UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)
[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                THE SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended December 31, 2008

                                       OR

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

For the transition period from _____ to _____

                         Commission File Number: 0-51102

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

            Federal                                         20-2107839
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                          Identification No.)

  2 East Main Street, Georgetown, MA                           01833
(Address of principal executive office)                     (Zip Code)

                                 (978) 352-8600
              (Registrant's telephone number, including area code)

                                      None
   (Former name, former address and former fiscal year, if changed since last
                                     report)

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

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

      Large accelerated filer  [ ]             Accelerated filer         [ ]
      Non-accelerated filer    [ ]             Smaller reporting company [X]

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

Indicate the number of shares  outstanding of the registrant's  common stock, as
of the latest practicable date: Common Stock, $0.10 par value,  2,638,387 shares
outstanding as of February 7, 2009.

<PAGE>

                                    Form 10-Q
                            GEORGETOWN BANCORP, INC.
                                Table of Contents

                                                                           Page
                                                                           ----
Part I.  Financial Information
         ---------------------

Item 1:  Financial Statements (Unaudited)

         Consolidated Statements of Financial Condition at December
         31, 2008 and June 30, 2008                                           1

         Consolidated Statements of Operations for the Three and Six
         Months Ended December 31, 2008 and 2007                              2

         Consolidated Statements of Changes in Stockholders' Equity
         for the Six Months Ended December 31, 2008 and 2007                  3

         Consolidated Statements of Cash Flows for the Six Months
         Ended December 31, 2008 and 2007                                     4

         Notes to Condensed Consolidated Financial Statements                 6

Item 2:  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                            8

Item 3:  Quantitative and Qualitative Disclosure About Market Risk           17

Item 4T: Controls and Procedures                                             17

Part II. Other Information
         -----------------

Item 1:  Legal Proceedings                                                   18
Item 1A: Risk Factors                                                        18
Item 2:  Unregistered Sales of Equity Securities and Use of Proceeds         18
Item 3:  Defaults upon Senior Securities                                     18
Item 4:  Submission of Matters to a Vote of Security Holders                 18
Item 5:  Other Information                                                   18
Item 6:  Exhibits                                                            18

SIGNATURES                                                                   19

<PAGE>

PART I--FINANCIAL INFORMATION

ITEM 1. Financial Statements

                            GEORGETOWN BANCORP, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                      ------------------------------------
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                  At            At
                                                             December 31,    June 30,
                                                                 2008          2008
                                                             ------------   ----------
                                                                   (In thousands)
<S>                                                          <C>            <C>
                                     ASSETS

Cash and due from banks                                      $      6,778   $   2,532
Short-term investments                                                664        2,923
                                                             ------------   ----------
      Total cash and cash equivalents                               7,442        5,455

Securities available for sale, at fair value                       12,171       12,703
Securities held to maturity, at amortized cost                      5,693        6,274
Federal Home Loan Bank stock, at cost                               3,111        3,008
Loans, net of allowance for loan losses of $1,385,000 at
   December 31, 2008 and $1,212,000 at June 30, 2008              165,767      148,909
Premises and equipment, net                                         4,338        4,458
Accrued interest receivable                                           737          674
Bank-owned life insurance                                           2,401        2,406
Other assets                                                          879          854
                                                             ------------   ----------

      Total assets                                           $    202,539   $  184,741
                                                             ============   ==========

                         LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                     $    130,714   $  106,292
Short-term Federal Home Loan Bank advances                          4,500       14,000
Long-term Federal Home Loan Bank advances                          47,945       45,321
Securities sold under agreements to repurchase                        488          552
Mortgagors' escrow accounts                                           394          361
Accrued expenses and other liabilities                              1,414        1,442
                                                             ------------   ----------
      Total liabilities                                           185,455      167,968
                                                             ------------   ----------

Commitments and contingencies

Stockholders' equity:
Preferred stock, $0.10 par value per share: 1,000,000
   shares authorized; none outstanding                                 --           --
Common Stock, $0.10 par value per share: 10,000,000 shares
   authorized; 2,777,250 shares issued                                278          278
Additional paid-in capital                                         11,452       11,452
Retained earnings                                                   6,920        6,819
Accumulated other comprehensive income (loss)                         150          (19)
Unearned compensation - ESOP (53,174 and 57,271 shares
   unallocated at December 31, 2008 and June 30, 2008,
   respectively)                                                     (532)        (573)
Treasury stock, at cost (138,863 shares at December 31,
   2008 and June 30, 2008)                                         (1,184)      (1,184)
                                                             ------------   ----------
      Total stockholders' equity                                   17,084       16,773
                                                             ------------   ----------

      Total liabilities and stockholders' equity             $    202,539   $  184,741
                                                             ============   ==========
</TABLE>

See notes to condensed consolidated financial statements.

                                        1

<PAGE>

                            GEORGETOWN BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                         -----------------------------
                                   (unaudited)

<TABLE>
<CAPTION>
                                                            Three Months Ended              Six Months Ended
                                                               December 31,                   December 31,
                                                            2008           2007           2008           2007
                                                        ------------   ------------   ------------   ------------
                                                                         (In thousands, except share data)
<S>                                                     <C>            <C>            <C>            <C>
Interest and dividend income:
   Loans, including fees                                $      2,451   $      2,086   $      4,763   $      4,062
   Securities                                                    222            279            445            565
   Short-term investments                                          1              9              6             25
                                                        ------------   ------------   ------------   ------------
      Total interest and dividend income                       2,674          2,374          5,214          4,652
                                                        ------------   ------------   ------------   ------------

Interest expense:
   Deposits                                                      653            743          1,216          1,474
   Short-term Federal Home Loan Bank advances                     30            136            106            249
   Long-term Federal Home Loan Bank advances                     520            478          1,048            946
   Securities sold under agreements to repurchase                  1              2              2              4
                                                        ------------   ------------   ------------   ------------
      Total interest expense                                   1,204          1,359          2,372          2,673
                                                        ------------   ------------   ------------   ------------

Net interest income                                            1,470          1,015          2,842          1,979
Provision for loan losses                                         91              2            178              3
                                                        ------------   ------------   ------------   ------------
Net interest income, after provision for loan losses           1,379          1,013          2,664          1,976
                                                        ------------   ------------   ------------   ------------

Non-interest income:
   Customer service fees                                         171            173            331            321
   Income (loss) from bank-owned life insurance                    9              7             (5)            23
   Other                                                          17              9             29             17
                                                        ------------   ------------   ------------   ------------
      Total non-interest income                                  197            189            355            361
                                                        ------------   ------------   ------------   ------------

Non-interest expenses:
   Salaries and employee benefits                                788            709          1,573          1,415
   Occupancy and equipment expenses                              198            220            390            430
   Data processing expenses                                       91             90            180            173
   Professional fees                                              81             80            151            162
   Advertising expense                                            53             37            115             97
   Other general and administrative expenses                     205            201            412            407
                                                        ------------   ------------   ------------   ------------
      Total non-interest expenses                              1,416          1,337          2,821          2,684
                                                        ------------   ------------   ------------   ------------

Income (loss) before income taxes                                160           (135)           198           (347)

Income tax provision (benefit)                                    53            (46)            79           (120)
                                                        ------------   ------------   ------------   ------------

Net income (loss)                                       $        107   $        (89)  $        119   $       (227)
                                                        ============   ============   ============   ============

Weighted average number of common shares outstanding:
   Basic and diluted                                       2,583,869      2,598,640      2,582,842      2,607,196

Net income (loss) per share:
   Basic and diluted                                    $       0.04   $      (0.03)  $       0.05   $      (0.08)
</TABLE>

See notes to condensed consolidated financial statements.

                                        2

<PAGE>

                            GEORGETOWN BANCORP, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                       -----------------------------------
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                              Accumulated
                                                     Additional                  Other          Unearned
                                                      Paid-in     Retained   Comprehensive   Compensation-   Treasury
                                      Common Stock    Capital     Earnings   Income (Loss)       ESOP          Stock     Total
                                      ------------   ----------   --------   -------------   -------------   --------   --------
                                                                           (In thousands)
<S>                                   <C>            <C>          <C>        <C>             <C>             <C>        <C>
Balance at June 30, 2007              $        278   $   11,452   $  7,522   $        (179)  $        (655)  $   (808)  $ 17,610
                                                                                                                        --------

Comprehensive loss:
   Net loss                                                           (227)                                                 (227)
   Net unrealized gain on
      securities available for
      sale, net of related tax
      effects of $116,000                                                              195                                   195
                                                                                                                        --------
         Total comprehensive loss                                                                                            (32)
                                                                                                                        --------

Common stock held by ESOP allocated
   or committed to be allocated
   (4,096 shares)                                                      (11)                             41                    30

Treasury stock purchased (43,063
   shares)                                                                                                       (303)      (303)
                                      ------------   ----------   --------   -------------   -------------   --------   --------

Balance at December 31, 2007          $        278   $   11,452   $  7,284   $          16   $        (614)  $ (1,111)  $ 17,305
                                      ============   ==========   ========   =============   =============   ========   ========

Balance at June 30, 2008              $        278   $   11,452   $  6,819   $         (19)  $        (573)  $ (1,184)  $ 16,773
                                                                                                                        --------

Comprehensive income:
   Net income                                                          119                                                   119
   Net unrealized gain on
      securities available for
      sale, net of related tax
      effects of $101,000                                                              169                                   169
                                                                                                                        --------
         Total comprehensive income                                                                                          288
                                                                                                                        --------

Common stock held by ESOP allocated
   or committed to be allocated
   (4,097 shares)                                                      (18)                             41                    23
                                      ------------   ----------   --------   -------------   -------------   --------   --------

Balance at December 31, 2008          $        278   $   11,452   $  6,920   $         150   $        (532)  $ (1,184)  $ 17,084
                                      ============   ==========   ========   =============   =============   ========   ========
</TABLE>

See notes to condensed consolidated financial statements.

                                        3

<PAGE>

                            GEORGETOWN BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          -----------------------------

                                   (unaudited)

<TABLE>
<CAPTION>
                                                                 Six Months Ended
                                                                   December 31,
                                                                 2008        2007
                                                               ---------   --------
                                                                  (In thousands)
<S>                                                            <C>         <C>
Cash flows from operating activities:
   Net income (loss)                                           $     119   $   (227)
   Adjustments to reconcile net income (loss) to net
      cash used by operating activities:
         Provision for loan losses                                   178          3
         Accretion of securities, net                                (17)       (16)
         Accretion of deferred loan costs, net                       (35)        --
         Depreciation and amortization expense                       189        234
         (Increase) decrease in accrued interest receivable          (63)        14
         Loss (income) from bank-owned life insurance                  5        (23)
         ESOP compensation expense                                    23         30
         Net change in other assets and liabilities                 (154)       (91)
                                                               ---------   --------
            Net cash provided (used) by operating activities         245        (76)
                                                               ---------   --------

Cash flows from investing activities:
   Activity in available-for-sale securities:
         Maturities, prepayments and calls                         1,814      3,324
         Purchases                                                (1,000)    (3,006)
   Activity in held-to-maturity securities:
         Maturities, prepayments and calls                           586      1,179
   Purchase of Federal Home Loan Bank stock                         (103)        --
   Loan principal originations, net                              (17,001)    (7,442)
   Purchase of premises and equipment                                (69)       (80)
                                                               ---------   --------
            Net cash used by investing activities                (15,773)    (6,025)
                                                               ---------   --------
</TABLE>

                                   (continued)

See notes to condensed consolidated financial statements.

                                        4

<PAGE>

                            GEORGETOWN BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          -----------------------------

                                   (unaudited)
                                   (concluded)

<TABLE>
<CAPTION>
                                                            Six Months Ended
                                                               December 31,
                                                            2008        2007
                                                          ---------   --------
                                                             (In thousands)
<S>                                                       <C>         <C>
Cash flows from financing activities:
   Net increase in deposits                                  24,422      1,566
   Net decrease in securities sold under agreements
      to repurchase                                             (64)       (86)
   Net change in borrowings with maturities of  three
      months or less                                        (11,000)    (3,100)
   Proceeds of Federal Home Loan Bank advances with
      maturities greater than three months                   15,500      7,000
   Repayments of Federal Home Loan Bank advances with
      maturities greater than three months                  (11,376)    (1,526)
   Treasury stock purchased                                      --       (303)
   Net change in mortgagors' escrow accounts                     33         24
                                                          ---------   --------
         Net cash provided by financing activities           17,515      3,575

Net change in cash and cash equivalents                       1,987     (2,526)

Cash and cash equivalents at beginning of period              5,455      5,603
                                                          ---------   --------

Cash and cash equivalents at end of period                $   7,442   $  3,077
                                                          =========   ========

Supplementary information:
      Interest paid on deposit accounts                   $   1,221   $  1,479
      Interest paid on borrowings                             1,152      1,196
      Income taxes paid                                          27          6
</TABLE>

See notes to condensed consolidated financial statements.

                                       5

<PAGE>

                            GEORGETOWN BANCORP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

      (1)   Basis of Presentation

      The accompanying  unaudited  financial  statements of Georgetown  Bancorp,
Inc. (the "Company") were prepared in accordance with instructions for Form 10-Q
and with  Regulation S-X and do not include  information or footnotes  necessary
for a complete presentation of financial condition,  results of operations,  and
cash flows in conformity with generally accepted accounting principles. However,
in the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments)  necessary for a fair presentation of the financial statements have
been included.  The results of operations  for the three- and six-month  periods
ended December 31, 2008 are not  necessarily  indicative of the results that may
be  expected  for future  periods,  including  the  entire  fiscal  year.  These
financial statements should be read in conjunction with the financial statements
and  notes  thereto  included  in the  2008  Consolidated  Financial  Statements
presented  in the  Company's  Annual  Report  on  Form  10-KSB  filed  with  the
Securities  and Exchange  Commission  on September  29, 2008.  The  consolidated
financial  statements  include the  accounts  of  Georgetown  Savings  Bank (the
"Bank") and its wholly  owned  subsidiary,  Georgetown  Securities  Corporation,
which engages in the buying, selling and holding of securities.  All significant
inter-company balances and transactions have been eliminated in consolidation.

      (2)   Critical Accounting Policies

      Our  critical  accounting  policies  are those  that  involve  significant
judgments and assumptions by management and that have, or could have, a material
impact  on our  income  or  the  carrying  value  of our  assets.  Our  critical
accounting  policies are those  related to our  allowance  for loan losses.  The
allowance for loan losses is the amount  estimated by management as necessary to
cover credit  losses  inherent in the loan  portfolio at the balance sheet date.
The  allowance  is  established  through the  provision  for loan losses that is
charged  against  income.  Management  performs a  quarterly  evaluation  of the
adequacy of the allowance  for loan losses.  We consider a variety of factors in
establishing  this  estimate  including,  but not limited to,  current  economic
conditions,  delinquency statistics, geographic and industry concentrations, the
adequacy of the underlying  collateral,  the financial strength of the borrower,
results of internal and external loan reviews and other relevant  factors.  This
evaluation  is  inherently  subjective,  as it requires  material  estimates  by
management that may be susceptible to significant change.

      The analysis has three components:  specific,  general, and an unallocated
component.  The specific  component  relates to loans that are  determined to be
impaired.  Impairment is measured by  determining  the present value of expected
future  cash flows or,  for  collateral-dependent  loans,  the fair value of the
collateral  adjusted for market  conditions  and selling  expenses.  The general
component is determined by segregating  the remaining  loans by type of loan and
payment history. We also analyze historical loss experience, delinquency trends,
general  economic  conditions and geographic and industry  concentrations.  This
analysis  establishes  factors  that are applied to the loan groups to determine
the  amount of the  general  component  of the  allowance  for loan  losses.  An
unallocated  component is  maintained to cover  uncertainties  that could affect
management's  estimate of probable  losses.  The  unallocated  component  of the
allowance  reflects  the  margin  of  imprecision  inherent  in  the  underlying
assumptions used in the  methodologies  for estimating  losses in the portfolio.
Because  of the  imprecision  surrounding  these  factors,  we may  maintain  an
unallocated  component  available  for other  factors that is not allocated to a
specific loan category.

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

                                        6

<PAGE>

      (3)   Net Income (Loss) Per Common Share

      Basic and diluted net income (loss) per common share (EPS)  represents the
loss or income to common stockholders  divided by the weighted average number of
common shares  outstanding.  Employee stock ownership plan (ESOP) shares,  which
are allocated or committed to be released,  are considered outstanding for basic
and diluted EPS.

<TABLE>
<CAPTION>
                                                               Three Months Ended          Six Months Ended
                                                                  December 31,                December 31,
                                                              2008          2007          2008          2007
                                                           -----------   -----------   -----------   -----------
<S>                                                        <C>           <C>           <C>           <C>
      Net income (loss) available to common stockholders   $   107,000   $   (89,000)  $   119,000   $  (227,000)
                                                           ===========   ===========   ===========   ===========

      Basic common shares:
      Weighted average shares outstanding                    2,638,387     2,661,350     2,638,387     2,671,569
      Weighted average unallocated ESOP shares                 (54,518)      (62,710)      (55,545)      (64,373)
                                                           -----------   -----------   -----------   -----------
      Basic weighted average shares outstanding              2,583,869     2,598,640     2,582,842     2,607,196

      Dilutive potential common shares                              --            --           --             --
                                                           -----------   -----------   -----------   -----------

      Diluted weighted average shares outstanding            2,583,869     2,598,640     2,582,842     2,607,196
                                                           ===========   ===========   ===========   ===========

      Basic and diluted EPS                                $      0.04   $     (0.03)  $      0.05   $     (0.08)
                                                           ===========   ===========   ===========   ===========
</TABLE>

      (4)   Mutual Holding Company Reorganization and Minority Stock Issuance

      In conjunction  with its  reorganization  into the mutual holding  company
structure, on January 5, 2005, the Bank (i) converted to a stock savings bank as
the  successor to the Bank in its mutual form;  (ii)  organized the Company as a
federally-chartered  corporation  that owns 100% of the common stock of the Bank
(in  stock  form);   and  (iii)   organized   Georgetown   Bancorp,   MHC  as  a
federally-chartered  mutual holding company that owned 57.9% of the Common Stock
of the Company as of December 31, 2008.

      (5)   Fair Value Measurements

      Effective  July 1,  2008,  the  Company  adopted  Statement  of  Financial
Accounting Standards No. 157 (SFAS 157), Fair Value Measurements, which provides
a  framework  for  measuring  fair value  under  generally  accepted  accounting
principles.  At the same time, the Company also adopted SFAS No. 159 (SFAS 159),
The Fair Value Option for Financial Assets and Financial Liabilities,  including
an  amendment  of FASB  Statement  No.  115.  SFAS  159  allows  an  entity  the
irrevocable  option to elect fair value treatment for the initial and subsequent
measurement  for  certain  financial  assets and  liabilities  on a  contract-by
contract basis. The Company did not elect fair value treatment for any financial
assets or liabilities upon adoption.

      In  October,  2008,  the FASB issued  FASB Staff  Position  No. FAS 157-3,
Determining  the Fair Value of a Financial  Asset When the Market for That Asset
Is Not Active (FSP 157-3).  FSP 157-3 clarifies the application of SFAS 157 in a
market  that  is  not  active  and  provides  an  example  to   illustrate   key
considerations  in  determining  the fair  value of a  financial  asset when the
market  for  that  financial  asset  is not  active.  FSP  157-3  was  effective
immediately  upon  issuance,  and  includes  prior  periods for which  financial
statements have not been issued.  The Company applied the guidance  contained in
FSP 157-3 in determining fair values at December 31, 2008, and it did not have a
material impact on the consolidated financial statements.

      In accordance  with SFAS 157, the Company groups its financial  assets and
financial  liabilities  measured  at fair  value in three  levels,  based on the
markets in which the assets and  liabilities  are traded and the  reliability of
the assumptions used to determine fair value as follows:

                                        7

<PAGE>

      Level l -  Quoted  prices  in  active  markets  for  identical  assets  or
liabilities.  Level l assets and liabilities  include debt and equity securities
that are traded in an active  exchange.  Market  valuations  are  obtained  from
readily available pricing sources for market  transactions  involving  identical
assets or liabilities.

      Level 2 -  Observable  inputs  other than  Level l 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.  For
example,  Level 2 assets and liabilities may include debt securities with quoted
prices that are traded  less  frequently  than  exchange-traded  instruments  or
mortgage  loans  held for sale,  for  which the fair  value is based on what the
securitization  market is currently  offering  for  mortgage  loans with similar
characteristics.

      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.  Leve1 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.  This category
generally  includes  certain private equity  investments,  residential  mortgage
servicing rights, and long-term derivative contracts.

      Securities  measured at fair value in Level 2 are based on pricing  models
that consider standard input factors such as observable  market data,  benchmark
yields, interest rate volatilities, broker/dealer quotes, credit spreads and new
issue data. There are no liabilities measured at fair value.

      Assets  measured at fair value on a recurring  basis at December  31, 2008
are summarized below.

<TABLE>
<CAPTION>
                                                                          Assets
                                      Level 1    Level 2    Level 3   at Fair Value
                                      -------   ---------   -------   -------------
                                                     (In Thousands)
<S>                                   <C>       <C>         <C>       <C>
      Securities available for sale   $    --   $  12,171   $   --    $      12,171

                                      ---------------------------------------------
      Total assets                    $    --   $  12,171   $   --    $      12,171
                                      ---------------------------------------------
</TABLE>

      Assets  measured at fair value on a  non-recurring  basis at December  31,
2008 are not material.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

      This  document may contain  certain  forward-looking  statements,  such as
statements  of the  Company's  or the Bank's  plans,  objectives,  expectations,
estimates and  intentions.  Forward-looking  statements may be identified by the
use of words such as "expects",  "subject",  and "believe",  "will",  "intends",
"will be" or "would".  These  statements  are subject to change based on various
important factors (some of which are beyond the Company's or the Bank's control)
and actual results may differ materially.  Accordingly, readers should not place
undue reliance on any  forward-looking  statements,  which reflect  management's
analysis of factors only as of the date of which they are given.  These  factors
include general  economic  conditions,  trends in interest rates, the ability of
our  borrowers to repay their  loans,  the ability of the Company or the Bank to
effectively  manage its growth,  and results of regulatory  examinations,  among
other factors. The foregoing list of important factors is not exclusive. Readers
should  carefully  review the risk  factors  described  in other  documents  the
Company  files from time to time with the  Securities  and Exchange  Commission,
including Current Reports on Form 8-K.

      Except as required by applicable law and regulation,  the Company does not
undertake - and specifically  disclaims any obligation - to publicly release the
result of any revisions  that may be made to any  forward-looking  statements to
reflect events or circumstances  after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.

Overview

      The Company's  results of operations  depend primarily on net interest and
dividend  income,  which is the  difference  between the  interest  and dividend
income earned on its interest-earning assets, such as loans and securities,  and
the interest expense on its interest-bearing  liabilities,  such as deposits and
borrowings.  The Company also generates non-interest income, primarily from fees
and service charges. Gains on sales of loans and securities are added sources of
non-interest  income. The Company's  non-interest  expense primarily consists of
employee   compensation   and  benefits,   occupancy   and  equipment   expense,
advertising, data processing, professional fees and other operating expenses.

      Our financial  performance for the three and six months ended December 31,
2008   continued  to  improve,   as  the   Company's   profitability   increased
significantly,  both on a year over year basis, as well as on a linked quarterly
basis. Our improved financial performance continued to

                                        8

<PAGE>

be driven by an expanding net interest margin,  primarily due to originations of
higher-yielding  commercial  loans, the majority of which are  collateralized by
multi-family  properties.  The asset quality of our loan portfolio remained very
stable during the quarter.  Additionally,  the Company was never involved in the
business  of  sub-prime  lending  and  has  no  financial   exposure  to  equity
investments  in Fannie Mae,  Freddie Mac or any equity  investment  or corporate
debt of the recently failed Wall Street investment banks.

Comparison of Financial Condition at December 31, 2008 and June 30, 2008

      Total assets  increased by $17.8  million,  or 9.6%, to $202.5  million at
December 31, 2008,  from $184.7  million at June 30, 2008. The increase in total
assets  resulted  primarily  from  increases  in net  loans  and  cash  and cash
equivalents,  partially offset by decreases in investment securities.  Net loans
increased $16.9 million,  or 11.3%, to $165.8 million at December 31, 2008, from
$148.9  million at June 30,  2008,  primarily  due to a $5.3  million,  or 27.1%
increase in commercial  construction loans, a $4.1 million, or 17.9% increase in
commercial  real estate loans, a $4.0 million,  or 34.5% increase in home equity
loans and a $2.2 million,  or 2.4% increase in residential  mortgage loans. Cash
and cash equivalents  temporarily  increased $2.0 million,  or 36.4%,  primarily
related  to  deposit  inflows  associated  with  a  December  promotion.   Total
investment  securities  decreased  $1.0  million,  or 4.6%,  to $21.0 million at
December 31, 2008, from $22.0 million at June 30, 2008,  which reflected the use
of investment  cash flows to fund loan demand.  At December 31, 2008  investment
securities   were  comprised  of   government-   sponsored   enterprises'   debt
obligations,  mortgage-backed  securities, all of which are guaranteed by United
States Government agencies or government-  sponsored enterprises and FHLB stock.
Our  investment  securities  impairment   considerations  generally  arise  from
fluctuations  in market interest rates. At December 31, 2008, no securities were
deemed to be other  -than-temporarily  impaired.  Total earning assets increased
$13.8  million,  or 7.9%,  to $188.8  million at December 31, 2008,  from $175.0
million at June 30, 2008.

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

                                             At December 31,    At June 30,
                                             ---------------   -------------
                                                  2008             2008
                                             ---------------   -------------
                                                 (Dollars in thousands)
Non-accrual loans:
   One-to-four family                        $           218   $         508
   Residential construction                               66              --
   Home equity loans and lines of credit                  49              47
   Multi-family and commercial real estate                --              --
   Commercial construction                                --             612
   Commercial                                             --              --
   Consumer                                               --              --
                                             ---------------   -------------
   Total non-accrual loans                               333           1,167

Restructured loans                                        --             219
                                             ---------------   -------------

   Total non-performing loans                            333           1,386

Real estate owned                                         57              --
                                             ---------------   -------------

   Total non-performing assets               $           390   $       1,386
                                             ===============   =============

Ratios:
   Non-performing loans to total loans                  0.20%           0.92%
   Non-performing assets to total assets                0.19%           0.75%

      Asset quality continued to improve, as nonperforming assets decreased $1.0
million to $390,000 at December  31, 2008  compared to $1.4  million at June 30,
2008,  primarily due to loan payoffs.  These balances  represented .19% of total
assets  at  December  31,  2008 and .75% of total  assets at June 30,  2008.  At
December 31, 2008, there were two restructured loans totaling $267,000 that were
included in the non-accrual  loan total.  The allowance for loan losses was $1.4
million at December 31, 2008 and $1.2 million at June 30,  2008.  The  allowance
represented  0.83% of total loans at December  31, 2008 and 0.81% of total loans
at June 30, 2008.  The increase was primarily a result of growth in loans with a
higher  degree of risk.  At these  levels,  the  allowance  for loan losses as a
percentage of nonperforming loans was 415.92% at December 31, 2008 and 87.45% at
June 30, 2008.

      Total deposits increased by $24.4 million,  or 23.0%, to $130.7 million at
December  31,  2008,  from  $106.3  million at June 30,  2008.  The  increase in
deposits was  primarily  due to increases in  certificates  of deposit and money
market  accounts and partially  offset by decreases in demand deposit  accounts.
Certificates  of deposit  increased  $21.4  million,  or 56.7%,  including  only
$400,000 in brokered certificates of deposit and money market accounts increased
$4.5 million, or 13.4%. These increases  reflected  promotional rates advertised
in local newspapers. Demand deposit accounts decreased $1.8 million, or 12.7%.

                                        9

<PAGE>

      Total  borrowings  from the Federal Home Loan Bank (FHLB)  decreased  $6.9
million,  or  11.6%,  as  deposit  increases  were  used  to  pay  off  maturing
borrowings.

      Total stockholders'  equity increased $311,000,  or 1.9%, to $17.1 million
from June 30, 2008,  to December 31, 2008,  primarily  due to an increase in net
unrealized gains on available-for-sale  securities of $169,000 and net income of
$119,000,  as well as a net  $23,000  decrease  associated  with  the  Company's
employee stock ownership plan. The net unrealized gains on securities  available
for sale were  attributable to changes in market  interest rates.

Comparison of Operating Results for the Three Months Ended December 31, 2008 and
2007

      General.  Net income for the three  months  ended  December  31,  2008 was
$107,000,  or $.04  per  basic  and  diluted  share,  compared  to a net loss of
$89,000, or $.03 per basic and diluted share for the three months ended December
31,  2007.  The increase in net income was  primarily  due to an increase in net
interest  income,  partially  offset by an  increase in our  provision  for loan
losses and an increase in non-interest expense.

      Interest Income.  Interest income increased by $300,000, or 12.6%, to $2.7
million for the three months ended  December 31, 2008.  The increase in interest
income  was   primarily   due  to  an  increase   in  the  average   balance  of
interest-earning  assets of $24.5 million,  or 15.5%,  to $182.4 million for the
three months ended December 31, 2008, from $157.9 million for the same period in
2007,  partially  offset by a 16 basis point  decrease  in the average  yield of
interest-earning  assets to 5.86% for the three months ended  December 31, 2008,
from 6.02% for the same period in 2007.

      Interest income on loans increased $365,000, or 17.5%, to $2.5 million for
the three months ended December 31, 2008, from $2.1 million for the three months
ended  December  31,  2007.  The  increase was due to an increase in the average
balance of loans of $26.3  million,  or 19.6%,  to $160.6  million for the three
months ended  December 31, 2008,  from $134.3 million for the three months ended
December 31, 2007,  partially  offset by a decrease in average loan yields of 10
basis points to 6.11% for the three months ended  December 31, 2008,  from 6.21%
for the three months ended December 31, 2007.

      Interest and dividend income on investment  securities  decreased $56,000,
or 20.2% for the three  months  ended  December  31,  2008  compared to the same
period in 2007.  The  decrease in  interest  income was due to a decrease in the
average  balance of investment  securities  of $1.7  million,  or 7.5%, to $20.9
million for the three months ended December 31, 2008, from $22.6 million for the
three  months ended  December  31, 2007 and by a decrease in average  investment
yields of 69 basis points to 4.24% for the three months ended December 31, 2008,
from 4.93% for the three months ended December 31, 2007.

      Interest income on short-term  investments  decreased $8,000, or 90.0% for
the three  months ended  December 31, 2008  compared to the same period in 2007.
The  decrease  in  interest  income was  primarily  due to a decrease in average
short-term  investment  yields of 358 basis points to 0.46% for the three months
ended  December  31, 2008,  from 4.04% for the three  months ended  December 31,
2007.

      Interest Expense.  Interest expense decreased $155,000,  or 11.4%, to $1.2
million for the three months ended December 31, 2008,  from $1.4 million for the
three months  ended  December  31,  2007.  The decrease in interest  expense was
primarily   due  to  a  97  basis  point   decrease  in  the  average   cost  of
interest-bearing  liabilities  to 2.99% for the three months ended  December 31,
2008, from 3.96% for the same period in 2007, partially offset by an increase in
the average balance of interest-bearing  liabilities of $23.8 million, or 17.3%,
to $161.2  million for the three  months ended  December  31, 2008,  from $137.4
million for the same period in 2007.

      Interest expense on interest-bearing deposits decreased $90,000, or 12.0%,
to $653,000 for the three months ended December 31, 2008,  from $743,000 for the
same period in 2007. The decrease was primarily due to a 96 basis point decrease
in the average cost of  interest-bearing  deposits to 2.50% for the three months
ended  December  31,  2008,  from 3.46% for the same  period in 2007,  partially
offset by an  increase in the average  balance of  interest-bearing  deposits of
$18.5 million,  or 21.6%,  to $104.4 million for the three months ended December
31, 2008 from $85.9 million for the same period in 2007.  Balance increases were
primarily  in money  market  accounts and  certificates  of deposit,  reflecting
promotional activities.  The promotional certificates of deposit rates increased
the weighted  average rate of certificates of deposit at December 31, 2008 by 14
basis  points.  The impact of  promotional  money market  account  rates was not
material.  Additionally,  interest  expense  on FHLB  short-term  and  long-term
advances  decreased  $64,000,  or 10.3%,  to $550,000 for the three months ended
December 31, 2008,  from $614,000 for the same period in 2007.  The decrease was
primarily  due  to a 94  basis  point  decrease  in the  average  cost  of  FHLB
short-term  and long-term  advances to 3.91% for the three months ended December
31,  2008,  from  4.85%  for the same  period  in 2007,  partially  offset by an
increase of in the average balance of FHLB short-term and long-term  advances of
$5.7 million, or 11.2%, to $56.3 million for the three months ended December 31,
2008 from $50.6 million for the same period in 2007

      Net Interest Income. Net interest income increased $455,000,  or 44.7%, to
$1.5 million for the three months ended December 31, 2008, from $1.0 million for
the same period in 2007.  The increase in net interest  income was primarily the
result of a 65 basis  point  increase  in net  interest  margin to 3.22% for the
three months ended December 31, 2008,  from 2.57% for the same period ended 2007
and by the $723,000 or 3.5%, increase in net average  interest-earning assets to
$21.2 million for the three months ended  December 31, 2008,  from $20.5 million
for the same period in 2007.

      Provision  for Loan Losses.  The  provision  for loan losses for the three
months ended  December  31, 2008 was  $91,000,  compared to $2,000 for the three
months ended  December  31,  2007,  reflecting  the  increased  risk in the loan
portfolio resulting from the increase in

                                       10

<PAGE>

commercial  loans as a percentage of total loans.  Loan  charge-offs were $9,000
and loan recoveries were $4,000 for the three months ended December 31, 2008, as
compared to loan  charge-offs  of $1,000 and loan  recoveries  of $3,000 for the
same period in 2007.

      Non-interest  Income.  Non-interest  income increased  $8,000, or 4.2%, to
$197,000  for the three months ended  December 31, 2008,  from  $189,000 for the
same period in 2007.

      Non-interest Expense.  Non-interest expense increased $79,000, or 5.8%, to
$1.4 million for the three months ended December 31, 2008, from $1.3 million for
the same period in 2007. The increase in non-interest  expense was primarily due
to an increase in salaries  and  benefits  and  advertising  expense,  partially
offset by a decrease in occupancy  and  equipment  expense and other general and
administrative expense. Salary and benefits expense increased $79,000, or 11.2%,
primarily  due to  $33,000  of costs  associated  with  supplemental  retirement
agreements,  which were  restructured  in June 2008,  and an $8,000  increase in
costs related to the  Company's  incentive  plan.  Occupancy  expense  decreased
$22,000,  or 10.5%,  to $198,000 for the three  months ended  December 31, 2008,
from  $220,000  for the same period in 2007,  primarily  due to a  reduction  of
equipment  depreciation  related to the Company's main office.  Data  processing
expense increased $1,000, or 0.6%, for the three months ended December 31, 2008,
from the same period in 2007.  Professional  fees increased $1,000, or 1.4%, for
the  three  months  ended  December  31,  2008,  from the same  period  in 2007.
Advertising  expense  increased $16,000 or 43.6% to $53,000 for the three months
ended  December  31, 2008 from  $37,000  for the same period in 2007,  primarily
related to deposit  promotional  activities.  Other  general and  administrative
expenses  increased  $4,000,  or 2.2%,  to $205,000  for the three  months ended
December  31,  2008,  from the same  period in 2007.  As a result of the Federal
Deposit  Insurance  Company's (FDIC) efforts to replenish its deposit  insurance
fund,  which was reduced due to losses from  several  large  troubled  financial
institutions  and  not  related  to  our  Company's  activities,  management  is
expecting  to incur an  $84,000  annual  increase  in  deposit  insurance  costs
effective January 1, 2009.  Additional  changes to FDIC deposit assessment rules
may result in further increases in deposit insurance for the Company.

      Income  Taxes.  The income  before  income taxes of $160,000 for the three
months ended  December 31, 2008  resulted in an income tax  provision of $53,000
for the three  months ended  December  31, 2008,  as compared to the loss before
income  taxes of $135,000 and income tax benefit of $46,000 for the three months
ended  December 31,  2007.  The  effective  tax rates for the three months ended
December 31, 2008 and 2007 were 33.3% and 33.9%, respectively.

                                       11

<PAGE>

      Average Balance Sheet. The following table sets forth certain  information
regarding  the  Company's  average  balance  sheet  for the  periods  indicated,
including  the  average  yields on its  interest-earning  assets and the average
costs of its  interest-bearing  liabilities.  Average  yields are  calculated by
dividing the interest income produced by the average balance of interest-bearing
assets.  Average costs are calculated by dividing the interest  expense produced
by the average balance of interest-bearing liabilities. The average balances for
the period are derived from average  balances  that are  calculated  daily.  The
average  yields and costs include fees that are  considered  adjustments to such
average yields and costs.

<TABLE>
<CAPTION>
                                                                                Three Months Ended December 31,
                                       At December 31,       -----------------------------------------------------------------------
                                             2008                           2008                                 2007
                                    ----------------------   ----------------------------------   ----------------------------------
                                                  Weighted     Average                              Average
                                    Outstanding   Average    Outstanding                Yield/    Outstanding               Yield/
                                      Balance       Rate       Balance     Interest      Rate       Balance     Interest     Rate
                                    -----------   --------   -----------   --------   ---------   -----------   --------   --------
                                                                                     (Dollars in thousands)
<S>                                 <C>           <C>        <C>           <C>        <C>         <C>           <C>        <C>
Interest-earning assets:
   Loans                            $   167,152       5.90%  $   160,573   $  2,451        6.11%  $   134,317   $  2,086       6.21%
   Investment securities (1)             20,975       4.05%       20,946        222        4.24%       22,648        279       4.93%
   Short-term investments                   664       0.14%          874          1        0.46%          890          9       4.04%
                                    -----------              -----------   --------               -----------   --------
     Total interest-earning
       assets                           188,791       5.67%      182,393      2,674        5.86%      157,855      2,374       6.02%
   Non-interest-earning assets           13,748                   11,266         --                     9,399         --
                                    -----------              -----------   --------               -----------   --------
   Total assets                     $   202,539              $   193,659   $  2,674               $   167,254   $  2,374
                                    ===========              ===========   ========               ===========   ========

   Interest-bearing liabilities:
   Savings deposits                 $    10,240       0.12%  $    10,034          3        0.12%  $    10,804          8       0.30%
   NOW accounts                          10,705       0.14%        9,473          3        0.13%        9,159         35       1.53%
   Money market accounts                 38,017       2.23%       36,441        224        2.46%       27,106        255       3.76%
   Certificates of deposit               59,083       3.56%       48,424        423        3.49%       38,801        445       4.59%
                                    -----------              -----------   --------               -----------   --------
     Total interest-bearing
       deposits                         118,045       2.52%      104,372        653        2.50%       85,870        743       3.46%
   FHLB advances                         52,445       3.95%       56,332        550        3.91%       50,649        614       4.85%
   Repurchase agreements                    488       0.50%          506          1        0.79%          876          2       0.91%
                                    -----------              -----------   --------               -----------   --------
     Total interest-bearing
       liabilities                      170,978       2.96%      161,210      1,204        2.99%      137,395      1,359       3.96%
Non-interest-bearing liabilities:
   Demand deposits                       12,669                   14,021                               11,689
   Other non-interest-bearing
     liabilities                          1,808                    1,425                                  673
                                    -----------              -----------                          -----------
Total liabilities                       185,455                  176,656                              149,757
   Stockholders' equity                  17,084                   17,003                               17,497
                                    -----------              -----------                          -----------
     Total liabilities and equity   $   202,539              $   193,659                          $   167,254
                                    ===========              ===========                          ===========

Net interest income                                                        $  1,470                             $  1,015
                                                                           ========                             ========
Net interest rate spread (2)                          2.71%                                2.87%                               2.06%
Net interest-earning assets (3)     $    17,813              $    21,183                          $    20,460
                                    ===========              ===========                          ===========
Net interest margin (4)                                                                    3.22%                               2.57%
Average of interest-earning
   assets to interest-bearing
     liabilitities                                  110.42%                              113.14%                             114.89%
</TABLE>

(1)   Consists entirely of taxable investment securities.

(2)   Net interest rate spread represents the difference between the yield on
      average interest-earning assets and the cost of average interest-bearing
      liabilities.

(3)   Net interest-earning assets represents total interest-earning assets less
      total interest-bearing liabilities.

(4)   Net interest margin represents net interest income divided by average
      total interest-earning assets.

                                       12

<PAGE>

      Rate/Volume Analysis. The following table presents the effects of changing
rates and volumes on our net interest income for the periods indicated. The rate
column  shows the  effects  attributable  to  changes in rate  (changes  in rate
multiplied by prior volume). The volume column shows the effects attributable to
changes in volume (changes in volume  multiplied by prior rate).  The net column
represents  the sum of the prior  columns.  For purposes of this table,  changes
attributable  to both rate and volume,  which  cannot be  segregated,  have been
allocated proportionately,  based on the changes due to rate and the changes due
to volume.

<TABLE>
<CAPTION>
                                                   Three Months Ended December 31,
                                                            2008 vs. 2007
                                               ----------------------------------------
                                               Increase (Decrease) Due to
                                               --------------------------
                                                  Volume         Rate           Net
                                               ------------   -----------   -----------
                                                            (In thousands)
<S>                                            <C>            <C>           <C>
      Interest-earning assets:
      Loans                                    $        408   $       (43)  $       365
      Investment securities                             (21)          (36)          (57)
      Short-term investments                             --            (8)           (8)
                                               ------------   -----------   -----------

         Total interest-earning assets                  387           (87)          300
                                               ------------   -----------   -----------

      Interest-bearing liabilities:
      Savings deposits                                   (1)           (4)           (5)
      NOW accounts                                        1           (33)          (32)
      Money market accounts                              88          (119)          (31)
      Certificates of deposit                           110          (132)          (22)
                                               ------------   -----------   -----------
      Total interest-bearing deposits                   198          (288)          (90)
      FHLB advances                                      69          (133)          (64)
      Repurchase agreements                              (1)           --            (1)
                                               ------------   -----------   -----------
         Total interest-bearing liabilities             266          (421)         (155)
                                               ------------   -----------   -----------

      Change in net interest income            $        121   $       334   $       455
                                               ============   ===========   ===========
</TABLE>

Comparison of Operating  Results for the Six Months Ended  December 31, 2008 and
2007

      General.  Net  income  for the six  months  ended  December  31,  2008 was
$119,000,  or $.05  per  basic  and  diluted  share,  compared  to a net loss of
$227,000,  or $.08 per basic and diluted share for the six months ended December
31,  2007.  The increase in net income was  primarily  due to an increase in net
interest  income,  partially  offset by an  increase in our  provision  for loan
losses,  an increase  in  non-interest  expense  and a decrease in  non-interest
income.

      Interest Income.  Interest income increased by $562,000, or 12.6%, to $5.2
million for the six months ended  December  31, 2008,  from $4.7 million for the
six months  ended  December  31,  2007.  The  increase  in  interest  income was
primarily due to an increase in the average balance of  interest-earning  assets
of $22.7 million,  or 14.6%, to $178.5 million for the six months ended December
31, 2008, from $155.8 million for the same period in 2007, partially offset by a
13 basis point decrease in the average yield of interest-earning assets to 5.84%
for the six months ended  December  31, 2008,  from 5.97% for the same period in
2007.

      Interest income on loans increased $701,000, or 17.2%, to $4.8 million for
the six months ended  December  31,  2008,  from $4.1 million for the six months
ended  December  31,  2007.  The  increase was due to an increase in the average
balance  of loans of $24.9  million,  or 18.9%,  to $156.6  million  for the six
months ended  December 31,  2008,  from $131.8  million for the six months ended
December  31, 2007,  partially  offset by a decrease in average loan yields of 8
basis points to 6.08% for the six months ended December 31, 2008, from 6.16% for
the six months ended December 31, 2007.

      Interest and dividend income on investment  securities decreased $120,000,
or 21.1% for the six months ended  December 31, 2008 compared to the same period
in 2007.  The  decrease in interest  income was due to a decrease in the average
balance of investment  securities of $2.1 million, or 9.1%, to $20.9 million for
the six months ended  December 31, 2008,  from $23.0  million for the six months
ended  December  31, 2007 and by a decrease in average  investment  yields of 65
basis points to 4.26% for the six months ended December 31, 2008, from 4.91% for
the six months ended December 31, 2007.

      Interest income on short-term  investments decreased $19,000, or 77.5% for
the six months ended  December 31, 2008 compared to the same period in 2007. The
decrease  in  interest  income  was  primarily  due  to a  decrease  in  average
short-term  investment  yields of 352 basis  points to 1.24% for the six  months
ended December 31, 2008, from 4.76% for the six months ended December 31, 2007.

                                       13

<PAGE>

      Interest Expense.  Interest expense decreased $301,000,  or 11.3%, to $2.4
million for the six months ended  December  31, 2008,  from $2.7 million for the
six months  ended  December  31,  2007.  The  decrease in  interest  expense was
primarily   due  to  a  92  basis  point   decrease  in  the  average   cost  of
interest-bearing  liabilities  to 3.02% for the six months  ended  December  31,
2008, from 3.94% for the same period in 2007, partially offset by an increase in
the average balance of interest-bearing  liabilities of $21.4 million, or 15.8%,
to $157.0  million  for the six months  ended  December  31,  2008,  from $135.6
million for the same period in 2007.

      Interest  expense on  interest-bearing  deposits  decreased  $258,000,  or
17.5%,  to $1.2  million for the six months ended  December 31, 2008,  from $1.5
million for the same period in 2007.  The  decrease  was  primarily  due to a 98
basis point decrease in the average cost of  interest-bearing  deposits to 2.46%
for the six months ended  December  31, 2008,  from 3.44% for the same period in
2007, partially offset by an increase in the average balance of interest-bearing
deposits of $12.9 million,  or 15.0%,  to $98.7 million for the six months ended
December  31,  2008 from  $85.8  million  for the same  period in 2007.  Balance
increases were primarily in money market  accounts and  certificates of deposit,
reflecting promotional activities. The promotional certificates of deposit rates
increased the weighted  average rate of  certificates of deposit at December 31,
2008 by 14 basis points.  The impact of  promotional  money market account rates
was  not  material.  Additionally,  interest  expense  on  FHLB  short-term  and
long-term  advances  decreased  $41,000,  or 3.4%,  to $1.2  million for the six
months ended  December 31, 2008.  The decrease was  primarily due to an 89 basis
point decrease in the average cost of FHLB short-term and long-term  advances to
3.99% for the six months ended December 31, 2008, from 4.88% for the same period
in  2007,  partially  offset  by an  increase  in the  average  balance  of FHLB
short-term and long-term  advances of $8.8 million,  or 18.0%,  to $57.8 million
for the six months  ended  December  31,  2008 from $49.0  million  for the same
period in 2007

      Net Interest Income. Net interest income increased $863,000,  or 43.6%, to
$2.8 million for the six months ended  December 31, 2008,  from $2.0 million for
the same period in 2007.  The increase in net interest  income was primarily the
result of a 64 basis point increase in net interest  margin to 3.18% for the six
months ended December 31, 2008, from 2.54% for the same period ended 2007 and by
the $1.3  million or 6.3%,  increase in net average  interest-earning  assets to
$21.5 million for the six months ended December 31, 2008, from $20.2 million for
the same period in 2007.

      Provision  for Loan  Losses.  The  provision  for loan  losses for the six
months  ended  December  31, 2008 was  $178,000,  compared to $3,000 for the six
months ended  December  31,  2007,  reflecting  the  increased  risk in the loan
portfolio  resulting  from the increase in  commercial  loans as a percentage of
total loans.  Loan  charge-offs were $10,000 and loan recoveries were $5,000 for
the six months  ended  December  31, 2008,  as compared to loan  charge-offs  of
$3,000 and loan recoveries of $36,000 for the same period in 2007.

      Non-interest  Income.  Non-interest  income decreased  $6,000, or 1.7%, to
$355,000 for the six months ended December 31, 2008,  from $361,000 for the same
period in 2007.  The decrease in  non-interest  income was  primarily  due to an
adjustment of the cash  surrender  value of variable  bank-owned  life insurance
(BOLI),  partially  offset by increases in customer  service  fees.  For the six
months  ended  December  31,  2008,  the net expense  from BOLI was  $5,000,  as
compared to $23,000 of income for the same period in 2007. Customer service fees
increased $10,000, or 3.1%, primarily due to overdraft fees.

      Non-interest Expense. Non-interest expense increased $137,000, or 5.1%, to
$2.8 million for the six months ended  December 31, 2008,  from $2.7 million for
the same period in 2007. The increase in non-interest  expense was primarily due
to an increase in salaries  and  benefits  and  advertising  expense,  partially
offset by a decrease in occupancy and equipment  expense and professional  fees.
Salary and benefits  expense  increased  $158,000,  or 11.2%,  primarily  due to
$66,000 of costs associated with supplemental retirement agreements,  which were
restructured  in June 2008,  $19,000  of costs  associated  with one  additional
employee  and a $17,000  increase in costs  related to the  Company's  incentive
plan.  Occupancy  expense  decreased  $40,000,  or 9.5%, to $390,000 for the six
months  ended  December  31,  2008,  from  $430,000 for the same period in 2007,
primarily due to a reduction of equipment  depreciation related to the Company's
main office.  Data processing  expense  increased  $7,000,  or 3.9%, for the six
months ended December 31, 2008, from the same period in 2007.  Professional fees
decreased $11,000, or 7.0%, for the six months ended December 31, 2008, from the
same period in 2007.  Advertising expense increased $18,000 or 18.6% to $115,000
for the six months  ended  December 31, 2008 from $97,000 for the same period in
2007,  primarily related to deposit  promotional  activities.  Other general and
administrative  expenses  increased  $5,000,  or 1.4%,  to $412,000  for the six
months ended December 31, 2008, from the same period in 2007. As a result of the
Federal  Deposit  Insurance  Company's  (FDIC)  efforts to replenish its deposit
insurance  fund,  which was reduced due to losses from  several  large  troubled
financial  institutions and not related to our Company's activities,  management
is  expecting to incur an $84,000  annual  increase in deposit  insurance  costs
effective January 1, 2009.  Additional  changes to FDIC deposit assessment rules
may result in further increases in deposit insurance for the Company.

      Income  Taxes.  The income  before  income  taxes of $198,000  for the six
months ended  December 31, 2008  resulted in an income tax  provision of $79,000
for the six months  ended  December  31,  2008,  as  compared to the loss before
income  taxes of $347,000  and income tax benefit of $120,000 for the six months
ended  December 31,  2007.  The $79,000  provision  for income taxes for the six
months ended December 31, 2008 included  $13,000 in additional  state income tax
provision,  reflecting  the one-time  impact of a  Massachusetts  bill,  "An Act
Relative to Tax Fairness and  Business  Competitiveness",  which was signed into
law on July 3, 2008.  The effective tax rates for the six months ended  December
31, 2008 and 2007 were 40.0% and 34.5%, respectively.

                                       14

<PAGE>

      Average Balance Sheet. The following table sets forth certain  information
regarding  the  Company's  average  balance  sheet  for the  periods  indicated,
including  the  average  yields on its  interest-earning  assets and the average
costs of its  interest-bearing  liabilities.  Average  yields are  calculated by
dividing the interest income produced by the average balance of interest-bearing
assets.  Average costs are calculated by dividing the interest  expense produced
by the average balance of interest-bearing liabilities. The average balances for
the period are derived from average  balances  that are  calculated  daily.  The
average  yields and costs include fees that are  considered  adjustments to such
average yields and costs.

<TABLE>
<CAPTION>
                                                                                 Six Months Ended December 31,
                                        At December 31,       ----------------------------------------------------------------------
                                              2008                           2008                               2007
                                     ----------------------   ---------------------------------   ----------------------------------
                                                   Weighted     Average                             Average
                                     Outstanding    Average   Outstanding               Yield/    Outstanding               Yield/
                                       Balance       Rate       Balance     Interest     Rate       Balance     Interest     Rate
                                     -----------   --------   -----------   --------   --------   -----------   --------   ---------
                                                                                     (Dollars in thousands)
<S>                                  <C>           <C>        <C>           <C>        <C>        <C>           <C>        <C>
Interest-earning assets:
   Loans                             $   167,152       5.90%  $   156,646   $  4,763       6.08%  $   131,778   $  4,062       6.16%
   Investment securities (1)              20,975       4.05%       20,900        445       4.26%       23,002        565       4.91%
   Short-term investments                    664       0.14%          970          6       1.24%        1,051         25       4.76%
                                     -----------              -----------   --------              -----------   --------
     Total interest-earning
       assets                            188,791       5.67%      178,516      5,214       5.84%      155,831      4,652       5.97%
   Non-interest-earning assets            13,748                   10,747         --                    9,598         --
                                     -----------              -----------   --------              -----------   --------
   Total assets                      $   202,539              $   189,263   $  5,214              $   165,429   $  4,652
                                     ===========              ===========   ========              ===========   ========

   Interest-bearing liabilities:
   Savings deposits                  $    10,240       0.12%  $    10,117          6       0.12%  $    11,152         17       0.30%
   NOW accounts                           10,705       0.14%        9,248          6       0.13%        9,290         73       1.57%
   Money market accounts                  38,017       2.23%       35,614        435       2.44%       25,667        484       3.77%
   Certificates of deposit                59,083       3.56%       43,698        769       3.52%       39,706        900       4.53%
                                     -----------              -----------   --------              -----------   --------
     Total interest-bearing
        deposits                         118,045       2.52%       98,677      1,216       2.46%       85,815      1,474       3.44%
   FHLB advances                          52,445       3.95%       57,789      1,154       3.99%       48,958      1,195       4.88%
   Repurchase agreements                     488       0.50%          581          2       0.69%          865          4       0.92%
                                     -----------              -----------   --------              -----------   --------
     Total interest-bearing
        liabilities                      170,978       2.96%      157,047      2,372       3.02%      135,638      2,673       3.94%
Non-interest-bearing liabilities:
   Demand deposits                        12,669                   13,821                              11,486
   Other non-interest-bearing
     liabilities                           1,808                    1,396                                 698
                                     -----------              -----------                         -----------
Total liabilities                        185,455                  172,264                             147,822
   Stockholders' equity                   17,084                   16,999                              17,607
                                     -----------              -----------                         -----------
     Total liabilities and equity    $   202,539              $   189,263                         $   165,429
                                     ===========              ===========                         ===========

Net interest income                                                         $  2,842                            $  1,979
                                                                            ========                            ========
Net interest rate spread (2)                           2.71%                               2.82%                               2.03%
Net interest-earning assets (3)      $    17,813              $    21,469                         $    20,193
                                     ===========              ===========                         ===========
Net interest margin (4)                                                                    3.18%                               2.54%
Average of interest-earning
 assets to interest-bearing
 liabilitities                                       110.42%                             113.67%                             114.89%
</TABLE>

(1)   Consists entirely of taxable investment securities.

(2)   Net interest rate spread represents the difference between the yield on
      average interest-earning assets and the cost of average interest-bearing
      liabilities.

(3)   Net interest-earning assets represents total interest-earning assets less
      total interest-bearing liabilities.

(4)   Net interest margin represents net interest income divided by average
      total interest-earning assets.

                                       15

<PAGE>

     Rate/Volume Analysis.  The following table presents the effects of changing
rates and volumes on our net interest income for the periods indicated. The rate
column  shows the  effects  attributable  to  changes in rate  (changes  in rate
multiplied by prior volume). The volume column shows the effects attributable to
changes in volume (changes in volume  multiplied by prior rate).  The net column
represents  the sum of the prior  columns.  For purposes of this table,  changes
attributable  to both rate and volume,  which  cannot be  segregated,  have been
allocated proportionately,  based on the changes due to rate and the changes due
to volume.

                                              Six Months Ended December 31,
                                                      2008 vs. 2007
                                        ----------------------------------------
                                        Increase (Decrease) Due to
                                        --------------------------
                                          Volume         Rate            Net
                                        ---------   --------------   -----------
                                                    (In thousands)

Interest-earning assets:
Loans                                   $     767   $          (66)  $      701
Investment securities                         (52)             (68)        (120)
Short-term investments                         (2)             (17)         (19)
                                        ---------   --------------   ----------

   Total interest-earning assets              713             (151)         562
                                        ---------   --------------   ----------
Interest-bearing liabilities:
Savings deposits                               (2)              (9)         (11)
NOW accounts                                   --              (67)         (67)
Money market accounts                         188             (237)         (49)
Certificates of deposit                        90             (221)        (131)
                                        ---------   --------------   ----------
Total interest-bearing deposits               276             (534)        (258)
FHLB advances                                 216             (257)         (41)
Repurchase agreements                          (1)              (1)          (2)
                                        ---------   --------------   ----------
   Total interest-bearing liabilities         491             (792)        (301)
                                        ---------   --------------   ----------

Change in net interest income           $     222   $          641   $      863
                                        =========   ==============   ==========

      Liquidity Management.  Liquidity is the ability to meet current and future
financial  obligations  of a  short-term  nature.  Our primary  sources of funds
consist  of  deposit  inflows,  loan  repayments  and  maturities  and  sales of
securities.  While maturities and scheduled amortization of loans and securities
are  predictable  sources of funds,  deposit flows and mortgage  prepayments are
greatly   influenced  by  general  interest  rates,   economic   conditions  and
competition.

      We  regularly  adjust  our  investments  in liquid  assets  based upon our
assessment  of (i) expected  loan demand,  (ii) expected  deposit  flows,  (iii)
yields  available  on  interest-earning  deposits and  securities,  and (iv) the
objectives of our asset/liability  management program.  Excess liquid assets are
invested generally in interest-earning deposits and short- and intermediate-term
securities.

      Our most liquid assets are cash and cash equivalents.  The levels of these
assets  are  dependent  on  our  operating,  financing,  lending  and  investing
activities  during  any  given  period.  At  December  31,  2008,  cash and cash
equivalents totaled $7.4 million.  Securities classified as  available-for-sale,
which provide additional sources of liquidity, totaled $12.2 million at December
31, 2008.  Our policies also allow for access to the wholesale  funds market for
up to 50.0% of total  assets,  or $101.3  million.  At December 31, 2008, we had
$52.4 million in FHLB advances  outstanding,  allowing the Company  access to an
additional $48.9 million in wholesale funds based on policy guidelines.

      At December 31, 2008, we had $6.1 million in loan commitments outstanding.
In  addition  to  commitments  to  originate  loans,  we had  $19.5  million  in
unadvanced  funds to borrowers.  Certificates  of deposit due within one year of
December 31, 2008 totaled $26.3 million,  or 20.1% of total  deposits.  If these
deposits do not remain  with us, we will be  required  to seek other  sources of
funds,  including  other  certificates  of  deposit or other  wholesale  funding
options.  Depending on market conditions, we may be required to pay higher rates
on such deposits or other  borrowings than we currently pay on the  certificates
of deposit due on or before  December 31, 2008.  We believe,  however,  based on
past experience that a significant  portion of our  certificates of deposit will
remain with us. We have the ability to attract and retain  deposits by adjusting
the interest rates offered.

                                       16

<PAGE>

      We have no material  commitments  or demands that are likely to affect our
liquidity  other than set forth below. In the event loan demand were to increase
at a pace greater than expected,  or any unforeseen demand or commitment were to
occur, we would access our borrowing  capacity with the FHLB and other wholesale
market sources.

      Our primary  investing  activities  are the  origination  of loans and the
purchase of  securities.  During the six months  ended  December  31,  2008,  we
originated $30.7 million of loans.

      Financing activities consist primarily of activity in deposit accounts and
FHLB borrowings and advances. We experienced a net increase in total deposits of
$24.4  million for the six months ended  December 31,  2008.  Deposit  flows are
affected by the overall level of interest rates, the interest rates and products
offered by us and our local  competitors and other factors.  We generally manage
the pricing of our deposits to be competitive.

      FHLB  borrowings  and  advances  reflected a net  decrease of $6.9 million
during the six months ended December 31, 2008. FHLB borrowings and advances have
primarily been used to fund loan demand and purchase securities.

      Capital  Management.  The Bank is subject to  various  regulatory  capital
requirements  including a risk-based  capital  measure.  The risk-based  capital
guidelines  include both a definition of capital and a framework for calculating
risk-weighted  assets by assigning  balance sheet assets and  off-balance  sheet
items to broad risk  categories.  At December 31, 2008, the Bank exceeded all of
its regulatory  capital  requirements and is considered "well capitalized" under
regulatory guidelines.

      The OTS,  as the  primary  federal  regulator  of federal  savings  banks,
periodically  recommends  certain of those  institutions take voluntary steps to
reduce  risk  to the  institutions  and  the  federal  deposit  insurance  fund.
Management  believes  in  light of the  current  economic  environment,  the OTS
requested  and the  Bank's  board of  directors  agreed on October  27,  2008 to
certain voluntary constraints on the Bank's 2009 leveraged growth strategy.  The
Bank currently  satisfies each of these standards.  Moreover,  the Bank does not
expect any of these standards to materially impair its execution of its business
plan.  The OTS has agreed to revisit these  voluntary  constraints  from time to
time.  The voluntary  constraints  are as follows:  (i) the Bank will maintain a
Tier one (core)  capital ratio of at least 7.1%;  and (ii) in the event the Tier
one (core) capital ratio decreases  below 7.5%, the ratio of "high-risk"  loans,
as  defined,  to Tier one (core)  capital  would not exceed  350%;  the ratio of
classified  assets  to Tier one  (core)  capital  (plus the  allowance  for loan
losses)  would not exceed 15%;  and the ratio of  nonperforming  assets to total
assets would not exceed 1.5%.

      On November  14, 2008 the Company  filed an  application  under the United
States Treasury's  Capital Purchase Program,  which is part of the United States
Treasury's  Emergency  Economic  Stabilization  Act  of  2008.  The  application
requested  $4.1  million in senior  preferred  stock and will  require  that the
Company issue common stock warrants  representing  15% of the ultimate amount of
senior  preferred  stock  issued.  While  the  Company  and the  Bank  are  both
well-capitalized,  participation  in the program  might  enhance  the  Company's
flexibility in meeting  future  capital needs that may arise.  Subsequent to the
filing of the  application,  the  United  States  Treasury  determined  that the
Company would be considered a mutual entity with regards to participation in the
Capital Purchase Program.  The United States Treasury is still in the process of
developing  the terms by which a mutual  entity can  participate  in the Capital
Purchase  Program.  The  Company  has  not  made  a  final  determination  as to
participation in the program.

      Off-Balance  Sheet  Arrangements.  For the six months  ended  December 31,
2008, we engaged in no off-balance sheet transactions  reasonably likely to have
a material  effect on our  financial  condition,  results of  operations or cash
flows.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

            Not applicable

Item 4T. Controls and Procedures

      Under  the  supervision  and with  the  participation  of our  management,
including our Chief Executive Officer and Chief Financial Officer,  we evaluated
the  effectiveness  of the design and operation of our  disclosure  controls and
procedures  (as defined in Rule  13a-15(e)  or  15d-15(e)  under the  Securities
Exchange Act of 1934) as of the end of the period covered by this report.  Based
upon that evaluation,  the Chief Executive  Officer and Chief Financial  Officer
concluded  that,  as of the  end of the  period  covered  by  this  report,  our
disclosure controls and procedures were effective to ensure (1) that information
required to be disclosed in the reports that the Company  files or submits under
the  Securities  Exchange Act of 1934, is recorded,  processed,  summarized  and
reported,  within the time periods  specified in the SEC's rules and forms;  and
(2) that they are alerted in a timely manner about material information relating
to the Company required to be filed in its periodic SEC filings.

      There has been no change in the Company's  internal control over financial
reporting  during the Company's  most recent fiscal  quarter that has materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.

                                       17

<PAGE>

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

            Not applicable

Item 1A. Risk Factors

            Not applicable

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

            a)    Not applicable

            b)    Not applicable

            (c)   The Company did not  repurchase  any shares during the quarter
                  ended December 31, 2008.

Item 3.  Defaults Upon Senior Securities

            Not applicable

Item 4.  Submission of Matters to a Vote of Security Holders

            On October 28, 2008, the Company held an annual meeting of
            shareholders. At the meeting, proposals to (1) elect Robert E.
            Balletto, Stephen L. Flynn and Thomas L. Hamelin to serve as
            directors of the Company for terms of three years and until their
            respective successors have been elected and qualified and (2) ratify
            the engagement of Wolf & Company, P.C. to be the Company's auditors
            for the June 30, 2009 fiscal year were approved. There were no
            broker non-votes. The votes cast for and against the proposals were
            as follows:

            Election to the Board of Directors           For      Withheld
            ----------------------------------        ---------   --------

            Robert E. Balletto                        2,479,351    108,101

            Stephen L. Flynn                          2,477,251    110,201

            Thomas L. Hamelin                         2,478,851    108,601

            Keith N. Congdon, Anthony S. Conte, Jr., Marybeth McInnis, Kathleen
            R. Sachs, Richard F. Spencer, David A. Splaine, Mary L. Williams,
            Robert T. Wyman and John H. Yeaton continued after the meeting to
            serve as directors of the Company.

            Ratification of Appointment of Wolf & Company, P.C. as auditors for
            the Company for the fiscal year ending June 30, 2009
            --------------------------------------------------------------------

                                    Abstain      For      Against
                                    -------   ---------   --------

            Number of votes         5,339     2,499,596   82,517

Item 5.  Other Information

            (a)   Not applicable

            (b)   There were no material changes to the procedures by which
                  security holders may recommend nominees to the Company's board
                  of directors during the period covered by this Form 10-Q.

Item 6.  Exhibits

            31.1  Certification of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act

            31.2  Certification of Chief Financial Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act

            32    Certification of Chief Executive Officer and Chief Financial
                  Officer pursuant to Section 906 of the Sarbanes-Oxley Act

                                       18

<PAGE>

                            GEORGETOWN BANCORP, INC.

                                   SIGNATURES

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

                            GEORGETOWN BANCORP, INC.
                                  (Registrant)

Date: February 12, 2009     /s/ Robert E. Balletto
                            -------------------------------------
                            Robert E. Balletto
                            President and Chief Executive Officer
                            (Principal Executive Officer)

                            /s/ Joseph W. Kennedy
                            -------------------------------------
                            Joseph W. Kennedy
                            Senior Vice President, Treasurer and Chief Financial
                            Officer (Principal Accounting and Financial Officer)

                                       19