U.S. SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D. C. 20549

FORM 10-K

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

For the fiscal
year ended December 31, 2005
Commission File No.: 000-27481

ROME
BANCORP, INC.(Exact
name of registrant as specified in its charter)

|                                |  |                    
|------------------------------- |  | -------------------
|Delaware                        |  | 16-1573070         
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | Identification No.)

100 W. Dominick Street, Rome, New
York 13440-5810(Address of principal executive offices)(315) 336-7300(Registrants Telephone
Number)

Securities
registered under Section 12(g) of the Act:

Title of ClassCommon
Stock, par value $0.01 per share

Indicate
by check mark of the registrant is a well-seasoned issuer, as defined in Rule
405 of the Securities Act. Yes   o   No  x

Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes   x   No  o

Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes   x   No  o

Indicate
by check mark if disclosure of delinquent filers in response to Item 405 of
Regulation S-K (Sect. 229.405 of this chapter) is not contained herein, and
will not 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-K or any amendment to this Form 10-K.   x

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of accelerated
filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check
one):

Large
accelerated filer o                          
Accelerated filer o                          Non-accelerated filer x

Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act. Yes  o   No  x

---

Based
on the closing sales price on June 30, 2005, the aggregate market value of the
voting stock held by non-affiliates of the registrant was $79,084,000

Rome Bancorp had 9,688,128 shares of common stock
outstanding as of March 10, 2006.

DOCUMENTS INCORPORATED BY REFERENCE

Portions
of the definitive proxy statement pursuant to Regulation 14A to be issued by
the Corporation in connection with the 2006 Annual Meeting and portions of the
2005 Annual Report to Shareholders for the fiscal year ended December 31, 2005
are incorporated by reference into Parts II and III of this report.

TABLE OF
  CONTENTS


PagePART IITEM 1.
DESCRIPTION
  OF THE BUSINESS
4ITEM 1A.
RISK
  FACTORS
32ITEM 1B.
UNRESOLVED
  STAFF COMMENTS
36ITEM 2.
DESCRIPTION
  OF PROPERTY
36ITEM 3.
LEGAL
  PROCEEDINGS
36ITEM 4.
SUBMISSION
  OF MATTERS TO A VOTE OF SECURITY HOLDERS
36PART IIITEM 5.
MARKET
  FOR REGISTRANTS COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER
  PURCHASES OF EQUITY SECURITIES
36ITEM 6.
SELECTED
  FINANCIAL DATA
37ITEM 7.
MANAGEMENTS
  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
37FINANCIAL
  STATEMENTS
37ITEM 7A.
QUANTITATIVE
  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
37ITEM 8.
FINANCIAL
  STATEMENTS AND SUPPLEMENTARY DATA
37ITEM 9.
CHANGES
  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
37ITEM 9A.
CONTROLS
  AND PROCEDURES
37ITEM 9B.
OTHER
  INFORMATION
38PART IIIITEM 10.
DIRECTORS
  AND EXECUTIVE OFFICERS OF THE REGISTRANT
38ITEM 11.
EXECUTIVE
  COMPENSATION
38ITEM 12.
SECURITY
  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER
  MATTERS
39ITEM 13.
CERTAIN
  RELATIONSHIPS AND RELATED TRANSACTIONS
39ITEM 14.
PRINCIPAL
  ACCOUNTING FEES AND SERVICES
39PART IVITEM 15.
EXHIBITS
39Forward looking Statements

Statements
included in this Form 10-K and in future filings by Rome Bancorp, Inc. with the
Securities and Exchange Commission, in Rome Bancorp, Inc. press releases, and
in oral statements made with the approval of an authorized executive officer,
which are not historical or current facts, are forward-looking statements
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, and are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. Rome Bancorp,
Inc. wishes to caution readers not to place undue reliance on such
forward-looking statements, which speak only as of the date made. The following
important factors, among others, in some cases have affected and in the future
could affect Rome Bancorp, Inc.s actual results, and could cause Rome Bancorp,
Inc.s actual financial performance to differ materially from that expressed in
any forward-looking statement: (1) competitive pressures among depository and
other financial institutions may increase significantly; (2) revenues may be
lower than expected; (3) changes in the interest rate environment may reduce
interest margins; (4) general economic conditions, either nationally or regionally,
may be less favorable than expected, resulting in, among other things, a
deterioration in credit quality and/or a reduced demand for credit; (5)
legislative or regulatory changes, including changes in accounting standards,
may adversely affect the business in which the Company is engaged; (6)
competitors may have greater financial resources and developed products that
enable such competitors to compete more successfully than the Company; and (7)
adverse changes may occur in the securities markets or with respect to
inflation. The foregoing list should not be construed as exhaustive, and Rome
Bancorp, Inc. disclaims any obligation to subsequently revise any
forward-looking statements to reflect events or circumstances after the date of
such statements, or to reflect the occurrence of anticipated or unanticipated
events.

PART I


ITEM 1.
DESCRIPTION OF THE BUSINESSGeneral

Rome
Bancorp, Inc. (Rome Bancorp or the Company) is a Delaware corporation
organized on June 9, 1999 as the stock holding company for The Rome Savings
Bank (Rome Savings), a federally chartered stock savings bank headquartered
in Rome, New York. Rome Bancorps principal business is to hold the capital
stock of Rome Savings.

The
Rome Savings Bank is a federal stock savings bank and the wholly-owned
subsidiary of Rome Bancorp. Rome Savings was originally chartered in 1851 as a
New York mutual savings bank. On October 6, 1999, Rome Savings reorganized into
a mutual holding company structure.

On
October 15, 2003, the Board of Trustees of Rome, MHC, a New York-chartered
mutual holding company and the majority stockholder of Rome Bancorp, and the
Boards of Directors of Rome Savings and Rome Bancorp adopted a Plan of Charter
Conversion. Pursuant to the Plan of Charter Conversion, Rome MHC established a
federal mutual holding company (the Federal MHC). Rome MHC was merged with
and into the Federal MHC, with the Federal MHC as the surviving entity.
Concurrently, Rome Savings exchanged its New York stock savings bank charter
for a federal stock savings bank charter (the Federal Savings Bank). As a
result of the charter conversion, which was completed on April 27, 2004, Rome,
MHC and Rome Bancorp became savings and loan holding companies regulated by the
Office of Thrift Supervision (the OTS) and Rome Savings became a federal
savings bank regulated by the OTS.

On
November 11, 2004, the Boards of Directors of Rome, MHC, Rome Bancorp and Rome
Savings

4

adopted a Plan of Conversion
and Agreement and Plan of Reorganization pursuant to which Rome, MHC would
convert to a stock form holding company and its ownership interest in Rome
Bancorp would be offered to the public (the Second-Step Conversion). On
December 7, 2004, Rome Savings formed New Rome Bancorp, Inc., as a Delaware
corporation, with the intent that this stock corporation would, as a result of
effectuating the steps of the Second Step Conversion, become the new Rome
Bancorp, Inc. and parent corporation of Rome Savings. The Plan of Conversion was
amended and restated on December 7, 2004, adding New Rome Bancorp as a party.
On February 11, 2005 the OTS approved the conversion and stock offering. New
Rome Bancorp conducted a subscription and community offering from February 18,
2005 to March 15, 2005 and commenced a syndicated community offering on March
17, 2005. On March 22, 2005, the members of Rome, MHC and the stockholders of
Rome Bancorp approved the Amended and Restated Plan of Conversion.

On
March 30, 2005, the Second-Step Conversion and Offering were completed,
resulting in the issuance of 9.6 million shares of common stock. A total of 5.9
million shares were sold, at $10.00 per share, and an additional 3.7 million
shares were issued to the former public stockholders of the Company based upon
an exchange ratio of 2.26784 new shares for each share of Rome Bancorp common
stock held as of the close of business on March 30, 2005. Following the
completion of the Conversion and Offering, the Company was succeeded by a new,
fully public, Delaware corporation with the same name and Rome MHC ceased to
exist.

Rome
Savings is a community and customer oriented retail savings bank that offers
traditional deposit products, residential real estate mortgage loans and
consumer, commercial and commercial real estate loans. In addition, Rome
Savings purchases securities issued by the U.S. Government and government
agencies, municipal securities, mortgage-backed securities and other
investments permitted by applicable laws and regulations. At December 31, 2005,
Rome Bancorp had assets of $308.9 million, deposits of $201.5 million and
stockholders equity of $93.5 million.

Business Strategy

Our
business will be and has been to hold Rome Savings. Our revenues are derived
principally from interest on our loans and interest and dividends on our
investment securities. Our primary sources of funds are deposits, payments of
loan principal and mortgage-backed securities, maturities and calls of
investment securities, and funds provided by operations.

Market Area

Operations
are conducted out of our executive office in Rome, New York and three branch
offices located in Oneida County, New York, two of which are located in Rome
and one in New Hartford, New York. As part of our business strategy, the
Company is pursuing new branch locations in Madison County, New York and the
Oneida County Town of Lee, New York. As of June 30, 2005, Rome Savings
maintained a 6.22% share of all Oneida County, New York deposits, ranking 6th
in size of deposits in Oneida County. Rome Savings also maintained a 47.31%
market share of all reported funds on deposit in the City of Rome as of June
30, 2005, making it the largest depository institution in Rome.

Our
geographic market area for loans and deposits is principally Oneida County, New
York. The local economy is not dependent on one key employer. The principal
employment sectors are service-related (excluding financial), wholesale and
retail trade, and manufacturing.

Similar
to national trends, most of the job growth currently realized in Oneida County
has been in service related industries, and service jobs now account for the
largest portion of the workforce. Our market area also includes a growing
number of healthcare, engineering, software, and technical firms that have
located in Oneida County in order to take advantage of its well-educated work
force, including current and former

5

military and defense
industry personnel. Rome, New York is located 15 miles west of Utica and
approximately 45 miles east of Syracuse. On occasion and depending on market
conditions, we also originate loans in the greater New York City metropolitan
area, typically through loan participations, and outside of New York State. At
December 31, 2005, Rome Savings total loan portfolio consisted of $244.8
million in loans located in the State of New York, while $9.1 million of such
loans consisted of loans made outside of New York.

Our
future growth opportunities will be influenced by growth and stability in the
regional and statewide economies, other demographic trends and the competitive
environment. We believe that Rome Savings has developed lending products and
marketing strategies to address the credit-related needs of the residents in
our local market area.

Competition

Rome
Savings faces intense competition both in making loans and attracting deposits.
New York has a high concentration of financial institutions, many of which are
branches of large money center and regional banks which have resulted from the
consolidation of the banking industry in New York and surrounding states. Some
of these competitors have greater resources than we do and may offer services
that we do not provide. For example, Rome Savings does not provide trust or investment
services, or credit cards. Customers who seek one stop shopping may be drawn
to these institutions.

Competition
for loans comes principally from commercial banks, savings institutions,
mortgage banking firms, credit unions, finance companies, insurance companies,
and brokerage and investment banking firms. The most direct competition for
deposits has historically come from credit unions, commercial banks, savings
banks, and savings and loan associations. Rome Savings faces additional competition
for deposits from short-term money market funds, corporate and government
securities funds, and from brokerage firms, mutual funds, and insurance
companies.

Lending Activities

General.
Rome Savings has a long-standing commitment to originate commercial real
estate, commercial and consumer loans in addition to a traditional emphasis on
residential lending. We currently retain substantially all of the loans that we
originate. In the future, Rome Savings
may sell longer term loans into the secondary market. At December 31, 2005,
Rome Savings had total loans of $253.9 million, of which $128.7 million, or
50.69%, were one-to-four family residential mortgages and building loans. Of
residential mortgage loans outstanding at that date, 20.51% were adjustable-rate
mortgage (ARM) loans and 79.49% were fixed-rate loans. The remainder of Rome
Savings loans at December 31, 2005, amounting to $125.2 million, or 49.31% of
total loans, consisted of commercial real estate, commercial loans, and
consumer loans. Rome Savings originates commercial real estate and commercial
business loans both within and outside of Oneida County, New York. As of
December 31, 2005, 21.19% of Rome Savings loan portfolio was in commercial
real estate loans and 9.39% was in commercial loans. In addition, as of
December 31, 2005, 18.74% of Rome Savings loan portfolio was in consumer
loans. Rome Savings also originates guaranteed student loans.

Our
loans are subject to federal and state laws and regulations. The interest rates
we charge on loans are affected principally by the demand for loans, the supply
of money available for lending purposes and the interest rates offered by our
competitors. These factors are, in turn, affected by general and local economic
conditions, monetary policies of the federal government, including the Federal
Reserve Board, legislative tax policies and governmental budgetary matters.

6

Loan
Portfolio.The following table sets forth the composition of
our mortgage and other loan portfolios, by type of loan, in dollar amounts and
in percentages at the dates indicated.

At
  December 31,2005

2004

2003

2002

2001Amount

Percent
  of
  Total

Amount

Percent
  of
  Total

Amount

Percent
  of
  Total

Amount

Percent
  of
  Total

Amount

Percent
  of
  Total(Dollars
  in thousands)Mortgage loans:One to four family

$
126,422


49.79
%
$
114,138


48.93
%
$
96,217


45.94
%
$
71,687


39.11
%
$
62,099


36.70
%Commercial real estate


52,748


20.78


49,364


21.16


50,239


23.98


53,530


29.20


49,266


29.12Construction and land


3,317


1.31


5,469


2.34


4,197


2.00


1,520


.83


2,165


1.28Total mortgage loans


182,487


71.88


168,971


72.43


150,653


71.92


126,737


69.14


113,530


67.10Commercial loans


23,832


9.39


21,507


9.22


19,171


9.15


16,752


9.14


15,440


9.13Consumer loans:Automobile


18,321


7.21


15,529


6.66


15,780


7.53


17,628


9.62


20,085


11.87Property improvement


15,434


6.08


12,766


5.47


9,460


4.52


6,422


3.51


3,018


1.78Education




















1,451


.79


4,523


2.67Other


13,804


5.44


14,499


6.22


14,401


6.88


14,304


7.80


12,608


7.45Total consumer loans


47,559


18.73


42,794


18.35


39,641


18.93


39,805


21.72


40,234


23.77Total loans


253,878


100.00
%

233,272


100.00
%

209,465


100.00
%

183,294


100.00
%

169,204


100.00
%Less: Allowance for loan
  losses


1,960





2,000





1,809





1,730





1,597Loans, net

$
251,918




$
231,272




$
207,656




$
181,564




$
167,6077

Loan
Maturity.The following table presents the contractual maturity
of our loan portfolio at December 31, 2005. The table does not include the
effect of prepayments or scheduled principal amortization.

At
  December 31, 2005Residential
  Mortgage Loans

Commercial
  Real
  Estate Loans

Consumer
  Loans

Commercial
  Loans(In thousands)Amounts
  due:Within one year

$
45

$
5,430

$
3,164

$
11,585After one year:One to three
  years


988


5,356


14,204


1,047Three to five
  years


1,379


682


20,321


2,826Five to ten
  years


11,372


8,921


7,911


5,010Ten to twenty
  years


52,760


27,285


698


2,274After twenty
  years


62,163


6,106


1,261


1,090Total due after
  one year


128,662


48,350


44,395


12,247Total loans

$
128,707

$
53,780

$
47,559

$
23,832The
following table presents, as of December 31, 2005, the dollar amount of all
loans, due after December 31, 2006, and whether these loans have fixed interest
rates or adjustable interest rates.

Due After
  December 31, 2006Fixed

Adjustable

Total(In
  thousands)Residential mortgage loans

$
104,620

$
24,042

$
128,662Commercial real estate loans


25,880


22,470


48,350Consumer loans


30,450


13,945


44,395Commercial loans


7,146


5,101


12,247Total loans

$
168,096

$
65,558

$
233,654The
following table presents Rome Savings loan originations, purchases, sales, and
principal payments for the periods indicated.

For the
  Year Ended December 31,2005

2004

2003Total loans:Balance outstanding at beginning of
period

$
233,272

$
209,465

$
183,294Originations:Mortgage loans


41,872


44,073


54,161Commercial and consumer loans


23,408


22,610


22,397Total originations


65,280


66,683


76,558Principal repayments:Mortgage loans


26,560


25,717


30,284Commercial and consumer loans


15,649


16,688


18,095Total principal payments


42,209


42,405


48,379Transfers to foreclosed
  real estate


83


87


202Loan sales


1,695





1,266Loans charged off


687


384


540Balance
  outstanding at end of period

$
253,878

$
233,272

$
209,4658

Residential
Mortgage Lending. Rome Savings emphasizes the origination of
mortgage loans secured by one- to four-family properties that serve as the
primary residence of the owner. As of December 31, 2005, loans on one- to
four-family residential properties accounted for $128.7 million, or 50.69%, of
Rome Savings total loan portfolio. Of residential mortgage loans outstanding
on that date, 20.51% were ARM loans and 79.49% were fixed rate loans. Rome Savings may seek to expand its
residential lending activities with the proceeds received in the offering
primarily through the marketing and sale to the secondary market of longer term
fixed-rate mortgage loans. Management of Rome Savings believes that the
expansion of Rome Savings residential lending will enhance its reputation as a
service-oriented institution that meets the needs of its local community.

Most
of Rome Savings loan originations are from existing or past customers, members
of Rome Savings local communities or referrals from local real estate agents,
attorneys, and builders. Management of Rome Savings believes that its branch
offices could be a significant source of new loan generation.

Rome
Savings mortgage loan originations are generally for terms from 10 to 30 years,
amortized on a monthly basis with interest and principal due each month.
Residential real estate loans may remain outstanding for significantly shorter
periods than their contractual terms as borrowers may refinance or prepay loans
at their option without penalty. Conventional residential mortgage loans
granted by Rome Savings customarily contain due-on-sale clauses that permit
Rome Savings to accelerate the indebtedness of the loan upon transfer of
ownership of the mortgage property.

As
of September 2002, Rome Savings Board of Directors approved a plan to have
residential lending policies and procedures conform to secondary market
guidelines. In the future, Rome Savings may sell qualifying fixed rate longer
term loans into the secondary market, but expects to continue to retain fixed
rate loans with maturities of shorter terms. Rome Savings allows residential
mortgage loans with a loan to value ratio up to 100%. All mortgages originated
with a loan-to-value ratio of 90% or greater have Private Mortgage Insurance
(PMI) with 25% coverage. Mortgages between 80 and 90% loan to value ratio may
require PMI based on credit scores and other financial attributes of the
applicants. PMI insurance is not required on loans with an 80% or less loan to
value ratio. Rome Savings at times may originate mortgages outside of secondary
market guidelines, tailored to the needs of its customers. Commitments issued
in these situations are reviewed with the board on a monthly base. Rome Savings
also offers residential construction loans to customers in its primary lending
market.

Generally,
Rome Savings will make construction loans up to 80% loan to value ratio and up
to 90% with PMI. The program allows for mortgagors to receive up to five
advances during the construction phase. Rome Savings uses third party board
approved inspectors to determine the advance amount and obtains a clear title
report prior to making each advance. The loan converts to permanent financing at
the end of six months from the initial closing whether the house is completed
or not. The interest rate on the permanent financing is locked in at the time
of the closing of the construction mortgage. Rome Savings receives at closing,
in addition to standard fees and closing costs, up to 3⁄4 of 1% of the loan
amount as additional income.

Rome
Savings also offers adjustable-rate mortgage loans with a maximum term of 30
years. Adjustable-rate loans offered by Rome Savings include loans that provide
for an interest rate based on the interest paid on U.S. Treasury securities of
corresponding terms plus a margin of up to 2.75%. Rome Savings currently offers
adjustable-rate loans with initial rates below those which would prevail under
the foregoing computations, based upon a determination of market factors and
competitive rates for adjustable-rate loans in its market area. For
adjustable-rate loans, borrowers are qualified at the initial rate.

Rome
Savings adjustable-rate mortgages include limits on increase or decrease in
the interest rate of the loan. The interest rate may increase or decrease by a
maximum 2.0% per adjustment period with a ceiling rate of 11% over the life of
the loan. The retention of adjustable-rate mortgage loans in our loan portfolio
helps reduce exposure to changes in interest rates. However, there are
unquantifiable credit risks resulting from potential increased costs to the
borrower as a result of the pricing of adjustable-rate mortgage loans. During
periods of rising interest rates, the risk of default on adjustable-rate
mortgage loans may increase due to the upward adjustment of interest cost to
the borrower.

During
the year ended December 31, 2005, Rome Savings originated $8.0 million in
adjustable-rate residential mortgage loans and $20.9 million in fixed-rate
one-to-four family residential loans. Approximately 5.2% of all

9

residential loan
originations during fiscal 2005 were re-financings of loans already in Rome
Savings portfolio. At December 31, 2005, Rome Savings loan portfolio included
$26.4 million in adjustable-rate one-to-four family residential mortgage loans,
or 10.40% of its total loan portfolio, and $102.3 million in fixed-rate
one-to-four family residential mortgage loans, or 40.29% of its total loan
portfolio.

Commercial
Real Estate Loans. We originate commercial real estate loans
to finance the purchase of real property, which generally consists of developed
real estate. In underwriting commercial real estate loans, consideration is
given to the propertys historic cash flow, current and projected occupancy,
location and physical condition. At December 31, 2005, our commercial real
estate loan portfolio consisted of 177 loans, totaling $53.8 million, or
21.19%, of total loans. Most of the commercial real estate portfolio consists
of loans which are collateralized by properties in our normal lending area. To
a lesser extent, commercial real estate loans are secured by out of market
properties. Our commercial real estate loan portfolio is diverse, and does not
have any significant loan concentration by type of industry or borrower. We
lend up to a maximum loan-to-value ratio of 75% on commercial properties and
require a minimum debt coverage ratio of 1.25. Commercial real estate lending involves additional risks compared with
one-to-four family residential lending. Because payments on loans secured by
commercial real estate properties are often dependent on the successful
operation or management of the properties, and/or the collateral value of the
commercial real estate securing the loan, repayment of such loans may be
subject, to a greater extent, to adverse conditions in the real estate market
or the economy. Also, commercial real estate loans typically involve large loan
balances to single borrowers or groups of related borrowers. Rome Savings loan
policies limit the amount of loans to a single borrower or group of borrowers
to reduce this risk.

Rome
Savings commercial real estate loan portfolio includes $1.0 million of
construction loans. From time to time Rome Savings approves commercial
construction mortgages. Recognizing the risks inherent to this type of lending,
it is Rome Savings practice to minimize lending risk by carefully studying
project feasibility, developing a detailed knowledge of the borrower/guarantors
entire business operation, assessing both primary and secondary sources of
repayment, and by structuring the credit in a manner appropriate to the
project.

Rome
Savings will only consider construction lending where it holds a first position
mortgage lien on the subject premises. No construction loan will be advanced
without permanent financing approved by Rome Savings or another lender.
Commitments from any source other than this bank must be reviewed for capacity
and conditions. Rome Savings exposure cannot exceed 75% of the project cost.
Rome Savings requires that up-front equity requirements be met in cash or free
and clear value of the land directly associated with the project. The ratio of
projected cash flow versus debt service coverage must equal or exceed 1.25.
Construction loans may have interest only payments until completion of the
project but not beyond 12 months. Personal guaranties are required of the
principals of closely held entities. Funds are disbursed only after proper
documentation of work completed. A 5% to 10% retainage is normally required.

Commercial
Loans. In addition to commercial real estate loans, we also
engage in small business commercial lending, including business installment
loans, lines of credit and other commercial loans. At December 31, 2005, our commercial loan portfolio consisted of 388
loans, totaling $23.8 million, or 9.39% of total loans. A portion of Rome
Savings commercial loans are participation loans. Unless otherwise structured as
a mortgage on commercial real estate, such loans generally are limited to terms
of five years or less. Substantially all such commercial loans have variable
interest rates tied to the prime rate. Whenever possible, Rome Savings
collateralizes these loans with a lien on commercial real estate or,
alternatively, with a lien on business assets and equipment and the personal
guarantees from principals of the borrower. Interest rates on commercial loans
generally have higher yields than residential mortgages.

Rome
Savings offers commercial services administered by Rome Savings commercial
loan department that are designed to give business owners borrowing
opportunities for modernization, inventory, equipment, construction,
consolidation, real estate, working capital, vehicle purchases, and the
refinancing of existing corporate debt.

Commercial
loans are generally considered to involve a higher degree of risk than
residential mortgage loans because the collateral may be in the form of intangible
assets and/or inventory subject to market obsolescence.

10

Commercial loans may also
involve relatively large loan balances to single borrowers or groups of related
borrowers, with the repayment of such loans typically dependent on the
successful operation and income stream of the borrower. Such risks can be
significantly affected by economic conditions. In addition, commercial business
lending generally requires substantially greater oversight efforts compared to
residential real estate lending. Rome Savings utilizes the services of an
outside consultant to conduct on-site reviews of the commercial loan portfolio
to ensure adherence to underwriting standards and policy requirements.

Consumer
Loans.Rome Savings offers a variety of consumer loans. At
December 31, 2005, the consumer loan portfolio totaled $47.6 million or 18.74%
of total loans. Consumer loans generally are offered for terms of up to five or
10 years, depending on the collateral, at fixed interest rates. Rome Savings consumer loan portfolio
consists primarily of property improvement loans (i.e., home equity loans and
home equity lines of credit) and used automobile loans. To a lesser extent, the
consumer loan portfolio also includes:


new automobile loans;
recreational vehicles,
  boats, and conversion vans;
motorcycles, ATVs,
  snowmobiles, and equipment loans;
secured passbook loans;
unsecured loans;
education loans; and
mobile or manufactured
  home loans.Rome
Savings expects consumer lending to be an area of steady lending growth, with
installment loans continuing to account for the major portion of our consumer
lending volume. Automobile loans currently comprise the largest portion at
38.52% of the consumer loan portfolio, which consists primarily of loans for
used cars. Rome Savings makes loans secured by deposit accounts up to 90.0% of
the amount of the depositors savings account balance. Rome Savings also makes
other consumer loans, which may or may not be secured. The terms of such loans
vary depending on the collateral.

Rome
Savings provides home equity lines of credit for any purpose, using the
applicants principal residence. The normal loan to value for these lines is
90%, with certain conditions allowing for up to 100%. This product has a
ten-year interest-only draw period. During this period, principal reductions
are at the applicants discretion. At the end of the ten-year period, any
outstanding principal balance due is termed out over 15 years with payments to
principal with interest monthly. These lines have a variable interest at prime
rate. Access to these lines are by customer checks.All closing costs are
waived providing that the line remains open for at least three years.

Rome
Savings makes loans for automobiles, both new and used, directly to the
borrowers. The term of automobile loans is generally limited to five years. The
financial terms of the loans are determined by the age of the collateral. Rome
Savings obtains a title lien on the vehicle and collision insurance policies
are required on all these loans. Rome Savings pays a referral fee of no more
than $200 to automobile dealers who refer it customers. There is no difference
in interest rates and terms for customers who are referred and those who are
not.

Consumer
loans are generally originated at higher interest rates than residential
mortgage loans but also tend to have a higher credit risk than residential
loans due to the loan being unsecured or secured by rapidly depreciable assets.
Despite these risks, Rome Savings level of consumer loan delinquencies
generally has been low. No assurance can be given, however, that Rome Savings
delinquency rate on consumer loans will continue to remain low in the future,
or that we will not incur future losses on these activities.

11

Loan
Approval Procedures and Authority.Rome Savings lending policies are
established by its Board of Directors. The policies differ depending on the
type of loan involved.


Residential Mortgage
  Loans: Once Rome Savings receives a completed application, each mortgage
  application is presented to the Residential Mortgage Committee (which
  consists of bank officers) for approval. Loans over $359,000 must also be
  presented to the Executive Committee or the Lending Committee, which consists
  of the officers and directors of Rome Savings, for a second approval.
Commercial Loans and
  Commercial Mortgage Loans: The maximum commercial loan or commercial mortgage
  amount is dictated by Rome Savings portfolio management guidelines. The
  total of all credit extended to one borrower may not exceed $5.0 million. The
  maximum amount of any single loan, or combination of loans secured by the
  same collateral, is $2.0 million. The total of commercial mortgages and
  commercial loans by industry may not exceed 8.0% of assets. Rome Savings may
  not exceed the legal limits of lending to one borrower, currently 15% of
  unimpaired capital, not including accumulated other comprehensive income. See
  Regulations  Regulation of Federal Savings Associations  Loans to One
  Borrower. Per Rome Savings internal policies, loans to one borrower include
  group credit. A group credit is broadly defined as any credit, either direct,
  indirect, or contingent, including unused lines of credit and other
  commitments by Rome Savings to lend, extended either jointly or severally to
  individuals, joint ventures, partnerships, corporations, subsidiaries or
  affiliates, which are commonly controlled or where the credit reliance is
  similar. The minimum amount for a commercial loan is not specific in policy
  but loans under $5,000 are unusual. The minimum amount for a commercial
  mortgage is not specified in policy but mortgages under $25,000 are unusual.Two designated vice presidents
  of Rome Savings each have authority to approve commercial loans up to
  $400,000 which are secured by liquid collateral. For other commercial loans,
  each of these officers may approve loans up to $250,000. Rome Savings
  President and Chief Executive Office may approve commercial loans up to
  $650,000 which are secured by liquid collateral, and all other commercial
  loans up to $400,000. A combination of any two of these three officers may
  approve commercial loans up to $800,000 which are secured by liquid
  collateral. Any two may approve all other commercial loans up to $500,000.
  Any commercial loan request in excess of the approval authority outlined
  above must be presented to the banks Lending Committee, Executive Committee,
  or Board of Directors for approval.Two designated vice
  presidents of Rome Savings each have authority to approve commercial
  mortgages up to $300,000. Rome Savings President and Chief Executive Officer
  has authority to approve commercial mortgages up to $500,000. A combination
  of any two of these three officers may approve a commercial mortgage up to
  $700,000. Any commercial mortgage request in excess of the approval
  authorities outlined above must be presented to Rome Savings Lending
  Committee, Executive Committee, or Board of Directors for approval.
Consumer Loans: Rome
  Savings extends consumer loans in amounts starting at a minimum of $1,000,
  and with no upper limit, other than the portfolio management guidelines.
  Approvals begin at the interviewer level with various approval authorities
  ranging from $7,500 to $25,000. Loan requests above these amounts are then
  addressed up to $100,000 with the Vice President of Consumer Loans, up to
  $250,000 with the Senior Loan Officer, and up to $450,000 with the President
  and Chief Executive Officer. Requests above $450,000 are referred to the
  Lending Committee, Executive Committee, or the Board of Directors.
Home Equity Lines of
  Credit: Lines of credit against an applicants principal residence extend
  from $7,500 to $250,000. Approvals for these lines are handled as follows: up
  to $75,000 by the assistant to the head of the Consumer Lending Department;
  $100,000 by the Vice President of Consumer Lending or Mortgage Departments;
  and up to $250,000 by the Senior Loan Officer or Rome Savings12

President and
  Chief Executive Officer. Any exceptions to the normal parameters are approved
  by the Lending Committee, Executive Committee, or the Board of Directors.Current
Lending Procedures. Upon receipt of a completed loan application
from a prospective borrower, Rome Savings orders a credit report and verifies
certain other information. If necessary, Rome Savings obtains additional
financial or credit related information. Rome Savings requires an appraisal for
all mortgage loans, including loans made to refinance existing mortgage loans.
Appraisals are performed by licensed or certified third-party appraisal firms
that have been approved by Rome Savings Board of Directors. Rome Savings
requires title insurance on all secondary market mortgage loans and certain
other loans. Rome Savings requires borrowers to obtain hazard insurance, and if
applicable, Rome Savings may require borrowers to obtain flood insurance prior
to closing. Available to borrowers is the option to advance funds on a monthly
basis together with each payment of principal and interest to a mortgage escrow
account from which Rome Savings makes disbursements for items such as real
estate taxes, flood insurance, and private mortgage insurance premiums, if required.

Asset Quality

One
of Rome Savings key operating objectives has been and continues to be
maintaining a high level of asset quality. Through a variety of strategies,
including, but not limited to, borrower workout arrangements and aggressive
marketing of foreclosed properties, Rome Savings has been proactive in
addressing problem and non-performing assets. These strategies, as well as Rome
Savings high proportion of one-to-four family mortgage loans, the maintenance
of sound credit standards for new loan originations, and loan administration
procedures, have resulted in historically low delinquency ratios and, in recent
years, a reduction in non-performing assets. These factors have helped
strengthen Rome Savings financial condition.

Collection
Procedures. When a
borrower fails to make required payments on a loan, Rome Savings takes a number
of steps to induce the borrower to cure the delinquency and restore the loan to
a current status. In the case of mortgage loans, Rome Savings mortgage
servicing department is responsible for collection procedures from the 15th day
up to the 120th day of delinquency. A reminder letter requesting prompt payment
is sent on the 25th day. A late charge notice is sent at 30 days. At 30 days
Rome Savings also attempts to establish telephone contact with the borrower. If
no contact is established, progressively stronger collection letters are sent
on the 45th and 55th days of delinquency. Late charge notices are sent on the
30th and 60th days of the delinquency. Between the 60th and 90th day of
delinquency, if telephone contact has not been established or if there has been
mail returned, the collector or his or her assistant makes a physical
inspection of the property. When contact is made with the borrower at any time
prior to foreclosure, Rome Savings attempts to obtain full payment of the
amount delinquent or work out a repayment schedule with the borrower in order
to avoid foreclosure. It has been Rome Savings experience that most loan
delinquencies are cured within 105 days and no legal action is taken.

Rome
Savings sends the right to cure foreclosure notice when a loan is
approximately 75 days delinquent. This contains a right to cure clause that
gives the customer the terms that must be met within 30 days of the date the
letter is sent in order to avoid foreclosure action. After this letter expires,
Rome Savings sends the loan to committee for approval to foreclose. Rome
Savings commences foreclosure if the loan is not brought current by the 120th day of delinquency unless specific limited circumstances
warrant an
exception. Rome Savings holds property foreclosed upon as other real estate
owned. Rome Savings carries foreclosed real estate at its fair market value
less estimated selling costs. If a foreclosure action is commenced and the loan
is brought current, paid in full, or refinanced before the foreclosure sale,
Rome Savings either sells the real property securing the loan at the
foreclosure sale or sells the property as soon thereafter as practical. The
collection procedures for Federal Housing Association (FHA) and Veterans
Administration (VA) one-to-four family mortgage loans follow the collection
guidelines outlined by those agencies.

The
collection procedures for consumer, commercial, and other loans, include the
sending of periodic late notices and letters to a borrower once a loan is past
due. Rome Savings attempts to make direct contact with a borrower once a loan
is 15 days past due. Rome Savings follows the same collection procedure as
mortgages in an attempt to reach individuals by telephone and sending them
letters and notices. Supervisory personnel in Rome Savings lending area and in
its collection area review loans 30 days or more delinquent on a regular basis.
If collection activity is

13

unsuccessful after 120 days,
Rome Savings may charge off a loan and/or refer the matter to its legal counsel
for further collection effort. Loans deemed uncollectible by the Collection
Department are proposed for charge-off. All loan charge-offs, regardless of
amount, are to be approved by the senior loan officer or the President of Rome
Savings. Those charge-offs in excess of $2,500 must be approved by a second
senior officer and reported to the Executive Committee or the Lending Committee
of Rome Savings at its next scheduled meeting.

Rome
Savings policies require that management continuously monitor the status of
the loan portfolio and report to the Board of Directors on a monthly basis.
These reports include information on delinquent loans and foreclosed real
estate and Rome Savings actions and plans to cure the delinquent status of the
loans and to dispose of the real estate.

Non-performing
  Assets. Non-performing assets totaled $947,000 and $829,000 at December
  31, 2005 and December 31, 2004, respectively.

The
following table presents information regarding non-accrual mortgage and
consumer and other loans, accruing loans delinquent 90 days or more, and
foreclosed real estate as of the dates indicated.

At December 31,2005

2004

2003

2002

2001(Dollars in thousands)Nonaccruing loans:Mortgage loans

$
539

$
362

$
689

$
531

$
51Commercial loans


216


268


513


377


420Consumer loans


117


113


138


148


103Total


872


743


1,340


1,056


574Accruing loans delinquent 90 days or more


75


86


66


460


181Total non-performing loans


947


829


1,406


1,516


755Foreclosed real estate, net








202


55


Total non-performing assets

$
947

$
829

$
1,608

$
1,571

$
755Non-performing loans to total loans


0.37
%

0.36
%

0.67
%

0.83
%

0.45
%Non-performing assets to total assets


0.31
%

0.31
%

0.61
%

0.63
%

0.31
%With
the exception of first mortgage loans insured or guaranteed by the FHA or VA or
for which the borrower has obtained private mortgage insurance, Rome Savings
stops accruing income on loans when interest or principal payments are 90 days
in arrears or earlier when the timely collectibility of such interest or
principal is doubtful. Rome Savings designates loans on which it stops accruing
income as non-accrual loans and it reverses outstanding interest that it
previously credited. Rome Savings may recognize income in the period that it
collects such income, when the ultimate collectibility of principal is no
longer in doubt. Rome Savings returns a non-accrual loan to accrual status when
factors indicating doubtful collection no longer exist. Rome Savings defines
non-performing loans as loans that are both non-accruing and accruing loans
whose payments are 90 days or more past due.

We
define the population for evaluation of impaired loans to be all non-accrual
commercial real estate and commercial loans greater than $250,000. Impaired
loans are individually assessed to determine whether a loans carrying value is
not in excess of the fair value of the collateral or the present value of the
loans cash flows. Smaller balance homogeneous loans that are collectively
evaluated for impairment, such as residential mortgage loans and consumer
loans, are specifically excluded from the impaired loan portfolio. The
Companys recorded investment in loans that are considered impaired totaled
$211,000 and $268,000 at December 31, 2005 and 2004, respectively. If all
non-accrual loans had been current in accordance with their terms during the
year ended December 31, 2005, 2004 and 2003, interest income on such loans
would have amounted to $62,500,

14

$53,300 and
$83,800, respectively. At December 31, 2005, Rome Savings did not have any
loans not included above which are troubled debt restructurings as defined in
SFAS No. 15.

Allowance
for Loan Losses. The following table sets forth
activity in Rome Savings allowance for loan losses and other ratios at or for
the dates indicated.

At December 31,2005

2004

2003

2002

2001(Dollars in thousands)Balance at beginning of year

$
2,000

$
1,809

$
1,730

$
1,597

$
1,688Provision for loan losses


115


390


510


330


325Charge-offs:Mortgage loans


18


47


160


51


37Commercial loans


174


31


85


32


341Consumer loans


495


306


295


289


213Total


687


384


540


372


591RecoveriesMortgage loans


4


12





1


1Commercial loans


419


36


3


75


110Consumer loans


109


137


106


99


64Total


532


185


109


175


175Net charge-offs


155


199


431


197


416Balance at end of year

$
1,960

$
2,000

$
1,809

$
1,730

$
1,597Ratio of net charge-offs to average loans outstanding during the
  period


0.06
%

0.09
%

0.22
%

0.11
%

0.25
%Allowance for loan losses as a percent of loans


0.77
%

0.86
%

0.86
%

0.94
%

0.94
%Allowance for loan losses as a percent of non-performing
Loans


207.00
%

241.25
%

128.66
%

114.12
%

211.52
%The
allowance for loan losses is a valuation account that reflects our evaluation
of the losses inherent in our loan portfolio. We maintain the allowance through
provisions for loan losses that we charge to income. We charge losses on loans
against the allowance for loan losses when we believe the collection of loan
principal is unlikely.

Our
evaluation of risk in maintaining the allowance for loan losses includes the
review of all loans on which the collectibility of principal may not be
reasonably assured. We consider the following factors as part of this
evaluation: our historical loan loss experience, known and inherent risks in
the loan portfolio, the estimated value of the underlying collateral and
current economic and market trends. There may be other factors that may warrant
our consideration in maintaining an allowance at a level sufficient to provide
for probable losses. Although we believe that we have established and
maintained the allowance for loan losses at adequate levels, future additions
may be necessary if economic and other conditions in the future differ
substantially from the current operating environment.

In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review our loan and foreclosed real estate portfolios and
the related allowance for loan losses and valuation allowance for foreclosed
real estate. These agencies, including the OTS, may require us to increase the
allowance for loan losses or the valuation allowance for foreclosed real estate
based on their judgments of information available to them at the time of their
examination, thereby adversely affecting our results of operations.

15

For
the year ended December 31, 2005, we increased our allowance for loan losses
through a $115,000 provision for loan losses based on our evaluation of the
items discussed above. We believe that the allowance for loan 15 losses
accurately reflects the level of risk in the loan portfolio. In addition to the
non-performing loans, management has identified, through normal internal credit
review procedures, $8.8 million in potential problem loans at December 31,
2005. Payments are current on $7.7 million or 87.5% of these loans. These
problem loans are defined as loans not included as non-performing loans, but
about which management has developed information regarding possible credit
problems, which may cause the borrowers future difficulties in complying with
loan repayments. Rome Savings will continue to be aggressive in identifying,
monitoring and resolving potential problem loans. See Managements Discussion
and Analysis - Comparison of Results of Operations for the Years Ended December
31, 2005, 2004 and 2003 - Provision for Loan Losses.

16

The
following table presents our allocation of the allowance for loan losses by
loan category and the percentage of loans in each category to total loans at
the periods indicated.

At December 31,2005

2004

2003

2002

2001Amount

Loans
  in
  Each
  Category to
  Total Loans

Amount

Loans
  in
  Each
  Category to
  Total Loans

Amount

Loans
  in
  Each
  Category to
  Total Loans

Amount

Loans
  in
  Each
  Category to
  Total Loans

Amount

Loans
  in
  Each
  Category to
  Total LoansMortgage
  loans:One-to-four
  family

$
129

49.79
%

$
236

48.93
%

$
192

45.94
%

$
220

39.11
%

$
222

36.70
%Commercial real
  estate


664

20.78



828

21.16



702

23.98



767

29.20



762

29.12Construction
  & land


0

1.31



0

2.34



0

2.00



0

0.83



0

1.28Total mortgage
  loans


793

71.88



1,064

72 43



894

71.92



987

69.14



984

67.10Commercial loans


712

9.39



592

9.22



619

9.15



511

9.14



391

9.13Consumer loans


455

18.73



344

18.35



296

18.93



232

21.72



222

23.77Total allowance
  for loan losses

$
1,960

100.00
%

$
2,000

100.00
%

$
1,809

100.00
%

$
1,730

100.00
%

$
1,597

100.00
%17

Investment Activities

General.
The Board of Directors reviews and approves our investment policy on an annual
basis. The Board of Directors has delegated primary responsibility for ensuring
that the guidelines in the investment policy are followed by the Executive Vice
President/Chief Financial Officer. The Chief Financial Officer reports to the
Asset Liability Management Committee and to the Executive Committee monthly.

Our
investment policy is designed primarily to manage the interest rate sensitivity
of our assets and liabilities, to generate a favorable return without incurring
undue interest rate and credit risk, to complement our lending activities and
to provide and maintain liquidity within established guidelines. In
establishing our investment strategies, we consider our interest rate
sensitivity, the types of securities to be held, liquidity and other factors.
Federal chartered savings banks have authority to invest in various types of
assets, including U.S. Government obligations, securities of various federal
agencies, obligations of states and municipalities, mortgage-backed securities,
certain time deposits of insured banks and savings institutions, certain
bankers acceptances, repurchase agreements, loans of federal funds, and,
subject to certain limits, corporate debt and commercial paper.

Rome
Savings classifies securities as held to maturity or available for sale at the
date of purchase. Held to maturity securities are reported at cost, adjusted
for amortization of premium and accretion of discount. Available for sale
securities are reported at fair market value. Rome Savings classifies U.S.
Government securities and U.S. Government agency securities, as available for
sale. These securities predominately have maturities of less than five years
although Rome Savings also invests in adjustable rate U.S. Government agency
securities with maturities up to 15 years. Rome Savings mortgage-backed
securities, all of which are directly or indirectly insured or guaranteed by
Freddie Mac, Government National Mortgage Association (GNMA) or Fannie Mae,
consist of both 30 year securities and seven year balloon securities. The
latter are so named because they mature (i.e.,
balloon) prior to completing their normal 30 year amortization. The 30 year
mortgage-backed securities are classified as held to maturity while the seven
year balloon securities are classified as available for sale.

Rome
Savings also invests in privately insured state and municipal obligations with
a maturity of fifteen years or less rated AAA by Moodys, Standard & Poors,
or Fitch. Rome Savings invests in these securities because of their favorable
after tax yields in comparison to U.S. Government and U.S. Government Agency
securities of comparable maturity. These securities are classified as available
for sale. Rome Savings purchases A and AA rated corporate bonds, principally of
financial institutions, as means of increasing yields on available for sale
investments while minimizing risk. In the past three years, spreads to the
comparable three to five year government agency securities, which Rome Savings
had typically purchased, has been 15 - 97 basis points favoring these corporate
bonds. Finally, Rome Savings has investments in FHLB stock and other equity
securities, which are classified as available for sale. As a result of
converting to a federal charter Rome Savings is required to liquidate its
equity securities, other than the FHLB stock, over a two-year period.

18

The
following table presents the composition of our securities portfolios in dollar
amount and in percentage of each investment type at the dates indicated. It
also presents the coupon type for the mortgage-backed securities portfolio.

At December 31,2005

2004

2003Amortized
  Cost

Fair
  Value

Amortized
  Cost

Fair
  Value

Amortized
  Cost

Fair
  ValueHeld to Maturity:Mortgage-backed securitiesGNMA

$
48

$
51

$
100

$
108

$
151

$
164FHLMC


3


3


6


6


1,025


1,037U.S. Government securities


1,208


1,193


1,320


1,313


1,463


1,492Other bonds


181


181


197


197


151


151Total held to maturity


1,440


1,428


1,623


1,624


2,790


2,844Available for sale:U.S. Government agencies


949


985


2,244


2,325


3,457


3,593State and Municipal obligations


4,506


4,595


7,004


7,266


8,654


9,155Mortgage-backed securitiesFNMA








126


129


252


244FHLMC


570


583


840


883


1,447


1,524Corporate bonds


2,008


2,017


3,024


3,116


6,499


6,798Total available for sale debt securities


8,033


8,180


13,238


13,719


20,309


21,314Equity securities


1,491


1,486


2,500


2,672


3,792


4,109Total available for sale


9,524


9,666


15,738


16,391


24,101


25,423FHLB stock


776


776


1,103


1,103


905


905Total investment securities

$
11,740

$
11,870

$
18,464

$
19,118

$
27,796

$
29,17219

Carrying
Values, Yields and Maturities. The following table
sets forth the scheduled maturities, book value, market value and weighted
average yields for Rome Savings debt securities at December 31, 2005.

One Year or Less

More Than One Year
  less than Five Years

More Than Five Years
  less than Ten Years

More Than Ten Years

TotalCarrying
  Value

Weighted
  Average
  Yield

Carrying
  Value

Weighted
  Average
  Yield

Carrying
  Value

Weighted
  Average
  Yield

Carrying
  Value

Weighted
  Average
  Yield

Carrying
  Value

WeightedAverage
  Yield(Dollars in thousands)Available
  for sale securities:U.S. Government agencies







$
311

4.62
%

$
674

4.62
%







$
985

4.62
%State and Municipal
  obligations (1)

$
2,177

6.35
%


2,111

6.65
%







$
307

6.77
%


4,595

6.51
%Mortgage-backed securities


37

4.71
%


546

5.66
%














583

5.60
%Corporate bonds


2,017

6.03
%




















2,017

6.03
%Held to
  maturity securities:U.S. Government securities


1,207

2.62
%




















1,207

2.62
%Mortgage-backed securities


2

8.00
%


50

10.57
%














52

10.49
%Other




















181

5.94
%


181

5.94
%Total debt
  securities

$
5,440

5.39
%

$
3,018

6.32
%

$
674

4.62
%

$
488

6.46
%

$
9,620

5.68
%(1) Yields are presented on
  a tax-equivalent basis.20

Deposit Activity and Other Sources of Funds

General.
Deposits, borrowings, scheduled amortization and prepayments of loan principal,
maturities and calls of investments securities and funds provided by operations
are our primary sources of funds for use in lending, investing and for other
general purposes. See Managements Discussion and Analysis - Liquidity and
Capital Resources.

Deposits.
We offer a variety of deposit accounts having a range of interest rates and
terms. We currently offer regular savings deposits (consisting of passbook and
statement savings accounts), interest-bearing demand accounts,
non-interest-bearing demand accounts, money market accounts and time deposits.

Deposit
flows are influenced significantly by general and local economic conditions,
changes in prevailing interest rates, pricing of deposits and competition. Our
deposits are primarily obtained from areas surrounding our offices and we rely
primarily on paying competitive rates, service and long-standing relationships
with customers to attract and retain these deposits. We do not use brokers to
obtain deposits.

When
we determine our deposit rates, we consider local competition, U.S. Treasury
securities offerings and the rates charged on other sources of funds. Core
deposits (defined as savings deposits, money market accounts and demand
accounts) represented 67.1% and 67.0% of total deposits on December 31, 2005
and 2004, respectively. At December 31, 2005 and 2004, time deposits with remaining
terms to maturity of less than one year amounted to $43.5 million and $45.9
million, respectively. See Managements Discussion and Analysis - Analysis of
Net Interest Income for information relating to the average balances and costs
of our deposit accounts for the years ended December 31, 2005, 2004 and 2003.

At
December 31, 2005, we had $11.6 million in time deposits with balances of
$100,000 or more maturing as follows:

Maturity Period

Amount(In thousands)Three months
  or less

$
3,560Over three
  months through six months


1,561Over six
  months through 12 months


3,050Over 12
  months


3,453Total

$
11,624Borrowings.
At December 31, 2004 the Company had outstanding borrowings of $9.4 million
which were used to fund loan growth. In the future, we expect to continue to
utilize borrowings as a funding source and may borrow funds pursuant to
repurchase agreements, whereby we sell an asset with an agreement to repurchase
it at some future date. We are a member of the Federal Home Loan Bank of New
York and have available a line of credit of $31.6 million, none of which was
drawn at December 31, 2005.

Subsidiary Activities

Rome
Savings has four subsidiaries, 100 On the Mall Corporation, Clocktower
Insurance Agency Incorporated, Clocktower Financial Corporation and RSB Capital
Inc. 100 On the Mall acts as a manager, and developer of real estate. Its only
activity is ownership of Rome Savings main office building and premises. Clocktower
Insurance owns real estate for future expansion, which is currently being
leased to a Dunkin Donuts franchise adjacent to one of our branch offices.
Clocktower Financial Corporation and RSB Capital, Inc. are currently inactive.

21

Employees

At
December 31, 2005, Rome Savings had 96 full-time and 10 part-time employees.
Rome Savings employees are not represented by a collective bargaining
agreement, and Rome Savings considers its relationship with its employees to be
good.

REGULATION AND SUPERVISION

General. Rome Bancorp is regulated as a savings and
loan holding company by the OTS. Rome Bancorp is required to file reports with
and otherwise comply with the rules and regulations of the OTS and the SEC
under the federal securities laws. Rome Savings, as a federal savings bank, is
subject to regulation, examination and supervision by the OTS and is subject to
the examination and supervision of the Federal Deposit Insurance Corporation
(FDIC) as its deposit insurer. Rome Savings must file reports with the OTS
and the FDIC concerning its activities and financial condition.

The
following references to the laws and regulations under which Rome Bancorp and
Rome Savings are regulated are brief summaries thereof, do not purport to be
complete, and are qualified in their entirety by reference to such laws and
regulations. The OTS and the FDIC have significant discretion in connection
with their supervisory and enforcement activities and examination policies
under the applicable laws and regulations. Any change in such laws, regulations
or policies, whether by the OTS, the FDIC, the SEC or the Congress, could have
a material adverse impact on Rome Bancorp and Rome Savings, and their
operations and stockholders.

Regulation of Federal Savings Associations

Business
Activities. Rome
Savings derives its lending and investment powers from the Home Owners Loan
Act, as amended (the HOLA), and the regulations of the OTS. Under these laws
and regulations, Rome Savings may invest in mortgage loans secured by
residential and commercial real estate, commercial and consumer loans, certain
types of debt securities, and certain other assets. Rome Savings may also
establish service corporations that may engage in activities not otherwise
permissible for Rome Savings, including certain real estate equity investments.
Rome Savings authority to invest in certain types of loans or other
investments is limited by federal law and regulation.

Loans
to One Borrower. Rome
Savings is generally subject to the same limits on loans to one borrower as a
national bank. With specified exceptions, Rome Savings total loans or
extensions of credit to a single borrower cannot exceed 15% of Rome Savings
unimpaired capital and surplus which does not include accumulated other
comprehensive income. Rome Savings may lend additional amounts up to 10% of its
unimpaired capital and surplus which does not include accumulated other
comprehensive income, if the loans or extensions of credit are fully-secured by
readily-marketable collateral. Rome Savings currently complies with applicable
loans-to-one borrower limitations.

QTL
Test. Under federal
law, Rome Savings must comply with the qualified thrift lender, or QTL test.
Under the QTL test, Rome Savings is required to maintain at least 65% of its
portfolio assets in certain qualified thrift investments in at least nine
months of the most recent 12-month period. Portfolio assets means, in general,
Rome Savings total assets less the sum of:


specified liquid assets up
  to 20% of total assets;
goodwill and other
  intangible assets; and22


the value of property used
  to conduct Rome Savings business.Rome
Savings may also satisfy the QTL test by qualifying as a domestic building and
loan association as defined in the Internal Revenue Code of 1986. Rome Savings
met the QTL test at December 31, 2005, and in each of the prior 12 months and,
therefore is a qualified thrift lender. If Rome Savings fails the QTL test, and
is unable to correct that failure for a period of time, it must either operate
under certain restrictions on its activities or convert to a bank charter.

Capital
Requirements. OTS
regulations require savings associations to meet three minimum capital
standards:

(1)
a tangible capital ratio
  requirement of 1.5% of total assets as adjusted under the OTS regulations;(2)
a leverage ratio
  requirement of 3.0% of core capital to such adjusted total assets, if Rome
  Savings has been assigned the highest composite rating of 1 under the Uniform
  Financial Institutions Rating System; the minimum leverage capital ration for
  any other depository institution that does not have a composite rating of 1
  will be 4%, unless a higher leverage capital ratio is warranted by the
  particular circumstances or risk profile of the depository institution; and(3)
a risk-based capital ratio
  requirement of 8.0% of core and supplementary capital to total risk-based
  assets, provided that the amount of supplementary capital used to satisfy
  this requirement shall not exceed the amount of core capital.The
minimum leverage capital ratio for any other depository institution that does
not have a composite rating of 1 will be 4%, unless a higher leverage capital
ratio is warranted by the particular circumstances or risk profile of the
depository institution. In determining the amount of risk-weighted assets for
purposes of the risk-based capital requirement, a savings association must
compute its risk-based assets by multiplying its assets and certain off-balance
sheet items by risk-weights, which range from 0% for cash and obligations
issued by the United States Government or its agencies to 100% for consumer and
commercial loans, as assigned by the OTS capital regulations based on the risks
found by the OTS to be inherent in the type of asset.

Tangible
capital is defined, generally, as common stockholders equity (including
retained earnings), certain noncumulative perpetual preferred stock and related
earnings, minority interests in equity accounts of fully consolidated
subsidiaries, less intangibles (other than certain mortgage servicing rights)
and investments in and loans to subsidiaries engaged in activities not
permissible for a national bank. Core capital (or tier 1 capital) is defined
similarly to tangible capital, but core capital also includes certain
qualifying supervisory goodwill and certain purchased credit card
relationships. Supplementary capital (or tier 2 capital) includes cumulative and
other preferred stock, mandatory convertible debt securities, subordinated debt
and intermediate preferred stock and the allowance for loan and lease losses.
In addition, up to 45% of unrealized gains on available-for-sale equity
securities with a readily determinable fair value may be included in tier 2
capital. The allowance for loan and lease losses includable in tier 2 capital
is limited to a maximum of 1.25% of risk-weighted assets.

Community
Reinvestment Act.
Under the Community Reinvestment Act (CRA), as implemented by OTS
regulations, a savings association has a continuing and affirmative obligation
consistent with its safe and sound operation to help meet the credit needs of
its entire community, including low and moderate income neighborhoods. The CRA
does not establish specific lending requirements or programs for financial
institutions nor does it limit an institutions discretion to develop the types
of products and services that it believes are best suited to its particular
community, consistent with the CRA. The CRA requires the OTS, in connection
with its examination of a savings association, to assess the associations
record of meeting the credit needs of its community and to take such record
into account in its evaluation of certain applications by such

23

association. The CRA also
requires all institutions to make public disclosure of their CRA ratings. Rome
Savings received a Satisfactory CRA rating in its most recent examination,
dated November 15, 2004.

The
CRA regulations establish an assessment system that bases an associations
rating on its actual performance in meeting community needs. In particular, the
assessment system focuses on three tests:


a lending test, to
  evaluate the institutions record of making loans in its assessment areas;
an investment test, to
  evaluate the institutions record of investing in community development
  projects, affordable housing, and programs benefiting low or moderate income
  individuals and businesses in its assessment area or a broader area that
  includes its assessment area; and
a service test, to
  evaluate the institutions delivery of services through its retail banking
  channels and the extent and innovativeness of its community development
  services.Transactions
with Affiliates. Rome
Savings authority to engage in transactions with its affiliates is limited by the
OTS regulations,
the Federal Reserve Boards Regulation W and Sections 23A and 23B of the
Federal Reserve Act (the FRA). In general, these transactions must be on terms
which are as favorable to Rome Savings as comparable transactions with
non-affiliates. In addition, certain types of these transactions referred to as
covered transaction are subject to quantitative limits based on a percentage
of Rome Savings capital, thereby restricting the total dollar amount of
transactions Rome Savings may engage in with each individual affiliate and with
all affiliates in the aggregate. Affiliates must pledge qualifying collateral
in amounts between 100% and 130% of the covered transaction in order to receive
loans from Rome Savings. In addition, applicable regulations prohibit a savings
association from lending to any of its affiliates that engage in activities
that are not permissible for bank holding companies and from purchasing
low-quality (i.e., non-performing) assets from an affiliate or purchasing the
securities of any affiliate, other than a subsidiary.

Loans
to Insiders. Rome
Savings authority to extend credit to its directors, executive officers and
principal shareholders, as well as to entities controlled by such persons, is
governed by the requirements of Sections 22(g) and 22(h) of the FRA and
Regulation O of the Federal Reserve Board. Among other things, these provisions
require that extensions of credit to insiders:


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
  non-insiders and that do not involve more that the normal risk of repayment
  or present other features that are unfavorable to Rome Savings; and
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 Rome
  Savings capital.The
regulations allow small discounts on fees on residential mortgages for
directors, officers and employees. In addition, extensions for credit to
insiders in excess of certain limits must be approved by Rome Savings Board of
Directors.

Enforcement. The OTS has primary enforcement
responsibility over savings associations, including Rome Savings. This
enforcement authority includes, among other things, the ability to assess civil
money penalties, to issue cease and desist orders and to remove directors and
officers. In general, these enforcement actions may be initiated in response to
violations of laws and regulations and to unsafe or unsound practices.

Standards
for Safety and Soundness.
Under federal law, the OTS has adopted a set of guidelines prescribing safety
and soundness standards. These guidelines establish general standards relating
to internal

24

controls, information
systems, internal audit systems, loan documentation, credit underwriting,
interest rate risk exposure, asset growth, asset quality, earnings standards,
compensation, fees and benefits. In general, the guidelines require appropriate
systems and practices to identify and mange the risks and exposures specified
in the guidelines.

In
addition, the OTS adopted regulations that authorize, but do not require, the
OTS to order an institution that has been given notice that it is not
satisfying these safety and soundness standards to submit a compliance plan.
If, after being notified, an institution fails to submit an acceptable plan or
fails in any material respect to implement an accepted plan, the OTS must issue
an order directing action to correct the deficiency. Further, the OTS may issue
an order directing corrective actions and may issue an order directing other
actions of the types to which an undercapitalized association is subject under
the prompt corrective action provisions of federal law. If an institution fails
to comply with such an order, the OTS may seek to enforce such order in
judicial proceedings and to impose civil money penalties.

Limitations
on Capital Distributions.
The OTS imposes various restrictions or requirements on Rome Savings ability
to make capital distributions, including cash dividends. A savings institution
that is the subsidiary of a savings and loan holding company must file a notice
with the OTS at least 30 days before making a capital distribution. Rome
Savings must file an application for prior approval if the total amount of its
capital distributions, including the proposed distribution, for the applicable
calendar year would exceed an amount equal to Rome Savings net income for that
year plus Rome Savings retained net income for the previous two years.

The
OTS may disapprove a notice or application if:


Rome Savings would be
  undercapitalized following the distribution;
the proposed capital
  distribution raises safety and soundness concerns; or
the capital distribution
  would violate a prohibition contained in any statute, regulation or
  agreement.Rome
Bancorps ability to pay dividends, service debt obligations and repurchase
common stock is dependent upon receipt of dividend payments from Rome Savings.

Liquidity. Rome Savings is required to maintain a
sufficient amount of liquid assets to ensure its safe and sound operation.

Prompt
Corrective Action Regulations. Under the OTS prompt corrective action regulations, the OTS is required
to take certain, and is authorized to take other, supervisory actions against
undercapitalized savings associations. For this purpose, a savings association
is placed in one of the following four categories based on the associations
capital:



well capitalized;

adequately capitalized;

undercapitalized; or

critically
  undercapitalized.At
December 31, 2005, Rome Savings met the criteria for being considered
well-capitalized.. When

25

appropriate, the OTS can require corrective action by
a savings association holding company under the prompt corrective action
provision of federal law.

Insurance
of Deposit Accounts. Rome Savings is a member of the Bank
Insurance Fund (the BIF), maintained by the FDIC, and Rome Savings pays its
deposit insurance assessments to the BIF. The FDIC also maintains another
insurance fund, the Savings Association Insurance Fund, which ordinarily
insures the deposits of federal savings associations. Rome Savings is a member
of the BIF, rather than the SAIF, because it paid to BIF prior to its
conversion from a New York bank on April 24, 2004, and continues to do so under
Section 10(0) of HOLA.

Under
federal law, the FDIC established a risk based assessment system for
determining the deposit insurance assessments to be paid by insured depositary
institutions. Under the assessment system, the FDIC assigns an institution to
one of three capital categories based on the institutions history and its
financial information as of the quarter ending three months before the
beginning of the assessment period. An institutions assessment rate depends on
the length of time the institution has been operating and the capital category
and supervisory sub-category to which it is assigned. Under the regulation,
there are nine assessment risk classifications (i.e., combinations of capital
groups and supervisory subgroups) to which different assessment rates are
applied. Assessment rates currently range from 0.0% of deposits for an
institution in the highest category (i.e., well-capitalized and financially
sound, with no more than a few minor weaknesses) to 0.27% of deposits for an
institution in the lowest category (i.e., undercapitalized and substantial
supervisory concern). The FDIC is authorized to raise the assessment rates as
necessary to maintain the required reserve ratio of 1.25%.

In
addition, all FDIC insured institutions are required to pay assessments to the
FDIC at an annual rate of approximately 0.0142% of insured deposits to fund
interest payments on bonds issued by the Financing Corporation, an agency of
the federal government established to recapitalize the predecessor to the SAIF.
These assessments will continue until the Financing Corporation bonds mature in
2017.

On
February 15, 2006, President Bush signed into law legislation designed, in
part, to increase insurance limits for certain accounts, including individual
retirement accounts, merge the BIF and SAIF funds and grant the FDIC additional
flexibility in establishing reserves in the fund. Pending rulemaking by the
FDIC, the legislation is not yet effective.

Federal
Home Loan Bank System. Rome Savings is a member of the
Federal Home Loan Bank (the FHLB) of New York, which is one of the regional
FHLBs composing the FHLB System. Each FHLB provides a central credit facility
primarily for its member institutions. Rome Savings, as a member of the FHLB of
New York, is required to acquire and hold shares of capital stock in the FHLB
of New York. While the required percentages of stock ownership are subject to
change by the FHLB, Rome Savings was in compliance with this requirement with
an investment in FHLB of New York stock at December 31, 2005 of $776,300. Any
advances from a FHLB must be secured by specified types of collateral, and all
long-term advances may be obtained only for the purpose of providing funds for
residential housing finance.

The
FHLBs are required to provide funds for the resolution of insolvent thrifts and
to contribute funds for affordable housing programs. These requirements could
reduce the amount of earnings that the FHLBs can pay as dividends to their
members and could also result in the FHLBs imposing a higher rate of interest
on advances to their members. If dividends were reduced, or interest on future
FHLB advances increased, Rome Savings net interest income would be affected.

Federal
Reserve System. Rome Savings is subject to provisions of the
FRA and the FRBs regulations pursuant to which depositary institutions may be
required to maintain non-interest-earning reserves against their transaction
accounts (primarily NOW and regular checking accounts). The amount of
transaction

26

accounts exempt from a reserve requirement is $7.0
million. A 3% reserve is required for transaction accounts from $7.0 million to
$40.6 million. Transaction accounts over $40.6 million are subject to a 10%
reserve requirement. Rome Savings is in compliance with these requirements.
Because required reserves must be maintained in the form of either vault cash,
a noninterest-bearing account at a Federal Reserve Bank or a pass-through
account as defined by the FRB, the effect of this reserve requirement is to
reduce Rome Savings interest-earning assets. The balances maintained to meet
the reserve requirements imposed by the FRB may be used to satisfy liquidity
requirements imposed by the OTS. FHLB System members are also authorized to
borrow from the Federal Reserve discount window, but FRB regulations require
such institutions to exhaust all FHLB sources before borrowing from a Federal
Reserve Bank.

Prohibitions
Against Tying Arrangements. Federal savings banks are subject
to prohibitions on certain tying arrangements. A depository institution is
prohibited, subject to some exceptions, from extending credit 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 credit or services
of a competitor of the institution.

The
Bank Secrecy Act. Rome
Savings and Rome Bancorp are subject to the Bank Secrecy Act, as amended by the
USA PATRIOT Act, which gives the federal government powers to address money
laundering and terrorist threats through enhanced domestic security measures,
expanded surveillance powers, and mandatory transaction reporting obligations.
By way of example, the Bank Secrecy Act imposes an affirmative obligation on
Rome Savings to report currency transactions that exceed certain thresholds and
to report other transactions determined to be suspicious.

Title
III of the USA PATRIOT Act takes measures intended to encourage information
sharing among financial institutions, bank regulatory agencies and law
enforcement bodies. Further, certain provisions of Title III impose affirmative
obligations on a broad range of financial institutions, including banks,
thrifts, brokers, dealers, credit unions, money transfer agents and parties
registered under the Commodity Exchange Act. Among other requirements, the USA
PATRIOT Act imposes the following obligations on financial institutions:


  financial institutions must establish anti-money
  laundering programs that include, at minimum: (i) internal policies,
  procedures, and controls, (ii) specific designation of an anti-money
  laundering compliance officer, (iii) ongoing employee training programs, and
  (iv) an independent audit function to test the anti-money laundering program;
  financial institutions must establish and meet
  minimum standards for customer due diligence, identification and
  verification;
  financial institutions that establish, maintain,
  administer, or manage private banking accounts or correspondent accounts in
  the United States for non-United States persons or their representatives
  (including foreign individuals visiting the United States) must establish
  appropriate, specific, and, where necessary, enhanced due diligence policies,
  procedures, and controls designed to detect and report money laundering
  through those accounts;
  financial institutions are prohibited from
  establishing, maintaining, administering or managing correspondent accounts
  for foreign shell banks (foreign banks that do not have a physical presence
  in any country), and are subject to certain recordkeeping obligations with
  respect to correspondent accounts of foreign banks;
  bank regulators are directed to consider a banks or
  holding companys effectiveness in combating27

money
laundering when ruling on Federal Reserve Act and Bank Merger Act applications.

Office
of Foreign Asset Control. Rome Savings and Rome Bancorp, like
all United States companies and individuals, are prohibited from transacting
business with certain individuals and entities named on the Office of Foreign
Asset Controls list of Specially Designated Nationals and Blocked Persons.
Failure to comply may result in fines and other penalties. Recently, the Office
of Foreign Asset Control issued guidance directed at financial institutions in
which it asserted that it may, in its discretion, examine institutions
determined to be high-risk or to be lacking in their efforts to comply with
these prohibitions.

Holding Company Regulation

Rome
Bancorp is a savings and loan holding company regulated by the OTS. As such,
Rome Bancorp is registered with and subject to OTS examination and supervision,
as well as certain reporting requirements. In addition, the OTS has enforcement
authority over Rome Bancorp and any of its non-savings institution
subsidiaries. Among other things, this authority permits the OTS to restrict or
prohibit activities that are determined to be a serious risk to the financial
safety, soundness or stability of a subsidiary savings institution. Unlike bank
holding companies, federal savings and loan holding companies are not subject
to regulatory capital requirements or to supervision by the FRB.

HOLA
prohibits a savings and loan holding company, directly or indirectly, or
through one or more subsidiaries, from acquiring control (as defined under
HOLA) of another savings institution without prior OTS approval. In addition, a
savings and loan holding company is prohibited from directly or indirectly
acquiring control of any depository institution not insured by the FDIC (except
through a merger with and into the holding companys savings institution
subsidiary that is approved by the OTS).

A
savings and loan holding company may not acquire as a separate subsidiary an
insured institution that has a principal office outside of the state where the
principal office of its subsidiary institution in located, except, (i) in the
case of certain emergency acquisitions approved by the FDIC; (ii) if the
holding company controls a savings institution subsidiary that operated a home
or branch office in such additional state as of March 5, 1987; or (iii) if the
laws of the home state of the savings institution to be acquired specifically
authorize a savings institution chartered by that state to be acquired by a
savings institution chartered by the state where the acquiring savings
institution or savings and loan holding company is located or by a holding
company that controls such a state chartered association.

Because
Rome Bancorp was organized after May 4, 1999, under the Gramm Leach Bliley Act
of 1999 (the GLB Act) it is prohibited from engaging in non-financial
activities. Unitary savings and loan holding companies that existed before this
date and that have not undergone certain reorganization or restructuring
transactions are grandfathered under the GLB Act and generally have no
restrictions on their business activities. Rome Bancorps activities, however,
are restricted to:


  furnishing or performing management services for its
  savings institution subsidiary;
  conducting an insurance agency or escrow business;
  holding, managing or liquidating assets owned or
  acquired from its savings institution subsidiary;
  holding or managing properties used or occupied by
  its savings institution subsidiary;
  acting as trustee under a deed of trust;
  any other activity (a) that the FRB, by regulation,
  has determined to be permissible for bank holding28

companies under Section 4(c) of the Bank Holding
  Company Act of 1956 (BHCA), unless the Director of the OTS, 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;
  purchasing, holding or disposing of stock acquired
  in connection with a qualified stock issuance if the purchase of such stock
  is approved by the Director of the OTS; and
  any activity permissible for financial holding
  companies under section 4(k) of the BHCA.Permissible activities
  which are deemed to be financial in nature or incidental thereto under
  section 4(k) of the BHCA include:
  lending, exchanging, transferring, investing for
  others or safeguarding money or securities;
  insurance activities or providing and issuing
  annuities, and acting as principal, agent or broker;
  financial, investment or economic advisory services;
  issuing or selling instruments representing
  interests in pools of assets that a bank is permitted to hold directly;
  underwriting, dealing in or making a market in
  securities;
  activities previously determined by the FRB to be
  closely related to banking;
  activities that bank holding companies are permitted
  to engage in outside of the U.S.; and
  portfolio investments made by an insurance company.Transactions between the Rome Savings and Rome
  Bancorp and its other subsidiaries are subject to various conditions and
  limitations. See Regulation of Federal Savings Associations - Transactions
  with Affiliates and Regulation of Federal Savings Associations - Limitation
  on Capital Distributions.The
  Sarbanes-Oxley Act. As a public company, Rome Bancorp is
  subject to the Sarbanes-Oxley Act, which implements a broad range of
  corporate governance and accounting measures for public companies designed to
  promote honesty and transparency in corporate America and better protect
  investors from corporate wrongdoing. The Sarbanes-Oxley Acts principal
  legislation and the derivative regulation and rule making promulgated by the
  SEC includes:
  the creation of an independent accounting oversight
  board;
  auditor independence provisions which restrict non-audit
  services that accountants may provide to their audit clients;
  additional corporate governance and responsibility
  measures, including the requirement that the chief executive officer and
  chief financial officer certify financial statements;
  a requirement that companies establish and maintain
  a system of internal control over financial reporting and that a companys
  management provide an annual report regarding its assessment of the
  effectiveness of such internal control over financial reporting to the
  companys independent29

accountants and that such accountants provide an
  attestation report with respect to managements assessment of the
  effectiveness of the companys internal control over financial reporting;
  the forfeiture of bonuses or other incentive-based
  compensation and profits from the sale of an issuers securities by directors
  and senior officers in the twelve month period following initial publication
  of any financial statements that later require restatement;
  an increase in the oversight of, and enhancement of
  certain requirements relating to audit committees of public companies and how
  they interact with the companys independent auditors;
  requirement that audit committee members must be
  independent and are absolutely barred from accepting consulting, advisory or
  other compensatory fees from the issuer;
  requirement that companies 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;
  expanded disclosure requirements for corporate
  insiders, including accelerated reporting of stock transactions by insiders
  and a prohibition on insider trading during pension blackout periods;
  a prohibition on personal loans to directors and
  officers, except certain loans made by insured financial institutions;
  disclosure of a code of ethics and filing a Form 8-K
  for a change or waiver of such code;
  mandatory disclosure by analysts of potential
  conflicts of interest; and
  a range of enhanced penalties for fraud and other
  violations.Section 402 of the Sarbanes-Oxley Act of 2002
  prohibits the extension of personal loans to directors and executive officers
  of issuers (as defined in Sarbanes-Oxley). The prohibition, however, does not
  apply to mortgages advanced by an insured depository institution, such as
  Rome Savings, that are subject to the insider lending restrictions of Section
  22(h) of the Federal Reserve Act.Although Rome Bancorp anticipates that it will incur
  additional expense in complying with the provisions of the Sarbanes-Oxley Act
  and the resulting regulations, management does not expect that such
  compliance will have a material impact on its results of operations or
  financial condition.Quotation
  on Nasdaq. Rome Bancorps common stock is quoted on The
  Nasdaq Stock Market. In order to maintain such quotation, Rome Bancorp is
  subject to certain corporate governance requirements, including:
  a majority of its board must be composed of
  independent directors;
  it is required to have an audit committee composed
  of at least three directors, each of whom is an independent director, as such
  term is defined by both the rules of the National Association of Securities
  Dealers (NASD) and by the Securities Exchange Act of 1934, as amended,
  regulations promulgated thereunder;
  the nominating committee and compensation committee
  must also be composed entirely of independent directors;30


  each of the audit committee, and nominating
  committee must have a publicly available written charter.Federal
Securities Laws. Rome Bancorps common stock is registered
with the SEC under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the Exchange Act). Rome Bancorp is subject to information, proxy
solicitation, insider trading restrictions and other requirements under the
Exchange Act.

31

ITEM 1A.
RISK FACTORSOur
Loan Portfolio Includes Loans With A Higher Risk Of Loss.
Rome Savings originates commercial mortgage loans, commercial loans, consumer
loans and residential mortgage loans primarily within its market area, although
a number of loans are in other states. Commercial mortgage, commercial, 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. These loans also have greater credit
risk than residential real estate for the following reasons:


  Commercial Mortgage Loans.
  Repayment is dependent upon income being generated in amounts sufficient to
  cover operating expenses and debt service.
  Commercial Loans. Repayment is
  generally dependent upon the successful operation of the borrowers business.
  Consumer Loans. Consumer loans
  (such as personal lines of credit) 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.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 the terms of the
loans, 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 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 loan quality reviews, 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.

Our
emphasis on a diverse loan portfolio has been one of the more significant
factors we have taken into account in evaluating our allowance for loan losses
and provision for loan losses. If we were to further increase the amount of
loans in our portfolio other than traditional real estate loans, we may decide
to make increased provisions for loan losses. In addition, bank regulators
periodically review our allowance for loan losses and may require us to
increase our provision for loan losses or recognize further loan charge-offs.

Our return on equity is low compared to other
companies.Net earnings divided by average equity,
known as return on equity, is a ratio many investors use to compare the
performance of a financial institution to its peers. Our return on average
equity amounted to 4.29% and 6.67% in 2005 and 2004 respectively. As a result
of the second-step stock conversion and offering completed in March of 2005,we
currently have capital proceeds to deploy into high-yielding earning assets.
Our ability to leverage our new capital profitably will be significantly
affected by industry competition for loans and deposits. Until the stock
proceeds are fully invested in long-term interest earning assets, we expect our
return on equity to be below our historical rations and the industry average,
which may negatively impact the value of our stock.

Because Rome Savings Loans Are Concentrated
In A
Small Geographical Area, Downturns In Its Local Economy May Affect Its
Profitability And Future Growth Possibilities. In
recent years, Oneida County has experienced a negative population growth rate.
While the local economy has been improving in recent years, it has not enjoyed
the rate of economic growth experienced in other parts of the United States. In
the event of an economic downturn, we may have greater risk of loan defaults
and experience deposit

32

runoff in our primary market area, which could have an
adverse impact on our profitability.

Low Demand For Real Estate Loans May Lower Our
Profitability. Making loans secured by real
estate, including one-to-four family and commercial real estate, is our primary
business and primary source of revenue. If customer demand for real estate
loans decreases, our profits may decrease because our alternative investments,
primarily securities, earn less income for us than real estate loans. Customer
demand for loans secured by real estate could be reduced by a weaker economy,
an increase in unemployment, a decrease in real estate values or an increase in
interest rates.

We Depend On Our Executive Officers And Key
Personnel
To Implement Our Business Strategy And Could Be Harmed By The Loss Of Their
Services. We believe that our growth and future success
will depend in large part upon the skills of our management team, particularly
Charles M. Sprock, our President and Chief Executive Officer. 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 an employment agreement with
our President and Chief Executive Officer that contains a non-compete
provision, the loss of the services of one or more of our executive officers
could impair our ability to continue to develop our business strategy.

The Implementation Of Stock-Based Benefits Will
Increase Our Future Compensation Expense And Reduce Our Earnings, And May
Dilute Your Ownership Interest In New Rome Bancorp.
We intend to adopt a new stock option plan that will provide for grants to
eligible officers and directors of options to purchase common stock of up to
6.64% of the common stock sold in the stock offering. We also intend to adopt a
new management recognition plan that will provide for awards of common stock to
eligible officers and directors of up to 3.62% of the common stock sold in the
stock offering. We will fund these plans through either open market purchases,
if permitted, or from the issuance of authorized but unissued shares. These
plans will increase our future costs of compensating our officers and
directors, thereby reducing our earnings. In addition, stockholders will
experience a reduction in ownership interest in the event newly-issued shares
are used to fund stock options and restricted stock awards.

If We Fail To Maintain An Effective System Of
Internal
Controls, We May Not Be Able To Accurately Report Our Financial Results Or
Prevent Fraud. As A Result, Current And Potential Stockholders Could Lose
Confidence In Our Financial Reporting, Which Would Harm Our Business And The
Trading Price Of Our Stock.Effective internal
controls are necessary for us to provide reliable financial reports and
effectively prevent fraud. If we cannot provide reliable financial reports or
prevent fraud, our operating results could be harmed. We devote significant
attention to establishing and maintaining effective internal controls. We
document, review and, if appropriate, improve our internal controls and
procedures in connection with Section 404 of the Sarbanes-Oxley Act of 2002,
which requires annual management assessments of the effectiveness of our
internal controls over financial reporting and a report by our independent
auditors addressing these assessments. Both we and our independent auditors
annually test our internal controls in connection with the Section 404
requirements and could identify areas for further attention or improvement.
Implementing any appropriate changes to our internal controls may require
specific compliance training of our directors, officers and employees, entail
substantial costs in order to modify our existing accounting systems, and take
a significant period of time to complete. Any failure to implement required new
or improved controls, or difficulties encountered in their implementation, could
harm our operating results or cause us to fail to meet our reporting
obligations. Any such failure could also adversely affect our assessment of the
effectiveness of our internal control over financial reporting. Inferior
internal controls could also cause investors to lose confidence in our reported
financial information, which could have a negative effect on the market price
of our stock.

We Operate In A Highly Regulated Environment And We
May Be Adversely Affected By Changes In Laws And Regulations.We
are subject to extensive regulation, supervision and examination by the OTS and
by the Federal Deposit Insurance Corporation, as insurer of deposits. Such
regulation and supervision

33

governs the activities in which Rome Savings and we
may engage and are intended primarily for the protection of the insurance fund
and deposits of Rome Savings. Regulatory authorities have extensive discretion
in connection with their supervisory and enforcement activities, including the
imposition of restrictions on the operation of Rome Savings, the classification
of its assets and the adequacy of its allowance for loan losses. Any change in
such regulation and oversight, whether in the form of regulatory policy,
regulations, or legislation, including changes in the regulations governing
holding companies, could have a material impact on the combined operations of
us and Rome Savings.

Competition In Our Primary Market Area May Reduce
Our
Ability To Attract And Retain Deposits And Obtain 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 bankers, 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.

Changes In Interest Rates Could Adversely Affect
Our
Results Of Operations And Financial Condition. Our
results of operations and financial condition are significantly affected by
changes in interest rates. Our results of operations depend 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.

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 Certificate Of Incorporation, Bylaws And
Certain
Laws And Regulations May Prevent Transactions You Might Favor, Including A Sale
Or Merger Of Rome Bancorp. Provisions of our
Certificate of Incorporation and Bylaws, federal regulations and various other factors
may make it more difficult for companies or persons to acquire control of us
without the consent of our Board of Directors. It is possible, however, that
you would want a takeover attempt to succeed because, for example, a potential
buyer could offer a premium over the then prevailing price of our common stock.
The factors that may discourage takeover attempts or make them more difficult
include:


  Office of Thrift Supervision regulations.
  OTS regulations prohibit, for three years following the completion of a
  mutual-to-stock conversion, the offer to acquire or the acquisition of more
  than 10% of any class of equity security of a converted institution without
  the prior approval of the OTS. In addition, the OTS has required, as a
  condition to approval of the conversion, that Rome Savings maintain a federal
  thrift charter for a period of three years.
  Certificate of Incorporation and statutory
  provisions. Provisions of our Certificate of Incorporation
  and Bylaws and of Delaware law may make it more difficult and expensive to
  pursue a takeover attempt that management opposes. These provisions also make
  more difficult the removal of our current directors or management, or the
  election of new directors. These provisions include:34

§
  limitations on voting rights of the beneficial
  owners of more than 10% of our common stock;§
  supermajority voting requirements for certain
  business combinations and changes to some provisions of the Certificate of
  Incorporation and Bylaws;§
  the election of directors to staggered terms of
  three years; and§
  provisions regarding the timing and content of
  stockholder proposals and nominations.35

ITEM 1B.
UNRESOLVED STAFF COMMENTSNone.

ITEM 2.
DESCRIPTION OF PROPERTYWe
conduct our business through our executive office, operations center, which
includes both the Mortgage Center and the Accounting Center listed below, and
three banking offices. At December 31, 2005, the net book value of the computer
equipment and other furniture, fixtures and equipment of Rome Savings and Rome
Bancorp at their offices totaled $4,503,000. For more information, see Note 5
of Notes to Consolidated Financial Statements, in the Companys 2005 Annual
Report to shareholders (the Annual Report), which is incorporated herein by
reference.

Location
  
  Leased or
  Owned
  
  Original Date Acquired
  
  
  Net Book Value
  December 31, 2004(In thousands)Executive Office:100 West
  Dominick St.Rome, NY
  
  Owned
  
  1956
  
  
  $
  1,143Branch Offices:1629 Black River
  BoulevardRome, NY
  
  Owned
  
  1963
  
  
  
  2551300 Erie
  BoulevardRome, NY
  
  Owned
  
  1997
  
  
  
  1,00782 Seneca
  TurnpikeNew Hartford, NY
  
  Owned
  
  1983
  
  
  
  115Mortgage Center:137 West
  Dominick StreetRome, NY
  
  Owned
  
  2002
  
  
  
  357Accounting Center:139 West
  Dominick StreetRome, NY
  
  Owned
  
  1995
  
  
  
  457ITEM 3.
LEGAL PROCEEDINGSAs
  of the date of this Form 10-K, we are not involved in any pending legal
  proceedings other than routine legal proceedings occurring in the ordinary
  course of business. We believe that these routine legal proceedings, in the
  aggregate, are immaterial to our financial condition and results of
  operations.ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF
  SECURITY HOLDERSNone.

PART II

ITEM 5.
  MARKET FOR ROME BANCORPS COMMON
  EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES36

The
following information included in the Annual Report is incorporated herein by
reference: Market for Rome Bancorps Common Stock.

ITEM 6.
SELECTED
  FINANCIAL DATAThe
following information included in Annual Report is incorporated herein by
reference: Selected Financial Data.

ITEM 7
MANAGEMENTS
  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe
following information included in the Annual Report is incorporated herein by
reference: Managements Discussion and Analysis of Financial Condition and
Results of Operations and Financial Highlights.

ITEM
  7A
QUANTITATIVE
  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.The
following information included in the Annual Report is incorporated herein by
reference: Management of Interest Rate Risk.

ITEM 8.
FINANCIAL
  STATEMENTS AND SUPPLEMENTARY DATAThe
following information included in the Annual Report is incorporated herein by
reference: Consolidated Financial Statements and Notes to Consolidated
Financial Statements.

ITEM 9.
CHANGES
  AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.

ITEM 9A.
CONTROLS AND PROCEDURESEvaluation
of Disclosure Controls and Procedures

Management,
including the Companys President and Chief Executive Officer and Executive
Vice President and Chief Financial Officer, has evaluated the effectiveness of
the Companys disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this
report. Based upon that evaluation, the Companys President and Chief Executive
Officer and Executive Vice President and Chief Financial Officer concluded that
the disclosure controls and procedures were effective to ensure that
information required to be disclosed in the reports the Company files and
submits under the Exchange Act is (i) recorded, processed, summarized and
reported as and when required, and (ii) accumulated and communicated to the
Companys management, including the President and Chief Executive Officer and
Executive Vice President and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.

Managements
annual report on internal control over financial reporting appears
on page 31 of the Companys Annual Report to Shareholders for the
year ended December 31, 2005, which is included as Exhibit 13.1 of this report,
and is incorporated herein by reference.

37

The attestation report of the Companys registered
public accounting firm on managements assessment of the Companys internal
control over financial reporting appears on page 32 Annual Report to
Shareholders for the year ended December 31, 2005, which is included as Exhibit
13.1 of this report, and is incorporated herein by reference.

There have been no changes
in the Companys internal control over financial reporting identified in
connection with the evaluation that occurred during the Companys last fiscal
quarter that has materially affected, or that is reasonably likely to
materially affect, the Companys internal control over financial reporting

ITEM 9B.
OTHER INFORMATIONNone.

PART III

ITEM 10.
DIRECTORS
  AND PRINCIPAL OFFICERS OF ROME BANCORPThe
following information included in the Proxy Statement is incorporated herein by
reference: Proposal 1, Election of Directors and the following subsections of
the section entitled Information About Board of Directors and Management: Board
of Directors, Committees of the Board, Executive Officers Who Are Not
Directors and Section 16(a) Beneficial Ownership Reporting Compliance.

Code of Ethics

Rome
Bancorp has adopted a Code of Conduct and Ethics, which applies to all employees,
directors and officers of Rome Bancorp including the principal executive
officer, principal financial officer, principal accounting officer, or
controller, or persons performing similar functions. The Code of conduct and
Ethics meets the requirements of a code of ethics as defined by Item 406 of
Regulation S-K. The Code of Conduct and Ethics was filed as Exhibit 14.1 to the
Form 10-KSB for the year ended December 31, 2003, and has not changed.

You
may obtain a copy of the Code of Conduct and Ethics, free of charge, by sending
a request in writing to Crystal M. Seymore at the following address:

Crystal M. Seymore,
Secretary
Rome Bancorp, Inc.
100 W. Dominick Street
Rome, New York 13440-5810

ITEM 11.
EXECUTIVE
  COMPENSATIONThe
information set forth in the following subsections of the section entitled
Information About Board of Directors and Management of the Proxy Statement
are incorporated herein by reference: Directors Compensation, Executive
Compensation (including the Summary Compensation Table), Benefit Plans and
Transactions with Certain Related Persons.

38

ITEM 12.
SECURITY
  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
  MATTERSThe
following subsections of the section entitled Security Ownership of Certain
Beneficial Owners and Management included in the Proxy Statement are
incorporated herein by reference: Principal Stockholders of Rome Bancorp and
Security Ownership of Management.

The
following table sets forth the aggregate information of our equity compensation
plans in effect as of December 31, 2005.

Plan
  category

Number of securities
  to be issued
  upon exercise of
  outstanding options,
  warrants and rights

Weighted-average
  exercise price of
  outstanding options,
  warrants and rights

Number of securities
  remaining available for
  future issuance under
  equity compensation plans
  (excluding securities
  reflected in column (a))1(a)

(b)

(c)Equity compensation
  plans approved by security holders



219,798



$
2.19




234,821Equity
  compensation plans not approved by security holders













Total



219,798



$
2.19




234,821(1)
The number of securities remaining for future
  issuance under equity compensation plans includes Recognition and 50,316
  shares available for issuance under the 2000 Recognition and Retention Plan
  and 184,505 shares available for issuance under the 2000 Stock Option Plan.ITEM 13.
CERTAIN
  RELATIONSHIPS AND RELATED TRANSACTIONSThe
following information included in the Proxy Statement is incorporated herein by
reference: Transactions with Certain Related Persons.

ITEM
  14.
PRINCIPAL
  ACCOUNTING FEES AND SERVICESThe
following information included in the Proxy Statement is incorporated herein by
reference: Principal Accounting Fees and Services.

PART IV

ITEM
  15.
EXHIBITS,
  FINANCIAL STATEMENTS(a) The following financial statements included
in the 2005 Annual Report are incorporated herein by reference:

Consolidated Balance Sheets - At December 31, 2005 and
2004;
Consolidated Statements of Income - Years Ended December 31, 2005, 2004 and
2003;
Consolidated Statements of Stockholders Equity and Comprehensive Income -
Years Ended December 31, 2005, 2004 and 2003;
Consolidated Statements of Cash Flows - Years Ended December 31, 2005, 2004 and
2003; and
Notes to Consolidated Financial Statements - Years Ended December 31, 2005,
2004 and 2003

39

(b) Exhibits.
The following exhibits are either filed as part of
  this report or are incorporated herein by reference:2.1
    
    Amended and Restated Plan of Conversion and
        Agreement and Plan of Reorganization. (1)3.1
    
    Certificate of Incorporation of New Rome Bancorp,
        Inc. (1)3.2
    
    Bylaws of New Rome Bancorp, Inc. (1)4.1
    
    Form of Stock Certificate of New Rome Bancorp,
        Inc. (1)10.1
    
    Form of Employee Stock Ownership Plan of Rome
        Bancorp, Inc. (2)10.2
    
    Amendment No. 1 to Employee Stock Ownership
        Plan of Rome Bancorp, Inc. (1)10.3
    
    Amendment No. 2 to Employee Stock Ownership
        Plan of Rome Bancorp, Inc. (1)10.4
    
    Form of Executive Employment Agreement by
        and between Charles M. Sprock and Rome Bancorp, Inc. (2)10.5
    
    Form of One Year Change in Control Agreement
        by and among certain officers and Rome Bancorp, Inc. and The Rome Savings
        Bank. (1)10.6
    
    Form of Employment Agreement between New Rome
        Bancorp, Inc. and Charles M. Sprock. (1)10.7
    
    Form of Employment Agreement between The Rome
        Savings Bank and Charles M. Sprock. (1)10.8
    
    Rome Bancorp, Inc. 2000 Stock Option Plan.
        (3)10.9
    
    Rome Bancorp, Inc. 2000 Recognition and Retention
        Plan. (3)10.10
    
    Amended and Restated Benefit Restoration Plan
        of Rome Bancorp, Inc. (4)10.11
    
    Amended and Restated Directors Deferred
        Compensation Plan of Rome Bancorp, Inc. (4)10.12
    
    Loan Agreement by and between the Employee
        Stock Ownership Plan Trust of Rome Bancorp, Inc. and Rome Bancorp, Inc.
        (5)10.13
    
    Amendment No. 3 to the Employee Stock Ownership
        Plan of Rome Bancorp, Inc. (6)13.1
    
    Annual Report to Shareholders for the Year
        Ended December 31, 2005.14.1
    
    Code of Conduct and Ethics. (7)21.1
    
    Subsidiaries of the Company. (1)23.1
    
    Consent of Crowe Chizek and Company LLC.23.2
    
    Consent of KPMG LLP.31.1
    
    Rule 13a-14a/15d-14a Certifications31.2
    
    Rule 13a-14a/15d-14a Certifications32.1
    
    Section 1350 Certifications32.2
    
    Section 1350 Certifications(1) Incorporated by
reference to Rome Bancorp, Inc.s Form S-1 (Registration No. 333-121245), filed
with the Commission on December 14, 2004, as amended.
(2) Incorporated by reference to Rome Bancorp, Inc.s Form SB-2
(Registration No. 333-80487), filed with the Commission on June 11, 1999, as
amended.
(3) Incorporated by reference to Rome Bancorp, Incs Proxy Statement on
Schedule 14A, filed with the Commission on April 5, 2000 and amended on April
2, 2001.
(4) Incorporated by reference to Rome Bancorp, Inc.s Form 8-K filed with
the Commission on December 27, 2005.
(5) Incorporated by reference to Rome Bancorp, Inc.s Form 8-K filed with
the Commission on March 29, 2005.
(6) Incorporated by reference to Rome Bancorp, Inc.s Form 8-K filed with
the Commission on August 29, 2005.

40

SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

ROME BANCORP, INC.

By:
/s/Charles M. SprockPresident, Chairman of the Board
  andChief Executive OfficerPursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

Name



Title



Date/s/Charles M. Sprock

Chairman of the Board,

March
  24, 2006President and ChiefCharles M. Sprock

Executive Officer(Principal Executive
  Officer)/s/David C. Nolan

Executive Vice-President

March
  24, 2006and Chief Financial
  OfficerDavid C. Nolan

(Principal Financial
  Officer)/s/Bruce R. Engelbert

Director

March
  24, 2006Bruce R. Engelbert/s/David C. Grow

Director

March
  24, 2006David C. Grow/s/Kirk B. Hinman

Director

March
  24, 2006Kirk B. Hinman/s/T. Richard Leidig

Director

March
  24, 2006T. Richard Leidig/s/Michael J. Valentine

Director

March
  24, 2006Michael J. Valentine/s/Dale A. Laval

Director

March
  24, 2006Dale A. Laval41