was $9.2 million.

                       DOCUMENTS INCORPORATED BY REFERENCE

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

2.    Proxy Statement for the 2006 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, 2006

                                TABLE OF CONTENTS

ITEM                                  PART I                                PAGE

1     BUSINESS                                                                 3
2     PROPERTIES                                                              34
3     LEGAL PROCEEDINGS                                                       34
4     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     34

                                       PART II

5     MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
      SMALL BUSINESS ISSUER PURCHASES OF SECURITIES                           34
6     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS                                               35
7     FINANCIAL STATEMENTS                                                    35
8     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE                                                35
8A    CONTROLS AND PROCEDURES                                                 35
8B    OTHER INFORMATION                                                       36

                                      PART III

9     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                      36
10    EXECUTIVE COMPENSATION                                                  36
11    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                         36
12    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                          36
13    EXHIBITS                                                                36
14    PRINCIPAL ACCOUNTANT FEES AND SERVICES                                  37

      SIGNATURES                                                              38


                                       2
<PAGE>

PART I

ITEM 1. 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. 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.

Georgetown Bancorp, Inc.

      Georgetown  Bancorp,  Inc.  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 Office of Thrift Supervision.

Georgetown Savings Bank

      Georgetown   Savings   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.

General

      Our principal  business  consists of attracting  retail  deposits from the
general  public in the Essex  County,  Massachusetts  region  and  southern  New
Hampshire 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.  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.


                                       3
<PAGE>

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  primarily  within our
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:

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

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

* 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.

      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
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.


                                       4
<PAGE>

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.

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.
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  may limit  our  future  growth  and  earnings  prospects.
Competition for loan  originations  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 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


                                       5
<PAGE>

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.  Our primary lending and
deposit  gathering areas are concentrated in the towns of Georgetown and Rowley,
Massachusetts  and communities  contiguous to Georgetown and Rowley. At June 30,
2006,  83.6% of our total  loan  portfolio  consisted  of loans  secured by real
estate located in Essex County, Massachusetts.

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  market  area is based on a mixture of  service,  manufacturing,
wholesale/retail  trade,  and state and local  government.  The 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 market area and the intensity
of the competitive environment for financial services.

Competition

      We face  intense  competition  within our market area both in making loans
and attracting  deposits.  Our 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.   One-  to  four-family
residential real estate mortgage loans  represented  $95.5 million,  or 73.7% of
our total loan  portfolio at June 30, 2006.  We also offer home equity loans and
lines of credit, multi-family and commercial real estate loans, and construction
loans and, to a lesser extent,  commercial and consumer loans. At June 30, 2006,
home equity loans and lines of credit totaled $10.6 million, or 8.2% of our loan
portfolio,  multi-family and commercial real estate loans totaled $11.9 million,
or 9.2% of our loan portfolio, construction mortgage loans totaled $9.5 million,
or 7.4% of our loan  portfolio,  and commercial  loans totaled $1.5 million,  or
1.2% 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, 2006, such loans totaled $617,000, or 0.5%
of our loan portfolio.


                                       6
<PAGE>

      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,
                                               ----------------------------------------------------
                                                         2006                         2005
                                               ----------------------       -----------------------
                                                 Amount       Percent         Amount       Percent
                                               ----------    --------       ----------     --------
                                                              (Dollars in thousands)
<S>                                            <C>             <C>          <C>              <C>
Mortgage loans:
   One- to four-family .................       $   95,478       73.66%      $   87,277        75.55%
   Multi-family and
   commercial real estate ..............           11,891        9.17            9,847         8.52
   Construction ........................            9,529        7.35            7,931         6.87
   Home equity loans and lines
   of credit ...........................           10,614        8.19            8,589         7.43
Commercial .............................            1,486        1.15            1,510         1.31
Consumer ...............................              617        0.48              372         0.32
                                               ----------    --------       ----------     --------

Total loans ............................          129,615      100.00%         115,526       100.00%
                                                             ========                      ========

Other items:
Net deferred loan origination
   costs ...............................              179                          137
Allowance for loan losses ..............           (1,016)                        (882)
                                               ----------                   ----------

Total loans, net .......................       $  128,778                   $  114,781
                                               ==========                   ==========
</TABLE>


                                       7
<PAGE>

      Loan Portfolio  Maturities and Yields.  The following table summarizes the
scheduled repayments of our loan portfolio at June 30, 2006. 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
                                                  Commercial Real                                 Home Equity Loans
                           One- to Four-Family        Estate                Construction         and Lines of  Credit
                          -------------------   -------------------     -------------------      --------------------
                                     Weighted              Weighted                Weighted                  Weighted
                                      Average               Average                 Average                   Average
                           Amount      Rate      Amount      Rate        Amount      Rate         Amount       Rate
                          --------   --------   --------   --------     --------   --------      --------    --------
                                                           (Dollars in thousands)
<S>                       <C>          <C>      <C>          <C>        <C>           <C>        <C>            <C>
Due During the Years
Ending June 30,
2007 .................    $    112     7.86%    $     14     10.25%     $    723      7.11%      $     80       9.35%
2008 .................          63     6.75           --        --         1,179      6.71             --         --
2009 .................         130     6.50           --        --            --        --              7       6.25
2010 to 2011 .........         559     5.17        1,968      7.70            --        --            229       5.76
2012 to 2016 .........       8,842     5.07        2,583      7.09            --        --            835       6.63
2017 to 2021 .........      22,127     5.20        1,393      7.44           248      6.52          1,922       7.49
2022 and beyond ......      63,645     5.49        5,933      7.09         7,379      5.51          7,541       7.79
                          --------              --------                --------                 --------

    Total ............    $ 95,478     5.39%    $ 11,891      7.23%     $  9,529      5.80%      $ 10,614       7.61%
                          ========              ========                ========                 ========

<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>
Due During the Years
Ending June 30,
2007 .................         $     35         --%      $    101      13.84%      $  1,065       7.80%
2008 .................              122       7.85             72       8.17          1,436       6.88
2009 .................               35       7.21             99       7.55            271       6.97
2010 to 2011 .........              591       7.08            241       7.98          3,588       7.10
2012 to 2016 .........              629       9.10             --         --         12,889       5.77
2017 to 2021 .........               --         --             36      10.33         25,726       5.52
2022 and beyond ......               74       9.90             68       4.85         84,640       5.82
                               --------                  --------                  --------

    Total ............         $  1,486       7.98%      $    617       8.68%      $129,615       5.82%
                               ========                  ========                  ========
</TABLE>

      The  following  table sets forth the  scheduled  repayments  of fixed- and
adjustable-rate loans at June 30, 2006 that are contractually due after June 30,
2007.

<TABLE>
<CAPTION>
                                                             Due After June 30, 2007
                                                     ---------------------------------------
                                                       Fixed       Adjustable      Total
                                                     -----------   -----------   -----------
                                                                 (In thousands)
<S>                                                  <C>           <C>           <C>
One- to four-family.............................     $    63,514   $    31,852   $    95,366
Multi-family and commercial real estate.........           6,903         4,974        11,877
Construction....................................           3,987         4,819         8,806
Home equity loans and lines of credit...........           2,687         7,847        10,534
Commercial......................................             735           716         1,451
Consumer........................................             352           164           516
                                                     -----------   -----------   -----------

         Total loans.............................    $    78,178   $    50,372   $   128,550
                                                     ===========   ===========   ===========
</TABLE>


                                       8
<PAGE>

      One- to  Four-Family  Residential  Loans.  Our  primary  lending  activity
consists of the  origination of one- to four-family  residential  mortgage loans
substantially  all of which are  secured by  properties  located in our  primary
market area. At June 30, 2006,  $95.5 million,  or 73.7% of our loan  portfolio,
consisted of one- to four-family residential mortgage loans. We generally retain
for our portfolio all loans that we originate. One- to four-family mortgage loan
originations are generally obtained from our in-house loan representatives, from
existing or past  customers,  through  advertising,  and through  referrals from
local real  estate  brokers,  third  party  commissioned  loan  originators  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%.  We  will  not  make  loans  with  a
loan-to-value  ratio in excess of 95%. 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  Fannie  Mae
policies and procedures.

      We also  offer  adjustable-rate  mortgage  loans  for one- to  four-family
properties,  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  $10.5 million of  adjustable  rate one- to  four-family  residential
loans  during  the  fiscal  year  ended  June 30,  2006,  as  compared  to total
originations of $13.4 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.

      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, 2006,  $31.8  million,  or 33.3% 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, 2006,  our largest
residential  mortgage loan had a principal  balance of $1.4 million and was by a
residence located in North Andover,  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, 2006, home equity loans and equity lines
of credit totaled $10.6 million, or 8.2% of total loans.  Additionally,  at June
30, 2006,  the  unadvanced  amounts of home equity lines of credit totaled $11.8
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


                                       9
<PAGE>

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 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
primarily located in our primary market area. At June 30, 2006, multi-family and
commercial real estate  mortgage loans totaled $11.9 million,  which amounted to
9.2% 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, 2006 was $2.5 million. Our
multi-family and commercial real estate loans may be made with terms of up to 25
years and are offered with interest rates that are fixed or adjust  periodically
and are indexed to the prime rate as reported  in The Wall  Street  Journal.  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, 2006 was a $1.1 million
loan  located  in  our  primary  market  area  and  secured  by  commercial  and
residential real estate. This loan was performing according to its terms at June
30, 2006.

      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  also  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, 2006,
residential construction loans amounted to $8.4 million, or 6.4% of total loans.
At June 30, 2006, the unadvanced portion of these residential construction loans
totaled $2.2 million.

      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.  At June 30, 2006, the largest  outstanding  residential  construction
loan commitment was for $2.4 million located in Lexington,  Massachusetts,  $1.7
million of which was  outstanding.  This loan was  performing  according  to its
terms at June 30, 2006. Residential construction loans are generally made on the
same terms as our one- to four-family mortgage loans.


                                       10
<PAGE>

      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
terms 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 and small retail and office buildings.
These loans  generally  have an  interest-only  phase during  construction  then
convert  to  permanent  financing.  Disbursements  of  funds  are  at  our  sole
discretion  and  are  based  on  the  progress  of  construction.   The  maximum
loan-to-value  ratio limit  applicable to these loans is generally  80%. At June
30, 2006,  commercial  construction loans totaled $1.2 million, or 0.9% of total
loans. At June 30, 2006, the unadvanced portion of these commercial construction
loans totaled $620,000.

      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.

      Commercial  Loans.  At June 30, 2006,  we had $1.5  million in  commercial
loans, which amounted to 1.2% of total loans. We make commercial  business loans
primarily in our market area to a variety of professionals, sole proprietorships
and  small  businesses.  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, 2006, was
$2.5 million.  Such loans are generally  used for  longer-term  working  capital
purposes such as purchasing  equipment or furniture.  Commercial  loans are made
with either  adjustable or fixed rates of interest.  Variable rates are 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 Federal  Home Loan
Bank 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.  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 90% of the value of the collateral
securing the loan. We generally do not make unsecured commercial loans.

      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, 2006,  our largest  commercial  loan was a
$168,000  loan secured by  commercial  property  and  business  equipment in our
primary market area. This loan was performing according to its terms at June 30,
2006.

      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 $617,000,  or 0.5% of our total loan portfolio at
June 30, 2006.


                                       11
<PAGE>

      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, 2006,  we had $1.3
million in loan participation interests.

      We  generally  retain in our  portfolio  and  service  all  loans  that we
originate.  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, 2006, we originated $23.9 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,  sales and  repayment
activities for the fiscal years indicated.

                                                         Years Ended June 30,
                                                      -------------------------
                                                         2006            2005
                                                      ---------       ---------
                                                            (In thousands)
Total loans at beginning of year ...............      $ 115,526       $  99,166
Loans originated:
   One- to four-family .........................         23,895          16,975
   Multi-family  and commercial real estate ....          3,750           2,520
   Construction ................................          7,217          10,748
   Home  equity  loans  and lines of credit ....          7,435           5,460
   Commercial ..................................          1,085           1,044
   Consumer ....................................            619             331
                                                      ---------       ---------
     Total loans originated ....................         44,001          37,078
                                                      ---------       ---------
Deduct:
   Principal repayments ........................        (29,912)        (20,718)
   Loan sales ..................................             --              --
                                                      ---------       ---------
Net loan activity ..............................         14,089          16,360
                                                      ---------       ---------
Total loans at end of year .....................      $ 129,615       $ 115,526
                                                      =========       =========

      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 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 Executive Committee.  The Executive Committee consists
of five non-employee  directors of Georgetown Savings Bank. All loans, which are
approved by the  Designated  Individuals,  are reviewed and ratified by 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 and Senior
Lending Officer each possess individual authority to approve all types of


                                       12
<PAGE>

credit in amounts up to  $700,000.  These two  Designated  Individuals  may also
approve all types of credits in amounts up to $1 million on a combined basis. In
addition,  the Loan Department Manager possesses individual authority to approve
all types of credits in amounts up to $200,000.  Georgetown  Savings Bank's Loan
Department  Manager and senior  loan  underwriter  possess  joint  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  Board  of  Directors.  Upon  direction  of the  Board  of
Directors,  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, 2006, $1.1 million or 0.9% of our total
loans were  non-performing  loans.  These loans  consisted of five loans to four
individual borrowers.  Four of the loans are secured by real property including,
personal  residence and commercial real estate. One of the loans is an unsecured
consumer loan.

      Potential  problem loans are loans that are currently  performing  and are
not included in non-accrual  loans below, but about which we have serious doubts
as to the borrower's ability to comply with present repayment terms. These loans
are likely to be included later in  non-accrual  or past due loans,  so they are
considered  by  management  in assessing  the adequacy of the allowance for loan
losses. At June 30, 2006, $638,000 or 0.5% of total loans had been identified as
potential  problem loans that caused management to have serious doubts regarding
the ability of such borrowers to comply with the present loan repayment terms.


                                       13
<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,
                                                        -----------------------
                                                           2006          2005
                                                        ---------     ---------
                                                         (Dollars in thousands)
      Non-accrual loans:
         One- to four-family ........................   $     519     $      --
         Multi-family and commercial real estate ....         321            --
         Construction ...............................          --            --
         Home equity loans and lines of credit ......          --            --
         Commercial .................................          --            --
         Consumer ...................................          --            --
                                                        ---------     ---------
           Total non-accrual loans ..................         840            --
                                                        ---------     ---------

      Loans greater than 90 days delinquent
         and still accruing:
         One- to four-family ........................          --           276
         Multi-family and commercial real estate ....          --           121
         Construction ...............................          --            --
         Home equity loans and lines of credit ......          50            --
         Commercial .................................          --            --
         Consumer ...................................          10            --
                                                        ---------     ---------
           Total loans 90 days and still
                accruing ............................          60           397
                                                        ---------     ---------

      Restructured loans ............................         226           230

           Total non-performing loans ...............       1,126           627
                                                        ---------     ---------

      Real estate owned:
         One- to four-family ........................          --            --
         Multi-family and commercial real estate ....          --            --
         Construction ...............................          --            --
         Home equity loans and lines of credit ......          --            --
         Commercial .................................          --            --
         Consumer ...................................          --            --
                                                        ---------     ---------
           Total real estate owned ..................          --            --
                                                        ---------     ---------

      Total non-performing assets ...................   $   1,126     $     627
                                                        =========     =========

      Ratios:
         Non-performing loans to total loans ........        0.87%         0.54%
         Non-performing assets to total assets ......        0.67%         0.39%

      For the fiscal year ended June 30, 2006,  gross interest income that would
have been recorded had our  non-accruing  loans been current in accordance  with
their  original terms amounted to $40,000.  Interest  income  recognized on such
loans for the fiscal year ended June 30, 2006 was $24,000.


                                       14
<PAGE>

      Delinquent Loans. The following table sets forth our loan delinquencies by
type, by amount and by percentage of 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, 2006
   One- to four-family ...............................            1    $     171            1    $     519            2    $     690
   Multi-family and commercial real estate ...........           --           --            1          321            1          321
   Construction ......................................           --           --           --           --           --           --
   Home equity loans and lines of credit .............            1           99            1           50            2          149
   Commercial ........................................            1            2           --           --            1            2
   Consumer ..........................................           --           --            1           10            1           10
                                                          ---------    ---------    ---------    ---------    ---------    ---------
     Total ...........................................            3    $     272            4    $     900            7    $   1,172
                                                          ---------    =========    =========    =========    =========    =========

At June 30, 2005
   One- to four-family ...............................           --    $      --            1    $     276            1    $     276
   Multi-family and commercial
   real estate .......................................           --           --            1          121            1          121
   Construction ......................................           --           --           --           --           --           --
   Home equity loans and linesof credit ..............           --           --           --           --           --           --
   Commercial ........................................           --           --           --           --           --           --
   Consumer ..........................................           --           --           --           --           --           --
                                                          ---------    ---------    ---------    ---------    ---------    ---------
     Total ...........................................           --    $      --            2    $     397            2    $     397
                                                          =========    =========    =========    =========    =========    =========
</TABLE>

      Classified Assets.  Office of Thrift Supervision  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.

      We are  required to  establish  general  allowances  for loan losses in an
amount  deemed  prudent  by  management  for  loans  classified  substandard  or
doubtful,  as well as for other problem loans. General allowances represent loss
allowances  which  have  been  established  to  recognize  the  inherent  losses
associated with lending activities, but which, unlike specific allowances,  have
not been allocated to particular problem assets. When we classify problem assets
as "loss," we are required  either to establish a specific  allowance for losses
equal to 100% of the  amount of the asset so  classified  or to charge  off such
amount.  Our determination as to the classification of our assets and the amount
of our  valuation  allowances  is  subject  to  review  by the  Office of Thrift
Supervision which can order the establishment of additional  general or specific
loss allowances.

      On the basis of  management's  review of our assets,  at June 30, 2006, we
had classified $1.1 million of our assets as special mention, which consisted of
two loans to two separate  borrowers.  At June 30, 2006, we had classified  $1.7
million  of our  assets as  substandard,  which  consisted  of six loans to five
separate borrowers,  of which $840,000 of those assets classified as substandard
were on non-accrual  status. At June 30, 2006, we had classified  $10,000 of our
assets as a loss, which was reserved for at 100%. 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.


                                       15
<PAGE>

Allowance for Loan Losses

      The  allowance  for loan losses is the amount  estimated by  management as
necessary to cover credit losses  inherent in the loan  portfolio at the balance
sheet date. The allowance is established  through the provision for loan losses,
which is charged against income.

      Management  performs  a  quarterly  evaluation  of  the  adequacy  of  the
allowance for loan losses. We consider a variety of factors in establishing this
estimate  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,  results of
internal and external loan reviews and other relevant qualitative loan portfolio
risk factors. This evaluation is inherently subjective,  as it requires material
estimates by management that may be susceptible to significant change.

      The analysis has three components:  specific,  general, and an unallocated
component.  The specific  component  relates to loans that are  determined to be
impaired.  Impairment is measured by  determining  the present value of expected
future  cash flows or,  for  collateral-dependent  loans,  the fair value of the
collateral  adjusted for market  conditions  and selling  expenses.  The general
component is determined by segregating  the remaining  loans by type of loan and
analyzing all of the appropriate  qualitative loan portfolio risk factors.  This
analysis establishes general allowance  percentages that are applied to the loan
groups to determine  the amount of the general  component of the  allowance  for
loan losses.

      An unallocated  component is maintained to cover  uncertainties that could
affect  management's  estimate of probable losses. The unallocated  component of
the  allowance  reflects the margin of  imprecision  inherent in the  underlying
assumptions used in the  methodologies  for estimating  losses in the portfolio,
because  regardless  of the  extent of our  analysis  of  customer  performance,
portfolio trends or risk management  processes,  certain inherent but undetected
losses are probable within our loan portfolio.  This is due to several  factors,
including  inherent  delays in  obtaining  information  regarding  a  customer's
financial condition or changes in a customer's unique business  conditions,  the
judgmental nature of individual loan evaluations, collateral assessments and the
interpretation of economic trends.  Volatility of economic or  customer-specific
conditions  affecting the  identification  and  estimation of losses from larger
non-homogeneous credits and the sensitivity of assumptions utilized to establish
allowances for homogeneous groups of loans, loan portfolio  concentrations,  and
other  subjective  considerations  are  among  other  factors.  Because  of  the
imprecision  surrounding  these factors,  we maintain an  unallocated  component
available to be allocated to a specific loan category.

      Actual loan losses may be  significantly  more than the allowances we have
established,  which  could  have a  material  negative  effect on our  financial
results.

      In addition,  as an integral part of their examination process, the Office
of Thrift  Supervision will  periodically  review our allowance for loan losses.
Such agency may require that we recognize  additions to the  allowance  based on
their  judgments  of  information  available  to  them  at  the  time  of  their
examination.


                                       16
<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,
                                                         ---------------------
                                                           2006         2005
                                                         --------     --------
                                                         (Dollars in thousands)

Balance at beginning of year ........................    $    882     $    876
                                                         --------     --------

Charge-offs:
   One- to four-family ..............................          --           --
   Multi-family and commercial real estate ..........          --           41
   Construction .....................................          --           --
   Home equity loans and lines of credit ............          --           --
   Commercial .......................................          --           68
   Consumer .........................................           8            1
                                                         --------     --------
     Total charge-offs ..............................           8          110
                                                         --------     --------

Recoveries:
   One- to four-family ..............................          23           --
   Multi-family commercial real estate ..............           8            1
   Construction .....................................          --           --
   Home equity loans and lines of credit ............          --           --
   Commercial .......................................          --           --
   Consumer .........................................           3            1
                                                         --------     --------
     Total recoveries ...............................          34            2
                                                         --------     --------

Net recoveries (charge-offs) ........................          26         (108)
Provision for loan losses ...........................         108          114
                                                         --------     --------

Balance at end of year ..............................    $  1,016     $    882
                                                         ========     ========

Ratios:
Net charge-offs to average loans
   outstanding (annualized) .........................        0.02%        0.10%
Allowance for loan losses to non-performing
   loans at end of year .............................       90.23       140.67
Allowance for loan losses to total loans at
   end of year (1) ..................................        0.78         0.76

----------
(1)   Total loans,  including net deferred loan costs, at June 30, 2006 and 2005
      were $129.8 million and $115.7 million respectively.


                                       17
<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,
                                ----------------------------------------------------------------------------------------------
                                                     2006                                            2005
                                ---------------------------------------------    ---------------------------------------------
                                                                  Percent of                                       Percent of
                                                                Loans in Each                                    Loans in Each
                                Allowance for   Loan Balances    Category to     Allowance for   Loan Balances    Category to
                                 Loan Losses     by Category     Total Loans      Loan Losses     by Category     Total Loans
                                -------------   -------------   -------------    -------------   -------------   -------------
                                                                    (Dollars in thousands)
<S>                               <C>             <C>                 <C>          <C>             <C>                 <C>
One- to four-family ..........    $      318      $   95,478           73.66%      $      395      $   87,277           75.55%
Multi-family and
commercial real estate .......           356          11,891            9.17              180           9,847            8.52
Construction .................           143           9,529            7.35              141           7,931            6.87
Home equity loans and
lines of credit ..............           144          10,614            8.19              129           8,589            7.43
Commercial ...................            32           1,486            1.15               30           1,510            1.31
Consumer .....................            23             617            0.48                7             372            0.32
                                  ----------      ----------      ----------       ----------      ----------      ----------

Total ........................    $    1,016      $  129,615          100.00%      $      882      $  115,526          100.00%
                                  ==========      ==========      ==========       ==========      ==========      ==========
</TABLE>

      Each quarter,  management evaluates the total balance of the allowance for
loan  losses  based on  several  factors  that are not  loan  specific,  but are
reflective of the inherent losses in the loan portfolio.  This process includes,
but is not  limited  to, a review of several  qualitative  loan  portfolio  risk
factors.  First, we group loans by delinquency status. All loans 90 days or more
delinquent  are  evaluated  individually,  based  primarily  on the value of the
collateral  securing the loan.  Specific  loss  allowances  are  established  as
required by this analysis. All loans for which a specific loss allowance has not
been assigned are  segregated  by type and a loss  allowance is  established  by
using loss experience data and management's judgment concerning other matters it
considers significant. The allowance is allocated to each category of loan based
on the results of the above analysis.

      This analysis process is inherently subjective,  as it requires us to make
estimates  that  are  susceptible  to  revisions  as  more  information  becomes
available.  Although we believe that we have established the allowance at levels
to absorb probable and estimable  losses,  future  additions may be necessary if
economic or other conditions in the future differ from the current environment.

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 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,


                                       18
<PAGE>

and Fannie Mae and Freddie Mac equity securities. Georgetown Bancorp, Inc., as a
federally  chartered  mid-tier  stock  holding  company,  may  invest  in equity
securities subject to certain limitations.

      Our investment portfolio at June 30, 2006, at amortized cost, consisted of
$4.5  million in  government-sponsored  enterprises  and $2.9 million in Federal
Home Loan Bank of Boston stock.  We also invest in  mortgage-backed  securities,
all of which are guaranteed by United States  Government  agencies or government
sponsored  enterprises.   At  June  30,  2006,  our  mortgage-backed  securities
portfolio  totaled $21.3  million,  or 12.6% of total  assets,  and consisted of
$18.0  million in  fixed-rate  and $3.3  million in  adjustable-rate  securities
guaranteed  by Fannie  Mae or  Freddie  Mac.  Securities  can be  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,
                                               ----------------------------------------------------------
                                                          2006                            2005
                                               -------------------------       --------------------------
                                               Amortized                       Amortized
                                                  Cost        Fair Value          Cost         Fair Value
                                               ---------      ----------       ---------       ----------
                                                                    (In thousands)
<S>                                             <C>             <C>             <C>             <C>
Securities available for sale:
Government-sponsored enterprises ........       $  4,000        $  3,921        $  4,994        $  4,952
  Mortgage-backed securities ............         11,988          11,544          11,842          11,862
                                                --------        --------        --------        --------
      Total securities available
        for sale ........................       $ 15,988        $ 15,465        $ 16,836        $ 16,814
                                                ========        ========        ========        ========

Securities held to maturity:
Government-sponsored enterprises ........       $    500        $    488        $  1,000        $    995
  Mortgage-backed securities ............          9,323           8,965          11,380          11,467
                                                --------        --------        --------        --------
      Total securities held to
        maturity ........................       $  9,823        $  9,453        $ 12,380        $ 12,462
                                                ========        ========        ========        ========
</TABLE>


                                       19
<PAGE>

      Portfolio  Maturities and Yields.  The  composition  and maturities of the
investment securities portfolio at June 30, 2006 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         More than Five Years
                                                         One Year or Less           through 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 ..........        $ 1,500        3.15%        $ 2,500        4.33%        $    --           --%
   Mortgage-backed securities ................             --          --              --          --           6,777         4.01
                                                      -------                     -------                     -------

      Total securities available for sale ....        $ 1,500        3.15%        $ 2,500        4.33%        $ 6,777         4.01%
                                                      =======                     =======                     =======
Securities held to maturity:
   Government-sponsored enterprises ..........        $    --          --%        $   500        3.38%        $    --           --%
   Mortgage-backed securities ................             20        6.90              75        6.25           3,732         4.12
                                                      -------                     -------                     -------

      Total securities held to maturity ......        $    20        6.90%        $   575        3.75%        $ 3,732         4.12%
                                                      =======                     =======                     =======

<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 ..........           $    --           --%        $ 4,000        $ 3,921       3.89%
   Mortgage-backed securities ................             5,211         5.00          11,988         11,544       4.44
                                                         -------                      -------        -------

      Total securities available for sale ....           $ 5,211         5.00%        $15,988        $15,465       4.30%
                                                         =======                      =======        =======
Securities held to maturity:
   Government-sponsored enterprises ..........           $    --           --%        $   500        $   488       3.38%
   Mortgage-backed securities ................             5,496         4.57           9,323          8,965       4.41
                                                         -------                      -------        -------

      Total securities held to maturity ......           $ 5,496         4.57%        $ 9,823        $ 9,453       4.35%
                                                         =======                      =======        =======
</TABLE>


                                       20
<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
Federal  Home Loan Bank of  Boston  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. 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 not  accepted  brokered  deposits in the past,
although we have the authority to do so.

      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, 2006, $41.0 million, or 42.5% of our deposit accounts were certificates
of deposit, of which $23.0 million have maturities of one year or less.

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

<TABLE>
<CAPTION>
                                                                   At June 30,
                                      -----------------------------------------------------------------------
                                                      2006                                2005
                                      ----------------------------------   ----------------------------------
                                                                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 ..................    $  11,285        11.68%      --%     $  10,388        11.50%        --%
NOW deposits .....................        7,562         7.83      1.04         4,665         5.16        0.05
Money market deposits ............       21,706        22.48      3.01        20,954        23.20        1.76
Regular and other savings ........       15,008        15.54      0.29        20,460        22.65        0.33
                                      ---------    ---------               ---------     --------
   Total transaction accounts ....       55,561        57.53                  56,467        62.51

Certificates of deposit ..........       41,010        42.47      4.13        33,869        37.49        3.31
                                      ---------    ---------               ---------     --------

   Total deposits ................    $  96,571       100.00%     2.56%    $  90,336       100.00%       1.72%
                                      =========    =========               =========     ========
</TABLE>

                                       21
<PAGE>

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

                                                          Years Ended June 30,
                                                       ------------------------
                                                          2006          2005
                                                       ----------    ----------
                                                            (In thousands)

Beginning balance ............................         $   90,336    $   87,259
                                                       ----------    ----------
Net deposits before interest credited ........              4,302         1,685
Interest credited ............................              1,933         1,392
                                                       ----------    ----------
Net increase in deposits .....................              6,235         3,077
                                                       ----------    ----------
Ending balance ...............................         $   96,571    $   90,336
                                                       ==========    ==========

      As of June 30, 2006, the aggregate  amount of outstanding  certificates of
deposit in amounts  greater  than or equal to $100,000  was $14.3  million.  The
following table indicates the amount of those certificates of deposit as of June
30, 2006 by time remaining until maturity.

                                                                     At
                                                              June 30, 2006
                                                              --------------
                                                              (In thousands)

      Three months or less .................................    $    1,162
      Over three months through six months .................         3,025
      Over six months through one year .....................         3,902
      Over one year to three years .........................         5,051
      Over three years .....................................         1,155
                                                                ----------

      Total ................................................    $   14,295
                                                                ==========

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

                                                            At June 30,
                                                     -------------------------
                                                        2006           2005
                                                     ----------     ----------
                                                           (In thousands)

      Interest Rate
      Less than 2% .........................         $      502     $    5,724
      2.00%-2.99% ..........................              3,551          4,171
      3.00%-3.99% ..........................             14,586         17,680
      4.00%-4.99% ..........................             14,890          3,227
      5.00%-5.99% ..........................              7,137          2,743
      6.00%-6.99% ..........................                344            324
                                                     ----------     ----------

      Total ................................         $   41,010     $   33,869
                                                     ==========     ==========

      The following  table sets forth the amount and maturities of time deposits
at June 30, 2006.

<TABLE>
<CAPTION>
                                               June 30,      June 30,      June 30,      June 30,     After June
                                                 2007          2008          2009          2010        30, 2011        Total
                                              ----------    ----------    ----------    ----------    ----------    ----------
                                                                               (In thousands)
<S>                                           <C>           <C>           <C>           <C>           <C>           <C>
      Interest Rate
         Less than 2% ....................    $      502    $       --    $       --    $       --    $       --    $      502
         2.00% -2.99% ....................         2,512           476           541            22            --         3,551
         3.00% -3.99% ....................         3,798         7,568         1,753           991           476        14,586
         4.00% -4.99% ....................         9,895         2,042         2,462           218           273        14,890
         5.00% -5.99% ....................         6,249           146            --             8           734         7,137
         6.00% -6.99% ....................            --            --           344            --            --           344
                                              ----------    ----------    ----------    ----------    ----------    ----------

         Total ...........................    $   22,956    $   10,232    $    5,100    $    1,239    $    1,483    $   41,010
                                              ==========    ==========    ==========    ==========    ==========    ==========
</TABLE>

                                       22
<PAGE>

      Borrowings.  Our borrowings consist primarily of advances from the Federal
Home Loan Bank of Boston.  As of June 30, 2006, we had Federal Home Loan Bank of
Boston advances in the amount of $51.2 million, which represented 34.1% of total
liabilities with a weighted average maturity of 1.50 years.  Georgetown  Savings
Bank can  currently  borrow up to  approximately  $65.0 million from the Federal
Home Loan Bank of Boston through its membership.

      The  following  table  sets  forth  information  concerning  balances  and
interest rates on our Federal Home Loan Bank of Boston advances at the dates and
for the periods indicated.

<TABLE>
<CAPTION>
                                                                     At or For the Years Ended June 30,
                                                          -------------------------------------------------------
                                                             Long-Term Borrowings        Short-Term Borrowings(1)
                                                          -------------------------     -------------------------
                                                             2006           2005           2006           2005
                                                          ----------     ----------     ----------     ----------
                                                                           (Dollars in thousands)
<S>                                                       <C>            <C>            <C>            <C>
Balance at end of year ...............................    $   28,921     $   18,468     $   22,300     $   28,350
Average balance during year ..........................        25,326         19,888         25,768         22,698
Maximum outstanding at any month end .................        25,349         21,008         30,400         28,350
Weighted  average interest rate at end of year .......          4.38%          3.87%          4.91%          3.32%
Average interest rate during year ....................          4.16%          3.78%          4.21%          2.56%
</TABLE>

----------
(1)   Represents borrowings 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  remains 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:

<TABLE>
<CAPTION>
                                                           At or For the Years Ended
                                                                    June 30,
                                                          ---------------------------
                                                              2006            2005
                                                          -----------     -----------
                                                              (Dollars in thousands)
<S>                                                       <C>             <C>
Balance at end of year ...............................    $       762     $       989
Average balance during year ..........................            751             828
Maximum outstanding at any month end .................            899             989
Weighted  average interest rate at end of year .......           1.00%           1.00%
Average interest rate during year ....................           1.00%           1.01%
</TABLE>

Subsidiary Activities

      Georgetown  Securities   Corporation  is  a  wholly  owned  subsidiary  of
Georgetown  Savings  Bank  established  in  1995  as  a  Massachusetts  security
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, 2006,  Georgetown  Securities  Corporation  had total
assets of $18.9 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,  2006,  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

                                       23
<PAGE>

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, 2006,  we had 37  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.

      At June 30,  2006,  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, 2006,  Georgetown  Savings Bank had no
net operating loss carryforwards for federal income tax purposes.

      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, 2006,  Georgetown  Savings Bank had a $61,000 capital
loss carryforward for federal income tax purposes.

                                       24
<PAGE>

      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 each of
its  subsidiaries  file separate annual income tax returns.  Georgetown  Savings
Bank's  state  tax  returns,  as  well as  those  of its  subsidiaries,  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  Security 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,  2006,  Georgetown  Bancorp,  Inc.  has not  applied  for  security
corporation status.

      Georgetown Savings Bank's subsidiary,  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.

                           SUPERVISION AND REGULATION

General

      Georgetown Savings Bank is examined and supervised by the Office of Thrift
Supervision.   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 Federal  Deposit  Insurance  Corporation'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
Federal Home Loan Bank of Boston,  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
Office  of  Thrift  Supervision   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 Federal  Deposit
Insurance Corporation,  the Office of Thrift Supervision or Congress, could have
a material  adverse impact on Georgetown  Bancorp,  Inc. and Georgetown  Savings
Bank and their operations.

                                       25
<PAGE>

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  Office  of  Thrift  Supervision.   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.  Office of Thrift Supervision  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 Office of Thrift Supervision, 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 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.  Georgetown  Savings  Bank  does  not
typically engage in asset sales.

      At  June  30,  2006,   Georgetown  Savings  Bank's  capital  exceeded  all
applicable 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,  2006,  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,
2006, Georgetown Savings Bank satisfied this test.

                                       26
<PAGE>

      Capital  Distributions.  Office of Thrift  Supervision  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 Office of Thrift Supervision-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 Office of
Thrift  Supervision  at least 30 days before the Board of  Directors  declares a
dividend or approves a capital distribution.

      The Office of Thrift  Supervision  may  disapprove a notice or application
if:

      o     the   savings   bank  would  be   undercapitalized   following   the
            distribution;

      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  Office  of  Thrift  Supervision  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 Office of Thrift Supervision
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  Office  of  Thrift  Supervision,  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
Office of Thrift  Supervision  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

                                       27
<PAGE>

Act and  Office  of  Thrift  Supervision  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  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 Office of Thrift
Supervision  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,  Office
of Thrift Supervision 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  Office of Thrift  Supervision  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

                                       28
<PAGE>

capital.  In addition,  extensions of credit in excess of certain limits must be
approved by Georgetown Savings Bank's Board of Directors.

      Enforcement.  The Office of Thrift  Supervision  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  Office  of  Thrift
Supervision  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 Federal  Deposit  Insurance  Corporation  also has the authority to
terminate  deposit  insurance  or to  recommend to the Director of the Office of
Thrift Supervision that enforcement action be taken with respect to a particular
savings institution. If action is not taken by the Director, the Federal Deposit
Insurance   Corporation   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.

      Prompt Corrective Action  Regulations.  Under the prompt corrective action
regulations, the Office of Thrift Supervision 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 8% total risk-based  capital, 4% Tier 1
            risk-based capital or 3% leverage capital);

      o     significantly   undercapitalized  (less  than  6%  total  risk-based
            capital, 3% Tier 1 risk-based capital or 3% leverage 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 Office of Thrift  Supervision  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

                                       29
<PAGE>

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  Office of
Thrift  Supervision,  or the amount  necessary  to restore the  savings  bank to
adequately  capitalized status. This guarantee remains in place until the Office
of  Thrift  Supervision  notifies  the  savings  bank  that  it  has  maintained
adequately  capitalized  status for each of four consecutive  calendar quarters,
and the Office of Thrift  Supervision  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 Office of Thrift  Supervision 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,  2006,  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 Federal  Deposit  Insurance  Corporation,  generally  up to a
maximum of $100,000 per separately insured depositor.  Georgetown Savings Bank's
deposits therefore are subject to Federal Deposit Insurance  Corporation deposit
insurance  assessments.  The Federal Deposit Insurance Corporation has adopted a
risk-based  system for determining  deposit insurance  assessments.  The Federal
Deposit  Insurance  Corporation is authorized to raise the  assessment  rates as
necessary  to maintain  the  required  ratio of reserves to insured  deposits of
1.25%.

      On February  15,  2006,  federal  legislation  to reform  federal  deposit
insurance was enacted.  This new legislation  requires,  among other things,  an
increase in the amount of federal  deposit  insurance  coverage from $100,000 to
$130,000 (with a cost of living  adjustment to become  effective in five years).
The Act also  requires  the reserve  ratio to be modified to provide for a range
between  1.15% and 1.50% of  estimated  insured  deposits.  The new  legislation
requires  the  Federal  Deposit  Insurance   Corporation  to  issue  regulations
implementing  the law. The changes required by the law will not become effective
until final  regulations have been issued,  which must be no later than 270 days
from the date of the enactment of the legislation.

      Effective March 31, 2006, the Federal Deposit Insurance Corporation 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
Federal Deposit  Insurance  Corporation,  assessments for anticipated  payments,
issuance  costs and  custodial  fees on bonds issued by the FICO in the 1980s to
recapitalize  the 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, 2006, the FICO  assessment was equal to 1.28 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 Federal Home Loan Bank of
Boston,  Georgetown  Savings  Bank is  required  to acquire  and hold  shares of
capital  stock in the  Federal  Home Loan  Bank of  Boston.  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.

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, 2006,
Georgetown Savings Bank was in compliance with these reserve requirements.

                                       30
<PAGE>

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

      In July 2002,  the  Sarbanes-Oxley  Act of 2002 (the  "Act") was  enacted,
which  implemented   legislative  reforms  intended  to  address  corporate  and
accounting fraud. In addition to the establishment of a new accounting oversight
board that will enforce auditing, quality control and independence standards and
will be  funded by fees  from all  publicly  traded  companies,  the Act  places
certain restrictions on the scope of services that may be provided by accounting
firms to their public  company  audit  clients.  Any  non-audit  services  being
provided to a public  company  audit  client  will  require  preapproval  by the
company's  audit  committee.  In addition,  the Act makes certain changes to the
requirements for partner rotation after a period of time. The Act requires chief
executive officers and chief financial officers, or their equivalent, to certify
to the  accuracy of periodic  reports  filed with the  Securities  and  Exchange
Commission,  subject  to civil  and  criminal  penalties  if they  knowingly  or
willingly violate this certification  requirement.  In addition,  under the Act,
counsel  will be required  to report  evidence  of a material  violation  of the
securities  laws or a  breach  of  fiduciary  duty  by a  company  to its  chief
executive  officer or its chief legal  officer,  and, if such  officer  does not
appropriately  respond,  to report such evidence to the audit committee or other
similar committee of the Board of Directors or the board itself.

      Under the Act, longer prison terms will apply to corporate  executives who
violate federal  securities laws; the period during which certain types of suits
can be brought against a company or its officers is extended; and bonuses issued
to top executives prior to restatement of a company's  financial  statements are
now subject to disgorgement if such restatement was due to corporate misconduct.
Executives  are also  prohibited  from insider  trading during  retirement  plan
"blackout"  periods,  and  loans to  company  executives  (other  than  loans by
financial   institutions   permitted  by  federal  rules  and  regulations)  are
restricted.  In addition, a provision directs that civil penalties levied by the
Securities and Exchange Commission as a result of any judicial or administrative
action under the Act be deposited to a fund for the benefit of harmed investors.
The Federal  Accounts  for  Investor  Restitution  provision  also  requires the
Securities and Exchange  Commission to develop  methods of improving  collection
rates.  The  legislation  accelerates  the time frame for  disclosures by public
companies,  as they must  immediately  disclose  any  material  changes in their
financial  condition or operations.  Directors and executive  officers must also
provide  information  for most changes in  ownership  in a company's  securities
within two business days of the change.

      The Act also increases the oversight of, and codifies certain requirements
relating to audit  committees of public companies and how they interact with the
company's  "independent  registered  public  accounting  firm." Audit  Committee
members must be independent and are absolutely barred from accepting consulting,
advisory or other compensatory fees from the issuer. In addition, companies must
disclose  whether at least one member of the  committee is a "financial  expert"
(as such term is defined by the Securities and Exchange  Commission) and if not,
why not. Under the Act, a company's  independent  registered  public  accounting
firm is prohibited  from  performing  statutorily  mandated audit services for a
company if such company's chief  executive  officer,  chief  financial  officer,
comptroller,  chief  accounting  officer  or any person  serving  in  equivalent
positions had been employed by such firm and  participated  in the audit of such
company during the one-year period  preceding the audit initiation date. The Act
also  prohibits  any officer or director of a company or any other person acting
under their direction from taking any action to fraudulently influence,  coerce,
manipulate  or mislead any  independent  accountant  engaged in the audit of the
company's  financial  statements  for the  purpose of  rendering  the  financial
statements  materially  misleading.

                                       31
<PAGE>

The Act also requires the Securities and Exchange  Commission to prescribe rules
requiring  inclusion of any internal control report and assessment by management
in the annual report to shareholders. The Act requires the company's independent
registered  public accounting firm that issues the audit report to attest to and
report on management's assessment of the company's internal controls.

      We anticipate that we will incur additional  expense in complying with the
provisions  of the  Act  and the  regulations  that  have  been  promulgated  to
implement the Act,  particularly those regulations relating to the establishment
of internal controls over financial reporting.

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 Office of Thrift  Supervision and subject to Office
of Thrift  Supervision  regulations,  examinations,  supervision  and  reporting
requirements.  In addition,  the Office of Thrift  Supervision  has  enforcement
authority over Georgetown Bancorp,  Inc. and Georgetown  Bancorp,  Inc. MHC, and
their  subsidiaries.  Among other things,  this authority  permits the Office of
Thrift Supervision 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 Office of Thrift  Supervision  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 acquiring more than 5% of
another savings  institution or holding company  thereof,  without prior written
approval of the Office of Thrift Supervision.  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  Office  of Thrift  Supervision  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  Office  of  Thrift  Supervision  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

                                       32
<PAGE>

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.  Office  of  Thrift
Supervision  regulations require Georgetown Bancorp, MHC to notify the Office of
Thrift  Supervision  of any  proposed  waiver of its receipt of  dividends  from
Georgetown  Bancorp,  Inc.  The Office of Thrift  Supervision  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)  for  as  long  as the  savings  bank
subsidiary  is controlled by the mutual  holding  company,  the dollar amount of
dividends waived by the mutual holding company is considered as a restriction on
the retained earnings of the savings bank, which  restriction,  if material,  is
disclosed in the public  financial  statements  of the savings bank as a note to
the financial statements;  (iii) 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 (iv) the
amount of any waived  dividend is  considered as having been paid by the savings
bank in  evaluating  any proposed  dividend  under Office of Thrift  Supervision
capital  distribution  regulations.  We anticipate that Georgetown Bancorp,  MHC
will waive any dividends paid by Georgetown Bancorp, Inc. Under Office of Thrift
Supervision 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.

                                       33
<PAGE>

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

      The  following  table  provides  certain  information  with respect to our
properties as of June 30, 2006:

<TABLE>
<CAPTION>
                                     Owned or       Year Acquired or                          Net Book Value of
         Location                      Leased             Leased            Square Footage       Real Property
------------------------           -------------    ----------------        --------------    -----------------
                                                                                               (In thousands)
<S>                                 <C>                 <C>                    <C>             <C>
Main Office:
2 East Main Street
Georgetown, MA 01833                   Own                2003(1)              14,400          $        3,245

Branch Office:
303 Haverhill Street
Rowley, MA 01969                    Leased(2)             1999                  3,500          $          552

Branch Office:
Turnpike Street/Route114
North Andover, MA 01845             Leased(3)             2005                  2,437          $          567

Other Property (4):
8 Prospect Street
Georgetown, MA 01833                   Own                1997                  1,000          $          100
</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
$5.2 million at June 30, 2006.

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, 2006,
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 56.6% of
our outstanding  common stock.  The  approximate  number of holders of record of
Georgetown  Bancorp,  Inc.'s  common  stock as of  September  19,  2006 was 305.
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.  Georgetown Bancorp,
Inc.  began  trading  on the  Electronic  Bulletin  Board on  January

                                       34
<PAGE>

6,  2005.  Accordingly,  no  information  prior to this date is  available.  The
following information was provided by the Electronic Bulletin Board.

       Fiscal 2006                           High          Low        Dividends
--------------------------------          ---------     ---------     ---------
Quarter ended September 30, 2005          $    9.90     $    9.00     $     0.0
Quarter ended December 31, 2005           $    9.10     $    8.30     $     0.0
Quarter ended March 31, 2006              $    9.40     $    8.60     $     0.0
Quarter ended June 30, 2006               $    9.70     $    8.75     $     0.0

       Fiscal 2005                           High          Low        Dividends
--------------------------------          ---------     ---------     ---------
Quarter ended March 31, 2005              $   10.15     $    9.60     $     0.0
Quarter ended June 30, 2005               $    9.70     $    8.24     $     0.0

      Dividend payments by Georgetown  Bancorp,  Inc. are dependent primarily on
dividends it receives from Georgetown Savings Bank, because Georgetown  Bancorp,
Inc. will have no source of income other than dividends from Georgetown  Savings
Bank and interest  payments with respect to Georgetown  Bancorp,  Inc.'s loan to
the Employee Stock Ownership Plan.

      At June 30,  2006,  there were no  compensation  plans under which  equity
securities of Georgetown Bancorp, Inc. were authorized for issuance.

      (b)   Not applicable

      (c)   Georgetown Bancorp, Inc. did not repurchase any shares of its common
            stock during the relevant period.

ITEM 6. Management's  Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
        of Operations
        -------------

      The  "Management's  Discussion  and  Analysis of Financial  Condition  and
Results of Operations" section of Georgetown Bancorp,  Inc.'s 2006 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 2006 Annual Report to Stockholders are incorporated herein by reference.

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

      None.

ITEM 8A. 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 2006 that has materially affected, or is
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

                                       35
<PAGE>

ITEM 8B. Other Information

      None.

                                    PART III

ITEM 9. Directors, Executive Officers, Promoters and Control Persons; 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.  The Code of Ethics is also  filed as
Exhibit 14 to this Form 10-KSB.

      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
-------------------------------------------------------

      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-40)

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

                                       36
<PAGE>

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, 2006 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.*

3.2         Bylaws of Georgetown Bancorp, Inc.**

4           Form of Common Stock Certificate of Georgetown Bancorp, Inc.*

10.1        Employee Stock Ownership Plan*

10.2        SERBA  Defined   Contribution  Plan  and  Nonstandardized   Adoption
            Agreement*

10.3        Split-Dollar Plan Agreement by and between  Georgetown  Savings Bank
            and Robert E. Balletto, dated January 22, 2002*

10.4        Executive   Supplemental   Retirement   Agreement   by  and  between
            Georgetown  Savings Bank and Robert E.  Balletto,  dated January 22,
            2002*

10.5        Split-Dollar Plan Agreement by and between  Georgetown  Savings Bank
            and Joseph W. Kennedy, dated January 22, 2002*

10.6        Executive   Supplemental   Retirement   Agreement   by  and  between
            Georgetown  Savings Bank and Joseph W.  Kennedy,  dated  January 22,
            2002*

10.7        Georgetown Savings Bank 2004 Incentive Compensation Plan*

10.8        Annually  Defined  Benchmarks for payouts under  Georgetown  Savings
            Bank 2004 Incentive Compensation Plan

10.9        Form of  Employment  Agreement by and between  certain  officers and
            Georgetown Savings Bank*

13          Annual Report to Stockholders

14          Code of Ethics

21          Subsidiaries of Registrant*

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

----------
*           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.

**          Incorporated  by  reference to the Form 8-K of  Georgetown  Bancorp,
            Inc. filed with the Securities and Exchange  Commission on September
            27, 2006.

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."

                                       37
<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 25, 2006           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         September 25, 2006
---------------------------        Officer and Director
Robert E. Balletto                 (Principal Executive Officer)


\s\ Joseph W. Kennedy              Senior Vice President, Chief       September 25, 2006
---------------------------        Financial Officer and Treasurer
Joseph W. Kennedy                  (Principal Financial and
                                   Accounting Officer)


\s\ Edward G. Williams             Chairman of the Board              September 25, 2006
---------------------------
Edward G. Williams


\s\ Roy C. Carlson                 Vice Chairman of the Board         September 25, 2006
---------------------------
Roy C. Carlson


\s\ David H. Condon                Director                           September 25, 2006
---------------------------
David H. Condon


\s\ Anthony S. Conte, Jr.          Director                           September 25, 2006
---------------------------
Anthony S. Conte, Jr.
</TABLE>

                                       38
<PAGE>

<TABLE>
<S>                                <C>                                <C>
\s\ Raymond W. DeZenzo Jr.         Director                           September 25, 2006
---------------------------
Raymond W. DeZenzo Jr.


\s\ Stephen L. Flynn               Director                           September 25, 2006
---------------------------
Stephen L. Flynn


\s\ T. Louis Hamelin               Director                           September 25, 2006
---------------------------
T. Louis Hamelin


\s\ Thomas L. Hamelin              Director                           September 25, 2006
---------------------------
Thomas L. Hamelin


\s\ Calvin H. Pingree              Director                           September 25, 2006
---------------------------
Calvin H. Pingree


\s\ Arthur J. Rauseo               Director                           September 25, 2006
---------------------------
Arthur J. Rauseo


\s\ Richard F. Spencer             Director                           September 25, 2006
---------------------------
Richard F. Spencer


\s\ Mary L. Williams               Director                           September 25, 2006
---------------------------
Mary L. Williams
</TABLE>


                                       39