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, 2009
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 pursuant to Section
12(b) of the Act:

|                                        |                                      
|--------------------------------------- | -------------------------------------
|Title of
 Class                         | Name of
 exchange on which registered
|Common Stock, par value $0.01 per share | The NASDAQ Stock Market, LLC         

Indicate
by check mark if the registrant is a well-known 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 Securities Exchange Act of 1934. Yes o   No x

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 Act 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 large
accelerated filer, accelerated filer and smaller reporting companyin Rule
12b-2 of the Exchange Act. (Check one):

Large
accelerated filer o Accelerated filer o
Non-accelerated filer o
Smaller reporting company x

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

Based
on the closing sales price on June 30, 2009, the aggregate market value of the
voting stock held by non-affiliates of the registrant was $46,333,000.

Rome Bancorp
had 6,797,819 shares of common stock outstanding as of March 4, 2010.

DOCUMENTS
INCORPORATED BY REFERENCE

Portions
of the definitive proxy statement pursuant to Regulation 14A to be issued by
the registrant in connection with the 2010 Annual Meeting and portions of the
2009 Annual Report to Shareholders for the fiscal year ended December 31, 2009
are incorporated by reference into Parts II and III of this report.

---



TABLE OF CONTENTS

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

---



Forward Looking Statements

This
Annual Report on Form 10-K contains forward-looking statements which may be
identified by the use of such words as believe, expect, anticipate,
should, planned, estimated, and potential. Examples of forward-looking
statements include, but are not limited to, estimates with respect to our
financial condition and results of operation and business that are subject to
various factors which could cause actual results to differ materially from
these estimates including, but not limited to, changes in the real estate
market or local economy, changes in interest rates, changes in laws and
regulations to which we are subject, and competition in our primary market
area.

Any
or all of our forward-looking statements in this Annual Report on Form 10-K and
in any other public statements we make may turn out to be wrong. They can be
affected by inaccurate assumptions we might make or unknown risks and
uncertainties. Consequently, no forward-looking statements can be guaranteed.
We disclaim 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. | BUSINESS

Available Information

The
Company files annual reports, quarterly reports, proxy statements and other
documents with the Securities and Exchange Commission (SEC) under the
Securities Exchange Act of 1934 (Exchange Act). The public may read and copy
any materials that the Company files with the SEC at the SECs Public Reference
Room at 100 F. Street, N.E., Room 1580, Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. Also, the SEC maintains a website that contains reports,
proxy and information statements, and other information regarding issuers,
including the Company, that file electronically with the SEC. The public can
obtain any documents that the Company files with the SEC at www.sec.gov.

The
Company also makes available free of charge through its website
(www.romesavings.com) the Companys Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable,
amendments to those reports filed or furnished pursuant to the Exchange Act as
soon as reasonably practicable after the Company electronically files such
material with, or furnishes it to, the SEC.

General

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 or the Bank), 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.

Rome
Savings 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 and formed Rome Bancorp and Rome, MHC. On April 27,
2004, Rome, MHC, Rome Bancorp and Rome Savings completed their conversions from
New York-chartered companies to federally-chartered companies regulated by the
Office of Thrift Supervision

4

---



(the OTS). On March 30,
2005, Rome, MHC completed its second-step conversion and related stock offering
and 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, 2009, Rome
Bancorp had assets of $329.9 million, deposits of $216.6 million and
stockholders equity of $60.4 million.

Business Strategy

Our
business is 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,
borrowings from the Federal Home Loan Bank, and funds provided by operations.

Market Area

Operations
are conducted out of our executive office in Rome, New York and four branch
offices located in Oneida County, New York, two of which are located in Rome,
one in New Hartford, New York and one in Lee, New York. As of June 30, 2009,
Rome Savings maintained a 7.12% share of all Oneida County, New York deposits,
ranking sixth in size of deposits in Oneida County. Rome Savings also
maintained a 40.99% market share of all reported funds on deposit in the City
of Rome as of June 30, 2009, 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 industries),
wholesale and retail trade, and manufacturing.

Similar
to national trends, in recent years most of the job growth 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 military and defense industry personnel.
Rome, New York is located 15 miles west of Utica and approximately 45 miles
east of Syracuse. Depending on market conditions, we also occasionally
originate loans in the greater New York City metropolitan area, typically
through loan participations, and outside of New York State. At December 31,
2009, Rome Savings total loan portfolio consisted of $282.4 million in loans
located in the State of New York, while $5.3 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.

5

---



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 retain the majority of the loans that we originate.
Currently, we are selling most of the
longer term residential mortgage loans we originate into the secondary market.
At December 31, 2009, Rome Savings had total loans of $287.7 million, of which
$159.4 million, or 55.38%, were one- to four-family residential mortgages and
residential construction loans. Of residential mortgage loans outstanding at
that date, 23.94% were adjustable-rate mortgage loans and 76.06% were
fixed-rate loans. The remainder of Rome Savings loans at December 31, 2009,
amounting to $128.3 million, or 44.62% 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, 2009, 18.46% of Rome Savings loan
portfolio was in commercial real estate loans and 10.58% was in commercial
loans. In addition, as of December 31, 2009, 15.58% of Rome Savings loan
portfolio was in consumer 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.

|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|-------------------------------- |  | ------ | ------- | ------------------ |  | ------ | - | ------------------ | ------- | ------ |  | ------------------ | - | ------ | ------- | ------------------ |  | ------ | - | ------------------ | ------- |  |  | ------ | - | - | ------- |  |  | ------ | -
|                                 |  | 2009   |         | 2008               |  | 2007   |   | 2006               |         | 2005   | 
|                                 |  |        |         |                    |  |        |   |                    |         |        | 
|                                 |  | Amount |         | Percent
 of
 Total |  | Amount |   | Percent
 of
 Total |         | Amount |  | Percent
 of
 Total |   | Amount |         | Percent
 of
 Total |  | Amount |   | Percent
 of
 Total |        
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |        
|Mortgage loans:                  |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|One- to four-family              |  | $      | 155,547 |                    |  | 54.06  | % | $                  | 170,197 |        |  | 56.65              | % | $      | 149,702 |                    |  | 52.91  | % | $                  | 135,078 |  |  | 51.06  | % | $ | 126,422 |  |  | 49.79  | %
|Commercial real estate           |  |        | 52,557  |                    |  | 18.26  |   |                    | 49,231  |        |  | 16.39              |   |        | 49,795  |                    |  | 17.60  |   |                    | 54,493  |  |  | 20.60  |   |   | 52,748  |  |  | 20.78  |  
|Construction and land            |  |        | 4,381   |                    |  | 1.52   |   |                    | 5,827   |        |  | 1.95               |   |        | 5,258   |                    |  | 1.86   |   |                    | 2,562   |  |  | 0.97   |   |   | 3,317   |  |  | 1.31   |  
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|Total mortgage loans             |  |        | 212,485 |                    |  | 73.84  |   |                    | 225,255 |        |  | 74.99              |   |        | 204,755 |                    |  | 72.37  |   |                    | 192,133 |  |  | 72.63  |   |   | 182,487 |  |  | 71.88  |  
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|Commercial loans                 |  |        | 30,429  |                    |  | 10.58  |   |                    | 28,472  |        |  | 9.48               |   |        | 29,127  |                    |  | 10.29  |   |                    | 24,189  |  |  | 9.14   |   |   | 23,832  |  |  | 9.39   |  
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|Consumer loans:                  |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|Automobile                       |  |        | 9,377   |                    |  | 3.26   |   |                    | 12,927  |        |  | 4.30               |   |        | 16,009  |                    |  | 5.66   |   |                    | 17,779  |  |  | 6.72   |   |   | 18,321  |  |  | 7.21   |  
|Property improvement             |  |        | 19,251  |                    |  | 6.69   |   |                    | 17,459  |        |  | 5.81               |   |        | 15,829  |                    |  | 5.59   |   |                    | 15,536  |  |  | 5.87   |   |   | 15,434  |  |  | 6.08   |  
|Other                            |  |        | 16,207  |                    |  | 5.63   |   |                    | 16,276  |        |  | 5.42               |   |        | 17,232  |                    |  | 6.09   |   |                    | 14,900  |  |  | 5.64   |   |   | 13,804  |  |  | 5.44   |  
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|Total consumer loans             |  |        | 44,835  |                    |  | 15.58  |   |                    | 46,662  |        |  | 15.53              |   |        | 49,070  |                    |  | 17.34  |   |                    | 48,215  |  |  | 18.23  |   |   | 47,559  |  |  | 18.73  |  
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|Total loans                      |  |        | 287,749 |                    |  | 100.00 | % |                    | 300,389 |        |  | 100.00             | % |        | 282,952 |                    |  | 100.00 | % |                    | 264,537 |  |  | 100.00 | % |   | 253,878 |  |  | 100.00 | %
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|Less: Allowance for loan
 losses |  |        | 2,132   |                    |  |        |   |                    | 1,936   |        |  |                    |   |        | 1,910   |                    |  |        |   |                    | 1,965   |  |  |        |   |   | 1,960   |  |  |        |  
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  
|Loans, net                       |  | $      | 285,617 |                    |  |        |   | $                  | 298,453 |        |  |                    |   | $      | 281,042 |                    |  |        |   | $                  | 262,572 |  |  |        |   | $ | 251,918 |  |  |        |  
|                                 |  |        |         |                    |  |        |   |                    |         |        |  |                    |   |        |         |                    |  |        |   |                    |         |  |  |        |   |   |         |  |  |        |  

7

---



Loan
Maturity. The following table presents the contractual
maturity of our loan portfolio at December 31, 2009. The table does not include
the effect of prepayments or scheduled principal amortization.

|                         |  |                             |         |                             |   |                 |  |                   |        |  |   |        | 
|------------------------ |  | --------------------------- | ------- | --------------------------- | - | --------------- |  | ----------------- | ------ |  | - | ------ | 
|                         |  | At December 31, 2009        |        
|                         |  | Residential
 Mortgage Loans |         | Commercial RealEstate Loans |   | Consumer
 Loans |  | Commercial
 Loans |       
|                         |  |                             |         |                             |   |                 |  |                   |       
|                         |  | (In thousands)              |        
|Amounts
 due:            |  |                             |         |                             |   |                 |  |                   |        |  |   |        | 
|Within one year          |  | $                           | 31      |                             | $ | 2,422           |  | $                 | 1,332  |  | $ | 12,382 | 
|After one year:          |  |                             |         |                             |   |                 |  |                   |        |  |   |        | 
|One to three years       |  |                             | 929     |                             |   | 607             |  |                   | 8,519  |  |   | 1,859  | 
|Three to five years      |  |                             | 2,482   |                             |   | 2,148           |  |                   | 11,006 |  |   | 2,599  | 
|Five to ten years        |  |                             | 13,356  |                             |   | 4,705           |  |                   | 15,428 |  |   | 5,827  | 
|Ten to twenty years      |  |                             | 63,139  |                             |   | 34,337          |  |                   | 4,533  |  |   | 2,853  | 
|After twenty years       |  |                             | 79,427  |                             |   | 8,902           |  |                   | 4,017  |  |   | 4,909  | 
|                         |  |                             |         |                             |   |                 |  |                   |        |  |   |        | 
|Total due after one year |  |                             | 159,333 |                             |   | 50,699          |  |                   | 43,503 |  |   | 18,047 | 
|                         |  |                             |         |                             |   |                 |  |                   |        |  |   |        | 
|Total loans              |  | $                           | 159,364 |                             | $ | 53,121          |  | $                 | 44,835 |  | $ | 30,429 | 
|                         |  |                             |         |                             |   |                 |  |                   |        |  |   |        | 

The following
table presents, as of December 31, 2009, the dollar amount of all loans, due
after December 31, 2010, and whether these loans have fixed interest rates or adjustable
interest rates.

|                              |  |                             |         |            |   |        |  |   |         | 
|----------------------------- |  | --------------------------- | ------- | ---------- | - | ------ |  | - | ------- | 
|                              |  | Due After December 31, 2010 |        
|                              |  |                             |        
|                              |  | Fixed                       |         | Adjustable |   | Total  | 
|                              |  |                             |         |            |   |        | 
|                              |  | (In thousands)              |        
|                              |  |                             |         |            |   |        | 
|Residential mortgage loans    |  | $                           | 124,211 |            | $ | 35,122 |  | $ | 159,333 | 
|Commercial real estate
 loans |  |                             | 22,990  |            |   | 27,709 |  |   | 50,699  | 
|Consumer loans                |  |                             | 22,796  |            |   | 20,707 |  |   | 43,503  | 
|Commercial loans              |  |                             | 14,748  |            |   | 3,299  |  |   | 18,047  | 
|                              |  |                             |         |            |   |        |  |   |         | 
|Total loans                   |  | $                           | 184,745 |            | $ | 86,837 |  | $ | 271,582 | 
|                              |  |                             |         |            |   |        |  |   |         | 

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

|                                           |  |                                 |         |      |   |         |  |   |         | 
|------------------------------------------ |  | ------------------------------- | ------- | ---- | - | ------- |  | - | ------- | 
|                                           |  | For the Year Ended December 31, |        
|                                           |  |                                 |        
|                                           |  | 2009                            |         | 2008 |   | 2007    | 
|                                           |  |                                 |         |      |   |         | 
|Total loans:                               |  |                                 |         |      |   |         |  |   |         | 
|Balance outstanding at beginning of period |  | $                               | 300,389 |      | $ | 282,952 |  | $ | 264,537 | 
|                                           |  |                                 |         |      |   |         |  |   |         | 
|Originations:                              |  |                                 |         |      |   |         |  |   |         | 
|Mortgage loans                             |  |                                 | 38,563  |      |   | 53,687  |  |   | 39,297  | 
|Commercial and consumer loans              |  |                                 | 12,909  |      |   | 12,706  |  |   | 22,384  | 
|                                           |  |                                 |         |      |   |         |  |   |         | 
|Total originations                         |  |                                 | 51,472  |      |   | 66,393  |  |   | 61,681  | 
|                                           |  |                                 |         |      |   |         |  |   |         | 
|Principal repayments:                      |  |                                 |         |      |   |         |  |   |         | 
|Mortgage loans                             |  |                                 | 40,300  |      |   | 33,136  |  |   | 26,675  | 
|Commercial and consumer
 loans             |  |                                 | 12,432  |      |   | 13,804  |  |   | 14,815  | 
|                                           |  |                                 |         |      |   |         |  |   |         | 
|Total principal payments                   |  |                                 | 52,732  |      |   | 46,940  |  |   | 41,490  | 
|                                           |  |                                 |         |      |   |         |  |   |         | 
|Transfers to foreclosed
 real estate       |  |                                 | 192     |      |   | 505     |  |   | 52      | 
|                                           |  |                                 |         |      |   |         |  |   |         | 
|Loan sales                                 |  |                                 | 11,018  |      |   | 1,163   |  |   | 1,491   | 
|                                           |  |                                 |         |      |   |         |  |   |         | 
|Loans charged off                          |  |                                 | 170     |      |   | 348     |  |   | 233     | 
|                                           |  |                                 |         |      |   |         |  |   |         | 
|                                           |  |                                 |         |      |   |         |  |   |         | 
|Balance outstanding at end
 of period      |  | $                               | 287,749 |      | $ | 300,389 |  | $ | 282,952 | 
|                                           |  |                                 |         |      |   |         |  |   |         | 

8

---



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. Rome Savings does not originate
subprime or interest only mortgage loans. As of December 31, 2009, loans on
one-to four-family residential properties accounted for $159.4 million, or
55.38%, of Rome Savings total loan portfolio. Of residential mortgage loans
outstanding on that date, 23.94% were adjustable-rate mortgage loans and 76.06%
were fixed-rate loans. Rome Savings has
expanded its residential lending activities 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 are 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.

Rome
Savings residential lending policies and procedures conform to secondary
market guidelines. Currently, Rome Savings sells the majority of its newly
originated qualifying fixed-rate longer-term loans into the secondary market,
but continues to retain fixed rate loans with maturities of shorter terms. Rome
Savings originates residential mortgage loans with a loan to value ratio up to
90%. Private mortgage insurance is not required on loans with an 80% or less
loan to value ratio. All mortgages originated with a loan to value above 80%
and up to 95% require private mortgage insurance with 17% to 30% coverage. 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 of Directors on a monthly basis.

Rome
Savings also offers residential construction loans to customers in its primary
lending market. Private mortgage insurance is not currently available on
construction loans. Rome Savings will make construction loans up to a 90% loan
to value ratio. 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 application for the construction/permanent mortgage. Construction loans up
to an 80% loan to value ratio carry a pricing premium of 0.50% to the interest
rate. Construction loans with a loan to value ratio of over 80% and up to 90%
carry an additional pricing premium to the interest rate of 0.25% to 0.50%. All
construction loans carry a fee of 0.50% of the loan amount payable at closing
in addition to standard fees and closing costs.

Rome
Savings adjustable-rate mortgages currently in portfolio 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, 2009, Rome Savings originated no adjustable-rate
residential mortgage loans and $28.7 million in fixed-rate one- to four- family
residential loans. Approximately 31.91% of all residential loan originations
during fiscal 2009 were refinancings of loans already in Rome Savings
portfolio. At December 31, 2009, Rome Savings loan portfolio included $38.1
million in adjustable-rate one to four-family residential mortgage loans, or
13.24% of its total loan portfolio, and $121.3 million in fixed-rate one to four-family
residential mortgage loans, or 42.15% of its total loan portfolio.

9

---



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 propertys historic cash flow, current and
projected occupancy, location and physical condition. At December 31, 2009, our
commercial real estate loan portfolio consisted of 154 loans, totaling $53.1
million, or 18.46%, 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. A portion of Rome Savings commercial
mortgages are participation loans. 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, or on
the successful operation of the owners business for owner occupied properties,
repayment of such loans may be affected by 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 $563,000 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 term
loans, lines of credit and other commercial loans. At December 31, 2009, our commercial loan portfolio consisted of 439
loans, totaling $30.4 million, or 10.58% of total loans. A portion of Rome
Savings commercial loans are participation loans. Term loans are typically
limited to a term of five years. Substantially all lines of credit have
variable interest rates tied to the prime rate. Typically, Rome Savings
collateralizes these loans with a lien on business assets and equipment,
occasionally commercial real estate, plus 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. 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.

10

---



Consumer
Loans.Rome Savings offers a variety of consumer
loans. At December 31, 2009, the consumer loan portfolio totaled $44.8 million
or 15.58% of total loans. Consumer loans generally are offered for terms of up
to 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 a continuing source of loan volume, with
installment loans continuing to account for the major portion of our consumer
lending volume. Property improvement loans, currently comprises the largest
portion of the consumer loan portfolio at 42.94%. Rome Savings makes loans
secured by deposit accounts up to 90% 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%. 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 plus interest monthly. These lines have a
variable interest at prime rate. Access to these lines is by customer checks.All
closing costs are waived providing that the line remains open for at least
three years. In addition, Rome Savings offers fixed rate amortizing installment
home equity loans with terms of up to fifteen 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 $225 to automobile dealers who refer it customers. There is no difference
in the interest rates and terms offered to 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 depreciating
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 it will not incur future losses on these activities.

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: Following underwriting, each mortgage application is reviewed by a
 designated employee or officer who has authority to approve mortgages up to
 $417,000. Mortgages over $417,000 must be presented to the Banks Lending
 Committee, Executive Committee, or Board of Directors for approval.

11

---



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 $7.0 million. The
 maximum amount of any single loan, or combination of loans secured by the
 same collateral, is $3.0 million. 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 and
 Supervision  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.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |   | One designated vice
 president of Rome Savings Bank has the authority to approve commercial loans
 which are secured by liquid collateral up to $425,000 and may approve other
 commercial loans up to $300,000. Rome Savings President and Chief Executive
 Office may approve commercial loans which are secured by liquid collateral up
 to $650,000, and all other commercial loans up to $400,000. Jointly these two
 officers may approve commercial loans which are secured by liquid collateral
 up to $800,000 and 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |   | One designated vice
 president of Rome Savings Bank has the authority to approve commercial
 mortgages up to $325,000. Rome Savings President and Chief Executive
 Officer has authority to approve commercial mortgages up to $500,000. Jointly
 these two 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;
 $150,000 by the Vice President of Consumer Lending or Mortgage Departments;
 and up to $250,000 by the Senior Loan Officer or Rome Savings 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. Also available to

12

---



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 low delinquency ratios and, in comparison to peer
institutions, a relatively low level of 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 servicing
department is responsible for collection procedures from the 15th day up to the
120th day of delinquency. A late charge notice is sent at 15 days. A reminder
letter requesting prompt payment is sent on the 25th day. 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,
a recommendation for foreclosure is presented to the Board of Directors for
approval. Upon approval the loan is forwarded to outside legal counsel to
commence the foreclosure action. If a foreclosure action is commenced and the
loan is brought current, paid in full, or refinanced before the foreclosure
sale, is held, the foreclosure action would be terminated. If Rome Savings
becomes the owner of the real property at the foreclosure sale, it is held as
other real estate owned. The property is valued at fair market value less
estimated selling costs. Other real estate property is actively marketed and
sold by the Bank as soon as practicle. 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 unsuccessful after 120 days, Rome Savings may charge
off a loan and/or refer the matter to an outside collection agency or to the
Banks legal counsel for further collection effort. Monthly, loans deemed
uncollectible are proposed for charge-off. Charge offs up to $10,000 may be
approved by the Banks senior loan officer. Charge-offs $10,000 and greater
require approval of both the senior loan officer and the President of Rome
Savings. All charge-offs are reported to the Board of Directors 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.

13

---



Non-Performing
Assets. Non-performing assets totaled $1.9 million and
$1.6 million at December 31, 2009 and December 31, 2008, 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,
|                                          |  |                 |       |                         |   |       |   |      |      
|                                          |  | 2009            |       | 2008                    |   | 2007  |   | 2006 |       | 2005 |  
|                                          |  |                 |       |                         |   |       |   |      |       |      |  
|                                          |  |                 |       | (Dollars
 in thousands) |   |       |  
|Nonaccruing loans:                        |  |                 |       |                         |   |       |   |      |       |      |   |       |   |   |      |  
|Mortgage loans                            |  | $               | 1,165 |                         | $ | 1,094 |   | $    | 653   |      | $ | 575   |   | $ | 539  |  
|Commercial loans                          |  |                 | 528   |                         |   | 105   |   |      | 271   |      |   | 423   |   |   | 216  |  
|Consumer loans                            |  |                 | 179   |                         |   | 74    |   |      | 44    |      |   | 98    |   |   | 117  |  
|                                          |  |                 |       |                         |   |       |   |      |       |      |   |       |   |   |      |  
|Total                                     |  |                 | 1,872 |                         |   | 1,273 |   |      | 968   |      |   | 1,096 |   |   | 872  |  
|Accruing loans delinquent 90 days or more |  |                 | 43    |                         |   |      |   |      | 35    |      |   | 8     |   |   | 75   |  
|                                          |  |                 |       |                         |   |       |   |      |       |      |   |       |   |   |      |  
|Total non-performing loans                |  |                 | 1,915 |                         |   | 1,273 |   |      | 1,003 |      |   | 1,104 |   |   | 947  |  
|Foreclosed real estate, net               |  |                 |      |                         |   | 331   |   |      | 97    |      |   | 45    |   |   |     |  
|                                          |  |                 |       |                         |   |       |   |      |       |      |   |       |   |   |      |  
|Total non-performing assets               |  | $               | 1,915 |                         | $ | 1,604 |   | $    | 1,100 |      | $ | 1,149 |   | $ | 947  |  
|                                          |  |                 |       |                         |   |       |   |      |       |      |   |       |   |   |      |  
|Non-performing loans to total loans       |  |                 | 0.67  | %                       |   | 0.42  | % |      | 0.35  | %    |   | 0.42  | % |   | 0.37 | %
|Non-performing assets to total assets     |  |                 | 0.58  | %                       |   | 0.47  | % |      | 0.35  | %    |   | 0.38  | % |   | 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 both non-accruing and accruing loans for which 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
$698,000 and $710,000 at December 31, 2009 and 2008, respectively. If all
non-accrual loans had been current in accordance with their terms during the
year ended December 31, 2009, 2008 and 2007, interest income on such loans
would have amounted to $65,300, $85,800 and $78,000, respectively. At December
31, 2009, Rome Savings had no loans which were considered to be a troubled
debt restructuring.

14

---



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,        |   |        |  
|                                                                         |  |      |        |                         |   |        |  
|                                                                         |  | 2009 |        | 2008                    |   | 2007   |   | 2006 |        | 2005 |  
|                                                                         |  |      |        |                         |   |        |   |      |        |      |  
|                                                                         |  |      |        | (Dollars
 in thousands) |   |        |  
|Balance at beginning of year                                             |  | $    | 1,936  |                         | $ | 1,910  |   | $    | 1,965  |      | $ | 1,960  |   | $ | 2,000  |  
|Provision for loan losses                                                |  |      | 300    |                         |   | 300    |   |      | 50     |      |   | 147    |   |   | 115    |  
|Charge-offs:                                                             |  |      |        |                         |   |        |   |      |        |      |   |        |   |   |        |  
|Mortgage loans                                                           |  |      | 15     |                         |   | 15     |   |      |       |      |   | 19     |   |   | 18     |  
|Commercial loans                                                         |  |      | 26     |                         |   | 215    |   |      | 78     |      |   | 50     |   |   | 174    |  
|Consumer loans                                                           |  |      | 129    |                         |   | 118    |   |      | 155    |      |   | 303    |   |   | 495    |  
|                                                                         |  |      |        |                         |   |        |   |      |        |      |   |        |   |   |        |  
|Total                                                                    |  |      | 170    |                         |   | 348    |   |      | 233    |      |   | 372    |   |   | 687    |  
|Recoveries                                                               |  |      |        |                         |   |        |   |      |        |      |   |        |   |   |        |  
|Mortgage loans                                                           |  |      | 4      |                         |   | 2      |   |      | 1      |      |   | 10     |   |   | 4      |  
|Commercial loans                                                         |  |      | 1      |                         |   | 1      |   |      | 21     |      |   | 79     |   |   | 419    |  
|Consumer loans                                                           |  |      | 61     |                         |   | 71     |   |      | 106    |      |   | 141    |   |   | 109    |  
|                                                                         |  |      |        |                         |   |        |   |      |        |      |   |        |   |   |        |  
|Total                                                                    |  |      | 66     |                         |   | 74     |   |      | 128    |      |   | 230    |   |   | 532    |  
|                                                                         |  |      |        |                         |   |        |   |      |        |      |   |        |   |   |        |  
|Net charge-offs                                                          |  |      | 104    |                         |   | 274    |   |      | 105    |      |   | 142    |   |   | 155    |  
|                                                                         |  |      |        |                         |   |        |   |      |        |      |   |        |   |   |        |  
|Balance at end of year                                                   |  | $    | 2,132  |                         | $ | 1,936  |   | $    | 1,910  |      | $ | 1,965  |   | $ | 1,960  |  
|                                                                         |  |      |        |                         |   |        |   |      |        |      |   |        |   |   |        |  
|Ratio of net charge-offs to average loans
 outstanding during the period |  |      | 0.04   | %                       |   | 0.09   | % |      | 0.04   | %    |   | 0.06   | % |   | 0.06   | %
|Allowance for loan losses as a percent of
 loans                         |  |      | 0.74   | %                       |   | 0.64   | % |      | 0.68   | %    |   | 0.74   | % |   | 0.77   | %
|Allowance for loan losses as a percent of
 non-performing loans          |  |      | 111.40 | %                       |   | 152.08 | % |      | 190.40 | %    |   | 177.99 | % |   | 207.00 | %

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, 2009, we increased our allowance for loan losses
through a $300,000 provision for loan losses based on our evaluation of the
items discussed above. We believe that the allowance for loan 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, $8.76 million in potential problem loans at December 31, 2009.
Payments are current on $8.70 million or 99.28% 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 of Financial Condition and Results of Operations - Comparison of
Results of Operations for the Years Ended December 31, 2009 and December 31,
2008 - Provision for Loan Losses incorporated into this document by reference
to the Annual Report attached hereto as Exhibit 13.1.

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,        |      
|                                |  |                         |      
|                                |  | 2009                    |       | 2008                                      |  | 2007   |   | 2006                                      |       | 2005   | 
|                                |  |                         |       |                                           |  |        |   |                                           |       |        | 
|                                |  | 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 Loans |  | Amount |   | Loans in
 Each
 Category to
 Total Loans |      
|                                |  |                         |       |                                           |  |        |   |                                           |       |        |  |                                           |   |        |       |                                           |  |        |   |                                          |      
|                                |  | (Dollars
 in thousands) |      
|Mortgage loans:                 |  |                         |       |                                           |  |        |   |                                           |       |        |  |                                           |   |        |       |                                           |  |        |   |                                          |       |  |  |        |   |   |       |  |  |        |  
|One to four-family              |  | $                       | 160   |                                           |  | 54.06  | % | $                                         | 132   |        |  | 56.65                                     | % | $      | 141   |                                           |  | 52.91  | % | $                                        | 117   |  |  | 51.06  | % | $ | 129   |  |  | 49.79  | %
|Commercial real estate          |  |                         | 514   |                                           |  | 18.26  |   |                                           | 746   |        |  | 16.39                                     |   |        | 618   |                                           |  | 17.60  |   |                                          | 721   |  |  | 20.60  |   |   | 664   |  |  | 20.78  |  
|Construction & land             |  |                         | 0     |                                           |  | 1.52   |   |                                           | 0     |        |  | 1.95                                      |   |        | 0     |                                           |  | 1.86   |   |                                          | 0     |  |  | 0.97   |   |   | 0     |  |  | 1.31   |  
|                                |  |                         |       |                                           |  |        |   |                                           |       |        |  |                                           |   |        |       |                                           |  |        |   |                                          |       |  |  |        |   |   |       |  |  |        |  
|Total mortgage loans            |  |                         | 674   |                                           |  | 73.84  |   |                                           | 878   |        |  | 74.99                                     |   |        | 759   |                                           |  | 72.37  |   |                                          | 838   |  |  | 72.63  |   |   | 793   |  |  | 71.88  |  
|                                |  |                         |       |                                           |  |        |   |                                           |       |        |  |                                           |   |        |       |                                           |  |        |   |                                          |       |  |  |        |   |   |       |  |  |        |  
|Commercial loans                |  |                         | 940   |                                           |  | 10.58  |   |                                           | 575   |        |  | 9.48                                      |   |        | 689   |                                           |  | 10.29  |   |                                          | 667   |  |  | 9.14   |   |   | 712   |  |  | 9.39   |  
|                                |  |                         |       |                                           |  |        |   |                                           |       |        |  |                                           |   |        |       |                                           |  |        |   |                                          |       |  |  |        |   |   |       |  |  |        |  
|Consumer loans                  |  |                         | 518   |                                           |  | 15.58  |   |                                           | 483   |        |  | 15.53                                     |   |        | 462   |                                           |  | 17.34  |   |                                          | 460   |  |  | 18.23  |   |   | 455   |  |  | 18.73  |  
|                                |  |                         |       |                                           |  |        |   |                                           |       |        |  |                                           |   |        |       |                                           |  |        |   |                                          |       |  |  |        |   |   |       |  |  |        |  
|                                |  |                         |       |                                           |  |        |   |                                           |       |        |  |                                           |   |        |       |                                           |  |        |   |                                          |       |  |  |        |   |   |       |  |  |        |  
|Total allowance for loan losses |  | $                       | 2,132 |                                           |  | 100.00 | % | $                                         | 1,936 |        |  | 100.00                                    | % | $      | 1,910 |                                           |  | 100.00 | % | $                                        | 1,965 |  |  | 100.00 | % | $ | 1,960 |  |  | 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 to the Executive Vice
President/Chief Financial Officer. The Executive Vice President/Chief Financial
Officer reports to the Asset Liability Committee (ALCO) 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 the Federal Home
Loan Mortgage Corporation (FHLMC), Government National Mortgage Association
(GNMA) or Federal National Mortgage Association (FNMA), 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. Finally, Rome Savings and Rome Bancorp have
investments in Federal Home Loan Bank (FHLB) stock and other equity
securities, which are classified as available for sale.

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,        |       
|                                         |  |                         |       
|                                         |  | 2009                    |        | 2008        |   | 2007            | 
|                                         |  |                         |        |             |   |                 | 
|                                         |  | Amortized
 Cost         |        | Fair
 Value |   | Amortized
 Cost |  | Fair
 Value |       | Amortized
 Cost |   | Fair
 Value | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             | 
|                                         |  | (Dollars
 in thousands) |       
|Held to Maturity:                        |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|Mortgage-backed securities               |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|GNMA                                     |  | $                       | 1      |             | $ | 1               |  | $           | 7     |                 | $ | 7           |  | $ | 14    |  | $ | 15    | 
|FHLMC                                    |  |                         |       |             |   |                |  |             |      |                 |   |            |  |   | 1     |  |   | 1     | 
|U.S. Government securities               |  |                         | 1,316  |             |   | 1,387           |  |             | 1,322 |                 |   | 1,436       |  |   | 1,001 |  |   | 1,048 | 
|Other bonds                              |  |                         | 114    |             |   | 114             |  |             | 118   |                 |   | 118         |  |   | 131   |  |   | 131   | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|Total held to maturity                   |  |                         | 1,431  |             |   | 1,502           |  |             | 1,447 |                 |   | 1,561       |  |   | 1,147 |  |   | 1,195 | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|Available for sale:                      |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|Corporate bonds                          |  |                         | 6,597  |             |   | 6,643           |  |             |      |                 |   |            |  |   |      |  |   |      | 
|State and Municipal obligations          |  |                         | 2,294  |             |   | 2,413           |  |             | 2,620 |                 |   | 2,663       |  |   | 1,255 |  |   | 1,284 | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|Mortgage-backed securities               |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|FHLMC                                    |  |                         |       |             |   |                |  |             | 24    |                 |   | 24          |  |   | 259   |  |   | 261   | 
|FNMA                                     |  |                         |       |             |   |                |  |             | 4     |                 |   | 4           |  |   | 45    |  |   | 45    | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|Total available for sale debt securities |  |                         | 8,891  |             |   | 9,056           |  |             | 2,648 |                 |   | 2,691       |  |   | 1,559 |  |   | 1,590 | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|Equity securities                        |  |                         | 872    |             |   | 968             |  |             | 872   |                 |   | 872         |  |   | 1,137 |  |   | 1,084 | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|Total available for sale                 |  |                         | 9,763  |             |   | 10,024          |  |             | 3,520 |                 |   | 3,563       |  |   | 2,696 |  |   | 2,674 | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|FHLB stock                               |  |                         | 3,222  |             |   | 3,222           |  |             | 3,578 |                 |   | 3,578       |  |   | 2,344 |  |   | 2,344 | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 
|Total investment securities              |  | $                       | 14,416 |             | $ | 14,748          |  | $           | 8,545 |                 | $ | 8,702       |  | $ | 6,187 |  | $ | 6,213 | 
|                                         |  |                         |        |             |   |                 |  |             |       |                 |   |             |  |   |       |  |   |       | 

19

---



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, 2009.

|                                    |  |                        |       |                                          |  |                                           |   |                          |       |                 |  |                          |   |                 |       |                          |  |                 |   |                          |     |  |  |      |   |   |        |  |  |       |  
|----------------------------------- |  | ---------------------- | ----- | ---------------------------------------- |  | ----------------------------------------- | - | ------------------------ | ----- | --------------- |  | ------------------------ | - | --------------- | ----- | ------------------------ |  | --------------- | - | ------------------------ | --- |  |  | ---- | - | - | ------ |  |  | ----- | -
|                                    |  | One Year or Less       |       | More Than One Year
 less than Five Years |  | More Than Five Years
 less than Ten Years |   | More Than Ten Years      |       | Total           | 
|                                    |  |                        |       |                                          |  |                                           |   |                          |       |                 | 
|                                    |  | Carrying
 Value        |       | Weighted
 Average
 Yield                 |  | Carrying
 Value                           |   | Weighted
 Average
 Yield |       | Carrying
 Value |  | Weighted
 Average
 Yield |   | Carrying
 Value |       | Weighted
 Average
 Yield |  | Carrying
 Value |   | Weighted
 Average
 Yield |    
|                                    |  |                        |       |                                          |  |                                           |   |                          |       |                 |  |                          |   |                 |       |                          |  |                 |   |                          |    
|                                    |  | (Dollars in thousands) |      
|Available for sale securities:      |  |                        |       |                                          |  |                                           |   |                          |       |                 |  |                          |   |                 |       |                          |  |                 |   |                          |     |  |  |      |   |   |        |  |  |       |  
|                                    |  |                        |       |                                          |  |                                           |   |                          |       |                 |  |                          |   |                 |       |                          |  |                 |   |                          |     |  |  |      |   |   |        |  |  |       |  
|State and municipal obligations (1) |  | $                      |      |                                          |  |                                          |   | $                        | 1,050 |                 |  | 5.25                     | % | $               | 1,363 |                          |  | 6.04            | % | $                        |    |  |  |     |   | $ | 2,413  |  |  | 5.70  | %
|Corporate bonds                     |  |                        | 1,200 |                                          |  | 4.09                                      | % |                          | 5,443 |                 |  | 4.20                     | % |                 |      |                          |  |                |   |                          |    |  |  |     |   |   | 6,643  |  |  | 4.18  | %
|                                    |  |                        |       |                                          |  |                                           |   |                          |       |                 |  |                          |   |                 |       |                          |  |                 |   |                          |     |  |  |      |   |   |        |  |  |       |  
|Held to maturity securities:        |  |                        |       |                                          |  |                                           |   |                          |       |                 |  |                          |   |                 |       |                          |  |                 |   |                          |     |  |  |      |   |   |        |  |  |       |  
|U.S. Government securities          |  |                        |      |                                          |  |                                          |   |                          | 1,316 |                 |  | 4.03                     | % |                 |      |                          |  |                |   |                          |    |  |  |     |   |   | 1,316  |  |  | 4.03  | %
|Mortgage-backed securities          |  |                        | 1     |                                          |  | 12.51                                     | % |                          |      |                 |  |                         |   |                 |      |                          |  |                |   |                          |    |  |  |     |   |   | 1      |  |  | 12.51 | %
|Other                               |  |                        |      |                                          |  |                                          |   |                          |      |                 |  |                         |   |                 |      |                          |  |                |   |                          | 114 |  |  | 5.60 | % |   | 114    |  |  | 5.60  | %
|                                    |  |                        |       |                                          |  |                                           |   |                          |       |                 |  |                          |   |                 |       |                          |  |                 |   |                          |     |  |  |      |   |   |        |  |  |       |  
|                                    |  |                        |       |                                          |  |                                           |   |                          |       |                 |  |                          |   |                 |       |                          |  |                 |   |                          |     |  |  |      |   |   |        |  |  |       |  
|Total debt securities               |  | $                      | 1,201 |                                          |  | 4.10                                      | % | $                        | 7,809 |                 |  | 4.31                     | % | $               | 1,363 |                          |  | 6.04            | % | $                        | 114 |  |  | 5.60 | % | $ | 10,487 |  |  | 4.53  | %
|                                    |  |                        |       |                                          |  |                                           |   |                          |       |                 |  |                          |   |                 |       |                          |  |                 |   |                          |     |  |  |      |   |   |        |  |  |       |  

|    |                                                 
|--- | ------------------------------------------------
|   
|(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 of Financial
Condition and Results of Operations  Liquidity and Capital Resources
incorporated into this document by reference to the Annual Report attached as
Exhibit 13.1.

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 66.8% and 65.0% of total deposits on December 31, 2009
and 2008, respectively. At December 31, 2009 and 2008, time deposits with
remaining terms to maturity of less than one year amounted to $50.4 million and
$54.4 million, respectively. See Managements Discussion and Analysis of
Financial Condition and Results of Operations - Analysis of Net Interest
Income for information relating to the average balances and costs of our
deposit accounts for the years ended December 31, 2009, 2008 and 2007.

At
December 31, 2009, we had $16.5 million in time deposits with balances of
$100,000 or more maturing as follows:

|                                      |  |                 |        | 
|------------------------------------- |  | --------------- | ------ | 
|Maturity
 Period                      |  | Amount          |       
|                                      |  |                 |       
|                                      |  | (In
 thousands) |       
|Three months
 or less                 |  | $               | 2,570  | 
|Over three
 months through six months |  |                 | 4,498  | 
|Over six
 months through 12 months    |  |                 | 6,054  | 
|Over 12
 months                       |  |                 | 3,363  | 
|                                      |  |                 |        | 
|Total                                 |  | $               | 16,485 | 
|                                      |  |                 |        | 

Borrowings.
At December 31, 2009, we had outstanding borrowings of $47.9 million which were
used to fund loan growth, purchase treasury stock and finance other
investments. 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 $44.1 million, of which $43.0 million remained available at December
31, 2009.

Subsidiary Activities

Rome
Savings has four subsidiaries: 100 On the Mall Corporation, Clocktower
Insurance Agency Incorporated, RSB Properties, Inc. 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 until January of 2010
had been leased to a Dunkin Donuts franchise adjacent to one of our branch
offices. This property was sold to a third party in January 2010. RSB
Properties, Inc. is a real estate investment trust. RSB Capital, Inc. is
currently inactive.

21

---



Employees

At
December 31, 2009, Rome Savings had 96 full-time employees and 5 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 Savings, as a federally-chartered
savings bank, is subject to regulation, examination and supervision by the OTS,
as its primary regulator, and the Federal Deposit Insurance Corporation (the
FDIC), as its deposit insurer. Rome Savings must file reports with the OTS
concerning its activities and financial condition. Rome Bancorp is also
required to file reports with, and otherwise comply with, the rules and
regulations of the OTS and of the SEC under the federal securities laws.

The OTS and the FDIC have
significant discretion in connection with their supervisory and enforcement
activities and examination policies or any other policies, including policies
with respect to Rome Savings capital levels, classification of assets and
establishment of adequate loan loss reserves for regulatory purposes. Any
change in such policies, whether by the OTS, the FDIC, the SEC or the United
States Congress, could have a material adverse impact on Rome Bancorp, Rome
Savings, and their operations and stockholders.

The description of statutory
provisions and regulations applicable to federally chartered savings
associations and their holding companies and of tax matters set forth in this
document does not purport to be a complete description of all such statutes and
regulations and their effects on Rome Bancorp and Rome Savings.

Proposed Government Actions

On
December 11, 2009, the House of Representatives passed H.R. 4173, the Wall
Street Reform and Consumer Protection Act of 2009, or the Reform Bill. The
Reform Bill is intended to address perceived weaknesses in the U.S. financial
regulatory system and prevent future economic and financial crises. The Reform
Bill, among other things, would create three new governmental agencies: the
Financial Services Oversight Council, the Federal Insurance Office and the
Consumer Financial Protection Agency (the CFPA). The CFPA will have the
authority to implement and enforce a variety of existing consumer protection
statutes and to issue new regulations. In addition, the Reform Bill would
establish a Division of Thrift Supervision, or the Division, within the Office
of the Comptroller of the Currency and abolish the OTS and transfer its
functions and personnel to the Division. The Reform Bill preserves the thrift
charter for thrifts, such as Rome Savings. Most significantly for us, the
Reform Bill contains provisions which would result in thrift holding companies,
such as Rome Bancorp, becoming bank holding companies subject to consolidated
capital requirements, Bank Holding Company Act limitations and supervision by
the Board of Governors of the Federal Reserve System (the FRB). Similar
legislation is being currently considered by the Senates Banking Committee.
The Senates proposed legislation contemplates elimination of the federal
thrift charter with federal thrifts being regulated by a proposed new federal
banking agency. The timing and ultimate implications of any final legislation
cannot be determined at this time.

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 OTS regulations. 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
and

22

---



securities and brokerage
activities. Rome Savings authority to make certain types of loans or other
investments is limited by federal law and regulation.

On October 30, 2009, the
Agencies adopted a policy statement supporting CRE loan workouts, or the CRE Policy
Statement. The CRE Policy Statement provides guidance for examiners, and for
financial institutions that are working with CRE borrowers who are experiencing
diminished operating cash flows, depreciated collateral values, or prolonged
delays in selling or renting commercial properties. The CRE Policy Statement
details risk-management practices for loan workouts that support prudent and
pragmatic credit and business decision-making within the framework of financial
accuracy, transparency, and timely loss recognition. Financial institutions
that implement prudent loan workout arrangements after performing comprehensive
reviews of borrowers financial conditions will not be subject to criticism for
engaging in these efforts, even if the restructured loans have weaknesses that
result in adverse credit classifications. In addition, performing loans,
including those renewed or restructured on reasonable modified terms, made to
creditworthy borrowers, will not be subject to adverse classification solely
because the value of the underlying collateral declined. The CRE Policy
Statement reiterates existing guidance that examiners are expected to take a
balanced approach in assessing institutions risk-management practices for loan
workout activities.

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; and                    
| |   |                                                               
| |  | 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, 2009, 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 a
 savings association has been assigned the highest composite rating of 1 under
 the Uniform Financial Institutions Rating System; and                      
| |     |                                                                                                                                                                                                                                                      
| | (3) | a total 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

23

---



will be 4.0%,
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 and certain other assets to 100% for consumer,
commercial, home equity and construction loans and certain other assets, 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 intangible assets (other than certain servicing rights and
nonsecurity financial instruments) 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 supplementary 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.

At December
31, 2009, Rome Savings met and exceeded each of its capital requirements. The
table below presents Rome Savings regulatory capital as compared to the OTS
regulatory capital requirements at December 31, 2009:

|                    |  |                |        |                       |  |                 |        |  |  |   |        | 
|------------------- |  | -------------- | ------ | --------------------- |  | --------------- | ------ |  |  | - | ------ | 
|                    |  | Bank           |        | Capital
 Requirements |  | Excess
 Capital |       
|                    |  |                |        |                       |  |                 |       
|                    |  | (In thousands) |       
|                    |  |                |        |                       |  |                 |        |  |  |   |        | 
|Tangible
 capital   |  | $              | 54,046 |                       |  | $               | 9,963  |  |  | $ | 44,083 | 
|                    |  |                |        |                       |  |                 |        |  |  |   |        | 
|Core capital        |  | $              | 54,046 |                       |  | $               | 9,963  |  |  | $ | 44,083 | 
|                    |  |                |        |                       |  |                 |        |  |  |   |        | 
|Risk-based
 capital |  | $              | 55,866 |                       |  | $               | 19,394 |  |  | $ | 36,472 | 

Interest Rate Risk

The Federal Deposit Insurance Corporation Improvement Act requires that
the OTS and other federal bank regulatory agencies (the Agencies) revise
their risk-based capital standards, with appropriate transition rules, to
ensure that they take into account IRR concentration of risk and the risks of
non-traditional activities. The OTS regulations do not include a specific IRR
component of the risk-based capital requirement. However, the OTS monitors the
IRR of individual institutions through a variety of means, including an
analysis of the change in net portfolio value, or NPV. NPV is defined as the
net present value of the expected future cash flows of an entitys assets and
liabilities and, therefore, hypothetically represents the value of an
institutions net worth. In addition, OTS Thrift Bulletin 13a provides guidance
on the management of IRR and the responsibility of boards of directors in that
area.

In January 2010, the Agencies released an Advisory on Interest Rate
Risk Management (the IRR Advisory) to remind institutions of the supervisory
expectations regarding sound practices for managing IRR. While some degree of
IRR is inherent in the business of banking, the Agencies expect institutions to
have sound risk management practices in place to measure, monitor and control
IRR exposures, and IRR management should be an integral component
of an institutions risk management infrastructure. The Agencies expect all institutions to manage their IRR exposures
using processes and systems commensurate with their earnings and capital
levels, complexity, business model, risk profile and scope of operations, and
the IRR Advisory reiterates the importance of effective corporate
governance, policies and procedures, risk measuring and monitoring systems,
stress testing,

24

---



and internal
controls related to the IRR exposures of institutions.

The IRR Advisory encourages institutions to use a variety
of techniques to measure IRR exposure, including simple maturity gap analysis,
income measurement and valuation measurement for assessing the impact of
changes in market rates, as well as simulation modeling to measure IRR
exposure. Institutions are encouraged to use the full complement of analytical
capabilities of their IRR simulation models. The IRR Advisory also reminds
institutions that stress testing, which includes both scenario and sensitivity
analysis, is an integral component of IRR management. The IRR Advisory
indicates that institutions should regularly assess IRR exposures beyond
typical industry conventions, including changes in rates of greater magnitude
(e.g., up and down 300 and 400 basis points, as compared to up and down 200
basis points, which has been the general practice) across different tenors to
reflect changing slopes and twists of the yield curve. The Company utilizes a
simulation model to track liquidity, portfolio value and interest rate
sensitivity of its financial instruments over a range of possible interest rate
scenario. These results are reviewed at least quarterly by the companys Asset
Liability Committee, which includes certain members of the Companys Board of
Directors and Senior Management.

Community Reinvestment Act.
Under the Community Reinvestment Act (CRA), as implemented by OTS
regulations, Rome Savings has a continuing and affirmative obligation,
consistent with its safe and sound operation, to ascertain and 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 Rome
Savings nor does it limit Rome Savings discretion to develop the types of
products and services that it believes are best suited to its particular
community, consistent with the CRA. Rather, the CRA requires the OTS, in
connection with its examination of a federally chartered 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 association.

The CRA
regulations rate an institution 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.                                                                                                        

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.
Regulations require that Rome Savings publicly disclose certain agreements that
are in fulfillment of CRA. There are no such agreements at this time.

Transactions with Affiliates.
Rome Savings authority to engage in transactions with its affiliates is
limited by the Sections 23A and 23B of the Federal Reserve Act (the FRA) and
Regulation W issued by the FRB, as made applicable to federal savings
associations by the HOLA and the OTS regulations. 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

25

---



shareholders,
as well as to entities controlled by such persons, is currently governed by the
requirements of Sections 22(g) and 22(h) of the FRA and Regulation O issued by
the FRB, as made applicable to federal savings associations by the HOLA and the
OTS regulations. 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 third parties 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.                                                                                                                                         

In addition,
extensions for credit in excess of certain limits must be approved by Rome
Savings Board of Directors.

Enforcement. The OTS
has primary enforcement responsibility over federally chartered 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.
Pursuant to the Federal Deposit Insurance Act, the OTS has adopted a set of
guidelines prescribing safety and soundness standards. These guidelines
establish general standards relating to internal 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 manage the risks and exposures specified in the
guidelines.

In addition,
the OTS adopted regulations that authorize, but do not require, the OTS to
order a savings association that has been given notice that it is not
satisfying these safety and soundness standards to submit a compliance plan.
If, after being notified, a savings association 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 a
savings association fails to comply with such an order, the OTS may seek to
enforce such order in judicial proceedings and to impose civil money penalties.

Limitation on Capital Distributions.
The OTS imposes various restrictions or requirements on Rome Savings ability
to make capital distributions, including the payment of cash dividends. A
savings association 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.

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

26

---



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, 2009, Rome Savings met the criteria for being considered
well-capitalized. When 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 Deposit Insurance Fund (DIF) maintained by
the FDIC, and Rome Savings pays its deposit insurance assessments to the DIF.
The DIF was formed on March 31, 2006, following the merger of the Bank
Insurance Fund and the Savings Association Insurance Fund in accordance with
the Federal Deposit Insurance Reform Act of 2005 (DIF Act). In addition to
merging the insurance funds, the DIF Act established a statutory minimum and
maximum designated reserve ratio for the Deposit Insurance Fund and granted the
FDIC greater flexibility in establishing the required reserve ratio. In its
regulations implementing the DIF Act, the FDIC had previously set the annual
designated reserve ratio for the Deposit Insurance Fund at 1.25%. However, as a
result of the recent failures of a number of banks and thrifts, there has been
a significant increase in the loss provisions of the DIF of the FDIC. This
increase has resulted in a decline in the DIF reserve ratio. Because the DIF
reserve ratio declined, and for the foreseeable future is expected to remain,
below 1.15%, the FDIC established a restoration plan to restore the DIF reserve
ration to 1.15% within five years.

As a result of
the recent failures of a number of banks and thrifts, there has been a
significant increase in the loss provisions of the DIF of the FDIC. This has
resulted in a decline in the DIF reserve ratio. Because the DIF reserve ratio
declined below 1.15% the FDIC was required to establish a restoration plan to
restore the reserve ratio to 1.15% within five years. In order to restore the
reserve ratio to 1.15%, the FDIC increased risk-based assessment rates
uniformly by 7 basis points (annualized) during the first quarter of 2009.
Thereafter, the FDIC further increased the initial base assessment rates,
beginning with the second quarter of 2009, depending on an institutions risk
category, with adjustments resulting in increased assessment rates for
institutions with a significant reliance on secured liabilities and brokered
deposits. In May of 2009 the FDIC imposed a five basis point special assessment
on each insured depository institutions assets minus Tier 1 capital as of June
30, 2009. The special assessment was $142,000 for Rome Savings and was
collected on September 30, 2009.

On September
29, 2009, the FDIC adopted an amendment to the restoration plan that increases
the deposit insurance assessment rate schedule uniformly across all four risk
categories by three basis points (annualized) of insured deposits beginning
January 1, 2011. In addition, on November 17, 2009 the FDIC adopted a final
rule which required insured depository institutions to prepay their estimated
quarterly risk-based assessments for the fourth quarter of 2009 and for all of
2010, 2011 and 2012. The prepaid assessment for these periods was collected on
December 30, 2009 and Rome Savings prepaid assessment was $752,000 which was
recorded as a prepaid expense.

In addition,
all FDIC-insured institutions are required to pay a pro rata portion of the
interest due on obligations issued by the Financing Corporation to fund the
closing and disposal of failed thrift institutions by the Resolution Trust
Corporation. At December 31, 2009, the Federal Deposit Insurance Corporation
assessed Deposit Insurance Fund-insured deposits 1.06 basis points per $100 of
deposits to cover those obligations. The Financing Corporation rate is adjusted
quarterly to reflect changes in assessment bases of the Deposit Insurance Fund.
This

27

---



obligation
will continue until the Financing Corporation bonds mature in 2017 through
2019.

Federal Home Loan Bank System.
Rome Savings is a member of 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, 2009 of $3.2 million.
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.
Under regulations of the FRB, Rome Savings is required to maintain
noninterest-earning reserves against its transaction accounts (primarily NOW
and regular checking accounts). The FRB regulations exempt $10.7 million of
otherwise reservable balances (subject to adjustment by the FRB) from the
reserve requirements. A 3% reserve is required for net transaction account
balances between $10.7 million and $55.2 million (subject to adjustment by the
FRB) plus a reserve requirement 10% (subject to adjustment by the FRB between
8% and 14%) against that portion of total transaction accounts in excess of
$55.2 million. Rome Savings is in compliance with the foregoing reserve
requirements. Because required reserves must be maintained in the form of 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 the Banks 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 associations are subject to prohibitions on certain tying
arrangements. A depository institution is prohibited, subject to certain
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 product or service from the
institution or its affiliates or not obtain 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;

28

---



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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; and                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | bank
 regulators are directed to consider a banks or holding companys
 effectiveness in combating 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. 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.

Regulation of Savings and Loan Holding
Companies

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 association
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 association. Unlike bank
holding companies, federal savings and loan holding companies are not subject
to any regulatory capital requirements or to supervision by the FRB.

In general, a
SLHC, with the prior approval of the OTS, may engage in all activities that
bank holding companies may engage in under any regulation that the FRB has
promulgated under Section 4(c) of the BHC Act. Current regulations limit such
authority to those activities that the FRB has, by regulation, determined to be
permissible under Section 4(c)(8) of the BHC Act, as noted below. Prior
approval from the OTS is not required, however, if: (1) the SLHC received a
rating of satisfactory or above prior to January 1, 2008, or a composite rating
of 1 or 2 thereafter, in its most recent examination, and its not in
troubled condition, and the holding company does not propose to commence the
activity by an acquisition of a going concern, or (2) the activity is otherwise
permissible under another provision of HOLA, for which prior notice to or
approval from the OTS is not required.

In addition, a
SLHC is precluded from acquiring more than 5% of a non-subsidiary thrift unless
the SLHC receives prior approval from the OTS. No savings and loan holding
company may, directly or indirectly, or through one or more subsidiaries or
through one or more transactions, acquire control of an uninsured institution
or retain, for more than one year after the date any savings association
subsidiary becomes uninsured, control of such 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:

29

---



|                                                                                                                                  |                                                                                                                                                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                 | 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 holding 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 of 2002,
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;

30

---



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 independent 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. 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.

Federal Securities Laws.
Rome Bancorps common stock is registered with the SEC under Section 12(b) 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.

Quotation on Nasdaq.
Rome Bancorps common stock is quoted on The Nasdaq Global 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;

31

---



|  |                                                                                                                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 the rules
 of the Nasdaq Stock Market and the Exchange Act regulations;
|  |                                                                                                                                                                                                                              
| | its
 nominating committee and compensation committee must also be composed
 entirely of independent directors; and                                                                                                           
|  |                                                                                                                                                                                                                              
| | each of the
 audit committee, and nominating committee must have a publicly available
 written charter.                                                                                                                      

|         |             
|-------- | ------------
|ITEM 1A. | RISK FACTORS

Our
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.

Due
to our large capital position, our return on equity may be 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. Rome Savings has
equity capital in excess of regulatory requirements, which while positive,
lowers our return on equity. Our return on average equity amounted to 5.27%

32

---



and 4.47% in
2009 and 2008, respectively.

Because
Rome Savings loans are concentrated in a small geographical area, recent
downturns in the local and national economy may affect its profitability and
future growth possibilities. We are operating in a
challenging and uncertain economic environment, both nationally and locally, as
the U.S. economy entered a recession early in 2008. Financial institutions
generally continue to be affected by sharp declines in the real estate market
and constrained financial markets. While it is experiencing the effects of the
recent economic downturn, Oneida County did not experience the rate of economic
growth enjoyed in other parts of the United States prior to this downturn and
thus has not yet been subject to a rapid decline in its economic environment
which is being seen in other parts of the United States. Continued declines in
real estate values and homes sales volumes and increases in the financial
stress on borrowers as a result of the uncertain economic environment, including
job losses, could have an adverse effect on our borrowers or their customers,
which could adversely affect our financial condition and results of operations.
In addition, decreases in real estate values could adversely affect the value
of property used as collateral for our loans. Adverse changes in the economy
may also increase the risk of loan defaults and result in deposit 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 the weakened economy, the increase in unemployment, the
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.

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, which requires
annual management assessments of the effectiveness of our internal controls
over financial reporting. Both we and our independent registered public
accounting firm test our internal controls in connection with the Section 404
requirements and attempt to 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

33

---



FDIC, as
insurer of deposits. Such regulation and supervision 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.

We
expect to face increased regulation and supervision of our industry as a result
of the existing financial crisis, and there will be additional requirements and
conditions imposed on us to the extent that we participate in any of the
programs established or to be established by the U.S. Treasury under the
Emergency Economic Stabilization Act of 2008 (EESA), as described below, or
by the federal bank regulatory agencies. 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.

During
2008 and 2009, there was unprecedented government intervention in response to
the financial crises affecting the banking system and financial markets,
including:

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The
 enactment of the EESA in October 2008, which gave the Treasury the authority
 to, among other things, purchase up to $700 billion of troubled assets from
 financial institutions;                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The
 announcements shortly thereafter by the Treasury, the FDIC and the FRB,
 respectively, of (i) the Capital Purchase Program (CPP), a $250 billion
 voluntary capital purchase program under which qualifying financial
 institutions were given the ability to sell preferred shares to the Treasury,
 (ii) the Temporary Liquidity Guarantee Program (TLGP) and (iii) further
 details of the Commercial Paper Funding Facility (CPFF), which provides a
 broad backstop for the commercial paper market;                                                                                                                       
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The
 announcement by the Treasury in February 2009 of the Capital Assistance
 Program (CAP), under which qualifying financial institutions were provided
 access to contingent common equity provided by the U.S. government as a
 bridge to private capital in the future;                                                                                                                                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The
 announcement by the federal banking regulators of the Supervisory Capital
 Assessment Program, under which the federal banking regulators measured how
 much of an additional capital buffer, if any, each of the 19 largest U.S.
 bank holding companies would need to establish to ensure that it would have
 sufficient capital to comfortably exceed minimum regulatory requirements at
 December 31, 2010, as a result of which many of the nineteen
 institutions underwent capital raising or restructuring transactions; and                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The
 announcement by the Treasury in March 2009, in conjunction with the FDIC and
 the FRB, of the Public-Private Investment Program (PPIP), which consists of
 two discrete components: (1) the Legacy Loan Program, which was designed to
 facilitate the sale of commercial and residential whole loans and other
 assets currently held by U.S. banks, and (2) the Legacy Securities Program,
 which was designed to facilitate the sale of legacy residential mortgage
 backed securities and commercial mortgage backed securities initially rated
 AAA and currently held by Financial Institutions (as defined under the EESA).

We did not
participate in the TLGP, the CPP, the CPFF or the CAP, and we do not expect to
participate in either PPIP program.

Although
it appears that there has been some stabilization of the U.S. financial markets
as a result of the foregoing programs and other actions taken by the U.S.
government, there can be no assurance as to the actual impact that such
programs or any other governmental program will have on the financial markets
and the economy in the future. The financial market and economic conditions
that existed during 2008 and 2009 have had, and to the extent that such
conditions continue or worsen, will continue to have, an adverse affect on our
financial condition and results of operations for the year ended December 31,
2009, and could also materially and adversely affect our business, access to
credit or the trading price of our common stock. In addition, we expect to face
increased regulation and supervision of our industry as a result of the
financial crisis in the banking and financial markets.

34

---



On
January 27, 2009, the House Judiciary Committee approved H.R. 200, the Helping
Families Save Their Homes in Bankruptcy Act of 2009 (Bankruptcy
Legislation). The Bankruptcy Legislation would grant a judge the ability to
modify the terms of a mortgage for a homeowner in chapter 13 bankruptcy. Under
the proposed Bankruptcy Legislation, borrowers would be eligible to have a
bankruptcy judge reduce the principal balance on their home loan. If any such
borrower resells their home within five years, the borrower will have to share
the proceeds with their lender.

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:

| |   |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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:
| |   |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                     
| |   | §                                                                                                                                                                                                                                                                                                                                                                                                   | 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 COMMENTS
|         |                          
|None.   
|         |                          
|ITEM 2.  | DESCRIPTION OF PROPERTY  

We
conduct our business through our executive office, operations center, which
includes both the Mortgage Center and the Accounting Center listed below, and
four banking offices. In addition, we have purchased land in Oneida, New York for
potential expansion into that market. At December 31, 2009, the net book value
of the computer equipment and other furniture, fixtures and equipment of Rome
Savings and Rome Bancorp at their offices totaled $820,000. For more
information, see Note 5 of Notes to Consolidated Financial Statements, in the
Annual Report attached as Exhibit 13.1.

|                           |  |                |  |                          |  |                                    |   |       |  | 
|-------------------------- |  | -------------- |  | ------------------------ |  | ---------------------------------- | - | ----- |  | 
|Location                   |  | Leased orOwned |  | Original
 Date
 Acquired |  | Net Book
 Value
 December 31, 2009 |  
|                           |  |                |  |                          |  |                                    |  
|                           |  |                |  |                          |  | (In thousands)                     |  
|Executive Office:          |  |                |  |                          |  |                                    |   |       |  | 
|100 West Dominick St.      |  |                |  |                          |  |                                    |   |       |  | 
|Rome, NY                   |  | Owned          |  | 1956                     |  |                                    | $ | 1,125 |  | 
|                           |  |                |  |                          |  |                                    |   |       |  | 
|Branch Offices:            |  |                |  |                          |  |                                    |   |       |  | 
|1629 Black River Boulevard |  |                |  |                          |  |                                    |   |       |  | 
|Rome, NY                   |  | Owned          |  | 1963                     |  |                                    |   | 215   |  | 
|                           |  |                |  |                          |  |                                    |   |       |  | 
|1300 Erie Boulevard        |  |                |  |                          |  |                                    |   |       |  | 
|Rome, NY                   |  | Owned          |  | 1997                     |  |                                    |   | 957   |  | 
|                           |  |                |  |                          |  |                                    |   |       |  | 
|82 Seneca Turnpike         |  |                |  |                          |  |                                    |   |       |  | 
|New Hartford, NY           |  | Owned          |  | 1983                     |  |                                    |   | 117   |  | 
|                           |  |                |  |                          |  |                                    |   |       |  | 
|Rt. 26 and Elmer Hill Rd   |  |                |  |                          |  |                                    |   |       |  | 
|Lee, NY                    |  | Owned          |  | 2006                     |  |                                    |   | 1,624 |  | 
|                           |  |                |  |                          |  |                                    |   |       |  | 
|Mortgage Center:           |  |                |  |                          |  |                                    |   |       |  | 
|137 West Dominick Street   |  |                |  |                          |  |                                    |   |       |  | 
|Rome, NY                   |  | Owned          |  | 2002                     |  |                                    |   | 413   |  | 
|                           |  |                |  |                          |  |                                    |   |       |  | 
|Accounting Center:         |  |                |  |                          |  |                                    |   |       |  | 
|139 West Dominick Street   |  |                |  |                          |  |                                    |   |       |  | 
|Rome, NY                   |  | Owned          |  | 1995                     |  |                                    |   | 316   |  | 
|                           |  |                |  |                          |  |                                    |   |       |  | 
|Undeveloped Land:          |  |                |  |                          |  |                                    |   |       |  | 
|Oneida, NY                 |  | Owned          |  | 2006                     |  |                                    |   | 454   |  | 

|                                                                                                                                                                                                                                                                                                                       |                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------
|ITEM 3.                                                                                                                                                                                                                                                                                                                | LEGAL PROCEEDINGS                                   
|                                                                                                                                                                                                                                                                                                                       |                                                     
|As
 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
 HOLDERS
|                                                                                                                                                                                                                                                                                                                       |                                                     
|None.                                                                                                                                                                                                                                                                                                                 

36

---



PART II

|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------
|ITEM 5.                                                                                                                                                                                                                                                                                                   | MARKET FOR ROME BANCORPS COMMON
 EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|The
 following information included in the Annual Report attached hereto as
 Exhibit 13.1 is incorporated herein by reference: Market for the Companys
 Common Stock.                                                                                                                                 
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|ITEM 6.                                                                                                                                                                                                                                                                                                   | SELECTED FINANCIAL DATA                                                                                        
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|The
 following information included in Annual Report attached hereto as Exhibit
 13.1 is incorporated herein by reference: Selected Financial and Other
 Data.                                                                                                                                         
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|ITEM 7.                                                                                                                                                                                                                                                                                                   | MANAGEMENTS
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                         
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|The
 following information included in the Annual Report attached hereto as
 Exhibit 13.1 is incorporated herein by reference: Managements Discussion
 and Analysis of Financial Condition and Results of Operations.                                                                                 
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|ITEM 7A.                                                                                                                                                                                                                                                                                                  | QUANTITATIVE AND QUALITATIVE DISCLOSURES
 ABOUT MARKET RISK.                                                   
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|The
 following information included in the Annual Report attached hereto as
 Exhibit 13.1 is incorporated herein by reference: Managements Discussion
 and Analysis of Financial Condition and Results of Operations - Management of
 Interest Rate Risk.                                             
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|ITEM 8.                                                                                                                                                                                                                                                                                                   | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                    
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|The
 following information included in the Annual Report attached hereto as
 Exhibit 13.1 is incorporated herein by reference: Report of Independent
 Registered Public Accounting Firm on Financial Statements, Consolidated
 Financial Statements and Notes to Consolidated Financial Statements.
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|ITEM 9.                                                                                                                                                                                                                                                                                                   | CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS
 ON ACCOUNTING AND FINANCIAL DISCLOSURE                             
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|None.                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|ITEM 9A.                                                                                                                                                                                                                                                                                                  | CONTROLS AND PROCEDURES                                                                                        
|                                                                                                                                                                                                                                                                                                          |                                                                                                                
|Evaluation
 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

37

---



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 in the Companys Annual Report to Shareholders for the year ended December 31,
2009, 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 INFORMATION                                      
|         |                                                        
|None.   
|         |                                                        
|PART III
|         |                                                        
|ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
 GOVERNANCE

The
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 Our 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 COMPENSATION

The
information included in the Proxy Statement is incorporated herein by
reference: Compensation.

38

---



|         |                                                                                                
|-------- | -----------------------------------------------------------------------------------------------
|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
 RELATED STOCKHOLDER MATTERS

The
following section included in the Proxy Statement is incorporated herein by
reference: Security Ownership of Certain Beneficial Owners and Management.

The
following table sets forth the aggregate information of our equity compensation
plans in effect as of December 31, 2009.

|                                                            |  |                                                                                             |         |                                                                               |   |                                                                                                                                                   |  |  |         | 
|----------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- | ------- | ----------------------------------------------------------------------------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ------- | 
|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     |  |                                                                                             | 354,000 |                                                                               | $ | 12.84                                                                                                                                             |  |  | 490,061 | 
|                                                            |  |                                                                                             |         |                                                                               |   |                                                                                                                                                   |  |  |         | 
|Equity compensation plans not approved by
 security holders |  |                                                                                             |        |                                                                               |   |                                                                                                                                                  |  |  |        | 
|                                                            |  |                                                                                             |         |                                                                               |   |                                                                                                                                                   |  |  |         | 
|                                                            |  |                                                                                             |         |                                                                               |   |                                                                                                                                                   |  |  |         | 
|Total                                                       |  |                                                                                             | 354,000 |                                                                               | $ | 12.84                                                                                                                                             |  |  | 490,061 | 
|                                                            |  |                                                                                             |         |                                                                               |   |                                                                                                                                                   |  |  |         | 

|    |                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | The number
 of securities remaining for future issuance under equity compensation plans
 includes: 136,061 shares available for issuance under the 2000 Stock Option
 Plan, 236,000 shares available for issuance under the 2006 Stock Option Plan
 and 118,000 shares available for issuance under the 2006 Recognition and
 Retention Plan

|         |                                                                           
|-------- | --------------------------------------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
 INDEPENDENCE

The
following information included in the Proxy Statement is incorporated herein by
reference: Transactions with Certain Related Persons.

|         |                                       
|-------- | --------------------------------------
|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES

The
following information included in the Proxy Statement is incorporated herein by
reference: Principal Accounting Fees and Services and Audit Committee
Preapproval Policy.

PART IV

|         |                               
|-------- | ------------------------------
|ITEM 15. | EXHIBITS, FINANCIAL STATEMENTS

(a) The
following financial statements included in the Annual Report attached hereto as
Exhibit 13.1 are incorporated herein by reference:

| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | Report of Independent Registered Accounting
 Firm on Financial Statements                                                 
| |                                                                                                                           
| | Consolidated Balance Sheets - At December
 31, 2009 and 2008;                                                             
| |                                                                                                                           
| | Consolidated Statements of Income - Years
 Ended December 31, 2009, 2008 and 2007;                                        
| |                                                                                                                           
| | Consolidated Statements of Stockholders
 Equity and Comprehensive Income - Years Ended December 31, 2009, 2008 and
 2007;
| |                                                                                                                           
| | Consolidated Statements of Cash Flows -
 Years Ended December 31, 2009, 2008 and 2007; and                                
| |                                                                                                                           
| | Notes to Consolidated Financial Statements
 - Years Ended December 31, 2009, 2008 and 2007                                

39

---



(b) 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  | Amended and restated form
 of One Year Change in Control Agreement by and among certain officers and
 Rome Bancorp, Inc. and The Rome Savings Bank. (8)
|     
|10.6  | Amended and restated form
 of Employment Agreement between New Rome Bancorp, Inc. and Charles M. Sprock.
 (8)                                          
|     
|10.7  | Amended and Restated form
 of Employment Agreement between The Rome Savings Bank and Charles M. Sprock.
 (8)                                           
|     
|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)                                                                        
|     
|10.14 | Rome Bancorp, Inc. 2006
 Stock Option Plan. (7)                                                                                                        
|     
|10.15 | Rome Bancorp, inc. 2006
 Recognition and Retention Plan. (7)                                                                                           
|     
|13.1  | Annual Report to Shareholders
 for the Year Ended December 31, 2009.                                                                                   
|     
|14.1  | Code of Conduct and
 Ethics. (7)                                                                                                                       
|     
|21.1  | Subsidiaries of the
 Company. (1)                                                                                                                      
|     
|23.1  | Consent of Crowe Horwath
 LLP.                                                                                                                         
|     
|31.1  | Rule 13a-14a/15d-14a
 Certifications.                                                                                                                  
|     
|32.1  | 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.                                                   
|   
|(7) | Incorporated by reference
 to Rome Bancorp, Inc.s Form S-8 filed with the commission on May 19, 2006,
 as amended.                                          
|   
|(8) | Incorporated
 by reference to Rome Bancorp Inc.s Form 8-K filed with the commission on
 December 3, 2007.                                                   

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. Sprock | 
| |                                      |                       | 
| | President, Chairman of the Board and
| | Chief Executive Officer             

Pursuant
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, President and Chief Executive Officer (Principal Executive
 Officer) |                | March 10, 2010
|                         |  |                                                                                              |               
|Charles M.
 Sprock       |  |                                                                                              |               
|                         |  |                                                                                              |                |               
|/s/David C.
 Nolan       |  | Executive
 Vice-President and Chief Financial Officer (Principal Financial Officer)          |                | March 10, 2010
|                         |  |                                                                                              |               
|David C.
 Nolan          |  |                                                                                              |               
|                         |  |                                                                                              |                |               
|/s/Mary
 Faith Messenger |  | Vice
 President and Controller (Principal Accounting Officer)                                |                | March 10, 2010
|                         |  |                                                                                              |               
|                         |  |                                                                                              |                |               
|/s/Bruce R.
 Engelbert   |  | Director                                                                                     |                | March 10, 2010
|                         |  |                                                                                              |               
|Bruce R.
 Engelbert      |  |                                                                                              |                |               
|                         |  |                                                                                              |                |               
|/s/David C.
 Grow        |  | Director                                                                                     |                | March 10, 2010
|                         |  |                                                                                              |               
|David C.
 Grow           |  |                                                                                              |                |               
|                         |  |                                                                                              |                |               
|/s/Kirk B.
 Hinman       |  | Director                                                                                     |                | March 10, 2010
|                         |  |                                                                                              |               
|Kirk B.
 Hinman          |  |                                                                                              |                |               
|                         |  |                                                                                              |                |               
|/s/Michael
 J. Valentine |  | Director                                                                                     |                | March 10, 2010
|                         |  |                                                                                              |               
|Michael J.
 Valentine    |  |                                                                                              |                |               
|                         |  |                                                                                              |                |               
|/s/Dale A.
 Laval        |  | Director                                                                                     |                |               
|                         |  |                                                                                              | March 10, 2010
|Dale A.
 Laval           |  |                                                                                              |                |               
|                         |  |                                                                                              |                |               
|/s/John A.
 Reinhardt    |  | Director                                                                                     |                | March 10, 2010
|                         |  |                                                                                              |               
|John A.
 Reinhardt       |  |                                                                                              |                |               

41

---