----

----

| x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | For the quarterly period ended December 31, 2010                                                                                                                                                                                                                                                                |
|   | OR                                                                                                                                                                                                                                                                                                                   |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                                                                                                                                                                                                                        |
|   | For the transition period from                     to                          |
|   | Commission file number: 000-51214                                                                                                                                                                                                                                                                                    |

| Prudential Bancorp, Inc. of Pennsylvania                       |   |
|----------------------------------------------------------------|--------|
| (Exact Name of Registrant as Specified in Its Charter)         |   |
| Pennsylvania                                                   |   | 68-0593604 |   |
| (State or Other Jurisdiction of Incorporation or Organization) |   | (I.R.S. Employer Identification No.) |   |
| 1834 Oregon AvenuePhiladelphia, Pennsylvania                   |   | 19145Zip Code |   |
| (Address of Principal Executive Offices)                       |   |   |   |
| (215) 755-1500                                                 |   |
| (Registrant’s Telephone Number, Including Area Code)     |   |

|   | o Yes   oNo |
|--------|---------------------------------|

| Large accelerated filer o                                              | Accelerated filer o         |
|-----------------------------------------------------------------------------|-----------------------------|
| Non-accelerated filer o  (Do not check if a smaller reporting company) | Smaller reporting company x |

----

|    |                   |                                                                                                                                                      |   | PAGE   |
|---------|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|    |                   |                                                                                                                                                      |   |   |
| PART I  | FINANCIAL INFORMATION: |                                                                                                                                                      |   |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 1.                | Consolidated Financial Statements                                                                                                                         |   |   |
|    |                   |                                                                                                                                                      |   |   |
|    |                   | Unaudited Consolidated Statements of Financial Condition December 31, 2010 and September 30, 2010                                                         |   | 2      |
|    |                   |                                                                                                                                                      |   |   |
|    |                   | Unaudited Consolidated Statements of Operations for the Three Months Ended December 31, 2010 and 2009                                                     |   | 3      |
|    |                   |                                                                                                                                                      |   |   |
|    |                   | Unaudited Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income for the Three Months Ended December 31, 2010 and 2009 |   | 4      |
|    |                   |                                                                                                                                                      |   |   |
|    |                   | Unaudited Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2010 and 2009                                                     |   | 5      |
|    |                   |                                                                                                                                                      |   |   |
|    |                   | Notes to Unaudited Consolidated Financial Statements                                                                                                      |   | 6      |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 2.                | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                               |   | 26     |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 3.                | Quantitative and Qualitative Disclosures About Market Risk                                                                                                |   | 38     |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 4.                | Controls and Procedures                                                                                                                                   |   | 38     |
|    |                   |                                                                                                                                                      |   |   |
| PART II | OTHER INFORMATION      |                                                                                                                                                      |   |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 1.                | Legal Proceedings                                                                                                                                         |   | 39     |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 1A.               | Risk Factors                                                                                                                                              |   | 39     |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 2.                | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                               |   | 39     |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 3.                | Defaults Upon Senior Securities                                                                                                                           |   | 39     |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 4.                | (Removed and Reserved)                                                                                                                                    |   | 39     |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 5.                | Other Information                                                                                                                                         |   | 39     |
|    |                   |                                                                                                                                                      |   |   |
|    | Item 6.                | Exhibits                                                                                                                                                  |   | 39     |
|    |                   |                                                                                                                                                      |   |   |
|    | SIGNATURES             |                                                                                                                                                      | 40     |

----

----

|                                                                                                                                                                  |   | December 31,           |    |   | September 30, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|---------------|--------|
|                                                                                                                                                                  |   | 2010                   |    |   | 2010          |   |
|                                                                                                                                                                  |   | (Dollars in Thousands) |    |
| ASSETS                                                                                                                                                                |   |                   |    |   |          |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |
| Cash and amounts due from depository institutions                                                                                                                     |   | $                      | 3,278   |   |          | $      | 3,649 |   |
| Interest-bearing deposits                                                                                                                                             |   |                   | 47,026  |   |          |   | 62,875 |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |   |   |
|            Total cash and cash equivalents                                                                     |   |                   | 50,304  |   |          |   | 66,524 |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |   |   |
| Investment and mortgage-backed securities held to maturity (estimated fair value—December 31, 2010, $126,822; September 30, 2010, $116,594)                     |   |                   | 125,230 |   |          |   | 112,673 |   |
| Investment and mortgage-backed securities available for sale (amortized cost—December 31, 2010, $72,935; September 30, 2010, $69,891)                           |   |                   | 74,445  |   |          |   | 72,425 |   |
| Loans receivable—net of allowance for loan losses (December 31, 2010, $3,731; September 30, 2010, $3,151)                                                  |   |                   | 252,719 |   |          |   | 255,091 |   |
| Accrued interest receivable                                                                                                                                           |   |                   | 2,751   |   |          |   | 2,669 |   |
| Real estate owned                                                                                                                                                     |   |                   | 2,034   |   |          |   | 3,197 |   |
| Federal Home Loan Bank stock—at cost                                                                                                                            |   |                   | 3,368   |   |          |   | 3,545 |   |
| Office properties and equipment—net                                                                                                                             |   |                   | 2,011   |   |          |   | 2,069 |   |
| Bank owned life insurance                                                                                                                                             |   |                   | 6,040   |   |          |   | 5,990 |   |
| Prepaid expenses and other assets                                                                                                                                     |   |                   | 2,919   |   |          |   | 3,135 |   |
| Deferred tax asset-net                                                                                                                                                |   |                   | 1,800   |   |          |   | 1,762 |   |
| TOTAL ASSETS                                                                                                                                                          |   | $                      | 523,621 |   |          | $      | 529,080 |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                            |   |                   |    |   |          |   |   |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |   |   |
| LIABILITIES:                                                                                                                                                          |   |                   |    |   |          |   |   |   |
|   Deposits:                                                                                                                                                 |   |                   |    |   |          |   |   |   |
|      Noninterest-bearing                                                                                                                     |   | $                      | 2,976   |   |          | $      | 2,570 |   |
|      Interest-bearing                                                                                                                        |   |                   | 461,058 |   |          |   | 461,885 |   |
|            Total deposits                                                                                      |   |                   | 464,034 |   |          |   | 464,455 |   |
|   Advances from Federal Home Loan Bank                                                                                                                      |   |                   | 604     |   |          |   | 615 |   |
|   Accrued interest payable                                                                                                                                  |   |                   | 89      |   |          |   | 3,361 |   |
|   Advances from borrowers for taxes and insurance                                                                                                           |   |                   | 1,765   |   |          |   | 1,115 |   |
|   Accounts payable and accrued expenses                                                                                                                     |   |                   | 686     |   |          |   | 2,033 |   |
|   Accrued dividend payable                                                                                                                                  |   |                   | 501     |   |          |   | 502 |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |   |   |
|            Total liabilities                                                                                   |   |                   | 467,679 |   |          |   | 472,081 |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |   |   |
| COMMITMENTS AND CONTINGENCIES (Note 8)                                                                                                                                |   |                   |    |   |          |   |   |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |   |   |
| STOCKHOLDERS’ EQUITY:                                                                                                                                           |   |                   |    |   |          |   |   |   |
|    Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued                                                                          |   |                   | -       |   |          |   | - |   |
|    Common stock, $.01 par value, 40,000,000 shares authorized, issued 12,563,750; outstanding - 10,031,472 at December 31, 2010 and September 30, 2010 |   |                   | 126     |   |          |   | 126 |   |
|    Additional paid-in capital                                                                                                                          |   |                   | 53,666  |   |          |   | 53,528 |   |
|    Unearned ESOP shares                                                                                                                                |   |                   | (3,178  | )      |          |   | (3,234 | ) |
|    Treasury stock, at cost: 2,532,278 shares at December 31, 2010 and September 30, 2010                                                               |   |                   | (31,576 | )      |          |   | (31,576 | ) |
|    Retained earnings                                                                                                                                   |   |                   | 35,907  |   |          |   | 36,483 |   |
|    Accumulated other comprehensive income                                                                                                              |   |                   | 997     |   |          |   | 1,672 |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |   |   |
|            Total stockholders’ equity                                                                    |   |                   | 55,942  |   |          |   | 56,999 |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                      |   | $                      | 523,621 |   |          | $      | 529,080 |   |
|                                                                                                                                                                  |   |                   |    |   |          |   |   |   |
| See notes to unaudited consolidated financial statements.                                                                                                             |   |                   |    |   |          |   |   |   |

----

----

|                                                                                                   |   | Three Months EndedDecember 31,                  |   |
|--------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                                                   |   | 2010                                            |   |   | 2009 |   |
|                                                                                                   |   |                                            |   |
|                                                                                                   |   | (Dollars in Thousands Except Per Share Amounts) |   |
| INTEREST INCOME:                                                                                       |   |                                            |   |   |   |   |
|   Interest on loans                                                                          |   | $                                               | 3,623  |   |   | $ | 3,751 |   |
|   Interest on mortgage-backed securities                                                     |   |                                            | 1,065  |   |   |   | 1,223 |   |
|   Interest and dividends on investments                                                      |   |                                            | 965    |   |   |   | 1,492 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
|           Total interest income                      |   |                                            | 5,653  |   |   |   | 6,466 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| INTEREST EXPENSE:                                                                                      |   |                                            |   |   |   |   |   |   |
|   Interest on deposits                                                                       |   |                                            | 2,020  |   |   |   | 2,272 |   |
|   Interest on borrowings                                                                     |   |                                            | 2      |   |   |   | 217 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
|           Total interest expense                     |   |                                            | 2,022  |   |   |   | 2,489 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| NET INTEREST INCOME                                                                                    |   |                                            | 3,631  |   |   |   | 3,977 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| PROVISION FOR LOAN LOSSES                                                                              |   |                                            | 580    |   |   |   | 135 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| NET INTEREST  INCOME AFTER PROVISION FOR LOAN LOSSES                                    |   |                                            | 3,051  |   |   |   | 3,842 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| NON-INTEREST INCOME:                                                                                   |   |                                            |   |   |   |   |   |   |
|   Fees and other service charges                                                             |   |                                            | 118    |   |   |   | 125 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
|      Total other-than-temporary impairment losses                             |   |                                            | (127   | ) |   |   | (294 | ) |
|      Portion of losses recognized in other comprehensive income, before taxes |   |                                            | 32     |   |   |   | 90 |   |
|      Net impairment losses recognized in earnings                             |   |                                            | (95    | ) |   |   | (204 | ) |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
|   Other                                                                                      |   |                                            | 111    |   |   |   | 98 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
|           Total non-interest income                  |   |                                            | 134    |   |   |   | 19 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| NON-INTEREST EXPENSE:                                                                                  |   |                                            |   |   |   |   |   |   |
|   Salaries and employee benefits                                                             |   |                                            | 1,431  |   |   |   | 1,361 |   |
|   Data processing                                                                            |   |                                            | 119    |   |   |   | 138 |   |
|   Professional services                                                                      |   |                                            | 77     |   |   |   | 141 |   |
|   Office occupancy                                                                           |   |                                            | 89     |   |   |   | 93 |   |
|   Depreciation                                                                               |   |                                            | 88     |   |   |   | 87 |   |
|   Payroll taxes                                                                              |   |                                            | 65     |   |   |   | 67 |   |
|   Director compensation                                                                      |   |                                            | 82     |   |   |   | 62 |   |
|   Real estate owned expenses                                                                 |   |                                            | 145    |   |   |   | 20 |   |
|   Federal Deposit Insurance Corporation insurance                                            |   |                                            | 265    |   |   |   | 182 |   |
|   Other                                                                                      |   |                                            | 502    |   |   |   | 402 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
|            Total non-interest expense           |   |                                            | 2,863  |   |   |   | 2,553 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| INCOME BEFORE INCOME TAXES                                                                             |   |                                            | 322    |   |   |   | 1,308 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| INCOME TAXES:                                                                                          |   |                                            |   |   |   |   |   |   |
|   Current expense                                                                            |   |                                            | 106    |   |   |   | 594 |   |
|   Deferred expense                                                                           |   |                                            | 310    |   |   |   | 28 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
|           Total income tax expense                   |   |                                            | 416    |   |   |   | 622 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| NET (LOSS) INCOME                                                                                      |   | $                                               | (94    | ) |   | $ | 686 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| BASIC (LOSS) INCOME PER SHARE                                                                          |   | $                                               | (0.01  | ) |   | $ | 0.07 |   |
|                                                                                                   |   |                                            |   |   |   |   |   |   |
| DILUTED (LOSS) INCOME PER SHARE                                                                        |   | $                                               | (0.01  | ) |   | $ | 0.07 |   |

----

----

----

|                                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   | Accumulated   |   |   |                |   |   |          |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|--------|------------|--------|--------|----------|--------|--------|----------|--------|--------|----------|---------|--------|---------------|--------|--------|---------------------|--------|--------|---------------|--------|
|                                                                                                                                |   |                                            |   |   | Additional |   |   | Unearned |   |   |     |   |   |     |    |   | Other         |   |   | Total               |   |   |          |   |
|                                                                                                                                |   | Common                                          |   |   | Paid-In    |   |   | ESOP     |   |   | Treasury |   |   | Retained |    |   | Comprehensive |   |   | Stockholders’ |   |   | Comprehensive |   |
|                                                                                                                                |   | Stock                                           |   |   | Capital    |   |   | Shares   |   |   | Stock    |   |   | Earnings |    |   | Income (Loss) |   |   | Equity              |   |   | Income (Loss) |   |
|                                                                                                                                |   | (Dollars in Thousands except per share amounts) |   |
| BALANCE, OCTOBER 1, 2010                                                                                                            |   | $                                               | 126    |   |       | $      | 53,528 |     |   | $      | (3,234   | )      |   | $        | (31,576 | )      |          | $      | 36,483 |                |   | $      | 1,672         |   |   | $ | 56,999 |   |   |   |   |
|                                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |
| Comprehensive loss:                                                                                                                 |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |
|                                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |
| Net loss                                                                                                                            |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   | (94    | )                   |   |   |          |   |   |   | (94 | ) |   |   | (94 | ) |
|                                                               |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Net unrealized holding loss on available for sale securities arising during the period, net of income tax benefit of $380 |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   | (738          | )      |   |   | (738 | ) |   |   | (738 | ) |
|                                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Reclassification adjustment for other than temporary impairment recognized in earnings net of tax of $32                            |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   | 63            |   |   |   | 63 |   |   |   | 63 |   |
| Comprehensive loss                                                                                                                  |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   | $ | (769 | ) |
|                                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Cash dividend declared                                                                                                              |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| ($ 0.05 per share)                                                                                                                  |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   | (482   | )                   |   |   |          |   |   |   | (482 | ) |   |   |   |   |
|                                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Excess tax benefit from stock compensation                                                                                          |   |                                            |   |   |       | 39     |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   | 39 |   |   |   |   |   |
|                                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Stock option expense                                                                                                                |   |                                            |   |   |       |   | 55     |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   | 55 |   |   |   |   |   |
|                                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Recognition and Retention Plan expense                                                                                              |   |                                            |   |   |       | 64     |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   | 64 |   |   |   |   |   |
|                                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| ESOP shares committed to                                                                                                            |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| be released (5,655 shares)                                                                                                          |   |                                            | -      |   |       |   | (20    | )        |   |   | 56       |   |   |     | -       |   |          |   | -      |                |   |   | -             |   |   |   | 36 |   |   |   |   |   |
|                                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| BALANCE, December 31, 2010                                                                                                          |   | $                                               | 126    |   |       | $      | 53,666 |     |   | $      | (3,178   | )      |   | $        | (31,576 | )      |          | $      | 35,907 |                |   | $      | 997           |   |   | $ | 55,942 |   |   |   |   |   |

|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   | Accumulated   |   |   |                |   |   |          |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|--------|------------|--------|--------|----------|--------|--------|----------|--------|--------|----------|---------|--------|---------------|--------|--------|---------------------|--------|--------|---------------|--------|
|                                                                                                                      |   |                                            |   |   | Additional |   |   | Unearned |   |   |     |   |   |     |    |   | Other         |   |   | Total               |   |   |          |   |
|                                                                                                                      |   | Common                                          |   |   | Paid-In    |   |   | ESOP     |   |   | Treasury |   |   | Retained |    |   | Comprehensive |   |   | Stockholders’ |   |   | Comprehensive |   |
|                                                                                                                      |   | Stock                                           |   |   | Capital    |   |   | Shares   |   |   | Stock    |   |   | Earnings |    |   | Income (Loss) |   |   | Equity              |   |   | Income (Loss) |   |
|                                                                                                                      |   | (Dollars in Thousands except per share amounts) |   |
| BALANCE, OCTOBER 1, 2009                                                                                                  |   | $                                               | 126    |   |       | $      | 52,938 |     |   | $      | (3,457   | )      |   | $        | (28,652 | )      |          | $      | 35,293 |                |   | $      | (391          | )      |   | $ | 55,857 |   |   |   |   |
|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                                                     |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |
|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |
| Net income                                                                                                                |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   | 686    |                |   |   |          |   |   |   | 686 |   |   |   | 686 |   |
|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Net unrealized holding loss on available for sale securities arising during the period, net of income tax benefit of $229 |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   | (445   | )             |   |   | (445 | ) |   |   | (445 | ) |
|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Reclassification adjustment for other than temporary impairment recognized in earnings net of tax of $69                  |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   | 135           |   |   |   | 135 |   |   |   | 135 |   |
| Comprehensive income                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   | $ | 376 |   |
|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Cash dividend declared                                                                                                    |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
|  ($ 0.05 per share)                                                                                                  |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   | (497   | )                   |   |   |          |   |   |   | (497 | ) |   |   |   |   |
|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Excess tax benefit from stock compensation                                                                                |   |                                            |   |   |       | 37     |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   | 37 |   |   |   |   |   |
|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Stock option expense                                                                                                      |   |                                            |   |   |       |   | 53     |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   | 53 |   |   |   |   |   |
|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| Recognition and Retention Plan expense                                                                                    |   |                                            |   |   |       | 63     |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   | 63 |   |   |   |   |   |
|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| ESOP shares committed to                                                                                                  |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| be released (5,655 shares)                                                                                                |   |                                            | -      |   |       |   | -      |     |   |   | 56       |   |   |     | -       |   |          |   | -      |                |   |   | -             |   |   |   | 56 |   |   |   |   |   |
|                                                                                                                      |   |                                            |   |   |       |   |   |     |   |   |     |   |   |     |    |   |          |   |   |                |   |   |          |   |   |   |   |   |   |   |   |   |
| BALANCE, December 31, 2009                                                                                                |   | $                                               | 126    |   |       | $      | 53,091 |     |   | $      | (3,401   | )      |   | $        | (28,652 | )      |          | $      | 35,482 |                |   | $      | (701          | )      |   | $ | 55,945 |   |   |   |   |   |

----

----

|                                                                                                                                          |   | Three Months Ended December 31, |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|---------|
|                                                                                                                                          |   | 2010                                 |    |   | 2009 |   |
| OPERATING ACTIVITIES:                                                                                                                         |   | (Dollars in Thousands)               |    |
|   Net (loss) income                                                                                                                 |   | $                                    | (94     | ) |   | $ | 686 |   |
|                                                                                                                                     |   |                                 |    |   |   |   |   |   |
|   Adjustments to reconcile net (loss) income to net cash used in operating activities:                                              |   |                                 |    |   |   |   |   |   |
|     Provision for loan losses                                                                                             |   |                                 | 580     |   |   |   | 135 |   |
|     Depreciation                                                                                                          |   |                                 | 88      |   |   |   | 87 |   |
|     Net accretion of premiums/discounts                                                                                   |   |                                 | (83     | ) |   |   | (81 | ) |
|     Net accretion of deferred loan fees and costs                                                                         |   |                                 | (18     | ) |   |   | (13 | ) |
|     Impairment charge on investment securities                                                                            |   |                                 | 95      |   |   |   | 204 |   |
|     Loss on sale of real estate owned                                                                                     |   |                                 | 135     |   |   |   | - |   |
|     Share-based compensation expense                                                                                      |   |                                 | 158     |   |   |   | 153 |   |
|     Compensation expense of ESOP                                                                                          |   |                                 | 36      |   |   |   | 56 |   |
|     Income from bank owned life insurance                                                                                 |   |                                 | (50     | ) |   |   | (53 | ) |
|     Deferred income tax expense                                                                                           |   |                                 | 310     |   |   |   | 28 |   |
|     Excess tax benefit related to stock compensation                                                                      |   |                                 | (39     | ) |   |   | (37 | ) |
|     Changes in assets and liabilities which used cash:                                                                    |   |                                 |    |   |   |   |   |   |
|       Accrued interest receivable                                                                               |   |                                 | (82     | ) |   |   | 81 |   |
|       Prepaid expenses and other assets                                                                         |   |                                 | 216     |   |   |   | (2,611 | ) |
|       Accrued interest payable                                                                                  |   |                                 | (3,272  | ) |   |   | (2,708 | ) |
|       Accounts payable and accrued expenses                                                                     |   |                                 | (1,347  | ) |   |   | (285 | ) |
|                Net cash used in operating activities               |   |                                 | (3,367  | ) |   |   | (4,358 | ) |
| INVESTING ACTIVITIES:                                                                                                                         |   |                                 |    |   |   |   |   |   |
|   Purchase of investment and mortgage-backed securities held to maturity                                                            |   |                                 | (25,000 | ) |   |   | (2,994 | ) |
|   Purchase of investment and mortgage-backed securities available for sale                                                          |   |                                 | (14,777 | ) |   |   | (5,935 | ) |
|   Loans originated or acquired                                                                                                      |   |                                 | (13,656 | ) |   |   | (11,167 | ) |
|   Principal collected on loans                                                                                                      |   |                                 | 15,466  |   |   |   | 11,300 |   |
|   Principal payments received on investment and mortgage-backed securities:                                                         |   |                                 |    |   |   |   |   |   |
|      held-to-maturity                                                                                                |   |                                 | 12,455  |   |   |   | 15,861 |   |
|      available-for-sale                                                                                              |   |                                 | 11,710  |   |   |   | 2,656 |   |
|   Proceeds from redemption of FHLB stock                                                                                            |   |                                 | 177     |   |   |   | - |   |
|   Proceeds from sale of real estate owned                                                                                           |   |                                 | 1,028   |   |   |   | - |   |
|   Purchases of equipment                                                                                                            |   |                                 | (30     | ) |   |   | (61 | ) |
|                Net cash (used in) provided by investing activities |   |                                 | (12,627 | ) |   |   | 9,660 |   |
| FINANCING ACTIVITIES:                                                                                                                         |   |                                 |    |   |   |   |   |   |
|   Net increase in demand deposits, NOW accounts, and savings accounts                                                               |   |                                 | 2,690   |   |   |   | 7,561 |   |
|   Net decrease in certificates of deposit                                                                                           |   |                                 | (3,111  | ) |   |   | (18,807 | ) |
|   Repayment of advances from Federal Home Loan Bank                                                                                 |   |                                 | (11     | ) |   |   | - |   |
|   Borrowings of advances from Federal Home Loan Bank                                                                                |   |                                 | -       |   |   |   | 3,989 |   |
|   Increase in advances from borrowers for taxes and insurance                                                                       |   |                                 | 650     |   |   |   | 596 |   |
|   Excess tax benefit related to stock compensation                                                                                  |   |                                 | 39      |   |   |   | 37 |   |
|   Cash dividend paid                                                                                                                |   |                                 | (483    | ) |   |   | (472 | ) |
|                Net cash used in financing activities               |   |                                 | (226    | ) |   |   | (7,096 | ) |
|                                                                                                                                          |   |                                 |    |   |   |   |   |   |
| NET DECREASE IN CASH AND CASH EQUIVALENTS                                                                                                     |   |                                 | (16,220 | ) |   |   | (1,794 | ) |
|                                                                                                                                          |   |                                 |    |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS—Beginning of period                                                                                           |   |                                 | 66,524  |   |   |   | 13,669 |   |
|                                                                                                                                          |   |                                 |    |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS—End of period                                                                                                 |   | $                                    | 50,304  |   |   | $ | 11,875 |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW                                                                                                         |   |                                 |    |   |   |   |   |   |
|   INFORMATION:                                                                                                                      |   |                                 |    |   |   |   |   |   |
|   Interest paid on deposits and advances from Federal                                                                               |   |                                 |    |   |   |   |   |   |
|      Home Loan Bank                                                                                                  |   | $                                    | 5,294   |   |   | $ | 5,197 |   |
|                                                                                                                                          |   |                                 |    |   |   |   |   |   |
|   Income taxes paid                                                                                                                 |   | $                                    | 550     |   |   | $ | 753 |   |
|                                                                                                                                          |   |                                 |    |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES OF NONCASH ITEMS:                                                                                                    |   |                                 |    |   |   |   |   |   |
|   Real estate acquired in settlement of loans                                                                                       |   | $                                    | -       |   |   | $ | 437 |   |
|                                                                                                                                          |   |                                 |    |   |   |   |   |   |
| See notes to unaudited consolidated financial statements.                                                                                     |   |                                 |    |   |   |   |   |   |

----

----

| 1. | SIGNIFICANT ACCOUNTING POLICIES |
|----|---------------------------------|

----

----

----

| 2.         EARNINGS PER SHARE |
|------------------------------------------------------------------|

|                                                                    |   | Quarter Ended December 31,                   |      |
|-------------------------------------------------------------------------|--------|----------------------------------------------|-----------|
|                                                                    |   |                                         |      |   |   |   |
|                                                                    |   | 2010                                         |      |   | 2009 |   |
|                                                                    |   | Basic                                        |      |   | Diluted |   |   | Basic |   |   | Diluted |   |
|                                                                    |   | (Dollars in Thousands Except Per Share Data) |      |
|                                                                    |   |                                         |      |   |   |   |   |   |   |   |   |   |
| Net (loss) income                                                       |   | $                                            | (94       | ) |   | $ | (94 | ) |   | $ | 686 |   |   | $ | 686 |   |
| Weighted average shares outstanding                                     |   |                                         | 9,514,031 |   |   |   | 9,514,031 |   |   |   | 9,873,428 |   |   |   | 9,873,428 |   |
| Effect of common stock equivalents                                      |   |                                         | -         |   |   |   | - |   |   |   | - |   |   |   | 187,566 |   |
|                                                                    |   |                                         |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjusted weighted average shares used in earnings per share computation |   | $                                            | 9,514,031 |   |   | $ | 9,514,031 |   |   | $ | 9,873,428 |   |   | $ | 10,060,994 |   |
| (Loss) income per share - basic and diluted                             |   | $                                            | (0.01     | ) |   | $ | (0.01 | ) |   | $ | 0.07 |   |   | $ | 0.07 |   |

----

| 3. | INVESTMENT AND MORTGAGE-BACKED SECURITIES |
|----|-------------------------------------------|

|                                                                                                  |   | December 31, 2010      |    |
|-------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                  |   |                   |    |   | Gross |   |   | Gross |   |   |   |   |
|                                                                                                  |   | Amortized              |    |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                                                                                  |   | Cost                   |    |   | Gains |   |   | Losses |   |   | Value |   |
| Securities held to maturity:                                                                          |   | (Dollars in Thousands) |    |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |
|   U.S. Government agency obligations                                                        |   | $                      | 100,703 |   |   | $ | 783 |   |   | $ | (1,043 | ) |   | $ | 100,443 |   |
|   Mortgage-backed securities - U.S.                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Government agencies                                                                 |   |                   | 24,527  |   |   |   | 1,852 |   |   |   | - |   |   |   | 26,379 |   |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total securities held to maturity   |   | $                      | 125,230 |   |   | $ | 2,635 |   |   | $ | (1,043 | ) |   | $ | 126,822 |   |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities available for sale:                                                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   U.S. Government agency obligations                                                        |   | $                      | 6,998   |   |   | $ | 91 |   |   | $ | (69 | ) |   | $ | 7,020 |   |
|   Mortgage-backed securities - U.S.                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Government agencies                                                                 |   |                   | 58,427  |   |   |   | 2,416 |   |   |   | (236 | ) |   |   | 60,607 |   |
|   Mortgage-backed securities - Non-agency                                                   |   |                   | 7,502   |   |   |   | 200 |   |   |   | (892 | ) |   |   | 6,810 |   |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total debt securities               |   |                   | 72,927  |   |   |   | 2,707 |   |   |   | (1,197 | ) |   |   | 74,437 |   |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   FHLMC preferred stock                                                                     |   |                   | 8       |   |   |   | - |   |   |   | - |   |   |   | 8 |   |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total securities available for sale |   | $                      | 72,935  |   |   | $ | 2,707 |   |   | $ | (1,197 | ) |   | $ | 74,445 |   |

|                                                                                                  |   | September 30, 2010     |    |
|-------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                  |   |                   |    |   | Gross |   |   | Gross |   |   |   |   |
|                                                                                                  |   | Amortized              |    |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                                                                                  |   | Cost                   |    |   | Gains |   |   | Losses |   |   | Value |   |
|                                                                                                  |   | (Dollars in Thousands) |    |
| Securities held to maturity:                                                                          |   |                   |    |   |   |   |   |   |   |   |   |   |
|   U.S. Government agency obligations                                                        |   | $                      | 85,983  |   |   | $ | 1,831 |   |   | $ | (12 | ) |   | $ | 87,802 |   |
|   Municipal obligations                                                                     |   |                   | 475     |   |   |   | - |   |   |   | - |   |   |   | 475 |   |
|   Mortgage-backed securities - U.S.                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Government agencies                                                                 |   |                   | 26,215  |   |   |   | 2,102 |   |   |   | - |   |   |   | 28,317 |   |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total securities held to maturity   |   | $                      | 112,673 |   |   | $ | 3,933 |   |   | $ | (12 | ) |   | $ | 116,594 |   |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities available for sale:                                                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   U.S. Government agency obligations                                                        |   | $                      | 9,995   |   |   | $ | 198 |   |   | $ | - |   |   | $ | 10,193 |   |
|   Mortgage-backed securities - U.S.                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Government agencies                                                                 |   |                   | 51,821  |   |   |   | 3,204 |   |   |   | - |   |   |   | 55,025 |   |
|   Mortgage-backed securities - Non-agency                                                   |   |                   | 8,067   |   |   |   | 178 |   |   |   | (1,046 | ) |   |   | 7,199 |   |
|            Total debt securities               |   |                   | 69,883  |   |   |   | 3,580 |   |   |   | (1,046 | ) |   |   | 72,417 |   |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   FHLMC preferred stock                                                                     |   |                   | 8       |   |   |   | - |   |   |   | - |   |   |   | 8 |   |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total securities available for sale |   | $                      | 69,891  |   |   | $ | 3,580 |   |   | $ | (1,046 | ) |   | $ | 72,425 |   |
|                                                                                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                  |   | Less than 12 months    |   |   | More than 12 months |   |   | Total      |   |
|-------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|---------------------|--------|--------|------------|--------|
|                                                                                                  |   | Gross                  |   |   |                |   |   | Gross      |   |   |   |   |   | Gross |   |   |   |   |
|                                                                                                  |   | Unrealized             |   |   | Fair                |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |
|                                                                                                  |   | Losses                 |   |   | Value               |   |   | Losses     |   |   | Value |   |   | Losses |   |   | Value |   |
|                                                                                                  |   | (Dollars in Thousands) |   |
| Securities held to maturity:                                                                          |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |
|    U.S. Government agency obligations                                                  |   | $                      | (1,043 | )      |                | $      | 53,669 |       |   | $ | - |   |   | $ | - |   |   | $ | (1,043 | ) |   | $ | 53,669 |   |
|                                                                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total securities held to maturity   |   |                   | (1,043 | )      |                |   | 53,669 |       |   |   | - |   |   |   | - |   |   |   | (1,043 | ) |   |   | 53,669 |   |
|                                                                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities available for sale:                                                                        |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    U.S. Government agency obligations                                                  |   |                   | (69    | )      |                |   | 1,931  |       |   |   | - |   |   |   | - |   |   |   | (69 | ) |   |   | 1,931 |   |
|    Mortgage-backed securities - U.S.                                                   |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Government agencies                                                     |   |                   | (236   | )      |                |   | 7,429  |       |   |   | - |   |   |   | - |   |   |   | (236 | ) |   |   | 7,429 |   |
|    Mortgage-backed securities - Non-agency                                             |   |                   | (15    | )      |                |   | 737    |       |   |   | (877 | ) |   |   | 3,149 |   |   |   | (892 | ) |   |   | 3,886 |   |
|                                                                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total securities available for sale |   |                   | (320   | )      |                |   | 10,097 |       |   |   | (877 | ) |   |   | 3,149 |   |   |   | (1,197 | ) |   |   | 13,246 |   |
|                                                                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                 |   | $                      | (1,363 | )      |                | $      | 63,766 |       |   | $ | (877 | ) |   | $ | 3,149 |   |   | $ | (2,240 | ) |   | $ | 66,915 |   |

|                                                                                                  |   | Less than 12 months    |   |   | More than 12 months |   |   | Total      |   |
|-------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|---------------------|--------|--------|------------|--------|
|                                                                                                  |   | Gross                  |   |   |                |   |   | Gross      |   |   |   |   |   | Gross |   |   |   |   |
|                                                                                                  |   | Unrealized             |   |   | Fair                |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |
|                                                                                                  |   | Losses                 |   |   | Value               |   |   | Losses     |   |   | Value |   |   | Losses |   |   | Value |   |
|                                                                                                  |   | (Dollars in Thousands) |   |
| Securities held to maturity:                                                                          |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |
|    U.S. Government and agency obligations                                              |   | $                      | (12    | )      |                | $      | 5,988  |       |   | $ | - |   |   | $ | - |   |   | $ | (12 | ) |   | $ | 5,988 |   |
|                                                                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total securities held to maturity   |   |                   | (12    | )      |                |   | 5,988  |       |   |   |   |   |   |   |   |   |   |   | (12 | ) |   |   | 5,988 |   |
|                                                                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities available for sale:                                                                        |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Mortgage-backed securities - Non-agency                                             |   |                   | (9     | )      |                |   | 225    |       |   |   | (1,037 | ) |   |   | 3,311 |   |   |   | (1,046 | ) |   |   | 3,536 |   |
|                                                                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total securities available for sale |   |                   | (9     | )      |                |   | 225    |       |   |   | (1,037 | ) |   |   | 3,311 |   |   |   | (1,046 | ) |   |   | 3,536 |   |
|                                                                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                 |   | $                      | (21    | )      |                | $      | 6,213  |       |   | $ | (1,037 | ) |   | $ | 3,311 |   |   | $ | (1,058 | ) |   | $ | 9,524 |   |

----

|                                                                                                                         |   | (Dollars in thousands) |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|
| Credit component of OTTI as of October 1, 2010                                                                               |   | $                      | 3,087  |   |
|                                                                                                                         |   |                   |   |   |
| Additions for credit-related OTTI charges on previously unimpaired securities                                                |   |                   | -      |   |
|                                                                                                                         |   |                   |   |   |
| Additional increases as a result of impairment charges recognized on investments for which an OTTI was previously recognized |   |                   | 95     |   |
|                                                                                                                         |   |                   |   |   |
| Credit component of OTTI as of December 31, 2010                                                                             |   | $                      | 3,182  |   |

----

----

|                             |   | December 31, 2010      |    |
|----------------------------------|--------|------------------------|---------|
|                             |   | Held to Maturity       |    |   | Available for Sale |   |
|                             |   |                   |    |   |   |   |   |   |   |   |   |   |
|                             |   | Amortized              |    |   | Fair |   |   | Amortized |   |   | Fair |   |
|                             |   | Cost                   |    |   | Value |   |   | Cost |   |   | Value |   |
|                             |   | (Dollars in Thousands) |    |
| Due within one year              |   | $                      | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Due after one through five years |   |                   | 13,000  |   |   |   | 12,869 |   |   |   | - |   |   |   | - |   |
| Due after five through ten years |   |                   | 29,994  |   |   |   | 30,337 |   |   |   | 2,999 |   |   |   | 3,081 |   |
| Due after ten years              |   |                   | 57,709  |   |   |   | 57,237 |   |   |   | 3,999 |   |   |   | 3,939 |   |
|                             |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                            |   | $                      | 100,703 |   |   | $ | 100,443 |   |   | $ | 6,998 |   |   | $ | 7,020 |   |

|                                                                          |   | December 31,           |    |   | September 30, |   |
|-------------------------------------------------------------------------------|--------|------------------------|---------|--------|---------------|--------|
|                                                                          |   | 2010                   |    |   | 2010          |   |
|                                                                          |   | (Dollars in Thousands) |    |
| One-to-four family residential                                                |   | $                      | 198,345 |   |          | $      | 197,164 |   |
| Multi-family residential                                                      |   |                   | 3,950   |   |          |   | 4,006 |   |
| Commercial real estate                                                        |   |                   | 21,214  |   |          |   | 19,710 |   |
| Construction and land development                                             |   |                   | 35,620  |   |          |   | 40,650 |   |
| Commercial business                                                           |   |                   | 882     |   |          |   | 893 |   |
| Consumer                                                                      |   |                   | 720     |   |          |   | 595 |   |
|                                                                          |   |                   |    |   |          |   |   |   |
|            Total loans |   |                   | 260,731 |   |          |   | 263,018 |   |
|                                                                          |   |                   |    |   |          |   |   |   |
|   Undisbursed portion of loans-in-process                           |   |                   | (4,847  | )      |          |   | (5,366 | ) |
|   Deferred loan costs, net                                          |   |                   | 566     |   |          |   | 590 |   |
|   Allowance for loan losses                                         |   |                   | (3,731  | )      |          |   | (3,151 | ) |
|                                                                          |   |                   |    |   |          |   |   |   |
| Net                                                                           |   | $                      | 252,719 |   |          | $      | 255,091 |   |

----

|                                  |   | One- to four-familyresidential    |    |   |   Multi-familyresidential |   |   |   Commercialreal estate |   |   | Constructionand landdevelopment |   |   |   Commercialbusiness |   |   |   Consumer |   |   |   Total |   |
|---------------------------------------|--------|-----------------------------------|---------|--------|--------------------------------|--------|--------|------------------------------|--------|--------|---------------------------------|--------|--------|---------------------------|--------|--------|-----------------|--------|--------|--------------|--------|
|                                  |   |   (Dollars inThousands) |    |
| Total loans                           |   | $                                 | 198,345 |   |                           | $      | 3,950  |                         |   | $      | 21,214                          |   |   | $                         | 35,620 |   |            | $      | 882    |         |   | $ | 720 |   |   | $ | 260,731 |   |
| Individually evaluated for impairment |   | $                                 | 2,824   |   |                           | $      | -      |                         |   | $      | -                               |   |   | $                         | 5,816  |   |            | $      | -      |         |   | $ | - |   |   | $ | 8,640 |   |
| Collectively evaluated for impairment |   |                              | 195,521 |   |                           |   | 3,950  |                         |   |   | 21,214                          |   |   |                      | 29,804 |   |            |   | 882    |         |   |   | 720 |   |   |   | 252,091 |   |

|                              |   |                        |   |   |        |   |   | Impaired                   |   |   |       |   |   |      |   |
|-----------------------------------|--------|-----------------------------|--------|--------|-------------|--------|--------|----------------------------|--------|--------|------------|--------|--------|-----------|--------|
|                              |   |                        |   |   |        |   |   | Loans with                 |   |   |       |   |   |      |   |
|                              |   | Impaired Loans with         |   |   | No Specific |   |   |                       |   |   |       |   |
|                              |   | Specific Allowance          |   |   | Allowance   |   |   |   Total ImpairedLoans |   |
|                              |   |  (Dollars inThousands) |   |
|                              |   |                        |   |   |        |   |   |                       |   |   |       |   |   |      | Unpaid |   |
|                              |   | Recorded                    |   |   | Related     |   |   | Recorded                   |   |   | Recorded   |   |   | Principal |   |
|                              |   | Investment                  |   |   | Allowance   |   |   | Investment                 |   |   | Investment |   |   | Balance   |   |
| One-to-four family residential    |   | $                           | 2,824  |   |        | $      | 16     |                       |   | $      | -          |   |   | $         | 2,824  |   |   | $ | 2,824 |   |
| Multi-family residential          |   | -                           |   |   | -           |   |   |                       | -      |   |       | -      |   |      | -      |   |
| Commercial real estate            |   | -                           |   |   | -           |   |   |                       | -      |   |       | -      |   |      | -      |   |
| Construction and land development |   |                        | 5,191  |   |        |   | 1,166  |                       |   |   | 625        |   |   |      | 5,816  |   |   |   | 5,816 |   |
| Commercial business               |   | -                           |   |   | -           |   |   |                       | -      |   |       | -      |   |      | -      |   |
| Consumer                          |   | -                           |   |   | -           |   |   |                       | -      |   |       | -      |   |      | -      |   |
| Total Loans                       |   | $                           | 8,015  |   |        | $      | 1,182  |                       |   | $      | 625        |   |   | $         | 8,640  |   |   | $ | 8,640 |   |

----

|                                                             | Three monthsended     |         |
|------------------------------------------------------------------|-----------------------|--------------|
|                                                             |                  | December 31, |   |
|                                                             | (Dollars inThousands) |         |
|                                                             |                  | 2010         |   |   |   | 2009 |   |
| Average recorded investment in impaired loans                    |                  | $            | 6,850 |   |   | $ | 1,665 |   |
| Interest income recognized on an accrual basis on impaired loans |                  |         | 68 |   |   | - |   |
| Interest income recognized on a cash basis on impaired loans     |                  |         | 15 |   |   |   | 8 |   |

|                              |   |                        |    |   | Special |   |   |        |   |   |     |   |   | Total  |   |
|-----------------------------------|--------|-----------------------------|---------|--------|---------|--------|--------|-------------|--------|--------|----------|--------|--------|--------|--------|
|                              |   | Pass                        |    |   | Mention |   |   | Substandard |   |   | Doubtful |   |   | Loans  |   |
|                              |   |  (Dollarsin Thousands) |    |
| One-to-four family residential    |   | $                           | 191,735 |   |    | $      | -      |        |   | $      | 6,610    |   |   | $      | -      |   |   | $ | 198,345 |   |
| Multi-family residential          |   |                        | 3,950   |   |    |   | -      |        |   |   | -        |   |   |   | -      |   |   |   | 3,950 |   |
| Commercial real estate            |   |                        | 20,319  |   |    |   | -      |        |   |   | 895      |   |   |   | -      |   |   |   | 21,214 |   |
| Construction and land development |   |                        | 20,538  |   |    |   | 4,331  |        |   |   | 10,751   |   |   |   | -      |   |   |   | 35,620 |   |
| Commercial business               |   |                        | 882     |   |    |   | -      |        |   |   | -        |   |   |   | -      |   |   |   | 882 |   |
| Consumer                          |   |                        | 720     |   |    |   | -      |        |   |   | -        |   |   |   | -      |   |   |   | 720 |   |
| Total Loans                       |   | $                           | 238,144 |   |    | $      | 4,331  |        |   | $      | 18,256   |   |   | $      | -      |   |   | $ | 260,731 |   |

----

|                              |   |                        |    |   |       |   |     |   |        | Total  |   |    |   |   |   |   |   |
|-----------------------------------|--------|-----------------------------|---------|--------|------------|--------|----------|--------|-------------|--------|--------|---------|--------|--------|--------|--------|--------|
|                              |   |                        |    |   | 30-89 Days |   | 90Days+  |   | PastDue     |   |   | Non-    |   |   | Total  |   |
|                              |   | Current                     |    |   | PastDue    |   | Past Due |   | andaccruing |   |   | Accrual |   |   | Loans  |   |
|                              |   |  (Dollars inThousands) |    |
| One-to-four family residential    |   | $                           | 190,399 |   |       | $      | 1,618    |   |        | $      | 3,197  |    |   | $      | 4,815  |   |   | $ | 3,131 |   |   | $ | 198,345 |   |
| Multi-family residential          |   |                        | 3,950   |   |       |   | -        |   |        |   | -      |    |   |   | -      |   |   |   | - |   |   |   | 3,950 |   |
| Commercial real estate            |   |                        | 20,319  |   |       |   | -        |   |        |   | 485    |    |   |   | 485    |   |   |   | 410 |   |   |   | 21,214 |   |
| Construction and land development |   |                        | 35,414  |   |       |   | -        |   |        |   | -      |    |   |   | -      |   |   |   | 206 |   |   |   | 35,620 |   |
| Commercial business               |   |                        | 882     |   |       |   | -        |   |        |   | -      |    |   |   | -      |   |   |   | - |   |   |   | 882 |   |
| Consumer                          |   |                        | 720     |   |       |   | -        |   |        |   | -      |    |   |   | -      |   |   |   | - |   |   |   | 720 |   |
| Total Loans                       |   | $                           | 251,684 |   |       | $      | 1,618    |   |        | $      | 3,682  |    |   | $      | 5,300  |   |   | $ | 3,747 |   |   | $ | 260,731 |   |

----

|                         |   | Three Months Ended December 31, |   |
|------------------------------|--------|---------------------------------|--------|
|                         |   | 2010                            |   |   | 2009 |   |
|                         |   | (Dollars in Thousands)          |   |
|                         |   |                            |   |   |   |   |
| Balance, beginning of period |   | $                               | 3,151  |   |   | $ | 2,732 |   |
| Provision for loan losses    |   |                            | 580    |   |   |   | 135 |   |
| Charge-offs                  |   |                            | -      |   |   |   | - |   |
| Recoveries                   |   |                            | -      |   |   |   | - |   |
|                         |   |                            |   |   |   |   |   |   |
| Balance, end of period       |   | $                               | 3,731  |   |   | $ | 2,867 |   |

|                                          |   | December 31,           |    |   | September 30, |   |
|-----------------------------------------------|--------|------------------------|---------|--------|---------------|--------|
|                                          |   | 2010                   |    |   | 2010          |   |
|                                          |   |                   |    |   |          |   |   |   |   |   |   |   |
|                                          |   | Amount                 |    |   | Percent       |   |   | Amount |   |   | Percent |   |
|                                          |   | (Dollars in Thousands) |    |
| Money market deposit accounts                 |   | $                      | 75,378  |   |          |   | 16.2 | % |   | $ | 75,822 |   |   |   | 16.3 | % |
| Checking accounts (1)                         |   |                   | 31,676  |   |          |   | 6.8 |   |   |   | 28,642 |   |   |   | 6.2 |   |
| Passbook, club and statement savings          |   |                   | 70,001  |   |          |   | 15.1 |   |   |   | 69,901 |   |   |   | 15.1 |   |
| Certificates maturing in six months or less   |   |                   | 154,092 |   |          |   | 33.3 |   |   |   | 111,180 |   |   |   | 23.9 |   |
| Certificates maturing in more than six months |   |                   | 132,887 |   |          |   | 28.6 |   |   |   | 178,910 |   |   |   | 38.5 |   |
|                                          |   |                   |    |   |          |   |   |   |   |   |   |   |   |   |   |   |
|   Total                             |   | $                      | 464,034 |   |          |   | 100.0 | % |   | $ | 464,455 |   |   |   | 100.0 | % |

|             (1)   | Includes interest and non-interest bearing checking accounts. |
|-----------------------------------------------------------------------------------------|---------------------------------------------------------------|

----

| 6. |   INCOME TAXES |
|----|---------------------|

|                                                         |   | December 31,           |   |   | September 30, |   |
|--------------------------------------------------------------|--------|------------------------|--------|--------|---------------|--------|
|                                                         |   | 2010                   |   |   | 2010          |   |
| Deferred tax assets:                                         |   | (Dollars in Thousands) |   |
|   Deposit premium                                  |   | $                      | 106    |   |          | $      | 118 |   |
|   Allowance for loan losses                        |   |                   | 1,333  |   |          |   | 1,114 |   |
|   Real estate owned expenses                       |   |                   | 2      |   |          |   | 291 |   |
|   Nonaccrual interest                              |   |                   | 17     |   |          |   | - |   |
|   Accrued vacation                                 |   |                   | 63     |   |          |   | 59 |   |
|   Capital loss carryforward                        |   |                   | 1,873  |   |          |   | 1,873 |   |
|   Impairment loss                                  |   |                   | 1,585  |   |          |   | 1,553 |   |
|   Split dollar life insurance                      |   |                   | 32     |   |          |   | 33 |   |
|   Post-retirement benefits                         |   |                   | 171    |   |          |   | 173 |   |
|   Employee benefit plans                           |   |                   | 342    |   |          |   | 298 |   |
|    Total deferred tax assets                  |   |                   | 5,524  |   |          |   | 5,512 |   |
|    Valuation allowance                        |   |                   | (2,538 | )      |          |   | (2,209 | ) |
| Total deferred tax assets, net of valuation allowance        |   |                   | 2,986  |   |          |   | 3,303 |   |
|                                                         |   |                   |   |   |          |   |   |   |
| Deferred tax liabilities:                                    |   |                   |   |   |          |   |   |   |
|   Unrealized gain on available for sale securities |   |                   | 514    |   |          |   | 861 |   |
|   Property                                         |   |                   | 478    |   |          |   | 478 |   |
|   Mortgage servicing rights                        |   |                   | 2      |   |          |   | 2 |   |
|   Deferred loan fees                               |   |                   | 192    |   |          |   | 200 |   |
| Total deferred tax liabilities                               |   |                   | 1,186  |   |          |   | 1,541 |   |
|                                                         |   |                   |   |   |          |   |   |   |
| Net deferred tax asset                                       |   | $                      | 1,800  |   |          | $      | 1,762 |   |

----

|                                            |   |  Three Months EndedDecember 31, 2010 |    |
|-------------------------------------------------|--------|-------------------------------------------|---------|
|                                            |   |   Number ofShares                    |    |   | Weighted AverageGrant Date FairValue |   |
|                                            |   |                                      |    |   |   |   |   |   |
| Nonvested stock awards at October 1, 2010       |   |                                      | 144,236 |   |   | $ | 11.11 |   |
|    Issued                        |   |                                      | -       |   |   |   | - |   |
|    Vested                        |   |                                      | -       |   |   |   | - |   |
| Nonvested stock awards at the December 31, 2010 |   |                                      | 144,236 |   |   | $ | 11.11 |   |

----

|                             |   |            | Three Months EndedDecember 31, 2010 |   |
|----------------------------------|--------|-----------------|-------------------------------------|--------|
|                             |   | Number ofShares |                                |   |  Weighted AverageExercise Price |   |
|                             |   |            |                                |   |   |   |   |   |
| Outstanding at October 1, 2010   |   |            | 442,400                             |   |   | $ | 11.12 |   |
| Granted                          |   |            | -                                   |   |   |   | - |   |
| Exercised                        |   |            | -                                   |   |   |   | - |   |
| Forfeited                        |   |            | -                                   |   |   |   | - |   |
| Outstanding at December 31, 2010 |   |            | 442,400                             |   |   | $ | 11.12 |   |
| Exercisable at December 31, 2010 |   |            | 85,653                              |   |   | $ | 11.17 |   |

|                     |   | Granted Fiscal Year Ended |   |
|--------------------------|--------|---------------------------|--------|
|                     |   | 2009                      |   |   | 2010 |   |
| Dividend yield           |   |                      | 1.79   | % |   |   | 2.10 | % |
| Expected volatility      |   |                      | 27.94  | % |   |   | 28.95 | % |
| Risk-free interest rate  |   |                      | 1.96   | % |   |   | 3.10 | % |
| Expected life of options |   | 6.5 years                 |   |   | 6.5 years |   |

| 8. | COMMITMENTS AND CONTINGENT LIABILITIES |
|----|----------------------------------------|

----

| 9. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
|----|-------------------------------------|

|                                                  |   |                   |    |   |         |   |
|-------------------------------------------------------|--------|------------------------|---------|--------|--------------|--------|
|                                                  |   | December 31,           |    |   | September 30 |   |
|                                                  |   | 2010                   |    |   | 2010         |   |
|                                                  |   |                   |    |   |         |   |   |   |   |   |   |   |
|                                                  |   | Carrying               |    |   | Fair         |   |   | Carrying |   |   | Fair |   |
|                                                  |   | Amount                 |    |   | Value        |   |   | Amount |   |   | Value |   |
|                                                  |   | (Dollars in Thousands) |    |
| Assets:                                               |   |                   |    |   |         |   |   |   |   |   |   |   |
|   Cash and cash equivalents                 |   | $                      | 50,304  |   |         | $      | 50,304 |   |   | $ | 66,524 |   |   | $ | 66,524 |   |
|   Investment and mortgage-backed            |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
|     securities held to maturity   |   |                   | 125,230 |   |         |   | 126,822 |   |   |   | 112,673 |   |   |   | 116,594 |   |
|   Investment and mortgage-backed            |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
|     securities available for sale |   |                   | 74,445  |   |         |   | 74,445 |   |   |   | 72,425 |   |   |   | 72,425 |   |
|   Loans receivable, net                     |   |                   | 252,719 |   |         |   | 258,866 |   |   |   | 255,091 |   |   |   | 262,777 |   |
|   Accrued interest receivable               |   |                   | 2,751   |   |         |   | 2,751 |   |   |   | 2,669 |   |   |   | 2,669 |   |
|   Federal Home Loan Bank stock              |   |                   | 3,368   |   |         |   | 3,368 |   |   |   | 3,545 |   |   |   | 3,545 |   |
|   Bank owned life insurance                 |   |                   | 6,040   |   |         |   | 6,040 |   |   |   | 5,990 |   |   |   | 5,990 |   |
|                                                  |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                          |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
|   Checking accounts                         |   |                   | 31,676  |   |         |   | 31,676 |   |   |   | 28,642 |   |   |   | 28,642 |   |
|   Money market deposit accounts             |   |                   | 75,378  |   |         |   | 75,378 |   |   |   | 75,822 |   |   |   | 75,822 |   |
|   Passbook, club and statement              |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
|     savings accounts              |   |                   | 70,001  |   |         |   | 70,001 |   |   |   | 69,901 |   |   |   | 69,901 |   |
|   Certificates of deposit                   |   |                   | 286,979 |   |         |   | 292,625 |   |   |   | 290,090 |   |   |   | 296,087 |   |
|   Advances from Federal Home                |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
|     Loan Bank                     |   |                   | 604     |   |         |   | 602 |   |   |   | 615 |   |   |   | 614 |   |
|   Accrued interest payable                  |   |                   | 89      |   |         |   | 89 |   |   |   | 3,361 |   |   |   | 3,361 |   |
|                                                  |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |

----

| 10. | FAIR VALUE MEASUREMENT |
|-----|------------------------|

----

| Level 1 | Quoted prices in active markets for identical assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.                                                                                                                                                 |
| Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.  |

|                                                                    |   | Category Used for Fair Value Measurement |   |
|-------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                    |   | Level 1                                  |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                                                                    |   | (Dollars in Thousands)                   |   |
|                                                                    |   |                                     |   |   |   |   |   |   |   |   |   |   |
| Assets:                                                                 |   |                                     |   |   |   |   |   |   |   |   |   |   |
| Securities available for sale:                                          |   |                                     |   |   |   |   |   |   |   |   |   |   |
|   U.S. Government and agency obligations                      |   | $                                        | -      |   |   | $ | 7,020 |   |   | $ | - |   |   | $ | 7,020 |   |
|   Mortgage-backed securities - U.S. Government agencies       |   |                                     | -      |   |   |   | 60,607 |   |   |   | - |   |   |   | 60,607 |   |
|   Mortgage-backed securities - Non-agency                     |   |                                     | -      |   |   |   | 6,810 |   |   |   | - |   |   |   | 6,810 |   |
|   FHLMC preferred stock                                       |   |                                     | 8      |   |   |   | - |   |   |   | - |   |   |   | 8 |   |
|            Total |   | $                                        | 8      |   |   | $ | 74,437 |   |   | $ | - |   |   | $ | 74,445 |   |

|                                                                    |   | Category Used for Fair Value Measurement |   |
|-------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                    |   | Level 1                                  |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                                                                    |   | (Dollars in Thousands)                   |   |
|                                                                    |   |                                     |   |   |   |   |   |   |   |   |   |   |
| Assets:                                                                 |   |                                     |   |   |   |   |   |   |   |   |   |   |
| Securities available for sale:                                          |   |                                     |   |   |   |   |   |   |   |   |   |   |
|   U.S. Government and agency obligations                      |   | $                                        | -      |   |   | $ | 10,193 |   |   | $ | - |   |   | $ | 10,193 |   |
|   Mortgage-backed securities - U.S. Government agencies       |   |                                     | -      |   |   |   | 55,025 |   |   |   | - |   |   |   | 55,025 |   |
|   Mortgage-backed securities - Non-agency                     |   |                                     | -      |   |   |   | 7,199 |   |   |   | - |   |   |   | 7,199 |   |
|   FHLMC preferred stock                                       |   |                                     | 8      |   |   |   | - |   |   |   | - |   |   |   | 8 |   |
|            Total |   | $                                        | 8      |   |   | $ | 72,417 |   |   | $ | - |   |   | $ | 72,425 |   |

----

|              |   | At December 31, 2010   |   |
|-------------------|--------|------------------------|--------|
|              |   | (Dollars in Thousands) |   |
|              |   | Level 1                |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Impaired Loans    |   | $                      | -      |   |   | $ | 7,458 |   |   | $ | - |   |   | $ | 7,458 |   |
| Real estate owned |   |                   | -      |   |   |   | 2,034 |   |   |   | - |   |   | $ | 2,034 |   |
| Total             |   | $                      | -      |   |   | $ | 9,492 |   |   | $ | - |   |   | $ | 9,492 |   |

|              |   | At September 30, 2010  |   |
|-------------------|--------|------------------------|--------|
|              |   | (Dollars in Thousands) |   |
|              |   |                   |   |   |   |   |   |   |   |   |   |   |
|              |   | Level 1                |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Impaired Loans    |   | $                      | -      |   |   | $ | 4,249 |   |   | $ | - |   |   |   | 4,249 |   |
| Real estate owned |   |                   | -      |   |   |   | 3,197 |   |   |   | - |   |   |   | 3,197 |   |
| Total             |   | $                      | -      |   |   | $ | 7,446 |   |   | $ | - |   |   | $ | 7,446 |   |

----

----

| ● | Levels of past due, classified and non-accrual loans, troubled debt restructurings and modifications |
|---------|------------------------------------------------------------------------------------------------------|

| ● | Nature and volume of loans |
|---------|----------------------------|

| ● | Changes in lending policies and procedures, underwriting standards, collections, charge-offs and recoveries and for commercial loans, the level of loans being approved with exceptions to lending policy |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Experience, ability and depth of management and staff |
|---------|-------------------------------------------------------|

| ● | National and local economic and business conditions, including various market segments |
|---------|----------------------------------------------------------------------------------------|

| ● | Quality of the Company’s loan review system and degree of Board oversight |
|---------|---------------------------------------------------------------------------------|

| ● | Concentrations of credit and changes in levels of such concentrations |
|---------|-----------------------------------------------------------------------|

| ● | Effect of external factors on the level of estimated credit losses in the current portfolio |
|---------|---------------------------------------------------------------------------------------------|

----

----

----

----

|                                                                                 |   |                           |    |   |     |   |   |              |   |   |           |   |   |     |    |   |              |   |
|--------------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|----------|--------|--------|-------------------|--------|--------|----------------|--------|--------|----------|---------|--------|-------------------|--------|
|                                                                                 |   | Three MonthsEnded December 31, |    |
|                                                                                 |   | 2010                           |    |   | 2009     |   |
|                                                                                 |   | AverageBalance                 |    |   | Interest |   |   | AverageYield/Rate |   |   | AverageBalance |   |   | Interest |    |   | AverageYield/Rate |   |
|                                                                                 |   |                           |    |
|                                                                                 |   | (Dollars in Thousands)         |    |
| Interest-earning assets:                                                             |   |                           |    |   |     |   |   |              |   |   |           |   |   |     |    |   |              |   |
| Investment securities                                                                |   | $                              | 99,371  |   |     | $      | 932    |              |   |   | 3.75           | %      |   | $        | 126,535 |   |              | $      | 1,490 |   |   |   | 4.71 | % |
| Mortgage-backed securities                                                           |   |                           | 88,339  |   |     |   | 1,065  |              |   |   | 4.82           |   |   |     | 94,671  |   |              |   | 1,223 |   |   |   | 5.17 |   |
| Loans receivable(1)                                                                  |   |                           | 255,129 |   |     |   | 3,623  |              |   |   | 5.68           |   |   |     | 256,079 |   |              |   | 3,751 |   |   |   | 5.86 |   |
| Other interest-earning assets                                                        |   |                           | 63,362  |   |     |   | 33     |              |   |   | 0.21           |   |   |     | 5,100   |   |              |   | 2 |   |   |   | 0.16 |   |
| Total interest-earning assets                                                        |   |                           | 506,201 |   |     |   | 5,653  |              |   |   | 4.47           |   |   |     | 482,385 |   |              |   | 6,466 |   |   |   | 5.36 |   |
| Cash and non-interest-bearing balances                                               |   |                           | 3,160   |   |     |   |   |              |   |   |           |   |   |     | 8,010   |   |              |   |   |   |   |   |   |   |
| Other non-interest-earning assets                                                    |   |                           | 18,620  |   |     |   |   |              |   |   |           |   |   |     | 18,180  |   |              |   |   |   |   |   |   |   |
| Total assets                                                                         |   | $                              | 527,981 |   |     |   |   |              |   |   |           |   |   | $        | 508,575 |   |              |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                        |   |                           |    |   |     |   |   |              |   |   |           |   |   |     |    |   |              |   |   |   |   |   |   |   |
| Savings accounts                                                                     |   | $                              | 69,391  |   |     |   | 229    |              |   |   | 1.32           |   |   | $        | 67,997  |   |              |   | 327 |   |   |   | 1.92 |   |
| Money market deposit and NOW accounts                                                |   |                           | 103,262 |   |     |   | 202    |              |   |   | 0.78           |   |   |     | 106,462 |   |              |   | 293 |   |   |   | 1.10 |   |
| Certificates of deposit                                                              |   |                           | 287,327 |   |     |   | 1,588  |              |   |   | 2.21           |   |   |     | 246,200 |   |              |   | 1,650 |   |   |   | 2.68 |   |
| Total deposits                                                                       |   |                           | 459,980 |   |     |   | 2,019  |              |   |   | 1.76           |   |   |     | 420,659 |   |              |   | 2,270 |   |   |   | 2.16 |   |
| Advances from Federal Home Loan Bank                                                 |   |                           | 608     |   |     |   | 2      |              |   |   | 1.32           |   |   |     | 20,043  |   |              |   | 217 |   |   |   | 4.33 |   |
| Advances from borrowers for taxes and insurance                                      |   |                           | 1,429   |   |     |   | 1      |              |   |   | 0.28           |   |   |     | 1,476   |   |              |   | 2 |   |   |   | 0.54 |   |
| Total interest-bearing liabilities                                                   |   |                           | 462,017 |   |     |   | 2,022  |              |   |   | 1.75           |   |   |     | 442,178 |   |              |   | 2,489 |   |   |   | 2.25 |   |
| Non-interest-bearing liabilities:                                                    |   |                           |    |   |     |   |   |              |   |   |           |   |   |     |    |   |              |   |   |   |   |   |   |   |
| Non-interest-bearing demand accounts                                                 |   |                           | 2,768   |   |     |   |   |              |   |   |           |   |   |     | 3,047   |   |              |   |   |   |   |   |   |   |
| Other liabilities                                                                    |   |                           | 6,725   |   |     |   |   |              |   |   |           |   |   |     | 7,449   |   |              |   |   |   |   |   |   |   |
| Total liabilities                                                                    |   |                           | 471,510 |   |     |   |   |              |   |   |           |   |   |     | 452,674 |   |              |   |   |   |   |   |   |   |
| Stockholders’ equity                                                           |   |                           | 56,471  |   |     |   |   |              |   |   |           |   |   |     | 55,901  |   |              |   |   |   |   |   |   |   |
|       Total liabilities and stockholders’ equity |   | $                              | 527,981 |   |     |   |   |              |   |   |           |   |   | $        | 508,575 |   |              |   |   |   |   |   |   |   |
| Net interest-earning assets                                                          |   | $                              | 44,184  |   |     |   |   |              |   |   |           |   |   | $        | 40,207  |   |              |   |   |   |   |   |   |   |
| Net interest income; interest rate spread                                            |   |                           |    |   |     | $      | 3,631  |              |   |   | 2.72           | %      |   |     |    |   |              | $      | 3,977 |   |   |   | 3.11 | % |
| Net interest margin(2)                                                               |   |                           |    |   |     |   |   |              |   |   | 2.87           | %      |   |     |    |   |              |   |   |   |   |   | 3.30 | % |
|                                                                                 |   |                           |    |   |     |   |   |              |   |   |           |   |   |     |    |   |              |   |   |   |   |   |   |   |
| Average interest-earning assets to average interest-bearing liabilities              |   |                           |    |   |     |   | 109.56 | %            |   |   |           |   |   |     |    |   |              |   | 109.09 | % |   |   |   |   |

----

| (1)  Includes non-accrual loans.  Calculated net of unamortized deferred fees, undisbursed portion of loans-in-process and allowance for loan losses. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  Equals net interest income divided by average interest-earning assets. |
|---------------------------------------------------------------------------------------|

----

----

----

|                                     |   |         |   |   |             |   |   | To Be             |   |
|------------------------------------------|--------|--------------|--------|--------|------------------|--------|--------|-------------------|--------|
|                                     |   |         |   |   |             |   |   | Well Capitalized  |   |
|                                     |   |         |   |   | Required for     |   |   | Under Prompt      |   |
|                                     |   |         |   |   | Capital Adequacy |   |   | Corrective Action |   |
|                                     |   | Actual Ratio |   |   | Purposes         |   |   | Provisions        |   |
| December 31, 2010:                       |   |         |   |   |             |   |   |              |   |
| Tier 1 capital (to average assets)       |   |         |   |   |             |   |   |              |   |
| The Company                              |   |         | 10.41  | %      |             |   | 4.0    | %                 |   |   | N/A |   |
| The Bank                                 |   |         | 9.48   | %      |             |   | 4.0    | %                 |   |   | 5.0 | % |
|                                     |   |         |   |   |             |   |   |              |   |   |   |   |
| Tier 1 capital (to risk weighted assets) |   |         |   |   |             |   |   |              |   |   |   |   |
| The Company                              |   |         | 23.15  | %      |             |   | 4.0    | %                 |   |   | N/A |   |
| The Bank                                 |   |         | 21.09  | %      |             |   | 4.0    | %                 |   |   | 6.0 | % |
|                                     |   |         |   |   |             |   |   |              |   |   |   |   |
| Total capital (to risk weighted assets)  |   |         |   |   |             |   |   |              |   |   |   |   |
| The Company                              |   |         | 24.41  | %      |             |   | 8.0    | %                 |   |   | N/A |   |
| The Bank                                 |   |         | 22.35  | %      |             |   | 8.0    | %                 |   |   | 10.0 | % |
|                                     |   |         |   |   |             |   |   |              |   |   |   |   |
| September 30, 2010:                      |   |         |   |   |             |   |   |              |   |   |   |   |
| Tier 1 capital (to average assets)       |   |         |   |   |             |   |   |              |   |   |   |   |
| Company                                  |   |         | 10.27  | %      |             |   | 4.0    | %                 |   |   | N/A |   |
| Bank                                     |   |         | 9.46   | %      |             |   | 4.0    | %                 |   |   | 5.0 | % |
|                                     |   |         |   |   |             |   |   |              |   |   |   |   |
| Tier 1 capital (to risk-weighted assets) |   |         |   |   |             |   |   |              |   |   |   |   |
| Company                                  |   |         | 23.12  | %      |             |   | 4.0    | %                 |   |   | N/A |   |
| Bank                                     |   |         | 21.28  | %      |             |   | 4.0    | %                 |   |   | 6.0 | % |
|                                     |   |         |   |   |             |   |   |              |   |   |   |   |
| Total capital (to risk-weighted assets)  |   |         |   |   |             |   |   |              |   |   |   |   |
| Company                                  |   |         | 24.37  | %      |             |   | 8.0    | %                 |   |   | N/A |   |
| Bank                                     |   |         | 22.53  | %      |             |   | 8.0    | %                 |   |   | 10.0 | % |

----

----

|                                                                                                               |   |                   |   |   | More than |   |    | More than  |   |   | More than  |   |   |      |    |   |   |   |
|--------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|-----------|--------|---------|------------|--------|--------|------------|--------|--------|-----------|---------|--------|--------|--------|
|                                                                                                               |   | 3 Months               |   |   | 3 Months  |   |    | 1 Year     |   |   | 3 Years    |   |   | More than |    |   | Total  |   |
|                                                                                                               |   | or Less                |   |   | to 1 Year |   |    | to 3 Years |   |   | to 5 Years |   |   | 5 Years   |    |   | Amount |   |
|                                                                                                               |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |
|                                                                                                               |   | (Dollars in Thousands) |   |
| Interest-earning assets(1):                                                                                        |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |
| Investment and mortgage-backed securities(2)                                                                       |   | $                      | 11,845 |   |      | $      | 20,119  |       |   | $      | 29,295     |   |   | $         | 23,871  |   |   | $      | 113,035 |   |   | $ | 198,165 |   |
| Loans receivable(3)                                                                                                |   |                   | 34,991 |   |      |   | 54,458  |       |   |   | 83,443     |   |   |      | 40,187  |   |   |   | 42,805 |   |   |   | 255,884 |   |
| Other interest-earning assets(4)                                                                                   |   |                   | 50,394 |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   | 50,394 |   |
| Total interest-earning assets                                                                                      |   | $                      | 97,230 |   |      | $      | 74,577  |       |   | $      | 112,738    |   |   | $         | 64,058  |   |   | $      | 155,840 |   |   | $ | 504,443 |   |
|                                                                                                               |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                      |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Savings accounts                                                                                                   |   | $                      | 1,709  |   |      | $      | 4,894   |       |   | $      | 9,497      |   |   | $         | 8,715   |   |   | $      | 45,640 |   |   | $ | 70,455 |   |
| Money market deposit and NOW accounts                                                                              |   |                   | 4,076  |   |      |   | 12,230  |       |   |   | 24,363     |   |   |      | 18,116  |   |   |   | 44,839 |   |   |   | 103,624 |   |
| Certificates of deposit                                                                                            |   |                   | 70,559 |   |      |   | 134,774 |       |   |   | 56,734     |   |   |      | 24,912  |   |   |   |   |   |   |   | 286,979 |   |
| Advances from Federal Home Loan Bank                                                                               |   |                   | 38     |   |      |   | 115     |       |   |   | 111        |   |   |      | 340     |   |   |   |   |   |   |   | 604 |   |
| Advances from borrowers for taxes and insurance                                                                    |   |                   | 1,765  |   |      |   | -       |       |   |   | -          |   |   |      | -       |   |   |   | - |   |   |   | 1,765 |   |
| Total interest-bearing liabilities                                                                                 |   | $                      | 78,147 |   |      | $      | 152,013 |       |   | $      | 90,705     |   |   | $         | 52,083  |   |   | $      | 90,479 |   |   | $ | 463,427 |   |
|                                                                                                               |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Interest-earning assets                                                                                            |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| less interest-bearing liabilities                                                                                  |   | $                      | 19,083 |   |      | $      | (77,436 | )          |   | $      | 22,033     |   |   | $         | 11,975  |   |   | $      | 65,361 |   |   | $ | 41,016 |   |
|                                                                                                               |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Cumulative interest-rate sensitivity gap (5)                                                                       |   | $                      | 19,083 |   |      | $      | (58,353 | )          |   | $      | (36,320    | )      |   | $         | (24,345 | )      |   | $      | 41,016 |   |   |   |   |   |
|                                                                                                               |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Cumulative interest-rate gap as a percentage of total assets at December 31, 2010                                  |   |                   | 3.64   | %      |      |   | -11.14  | %          |   |   | -6.94      | %      |   |      | -4.65   | %      |   |   | 7.83 | % |   |   |   |   |
|                                                                                                               |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Cumulative interest-earning assets as a percentage of cumulative interest-bearing liabilities at December 31, 2010 |   |                   | 124.42 | %      |      |   | 74.65   | %          |   |   | 88.68      | %      |   |      | 93.47   | %      |   |   | 108.85 | % |   |   |   |   |

| (1) | Interest-earning assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | For purposes of the gap analysis, investment securities are stated at amortized cost. |
|-----|---------------------------------------------------------------------------------------|

| (3) | For purposes of the gap analysis, loans receivable includes non-performing loans and is gross of the allowance for loan losses and unamortized deferred loan fees, but net of the undisbursed portion of loans-in-process. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes FHLB stock. |
|-----|----------------------|

| (5) | Cumulative interest-rate sensitivity gap represents the difference between interest-earning assets and interest-bearing liabilities. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

----

|            |   |   |                   |   |   |            |   |   |     |   |   |                  |   |   |   |   |
|-----------------|--------|--------|------------------------|--------|--------|-----------------|--------|--------|----------|--------|--------|-----------------------|--------|--------|--------|--------|
| Change in       |   |   |                   |   |   |            |   |   |     |   |   | NPV as % of Portfolio |   |
| Interest Rates  |   |   | Net Portfolio Value    |   |   | Value of Assets |   |
| In Basis Points |   |   |                   |   |   |            |   |   |     |   |   |                  |   |   |   |   |
| (Rate Shock)    |   |   | Amount                 |   |   | $ Change        |   |   | % Change |   |   | NPV Ratio             |   |   | Change |   |
|            |   |   |                   |   |   |            |   |   |     |   |   |                  |   |   |   |   |
|            |   |   | (Dollars in Thousands) |   |
|            |   |   |                   |   |   |            |   |   |     |   |   |                  |   |   |   |   |
|            | 300    |   |                   | $      | 39,186 |            |   | $      | (42,721  | )      |   |                  | (52.16 | )%     |   |   | 8.45 | % |   |   | (6.98 | )% |
|            | 200    |   |                   |   | 52,789 |            |   |   | (29,118  | )      |   |                  | (35.55 | )%     |   |   | 10.83 | % |   |   | (4.60 | )% |
|            | 100    |   |                   |   | 66,873 |            |   |   | (15,034  | )      |   |                  | (18.35 | )%     |   |   | 13.18 | % |   |   | (2.25 | )% |
|            | Static |   |                   |   | 81,907 |            |   |   | -        |   |   |                  | -      |   |   |   | 15.43 | % |   |   | - |   |
|            | (100)  |   |                   |   | 82,435 |            |   |   | 528      |   |   |                  | 0.64   | %      |   |   | 15.26 | % |   |   | (0.17 | )% |
|            | (200)  |   |                   |   | 80,614 |            |   |   | (1,293   | )      |   |                  | (1.58  | )%     |   |   | 14.79 | % |   |   | (0.64 | )% |
|            | (300)  |   |                   |   | 80,705 |            |   |   | (1,202   | )      |   |                  | (1.47  | )%     |   |   | 14.63 | % |   |   | (0.80 | )% |

----

----

|   | (a) | Not applicable |
|--------|-----|----------------|

|   | (b) | Not applicable |
|--------|-----|----------------|

|   | (c) | There were no repurchases of common stock by the Company or purchases of common stock by the MHC during the quarter ended December 31, 2010. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit No. |   | Description                                                       |   |
|-------------|--------|-------------------------------------------------------------------|--------|
| 31.1        |   | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer |
| 31.2        |   | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer |
| 32.0        |   | Section 1350 Certifications                                       |

----

|   |   |              |   |                                                 |
|--------|--------|-------------------|--------|------------------------------------------------------|
|   | Date:  | February 14, 2011 |   |      By: /s/ Thomas A. Vento     |
|   |   |              |   | Thomas A. Vento                                      |
|   |   |              |   | President and Chief Executive Officer                |
|   |   |              |   |                                                 |
|   | Date:  | February 14, 2011 |   |      By: /s/ Joseph R. Corrato   |
|   |   |              |   | Joseph R. Corrato                                    |
|   |   |              |   | Executive Vice President and Chief Financial Officer |