CONTENTS

| CORPORATE PROFILE AND RELATED INFORMATION                                                   | 1      |
|---------------------------------------------------------------------------------------------|--------|
| MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 2      |
| MANAGEMENT’S REPORT ON INTERNAL CONTROL                                               | 9      |
| REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS                                   | 10     |
| FINANCIAL STATEMENTS                                                                        |   |
| CONSOLIDATED BALANCE SHEETS                                                                 | 12     |
| CONSOLIDATED STATEMENTS OF INCOME                                                           | 13     |
| CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME   | 14     |
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                       | 15     |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                  | 17     |
| BOARD OF DIRECTORS AND EXECUTIVE OFFICERS                                                   | 46     |

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CORPORATE PROFILE AND RELATED INFORMATION

| 1.   | The capital of the Company is adequate for the current and projected business operations of the Company. |
|----------------|----------------------------------------------------------------------------------------------------------|

| 2.   | The liquidity of the Company after the payment of the dividend is adequate to fund the operations of the Company for a reasonable period of time into the future. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | In light of the fact that the primary source of liquidity with which to pay dividends is dividend payments from the subsidiary Bank, the Board considers a number of factors specifically applicable to the Bank, such as its expected level of earnings and capital, and the possibility of regulatory restrictions.  Among other limitations, Third Federal may not declare or pay a cash dividend on any of its stock if the effect thereof would cause Third Federal’s regulatory capital to be reduced below (1) the amount required for the liquidation account established in connection with Third Federal’s conversion from mutual to stock form, or (2) the regulatory capital requirements imposed by the Office of Thrift Supervision (“OTS”). |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    | Quoted market price | Dividend paid |
|-------------------------|---------------------|---------------|
| Quarter ended      |                | High     | Low  | per share  |
| December 31, 2010  | $21.23              | $19.67        | $0.19 |
| September 30, 2010 | $21.81              | $19.05        | $0.19 |
| June 30, 2010      | $21.38              | $17.95        | $0.19 |
| March 31, 2010     | $18.29              | $17.67        | $0.19 |
| December 31, 2009  | $18.32              | $17.19        | $0.19 |
| September 30, 2009 | $18.51              | $15.71        | $0.19 |
| June 30, 2009      | $19.38              | $15.95        | $0.19 |
| March 31, 2009     | $21.90              | $15.24        | $0.19 |

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

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|                                                                             |   | 2010            |    | 2009     |
|----------------------------------------------------------------------------------|--------|-----------------|---------|----------|
|                                                                             |   | Average balance |    | Interest |   | Average yield/ cost |   |   | Average balance |   | Interest |   | Average yield/ cost |
| ASSETS                                                                           |   |            |    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                         |   |            |    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans receivable(1)                                                              |   | $               | 521,272 |     | $ | 28,205 |   | 5.43 | % |   |   | $ | 538,759 |   | $ | 30,426 |   | 5.66 | % |
| Mortgage-backed securities                                                       |   |            | 78,401  |     |   | 3,595 |   | 4.60 | % |   |   |   | 101,142 |   |   | 4,966 |   | 4.92 | % |
| Investment securities(2)                                                         |   |            | 58,204  |     |   | 2,328 |   | 4.01 | % |   |   |   | 41,360 |   |   | 1,653 |   | 4.01 | % |
| Other interest-earning assets(3)                                                 |   |            | 9,534   |     |   | 6 |   | 0.06 | % |   |   |   | 3,747 |   |   | 3 |   | 0.08 | % |
| Total interest-earning assets                                                    |   |            | 667,411 |     |   | 34,134 |   | 5.13 | % |   |   |   | 685,008 |   |   | 37,048 |   | 5.42 | % |
| Non interest-earning assets                                                      |   |            | 42,850  |     |   |   |   |   |   |   |   |   | 37,170 |   |   |   |   |   |   |
| Total assets                                                                     |   | $               | 710,261 |     |   |   |   |   |   |   |   | $ | 722,178 |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                       |   |            |    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                    |   |            |    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                         |   | $               | 553,307 |     |   | 7,210 |   | 1.31 | % |   |   | $ | 524,431 |   |   | 9,566 |   | 1.83 | % |
| Advances from the FHLB and other borrowings                                      |   |            | 75,406  |     |   | 2,998 |   | 3.99 | % |   |   |   | 120,631 |   |   | 4,415 |   | 3.67 | % |
| Total interest-bearing liabilities                                               |   |            | 628,713 |     |   | 10,208 |   | 1.63 | % |   |   |   | 645,062 |   |   | 13,981 |   | 2.17 | % |
| Non interest-bearing liabilities                                                 |   |            | 7,847   |     |   |   |   |   |   |   |   |   | 9,081 |   |   |   |   |   |   |
| Total liabilities                                                                |   |            | 636,560 |     |   |   |   |   |   |   |   |   | 654,143 |   |   |   |   |   |   |
| Stockholders’ equity                                                       |   |            | 73,701  |     |   |   |   |   |   |   |   |   | 68,035 |   |   |   |   |   |   |
| Total liabilities and stockholders’ equity                                 |   | $               | 710,261 |     |   |   |   |   |   |   |   | $ | 722,178 |   |   |   |   |   |   |
| Net interest income-tax equivalent basis                                         |   |            |    |     | $ | 23,926 |   |   |   |   |   |   |   |   | $ | 23,067 |   |   |   |
| Interest rate spread(4)—tax equivalent basis                               |   |            |    |     |   |   |   | 3.50 | % |   |   |   |   |   |   |   |   | 3.25 | % |
| Net yield on interest-earning assets(5)—tax equivalent basis          |   |            |    |     |   |   |   | 3.59 | % |   |   |   |   |   |   |   |   | 3.38 | % |
| Ratio of average interest-earning assets to average interest-bearing liabilities |   |            |    |     |   |   |   | 106.15 | % |   |   |   |   |   |   |   |   | 106.19 | % |
| Less: tax—equivalent interest adjustment                                   |   |            |    |     |   | (566 | ) |   |   |   |   |   |   |   |   | (451 | ) |   |   |
| Net interest income                                                              |   |            |    |     | $ | 23,360 |   |   |   |   |   |   |   |   | $ | 22,616 |   |   |   |
| Interest rate spread(4)                                                          |   |            |    |     |   |   |   | 3.42 | % |   |   |   |   |   |   |   |   | 3.18 | % |
| Net yield on interest-earning assets(5)                                          |   |            |    |     |   |   |   | 3.51 | % |   |   |   |   |   |   |   |   | 3.31 | % |

| (1) | Nonaccrual loans have been included in the appropriate average loan balance category, but interest on nonaccrual loans has not been included for purposes of determining interest income. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Tax equivalent adjustments to interest on investment securities were $566,000 and $451,000 for the years ended December 31, 2010 and 2009 respectively. Tax equivalent interest income is based upon a marginal effective tax rate of 34%. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes interest-bearing deposits in other banks. |
|-----|----------------------------------------------------|

| (4) | Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Net yield on interest-earning assets represents net interest income as a percentage of average interest-earning assets. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

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|                                        |   | 2010 vs. 2009              |   |   |   |   |
|---------------------------------------------|--------|----------------------------|--------|--------|--------|--------|
|                                        |   | Increase (decrease) due to |   |   |   |   |
|                                        |   | Volume                     |   | Rate   |   | Net    |   |   |
|                                        |   | (in thousands)             |   |   |
| Interest income:                            |   |                       |   |   |   |   |   |   |   |   |   |
| Loans receivable, net                       |   | $                          | (970   | )      | $      | (1,251 | ) | $ | (2,221 | ) |   |
| Mortgage-backed securities                  |   |                       | (1,060 | )      |   | (311   | ) |   | (1,371 | ) |   |
| Investment securities(1)                    |   |                       | 674    |   |   | 1      |   |   | 675 |   |   |
| Other interest-earning assets               |   |                       | 4      |   |   | (1     | ) |   | 3 |   |   |
| Total interest-earning assets               |   |                       | (1,352 | )      |   | (1,562 | ) |   | (2,914 | ) |   |
| Interest expense:                           |   |                       |   |   |   |   |   |   |   |   |   |
| Deposits                                    |   |                       | 505    |   |   | (2,861 | ) |   | (2,356 | ) |   |
| Advances from the FHLB and other borrowings |   |                       | (1,773 | )      |   | 356    |   |   | (1,417 | ) |   |
| Total interest-bearing liabilities          |   |                       | (1,268 | )      |   | (2,505 | ) |   | (3,773 | ) |   |
| Net change in net interest income           |   | $                          | (84    | )      | $      | 943    |   | $ | 859 |   |   |

|   | (1) | Tax equivalent adjustments to interest on investment securities were $566,000 and $451,000 for the years ended December 31, 2010 and 2009 respectively. Tax equivalent interest income is based upon a marginal effective rate of 34%. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Change in interest rates  |           | NPV amount  | % change  | Policy limitation  |
|--------------------------------|----------------|------------------|----------------|-------------------------|
|                           | (in thousands) |             |           |
| +300 Basis Points              | $68,716        | −28%       | −50%     |
| +200 Basis Points              | $79,415        | −17%       | −35%     |
| +100 Basis Points              | $89,107        | −7%        | −25%     |
| +50 Basis Points               | $92,202        | −3%        | −15%     |
| Flat Rates                     | $95,454        | 0%               | 0%             |
| −50 Basis Points         | $97,091        | 2%               | −10%     |
| −100 Basis Points        | $100,096       | 5%               | −20%     |

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

|                                                     |                                                                       |
|-----------------------------------------------------|-----------------------------------------------------------------------|
| Kent C. LufkinPresident and Chief Executive Officer | Dennis R. StewartExecutive Vice President and Chief Financial Officer |

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                                                                                        |   | December 31,   |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|
|                                                                                                                                                                                                                                                        |   | 2010           |    | 2009 |   |
|                                                                                                                                                                                                                                                        |   | (in thousands) |    |
| ASSETS                                                                                                                                                                                                                                                      |   |           |    |   |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                                                                   |   | $              | 7,437   |   | $ | 12,801 |   |
| Investment securities available for sale—at fair value                                                                                                                                                                                                |   |           | 57,830  |   |   | 40,853 |   |
| Mortgage-backed securities available for sale—at fair value                                                                                                                                                                                           |   |           | 66,491  |   |   | 78,198 |   |
| Mortgage-backed securities held to maturity (fair value of $3,510 and $4,033 as of December 31, 2010 and 2009, respectively)                                                                                                                      |   |           | 3,169   |   |   | 3,733 |   |
| Loans receivable, net                                                                                                                                                                                                                                       |   |           | 501,528 |   |   | 529,652 |   |
| Loans receivable, held for sale                                                                                                                                                                                                                             |   |           | 130     |   |   | 1,082 |   |
| Federal Home Loan Bank stock—at cost                                                                                                                                                                                                                  |   |           | 9,401   |   |   | 9,896 |   |
| Accrued interest receivable                                                                                                                                                                                                                                 |   |           | 2,738   |   |   | 2,777 |   |
| Premises and equipment, net                                                                                                                                                                                                                                 |   |           | 6,797   |   |   | 5,523 |   |
| Goodwill                                                                                                                                                                                                                                                    |   |           | 4,324   |   |   | 4,324 |   |
| Bank owned life insurance                                                                                                                                                                                                                                   |   |           | 17,868  |   |   | 17,190 |   |
| Other assets                                                                                                                                                                                                                                                |   |           | 14,044  |   |   | 8,061 |   |
| TOTAL ASSETS                                                                                                                                                                                                                                                |   | $              | 691,757 |   | $ | 714,090 |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                  |   |           |    |   |   |   |   |
| Liabilities                                                                                                                                                                                                                                                 |   |           |    |   |   |   |   |
| Deposits                                                                                                                                                                                                                                                    |   | $              | 550,135 |   | $ | 552,716 |   |
| Advances from the FHLB                                                                                                                                                                                                                                      |   |           | 61,987  |   |   | 80,241 |   |
| Advances from borrowers for taxes and insurance                                                                                                                                                                                                             |   |           | 2,166   |   |   | 2,231 |   |
| Accrued interest payable                                                                                                                                                                                                                                    |   |           | 1,784   |   |   | 2,818 |   |
| Other liabilities                                                                                                                                                                                                                                           |   |           | 2,269   |   |   | 4,210 |   |
| Total liabilities                                                                                                                                                                                                                                           |   |           | 618,341 |   |   | 642,216 |   |
| Stockholders’ equity                                                                                                                                                                                                                                  |   |           |    |   |   |   |   |
| Preferred stock, no par value; 2,000,000 shares authorized at December 31, 2010 and 2009,none issued                                                                                                                                                   |   |           | — |   |   | — |   |
| Common stock, $0.10 par value; 10,000,000 shares authorized, 5,290,000 shares issued,2,822,449 and 2,672,603 shares outstanding at December 31, 2010 and 2009,respectively, net of shares in treasury: 2010—2,467,551; 2009—2,617,397 |   |           | 529     |   |   | 529 |   |
| Additional paid-in capital                                                                                                                                                                                                                                  |   |           | 53,964  |   |   | 54,009 |   |
| Unearned ESOP shares                                                                                                                                                                                                                                        |   |           | (1,217  | ) |   | (1,334 | ) |
| Treasury stock—at cost                                                                                                                                                                                                                                |   |           | (51,220 | ) |   | (54,331 | ) |
| Retained earnings                                                                                                                                                                                                                                           |   |           | 70,749  |   |   | 72,376 |   |
| Accumulated other comprehensive income                                                                                                                                                                                                                      |   |           | 611     |   |   | 625 |   |
| Total stockholders’ equity                                                                                                                                                                                                                            |   |           | 73,416  |   |   | 71,874 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                            |   | $              | 691,757 |   | $ | 714,090 |   |
|                                                                                                                                                                                                                                                        |   |           |    |   |   |   |   |

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CONSOLIDATED STATEMENTS OF INCOME

|                                                            |   | Year endedDecember 31,               |    |
|-----------------------------------------------------------------|--------|--------------------------------------|---------|
|                                                            |   | 2010                                 |    | 2009 |   |
|                                                            |   | (in thousands, exceptper share data) |    |
| Interest income                                                 |   |                                 |    |   |   |   |   |
| Loans, including fees                                           |   | $                                    | $28,205 |   | $ | 30,426 |   |
| Mortgage-backed securities                                      |   |                                 | 3,595   |   |   | 4,966 |   |
| Investment securities                                           |   |                                 | 1,762   |   |   | 1,202 |   |
| Interest-bearing deposits and other                             |   |                                 | 6       |   |   | 3 |   |
| TOTAL INTEREST INCOME                                           |   |                                 | 33,568  |   |   | 36,597 |   |
| Interest expense                                                |   |                                 |    |   |   |   |   |
| Deposits                                                        |   |                                 | 7,210   |   |   | 9,566 |   |
| Borrowings                                                      |   |                                 | 2,998   |   |   | 4,415 |   |
| TOTAL INTEREST EXPENSE                                          |   |                                 | 10,208  |   |   | 13,981 |   |
| NET INTEREST INCOME                                             |   |                                 | 23,360  |   |   | 22,616 |   |
| Provision for loan losses                                       |   |                                 | 4,241   |   |   | 2,930 |   |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES             |   |                                 | 19,119  |   |   | 19,686 |   |
| Non-interest income                                             |   |                                 |    |   |   |   |   |
| Service fees, charges and other operating income                |   |                                 | 1,958   |   |   | 1,978 |   |
| Gain on sale of investment and mortgage-backed securities       |   |                                 | 20      |   |   | 762 |   |
| Bank owned life insurance                                       |   |                                 | 678     |   |   | 676 |   |
| Gain on sale of loans                                           |   |                                 | 871     |   |   | 657 |   |
| (Loss)/gain on sale of real estate acquired through foreclosure |   |                                 | (244    | ) |   | 337 |   |
| TOTAL NON-INTEREST INCOME                                       |   |                                 | 3,283   |   |   | 4,410 |   |
| Non-interest expense                                            |   |                                 |    |   |   |   |   |
| Compensation and benefits                                       |   |                                 | 10,205  |   |   | 10,642 |   |
| Occupancy and equipment                                         |   |                                 | 3,003   |   |   | 2,870 |   |
| Federal deposit insurance premiums                              |   |                                 | 915     |   |   | 920 |   |
| Professional fees                                               |   |                                 | 1,063   |   |   | 856 |   |
| Marketing and advertising                                       |   |                                 | 483     |   |   | 469 |   |
| Other operating                                                 |   |                                 | 2,332   |   |   | 2,328 |   |
| TOTAL NON-INTEREST EXPENSE                                      |   |                                 | 18,001  |   |   | 18,085 |   |
| INCOME BEFORE INCOME TAXES                                      |   |                                 | 4,401   |   |   | 6,011 |   |
| Income tax expense                                              |   |                                 | 1,049   |   |   | 1,497 |   |
| NET INCOME                                                      |   | $                                    | 3,352   |   | $ | 4,514 |   |
| Earnings per share—basic                                  |   | $                                    | 1.25    |   | $ | 1.70 |   |
| Earnings per share—diluted                                |   | $                                    | 1.25    |   | $ | 1.70 |   |

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND

COMPREHENSIVE INCOME

|                                                              |   | Common Stock                      |      |   | Additional |   |    | Unearned       |   |   |       |   |   |          |    |   | Accumulatedother |   |    |                       |   |   |    |   |
|-------------------------------------------------------------------|--------|-----------------------------------|-----------|--------|------------|--------|---------|----------------|--------|--------|------------|--------|--------|---------------|---------|--------|------------------|--------|---------|----------------------------|--------|--------|---------|--------|
|                                                              |   | Shares                            |      |   | Parvalue   |   |    | paid-incapital |   |   | ESOPshares |   |   | Treasurystock |    |   | Retainedearnings |   |    | comprehensiveincome (loss) |   |   | Total   |   |   | Comprehensiveincome (loss) |   |
|                                                              |   | (in thousands, except share data) |      |
| Balance at December 31, 2008                                 |   |                              | 2,515,407 |   |       | $      | 529     |           |   | $      | 53,897     |   |   | $             | (1,468  | )      |             | $      | (54,538 | )                          |   | $      | 69,875  |   |   | $ | (603 | ) |   | $ | 67,692 |   |   |   |   |
| Allocation of ESOP shares                                         |   |                              | 13,433    |   |       |   | — |           |   |   | 110        |   |   |          | 134     |   |             |   | — |                       |   |   | — |   |   |   | — |   |   |   | 244 |   |   |   |   |
| Purchase of treasury stock                                        |   |                              | (5,756    | )      |       |   | — |           |   |   | —    |   |   |          | — |   |             |   | (128    | )                          |   |   | — |   |   |   | — |   |   |   | (128 | ) |   |   |   |
| Cash dividends—common stock                                 |   |                              | —   |   |       |   | — |           |   |   | —    |   |   |          | — |   |             |   | — |                       |   |   | (2,013  | )      |   |   | — |   |   |   | (2,013 | ) |   |   |   |
| Compensation expense—restricted shares                      |   |                              | —   |   |       |   | — |           |   |   | 16         |   |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | — |   |   |   | 16 |   |   |   |   |
| Exercise of options                                               |   |                              | 15,445    |   |       |   | — |           |   |   | (79        | )      |   |          | — |   |             |   | 321     |                       |   |   | — |   |   |   | — |   |   |   | 242 |   |   |   |   |
| Income tax benefit arising from stock compensation                |   |                              | —   |   |       |   | — |           |   |   | 23         |   |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | — |   |   |   | 23 |   |   |   |   |
| Stock option expense                                              |   |                              | —   |   |       |   | — |           |   |   | 56         |   |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | — |   |   |   | 56 |   |   |   |   |
| Vesting of restricted stock grant                                 |   |                              | 666       |   |       |   | — |           |   |   | (14        | )      |   |          | — |   |             |   | 14      |                       |   |   | — |   |   |   | — |   |   |   | — |   |   |   |   |
| Unrealized gains on securities, net of tax                        |   |                              | —   |   |       |   | — |           |   |   | —    |   |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | 867 |   |   |   | 867 |   |   | $ | 867 |   |
| Adjustment to record funded status of pension, net of tax         |   |                              | —   |   |       |   | — |           |   |   | —    |   |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | 361 |   |   |   | 361 |   |   |   | 361 |   |
| Net income for the year ended December 31, 2009              |   |                              | —   |   |       |   | — |           |   |   | —    |   |   |          | — |   |             |   | — |                       |   |   | 4,514   |   |   |   | — |   |   |   | 4,514 |   |   |   | 4,514 |   |
| Comprehensive income                                              |   |                              |      |   |       |   |    |           |   |   |       |   |   |          |    |   |             |   |    |                       |   |   |    |   |   |   |   |   |   |   |   |   |   | $ | 5,742 |   |
| Balance at December 31, 2009                                 |   |                              | 2,539,195 |   |       | $      | 529     |           |   | $      | 54,009     |   |   | $             | (1,334  | )      |             | $      | (54,331 | )                          |   | $      | 72,376  |   |   | $ | 625 |   |   | $ | 71,874 |   |   |   |   |   |
| Allocation of ESOP shares                                         |   |                              | 11,712    |   |       |   | — |           |   |   | 124        |   |   |          | 117     |   |             |   | — |                       |   |   | — |   |   |   | — |   |   |   | 241 |   |   |   |   |   |
| Cash dividends—common stock                                 |   |                              | —   |   |       |   | — |           |   |   | —    |   |   |          | — |   |             |   | — |                       |   |   | (2,037  | )      |   |   | — |   |   |   | (2,037 | ) |   |   |   |   |
| Compensation expense—restricted shares                      |   |                              | —   |   |       |   | — |           |   |   | 16         |   |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | — |   |   |   | 16 |   |   |   |   |   |
| Exercise of options                                               |   |                              | 14,870    |   |       |   | — |           |   |   | (102       | )      |   |          | — |   |             |   | 309     |                       |   |   | — |   |   |   | — |   |   |   | 207 |   |   |   |   |   |
| Income tax benefit arising from stock compensation                |   |                              | —   |   |       |   | — |           |   |   | 6          |   |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | — |   |   |   | 6 |   |   |   |   |   |
| Stock option expense                                              |   |                              | —   |   |       |   | — |           |   |   | 52         |   |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | — |   |   |   | 52 |   |   |   |   |   |
| Vesting of restricted stock grant                                 |   |                              | 667       |   |       |   | — |           |   |   | (14        | )      |   |          | — |   |             |   | 14      |                       |   |   | — |   |   |   | — |   |   |   | — |   |   |   |   |   |
| Unrealized losses on securities, net of tax                       |   |                              | —   |   |       |   | — |           |   |   | —    |   |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | (91 | ) |   |   | (91 | ) |   |  $ | (91 | ) |
| Adjustment to record funded status of pension, net of tax         |   |                              | —   |   |       |   | — |           |   |   | —    |   |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | 77 |   |   |   | 77 |   |   |   | 77 |   |
| Adjustment of deferred tax asset related to expired stock options |   |                              | —   |   |       |   | — |           |   |   | (281       | )      |   |          | — |   |             |   | — |                       |   |   | — |   |   |   | — |   |   |   | (281 | ) |   |   |   |   |
| 5% stock dividend                                                 |   |                              | 134,308   |   |       |   | — |           |   |   | 154        |   |   |          | — |   |             |   | 2,788   |                       |   |   | (2,942  | )      |   |   | — |   |   |   | — |   |   |   |   |   |
| Net income for the year ended December 31, 2010              |   |                              | —   |   |       |   | — |           |   |   | —    |   |   |          | — |   |             |   | — |                       |   |   | 3,352   |   |   |   | — |   |   |   | 3,352 |   |   |   | 3,352 |   |
| Comprehensive income                                              |   |                              |      |   |       |   |    |           |   |   |       |   |   |          |    |   |             |   |    |                       |   |   |    |   |   |   |   |   |   |   |   |   |   | $ | 3,338 |   |
| Balance at December 31, 2010                                 |   |                              | 2,700,752 |   |       | $      | 529     |           |   | $      | 53,964     |   |   | $             | (1,217  | )      |             | $      | (51,220 | )                          |   | $      | 70,749  |   |   | $ | 611 |   |   | $ | 73,416 |   |   |   |   |   |

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CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                             |   | Year endedDecember 31, |    |
|----------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                             |   | 2010                   |    | 2009 |   |
|                                                                             |   | (in thousands)         |    |
| OPERATING ACTIVITIES                                                             |   |                   |    |   |   |   |   |
| Net income                                                                       |   | $                      | 3,352   |   | $ | 4,514 |   |
| Adjustments to reconcile net income to net cash provided by operating activities |   |                   |    |   |   |   |   |
| Amortization (accretion) of:                                                     |   |                   |    |   |   |   |   |
| Mortgage loan servicing rights                                                   |   |                   | 160     |   |   | 146 |   |
| Deferred loan origination fees                                                   |   |                   | 191     |   |   | 137 |   |
| Premiums and discounts on investment securities, net                             |   |                   | 79      |   |   | 80 |   |
| Premiums and discounts on mortgage-backed securities, net                        |   |                   | 96      |   |   | (230 | ) |
| Premiums and discounts on loans, net                                             |   |                   | 170     |   |   | 176 |   |
| Deferred income taxes                                                            |   |                   | (642    | ) |   | 198 |   |
| Provision for loan losses                                                        |   |                   | 4,241   |   |   | 2,930 |   |
| Depreciation of premises and equipment                                           |   |                   | 867     |   |   | 886 |   |
| Increase in value of bank-owned life insurance                                   |   |                   | (678    | ) |   | (676 | ) |
| Restricted shares grant expense                                                  |   |                   | 16      |   |   | 16 |   |
| Stock option expense                                                             |   |                   | 52      |   |   | 56 |   |
| Stock based benefit programs: ESOP                                               |   |                   | 241     |   |   | 244 |   |
| Proceeds from sale of loans originated for sale                                  |   |                   | 40,455  |   |   | 44,926 |   |
| Origination of loans held for sale                                               |   |                   | (38,973 | ) |   | (44,085 | ) |
| (Loss) gain on sale of:                                                     |   |                   |    |   |   |   |   |
| Investment and mortgage-backed securities                                        |   |                   | (20     | ) |   | (762 | ) |
| Loans                                                                            |   |                   | (871    | ) |   | (657 | ) |
| Real estate acquired through foreclosure                                         |   |                   | 244     |   |   | (337 | ) |
| (Increase) decrease in:                                                          |   |                   |    |   |   |   |   |
| Accrued interest receivable                                                      |   |                   | 39      |   |   | 11 |   |
| Other assets                                                                     |   |                   | 516     |   |   | (3,757 | ) |
| (Decrease) increase in:                                                          |   |                   |    |   |   |   |   |
| Accrued interest payable                                                         |   |                   | (1,034  | ) |   | (248 | ) |
| Other liabilities                                                                |   |                   | (1,603  | ) |   | 744 |   |
| NET CASH PROVIDED BY OPERATING ACTIVITIES                                        |   |  $                | 6,898   |   |  $ | 4,312 |   |
|                                                                             |   |                   |    |   |   |   |   |

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|                                                                    |   | Year endedDecember 31, |    |
|-------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                    |   | 2010                   |    | 2009 |   |
|                                                                    |   | (in thousands)         |    |
| INVESTING ACTIVITIES                                                    |   |                   |    |   |   |   |   |
| Loan originations                                                       |   | $                      | (83,117 | ) | $ | (82,610 | ) |
| Loan principal payments                                                 |   |                   | 99,159  |   |   | 90,602 |   |
| Principal repayments on mortgage-backed securities held to maturity     |   |                   | 561     |   |   | 1,050 |   |
| Principal repayments on mortgage-backed securities available for sale   |   |                   | 28,544  |   |   | 32,230 |   |
| Purchase of investment securities available for sale                    |   |                   | (17,837 | ) |   | (14,746 | ) |
| Purchase of mortgage-backed securities available for sale               |   |                   | (17,027 | ) |   | (10,608 | ) |
| Proceeds from the sale of investment securities available for sale      |   |                   | 170     |   |   | 5,514 |   |
| Proceeds from the sale of mortgage-backed securities available for sale |   |                   | — |   |   | 8,859 |   |
| Proceeds from maturities of investment securities available for sale    |   |                   | 590     |   |   | 755 |   |
| Redemption of FHLB stock                                                |   |                   | 495     |   |   | — |   |
| Proceeds from sale of real estate acquired through foreclosure          |   |                   | 1,065   |   |   | 2,498 |   |
| Purchase of premises and equipment                                      |   |                   | (2,141  | ) |   | (773 | ) |
| NET CASH PROVIDED BY INVESTING ACTIVITIES                               |   |                   | 10,462  |   |   | 32,771 |   |
| FINANCING ACTIVITIES                                                    |   |                   |    |   |   |   |   |
| Net (decrease) increase in deposits                                     |   |                   | (2,581  | ) |   | 62,866 |   |
| Net decrease in short-term FHLB and other borrowings                    |   |                   | — |   |   | (42,416 | ) |
| Proceeds from long-term FHLB advances                                   |   |                   | 12,884  |   |   | — |   |
| Repayment of long-term FHLB advances                                    |   |                   | (31,138 | ) |   | (45,491 | ) |
| Net decrease in advances from borrowers for taxes and insurance         |   |                   | (65     | ) |   | (84 | ) |
| Treasury stock acquired                                                 |   |                   | — |   |   | (128 | ) |
| Exercise of stock options                                               |   |                   | 207     |   |   | 242 |   |
| Tax benefit arising from stock compensation                             |   |                   | 6       |   |   | 23 |   |
| Common stock dividends paid                                             |   |                   | (2,037  | ) |   | (2,013 | ) |
| NET CASH USED IN FINANCING ACTIVITIES                                   |   |                   | (22,724 | ) |   | (27,001 | ) |
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                    |   |                   | (5,364  | ) |   | 10,082 |   |
| Cash and cash equivalents at beginning of year                          |   |                   | 12,801  |   |   | 2,719 |   |
| Cash and cash equivalents at end of year                                |   | $                      | 7,437   |   | $ | 12,801 |   |
| Supplemental disclosure of cash flow information:                       |   |                   |    |   |   |   |   |
| Cash paid for                                                           |   |                   |    |   |   |   |   |
| Interest on deposits and advances from FHLB and other borrowings        |   | $                      | 11,242  |   | $ | 14,229 |   |
| Income taxes                                                            |   | $                      | 2,237   |   | $ | 1,225 |   |
| Capitalization of mortgage servicing rights                             |   | $                      | 341     |   | $ | 393 |   |
| Transfers from loans to real estate acquired through foreclosure        |   | $                      | 7,479   |   | $ | 3,443 |   |
| Securities available for sale purchased, not settled                    |   | $                      | — |   | $ | 745 |   |

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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|                                                         |   | December 31, 2010 |
|--------------------------------------------------------------|--------|-------------------|
|                                                         |   | Beforetax amount  |   |   | Tax(expense)benefit |   | Net of taxamount |   |
|                                                         |   | (in thousands)    |
|                                                         |   |              |   |   |   |   |   |   |   |   |   |
| Unrealized losses on securities                              |   |              |   |   |   |   |   |   |   |   |   |
| Unrealized holding losses arising during period              |   | $                 | (118 | ) |   | $ | 40 |   | $ | (78 | ) |
| Reclassification adjustment for gains realized in net income |   |              | (20 | ) |   |   | 7 |   |   | (13 | ) |
| Pension plan benefit adjustment related to actuarial losses  |   |              | 117 |   |   |   | (40 | ) |   | 77 |   |
| Other comprehensive loss, net                                |   | $                 | (21 | ) |   | $ | 7 |   | $ | (14 | ) |

|                                                         |   | December 31, 2009 |
|--------------------------------------------------------------|--------|-------------------|
|                                                         |   | Beforetax amount  |   |   | Tax(expense)benefit |   | Net of taxamount |   |
|                                                         |   | (in thousands)    |
|                                                         |   |              |   |   |   |   |   |   |   |   |   |
| Unrealized gains on securities                               |   |              |   |   |   |   |   |   |   |   |   |
| Unrealized holding gains arising during period               |   | $                 |  2,076 |   |   | $ | (706 | ) | $ |  1,370 |   |
| Reclassification adjustment for gains realized in net income |   |              | (762 | ) |   |   | 259 |   |   |  (503 | ) |
| Pension plan benefit adjustment related to actuarial losses  |   |              | 552 |   |   |   | (191 | ) |   | 361 |   |
| Other comprehensive income, net                              |   | $                 | 1,866 |   |   | $ | (638 | ) | $ |  1,228 |   |

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|                                                      | December 31,   |         |   |
|-----------------------------------------------------------|----------------|--------------|--------|
|                                                      | 2010           |         |   | 2009 |   |   |
|                                                      | (in thousands) |         |   |
| Cash and due from banks                                   | $              | 3,218        |   |   | $ | 2,830 |   |   |
| Interest-bearing deposits in other financial institutions |           |   4,219 |   |   |   |   9,971 |   |   |
|                                                      | $              | 7,437        |   |   | $ | 12,801 |   |   |

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|                                                                                                                     |   | December 31, 2010 |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|
|                                                                                                                     |   | Amortizedcost     |   |   | Grossunrealizedgains |   |   | Grossunrealizedlosses |   |   | Fairvalue |   |
|                                                                                                                     |   | (in thousands)    |   |
| Investment securities available for sale                                                                                 |   |              |   |   |   |   |   |   |   |   |   |   |
|  U.S. Government and federal agencies                                                                               |   | $                 | 6,000  |   |   | $ | 59 |   |   | $ | — |   |   | $ | 6,059 |   |
|  Corporate debt securities                                                                                          |   |              | 3,340  |   |   |   | 223 |   |   |   | — |   |   |   | 3,563 |   |
|  State and political subdivisions                                                                                   |   |              | 47,348 |   |   |   | 1,120 |   |   |   | (260 | ) |   |   | 48,208 |   |
|  Total investment securities available for sale                                                                     |   | $                 | 56,688 |   |   | $ | 1,402 |   |   | $ | (260 | ) |   | $ | 57,830 |   |
|                                                                                                                     |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed  securities available for sale                                                                 |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Residential mortgage-backed securities issued by quasi-governmental agencies |   | $                 | 50,942 |   |   | $ | 1,950 |   |   | $ | (6 | ) |   | $ | 52,886 |   |
|     Residential mortgage-backed securities, privately issued                                         |   |              | 13,425 |   |   |   | 224 |   |   |   | (44 | ) |   |   | 13,605 |   |
| Total mortgage-backed securities available for sale                                                                 |   | $                 | 64,367 |   |   | $ | 2,174 |   |   | $ | (50 | ) |   | $ | 66,491 |   |
|                                                                                                                     |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities held to maturity issued by quasi-governmental agencies                            |   | $                 | 3,169  |   |   | $ | 341 |   |   | $ | — |   |   | $ | 3,510 |   |
|                                                                                                                     |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                             |   | December 31, 2009 |   |
|--------------------------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                                             |   | Amortizedcost          |   |   | Grossunrealizedgains |   |   | Grossunrealizedlosses |   |   | Fairvalue |   |
|                                                                                             |   | (in thousands)         |   |
| Investment securities available for sale                                                         |   |                   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government and federal agencies                                                             |   | $                      | 3,000  |   |   | $ | — |   |   | $ | (55 | ) |   | $ | 2,945 |   |
| Corporate debt securities                                                                        |   |                   | 3,340  |   |   |   | 177 |   |   |   | — |   |   |   | 3,517 |   |
| State and political subdivisions                                                                 |   |                   | 33,180 |   |   |   | 1,170 |   |   |   | (109 | ) |   |   | 34,241 |   |
| Equity securities                                                                                |   |                   | 150    |   |   |   | — |   |   |   | — |   |   |   | 150 |   |
| Total investment securities available for sale                                                   |   | $                      | 39,670 |   |   | $ | 1,347 |   |   | $ | (164 | ) |   | $ | 40,853 |   |
|                                                                                             |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed  securities available for sale                                         |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities issued by quasi-governmental agencies |   | $                      | 68,707 |   |   | $ | 2,483 |   |   | $ | (39 | ) |   | $ | 71,151 |   |
| Residential mortgage-backed securities, privately issued                                         |   |                   | 7,270  |   |   |   | — |   |   |   | (223 | ) |   |   | 7,047 |   |
| Total mortgage-backed securities available for sale                                         |   | $                      | 75,977 |   |   | $ | 2,483 |   |   | $ | (262 | ) |   | $ | 78,198 |   |
|                                                                                             |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage-backed securities held to maturity issued by quasi-governmental agencies    |   | $                      | 3,733  |   |   | $ | 300 |   |   | $ | — |   |   | $ | 4,033 |   |
|                                                                                             |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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|                                            |   | December 31, 2010 |    |
|-------------------------------------------------|--------|------------------------|---------|
|                                            |   | Available for sale     |    |   | Held to maturity |   |
|                                            |   | Amortizedcost          |    |   | Fairvalue |   |   | Amortizedcost |   |   | Fairvalue |   |
|                                            |   | (in thousands)         |    |
| Investment securities                           |   |                   |    |   |   |   |   |   |   |   |   |   |
| Due in one year or less                         |   | $                      | 860     |   |   | $ | 863 |   |   | $ | — |   |   | $ | — |   |
| Due after one year through five years           |   |                   | 13,459  |   |   |   | 13,932 |   |   |   | — |   |   |   | — |   |
| Due after five years through 10 years      |   |                   | 23,258  |   |   |   | 24,058 |   |   |   | — |   |   |   | — |   |
| Due after ten years                             |   |                   | 19,111  |   |   |   | 18,977 |   |   |   | — |   |   |   | — |   |
|                                            |   |                   | 56,688  |   |   |   | 57,830 |   |   |   | — |   |   |   | — |   |
|                                            |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed  securities           |   |                   | 64,367  |   |   |   | 66,491 |   |   |   | 3,169 |   |   |   | 3,510 |   |
| Total investment and mortgage-backed securities |   | $                      | 121,055 |   |   | $ | 124,321 |   |   | $ | 3,169 |   |   | $ | 3,510 |   |

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|                                                                         |   | Numberofsecurities |           |      | Less than12 months |   |           | 12 monthsor longer |   |      | Total  |   |
|------------------------------------------------------------------------------|--------|--------------------|----------------|-----------|-------------------------|--------|----------------|-------------------------|--------|-----------|--------|--------|
| Description of securities                                                    |   |               |           | Fairvalue |                    |   | Unrealizedloss |                    |   | Fairvalue |   |   | Unrealizedloss |   |   | Fairvalue |   |   | Unrealizedloss |   |
|                                                                         |   |               | (in thousands) |      |
| State and political subdivisions                                             |   |               |           | 17        |                    |   | $              | 14,210                  |   |      | $      | (260   | ) |   | $ | — |   |   | $ | — |   |   | $ | 14,210 |   |   | $ | (260 | ) |
| Residential mortgage-backed securities issued by quasi-governmental agencies |   |               |           | 1         |                    |   |           | 3,027                   |   |      |   | (6     | ) |   |   | — |   |   |   | — |   |   |   | 3,027 |   |   |   | (6 | ) |
| Residential mortgage-backed securities privately issued                      |   |               |           | 3         |                    |   |           | 7,048                   |   |      |   | (44    | ) |   |   | — |   |   |   | — |   |   |   | 7,048 |   |   |   | (44 | ) |
| Total temporarily impaired securities                                        |   |               |           | 21        |                    |   | $              | 24,285                  |   |      | $      | (310   | ) |   | $ | — |   |   | $ | — |   |   | $ | 24,285 |   |   | $ | (310 | ) |

|                                                                         |   | Numberofsecurities |      | Less than12 months |   |           | 12 monthsor longer |   |      | Total  |   |
|------------------------------------------------------------------------------|--------|--------------------|-----------|-------------------------|--------|----------------|-------------------------|--------|-----------|--------|--------|
| Description of securities                                                    |   |               | Fairvalue |                    |   | Unrealizedloss |                    |   | Fairvalue |   |   | Unrealizedloss |   |   | Fairvalue |   |   | Unrealizedloss |   |
|                                                                         |   | (in thousands)     |      |
| U.S. Government  and federal agencies                              |   |               | 1         |                    |   | $              | 2,945                   |   |      | $      | (55    | ) |   | $ | — |   |   | $ | — |   |   | $ | 2,945 |   |   | $ | (55 | ) |
| State and political subdivisions                                             |   |               | 6         |                    |   |           | 4,086                   |   |      |   | (109   | ) |   |   | — |   |   |   | — |   |   |   | 4,086 |   |   |   | (109 | ) |
| Residential mortgage-backed securities issued by quasi-governmental agencies |   |               | 2         |                    |   |           | 4,352                   |   |      |   | (39    | ) |   |   | — |   |   |   | — |   |   |   | 4,352 |   |   |   | (39 | ) |
| Residential mortgage-backed securities privately issued                      |   |               | 4         |                    |   |           | 5,536                   |   |      |   | (160   | ) |   |   | 1,511 |   |   |   | (63 | ) |   |   | 7,047 |   |   |   | (223 | ) |
| Total temporarily impaired securities                                        |   |               | 13        |                    |   | $              | 16,919                  |   |      | $      | (363   | ) |   | $ | 1,511 |   |   | $ | (63 | ) |   | $ | 18,430 |   |   | $ | (426 | ) |

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|                                                                                     | December 31,   |    |   |
|------------------------------------------------------------------------------------------|----------------|---------|--------|
|                                                                                     | 2010           |    |   | 2009 |   |   |
|                                                                                     | (in thousands) |    |   |
| Held for investment:                                                                     |           |    |   |   |   |   |   |   |
| First mortgage loans                                                                     | $              | 269,077 |   |   | $ | 271,651 |   |   |
| Secured by one-to-four family residences                                                 |           | 137,307 |   |   |   | 134,584 |   |   |
| Secured by non-residential properties or non—owner occupied residential properties |           | 18,799  |   |   |   | 29,671 |   |   |
| Construction loans                                                                       |           | 425,183 |   |   |   | 435,906  |   |   |
| Total first mortgage loans                                                               |           |    |   |   |   |   |   |   |
|                                                                                     |           |    |   |   |   |   |   |   |
| Other loans                                                                              |           |    |   |   |   |   |   |   |
| Commercial-business, real estate secured                                                 |           | 26,603  |   |   |   | 33,514 |   |   |
| Commercial-business, non-real estate secured                                             |           | 5,575   |   |   |   | 7,462 |   |   |
| Home equity and second mortgage                                                          |           | 49,430  |   |   |   | 54,811 |   |   |
| Other                                                                                    |           | 2,407   |   |   |   | 2,565 |   |   |
| Total other loans                                                                        |           | 84,015  |   |   |   | 98,352 |   |   |
|                                                                                     |           |    |   |   |   |   |   |   |
| Total loans                                                                              |           | 509,198 |   |   |   | 534,258 |   |   |
| Net deferred loan origination costs and unamortized premiums                             |           | 658     |   |   |   | 609 |   |   |
| Less allowance for loan losses                                                           |           | (8,328  | )      |   |   | (5,215 | ) |   |
| Total loans receivable                                                                   | $              | 501,528 |   |   | $ | 529,652 |   |   |
|                                                                                     |           |    |   |   |   |   |   |   |
| Held for sale:                                                                           |           |    |   |   |   |   |   |   |
| First mortgage loans                                                                     |           |    |   |   |   |   |   |   |
| Secured by one-to-four family residences                                                 | $              | 130     |   |   | $ | 1,082 |   |   |

| Commercial credit exposure-credit risk profile by internally assigned grade         |
|------------------------------------------------------------------------------------------|
|                                                                                     |   |   | Pass |   |   |   | Specialmention |   |   |   | Substandard |   |   |   | Doubtful |   |   |   | Total |
|                                                                                     |   |   | (in thousands) |
| Secured by non-residential properties or non—owner occupied residential properties |   | $ | 108,484 |   |   | $ | 19,299 |   |   | $ | 9,524 |   |   | $ | — |   |   | $ | 137,307 |
| Construction loans                                                                       |   |   | 3,482 |   |   |   | 6,269 |   |   |   | 9,048 |   |   |   | — |   |   |   | 18,799 |
| Commercial-business, real estate secured                                                 |   |   | 15,778 |   |   |   | 1,007 |   |   |   | 9,818 |   |   |   | — |   |   |   | 26,603 |
| Commercial-business, non-real estate secured                                             |   |   | 5,531 |   |   |   | — |   |   |   | — |   |   |   | 44 |   |   |   | 5,575 |
|   Total                                                                             |   | $ | 133,275 |   |   | $ | 26,575 |   |   | $ | 28,390 |   |   | $ | 44 |   |   | $ | 188,284 |

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Table of Contents

| Mortgage and consumer credit exposure-credit risk profile by payment activity  |
|-------------------------------------------------------------------------------------|
|                                                                                |   |   | Performing |   |   |   | Non-performing |   |   | Total |
|                                                                                |   |   | (in thousands) |
| Secured by one-to-four family residences                                            |   | $ | 265,459 |   |   | $ | 3,618 |   |   | $ | 269,077 |
| Home equity and second mortgage                                                     |   |   | 48,018 |   |   |   | 1,412 |   |   |   | 49,430 |
| Other                                                                               |   |   | 2,404 |   |   |   | 3 |   |   |   | 2,407 |
|   Total                                                                        |   | $ | 315,881 |   |   | $ | 5,033 |   |   | $ | 320,914 |

|                                                                                     |   | (in thousands) |    |
|------------------------------------------------------------------------------------------|--------|----------------|---------|
| Secured by one-to-four family residences                                                 |   | $              | 3,618   |   |
| Secured by non-residential properties or non—owner occupied residential properties |   |           | 4,993   |   |
| Construction loans                                                                       |   |           | 4,307   |   |
| Commercial-business, real estate secured                                                 |   |           | 4,601   |   |
| Commercial-business, non-real estate secured                                             |   |           | 44      |   |
| Home equity and second mortgage                                                          |   |           | 1,412   |   |
| Other consumer                                                                           |   |           | 3       |   |
| Total non-performing loans                                                               |   | $              | 18,978  |   |
| Total loans past due 90 days as to interest or principal and accruing interest           |   | $              | — |   |

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Table of Contents

|                                                                                     |   | Impaired loans |
|------------------------------------------------------------------------------------------|--------|----------------|
|                                                                                     |   |           | Recorded investment |   |   |   | Unpaid principal balance |   |   |   | Related allowance |   |   |   | Average recorded investment |   |   |   | Interest income recognized |
|                                                                                     |   |           | (in thousands) |
| With an allowance recorded:                                                              |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Secured by non-residential properties or non—owner occupied residential properties |   | $              | 1,855 |   |   | $ | 1,855 |   |   | $ | 218 |   |   |  $ | 925 |   |   | $ | — |
| Construction loans                                                                       |   |           | 3,887 |   |   |   | 3,887 |   |   |   | 1,627 |   |   |   | 3,887 |   |   |   | — |
| Commercial-business, real estate secured                                                 |   |           | 2,605 |   |   |   | 2,605 |   |   |   | 373 |   |   |   | 1,563 |   |   |   | — |
| Commercial-business, non-real estate secured                                             |   |           | 44 |   |   |   | 44 |   |   |   | 44 |   |   |   | 18 |   |   |   | — |
|                                                                                     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| With no allowance recorded:                                                              |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Secured by non-residential properties or non—owner occupied residential properties |   |           | 2,830 |   |   |   | 2,830 |   |   |   | — |   |   |   | 3,479 |   |   |   | — |
| Construction loans                                                                       |   |           | 420 |   |   |   | 420 |   |   |   | — |   |   |   | 492 |   |   |   | — |
| Commercial-business, real estate secured                                                 |   |           | 1,996 |   |   |   | 1,996 |   |   |   | — |   |   |   | 4,717 |   |   |   | — |
| Commercial-business, non-real estate secured                                             |   |           | — |   |   |   | — |   |   |   | — |   |   |   | 22 |   |   |   | — |
| Total                                                                                    |   | $              | 13,637 |   |   | $ | 13,637 |   |   | $ | 2,262 |   |   | $ | 15,103 |   |   | $ | — |

|                                                                           |   | (thousands) |    |
|--------------------------------------------------------------------------------|--------|-------------|---------|
| Impaired loans with a related allowance                                        |   | $           | 2,389   |   |
| Impaired loans without a related allowance                                     |   |        | 5,895   |   |
| Total impaired loans                                                           |   | $           | 8,284   |   |
| Allowance for impaired loans                                                   |   | $           | 540     |   |
| Total non-performing loans                                                     |   | $           | 8,284   |   |
| Total loans past due 90 days as to interest or principal and accruing interest |   | $           | — |   |

|                                                                                     |   | Current        |    |   | 30-59 days past due |   |    | 60-89 days past due |   |   | Loans past due 90 days or more |   |   | Total past due |   |   | Total loans |   |   | Recorded investment over 90 days and accruing interest |   |
|------------------------------------------------------------------------------------------|--------|----------------|---------|--------|---------------------|--------|---------|---------------------|--------|--------|--------------------------------|--------|--------|----------------|--------|--------|-------------|--------|--------|--------------------------------------------------------|--------|
|                                                                                     |   | (in thousands) |    |
| Secured by one-to-four family residences                                                 |   | $              | 267,885 |   |                | $      | 424     |                |   | $      | 26                             |   |   | $              | 742    |   |        | $      | 1,192  |                                                   |   | $ | 269,077 |   |   | $ | — |   |
| Secured by non-residential properties or non—owner occupied residential properties |   |           | 131,566 |   |                |   | 748     |                |   |   | 754                            |   |   |           | 4,239  |   |        |   | 5,741  |                                                   |   |   | 137,307 |   |   |   | — |   |
| Construction loans                                                                       |   |           | 14,492  |   |                |   | — |                |   |   | —                        |   |   |           | 4,307  |   |        |   | 4,307  |                                                   |   |   | 18,799 |   |   |   |   |   |
| Commercial-business, real estate secured                                                 |   |           | 18,877  |   |                |   | 3,125   |                |   |   | —                        |   |   |           | 4,601  |   |        |   | 7,726  |                                                   |   |   | 26,603 |   |   |   | — |   |
| Commercial-business, non-real estate secured                                             |   |           | 5,531   |   |                |   | — |                |   |   | —                        |   |   |           | 44     |   |        |   | 44     |                                                   |   |   | 5,575 |   |   |   | — |   |
| Home equity and second mortgage                                                          |   |           | 48,285  |   |                |   | 60      |                |   |   | 9                              |   |   |           | 1,076  |   |        |   | 1,145  |                                                   |   |   | 49,430 |   |   |   |   |   |
| Other                                                                                    |   |           | 2,381   |   |                |   | 13      |                |   |   | 10                             |   |   |           | 3      |   |        |   | 26     |                                                   |   |   | 2,407 |   |   |   | — |   |
|   Total                                                                             |   |  $        | 489,017 |   |                | $      | 4,370   |                |   | $      | 799                            |   |   | $              | 15,012 |   |        | $      | 20,181 |                                                   |   | $ | 509,198 |   |   | $ | — |   |

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|                             |   | December 31, |   |
|----------------------------------|--------|-------------------|--------|
|                             |   | 2010              |   |   | 2009 |   |
|                             |   | (in thousands)    |   |
|                             |   |              |   |
| Balance at beginning of year     |   | $                 | 5,215  |   |   | $ | 3,855 |   |
| Provision charged to income      |   |              | 4,241  |   |   |   | 2,930 |   |
| (Charge-offs), net of recoveries |   |              | (1,128 | )  |   |   | (1,570 | )  |
| Balance at end of year           |   | $                 | 8,328  |   |   | $ | 5,215 |   |

| Allowance                                                                                |   |   | Individually evaluated for impairment |   |   |   | Collectively evaluated for impairment |   |   |          | Total |
|------------------------------------------------------------------------------------------|--------|--------|---------------------------------------|--------|--------|--------|---------------------------------------|--------|--------|---------------|-------|
|                                                                                     |   |   | (in thousands)                        |
| Secured by one-to-four family residences                                                 |   | $      | —                               |   |   | $      | 1,839                                 |   |   |   $ | 1,839 |
| Secured by non-residential properties or non—owner occupied residential properties |   |   | 218                                   |   |   |   | 1,906                                 |   |   |          | 2,124 |
| Construction loans                                                                       |   |   | 1,627                                 |   |   |   | 852                                   |   |   |          | 2,479 |
| Commercial-business, real estate secured                                                 |   |   | 373                                   |   |   |   | 601                                   |   |   |          | 974   |
| Commercial-business, non-real estate secured                                             |   |   | 44                                    |   |   |   | 33                                    |   |   |          | 77    |
| Home equity and second mortgage                                                          |   |   | —                               |   |   |   | 607                                   |   |   |          | 607   |
| Other consumer                                                                           |   |   | —                               |   |   |   | 16                                    |   |   |          | 16    |
| Unallocated                                                                              |   |   | —                               |   |   |   | 212                                   |   |   |          | 212   |
| Total                                                                                    |   | $      | 2,262                                 |   |   | $      | 6,066                                 |   |   | $             | 8,328 |

| Loan balance                                                                             |   |   | Individually evaluated for impairment |   |   |   | Collectively evaluated for impairment |   |   |          | Total   |
|------------------------------------------------------------------------------------------|--------|--------|---------------------------------------|--------|--------|--------|---------------------------------------|--------|--------|---------------|---------|
|                                                                                     |   |   | (in thousands)                        |
| Secured by one-to-four family residences                                                 |   | $      | —                               |   |   | $      | 269,077                               |   |   |   $ | 269,077 |
| Secured by non-residential properties or non—owner occupied residential properties |   |   | 4,685                                 |   |   |   | 132,621                               |   |   |          | 137,307 |
| Construction loans                                                                       |   |   | 4,307                                 |   |   |   | 14,492                                |   |   |          | 18,799  |
| Commercial-business, real estate secured                                                 |   |   | 4,601                                 |   |   |   | 22,003                                |   |   |          | 26,603  |
| Commercial-business, non-real estate secured                                             |   |   | 44                                    |   |   |   | 5,531                                 |   |   |          | 5,575   |
| Home equity and second mortgage                                                          |   |   | —                               |   |   |   | 49,430                                |   |   |          | 49,430  |
| Other consumer                                                                           |   |   | —                               |   |   |   | 2,407                                 |   |   |          | 2,407   |
| Total                                                                                    |   | $      | 13,637                                |   |   | $      | 495,561                               |   |   | $             | 509,198 |

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Table of Contents

|                               | December 31, |    |
|------------------------------------|-------------------|---------|
|                               | 2010              |    |   | 2009 |   |
|                               | (in thousands)    |    |
| Mortgage loan servicing portfolios |              |    |
| FHLMC                              | $                 | 342     |   |   | $ | 401 |   |
| FNMA                               |              | 98,367  |   |   |   | 76,429 |   |
| Other investors                    |              | 14,348  |   |   |   | 15,408 |   |
|                               | $                 | 113,057 |   |   | $ | 92,238 |   |

|                              |   | Estimated    |                              |   | December 31, |
|-----------------------------------|--------|--------------|-----------------------------------|--------|--------------|
|                              |   | useful lives |                              |   | 2010         |   |   | 2009 |
|                              |   |         |                              |   |         | (in thousands) |
|                              |   |         |                              |   |         |   |   |   |   |   |   |
| Buildings                         |   |         | 30 years                     |   |         | $ | 7,369 |   |   | $ | 6,492 |
| Leasehold improvements            |   |         | 5 – 10 years |   |         |   | 3,254 |   |   |   | 2,003 |
| Furniture, fixtures and equipment |   |         | 3 – 7 years  |   |         |   | 8,438 |   |   |   | 11,389 |
|                              |   |         |                              |   |         |   | 19,061 |   |   |   | 19,884 |
| Less accumulated depreciation     |   |         |                              |   |         |   | 13,956 |   |   |   | 16,053 |
|                              |   |         |                              |   |         |   | 5,105 |   |   |   | 3,831 |
| Land                              |   |         |                              |   |         |   | 1,692 |   |   |   | 1,692 |
|                              |   |         |                              |   |         | $ | 6,797 |   |   | $ | 5,523 |

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|                                            |   | December 31, |    |
|-------------------------------------------------|--------|-------------------|---------|
|                                            |   | 2010              |    |   | 2009 |   |
|                                            |   | (in thousands)    |    |
| Deposit Type                                    |   |              |    |
|                                            |   |              |    |   |   |   |   |   |
| Demand                                          |   | $                 | 40,389  |   |   | $ | 37,288 |   |
| NOW                                             |   |              | 56,157  |   |   |   | 52,988 |   |
| Money market                                    |   |              | 149,744 |   |   |   | 141,286 |   |
| Passbook savings                                |   |              | 99,686  |   |   |   | 96,061 |   |
| Total demand, transaction and passbook deposits |   |              | 345,976 |   |   |   | 327,623 |   |
| Certificates of deposit                         |   |              | 204,159 |   |   |   | 225,093 |   |
|                                            |   | $                 | 550,135 |   |   | $ | 552,716 |   |

| Maturity year  |
|---------------------|
| 2011           | 2012  | 2013  | 2014  | 2015  | Thereafter  | Total  |
| (in thousands)      |
| $146,308            | $37,462 | $9,701 | $3,950 | $6,416 | $322 | $204,159 |

|                          |   | December 31,   |
|-------------------------------|--------|----------------|
|                          |   | 2010           |   | 2009 |
|                          |   |           |   | Weighted |   |   |   | Weighted |
| Principal payments due during |   | Amount         |   | average rate |   | Amount |   | Average rate |
|                          |   | (in thousands) |
|                          |   |           |   |   |   |   |   |   |   |   |   |   |
| 2010                          |   | $              | — |   |   | —% |   | $ | 29,879 |   |   | 4.49% |
| 2011                          |   |           | 21,322 |   |   | 4.02% |   |   | 19,461 |   |   | 4.18% |
| 2012                          |   |           | 24,578 |   |   | 3.93% |   |   | 22,676 |   |   | 4.06% |
| 2013                          |   |           | 9,492 |   |   | 3.39% |   |   | 7,542 |   |   | 3.66% |
| 2014                          |   |           | 2,686 |   |   | 2.69% |   |   | 683 |   |   | 3.66% |
| 2015                          |   |           | 2,044 |   |   | 2.35% |   |   | — |   |   | —% |
| Thereafter                    |   |           | 1,865 |   |   | 2.46% |   |   | — |   |   | —% |
|                          |   | $              | 61,987 |   |   | 3.73% |   | $ | 80,241 |   |   | 4.21% |

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Table of Contents

|                                           |   | December 31,   |   |   |
|------------------------------------------------|--------|----------------|--------|--------|
|                                           |   | 2010           |   |   | 2009 |   |   |
|                                           |   | (in thousands) |   |   |
| Reconciliation of projected benefit obligation |   |           |   |   |   |   |   |
| Benefit obligation at beginning of year        |   | $              | 4,938  |   |   | $ | 4,346 |   |   |
| Service cost                                   |   |           | 553    |   |   |   | 471 |   |   |
| Interest cost                                  |   |           | 296    |   |   |   | 249 |   |   |
| Actuarial loss                                 |   |           | 202    |   |   |   | 10 |   |   |
| Amendments                                     |   |           | 33     |   |   |   | — |   |   |
| Benefits paid                                  |   |           | (185   | )      |   |   | (138 | ) |   |
| Benefits obligation at end of year             |   | $              | 5,837  |   |   | $ | 4,938 |   |   |
| Reconciliation of fair value of assets         |   |           |   |   |   |   |   |   |   |
| Fair value of plan assets at beginning of year |   | $              | 6,756  |   |   | $ | 4,637 |   |   |
| Actual return on plan assets                   |   |           | 747    |   |   |   | 751 |   |   |
| Employer contribution                          |   |           | 443    |   |   |   | 1,506 |   |   |
| Benefits paid                                  |   |           | (185   | )      |   |   | (138 | ) |   |
| Fair value of plan assets at end of year       |   | $              | 7,761  |   |   | $ | 6,756 |   |   |
| Prepaid benefit cost at end of year            |   | $              | 1,924  |   |   | $ | 1,818 |   |   |

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Table of Contents

|                                                                |   | December 31, |   |   |
|---------------------------------------------------------------------|--------|--------------|--------|--------|
|                                                                |   | 2010         |   |   | 2009 |   |   |
| Weighted-average assumptions used to determine benefit obligations: |   |         |   |   |   |   |   |
| Discount rate                                                       |   |         | 5.75%  |   |   |   | 5.75% |   |   |
| Rate of compensation increase                                       |   |         | 4.00%  |   |   |   | 4.00% |   |   |

|                                     |   | December 31,   |   |   |
|------------------------------------------|--------|----------------|--------|--------|
|                                     |   | 2010           |   |   | 2009 |   |   |
|                                     |   | (in thousands) |   |   |
| Components of net periodic benefit cost: |   |           |   |   |   |   |   |
| Service cost                             |   | $              | 553    |   |   | $ | 471 |   |   |
| Interest cost                            |   |           | 296    |   |   |   | 249 |   |   |
| Expected return on plan assets           |   |           | (545   | )      |   |   | (371 | ) |   |
| Amortization of prior service cost       |   |           | 3      |   |   |   | — |   |   |
| Recognized net actuarial loss            |   |           | 147    |   |   |   | 183 |   |   |
| Net periodic benefit cost                |   | $              | 454    |   |   | $ | 532 |   |   |

|                                                              |   | December 31, |   |   |
|-------------------------------------------------------------------|--------|--------------|--------|--------|
|                                                              |   | 2010         |   |   | 2009 |   |   |
| Weighted-average assumptions used to determine net benefit costs: |   |         |   |   |   |   |   |
| Discount rate                                                     |   |         | 5.75%  |   |   |   | 5.75% |   |   |
| Expected return on plan assets                                    |   |         | 8.00%  |   |   |   | 8.00% |   |   |
| Rate of compensation increase                                     |   |         | 4.00%  |   |   |   | 4.00% |   |   |

|  Year ending December 31, |   | Amount         |
|--------------------------------|--------|----------------|
|                           |   | (in thousands) |
| 2011                           |   | $              | 64 |   |   |
| 2012                           |   |           | 107 |   |   |
| 2013                           |   |           | 120 |   |   |
| 2014                           |   |           | 198 |   |   |
| 2015                           |   |           | 218 |   |   |
| 2016 – 2020              |   |           | 1,439 |   |   |

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Table of Contents

|                              |   | Quotedprices inactivemarketsforidenticalassets |    | Significantotherobservableinputs |   | Significantunobservableinputs |   | Balance as ofDecember 31, |    |
|-----------------------------------|--------|------------------------------------------------|---------|----------------------------------|--------|-------------------------------|--------|---------------------------|---------|
|                              |   | (Level 1)                                      |    | (Level 2)                        |   | (Level 3)                     |   | 2010                      |    |
|                              |   | (in thousands)                                 |    |
| Assets                            |   |                                           |    |                             |   |                          |   |                      |    |   |   |   |   |
| Collective investment trust funds |   | $                                              | — |                             | $      | 7,761                         |   | $                         | — |   | $ | 7,761 |   |
| Total Plan assets at fair value   |   | $                                              | — |                             | $      | 7,761                         |   | $                         | — |   | $ | 7,761 |   |

|                                 |   | Quotedprices inactivemarketsforidenticalassets |    | Significantotherobservableinputs |   | Significantunobservableinputs |   | Balance as ofDecember 31, |    |
|--------------------------------------|--------|------------------------------------------------|---------|----------------------------------|--------|-------------------------------|--------|---------------------------|---------|
|                                 |   | (Level 1)                                      |    | (Level 2)                        |   | (Level 3)                     |   | 2009                      |    |
|                                 |   | (in thousands)                                 |    |
| Assets                               |   |                                           |    |                             |   |                          |   |                      |    |   |   |   |   |
| Collective investment trust funds    |   | $                                              | — |                             | $      | 4,953                         |   | $                         | — |   | $ | 4,953 |   |
| Equities                             |   |                                           | 6       |                             |   | —                       |   |                      | — |   |   | 6 |   |
| Other assets                         |   |                                           | 269     |                             |   | —                       |   |                      | — |   |   | 269 |   |
| Total Plan assets available for sale |   | $                                              | 275     |                             | $      | 4,953                         |   | $                         | — |   | $ | 5,228 |   |

|              |   | Percentage of Plan assetsAt December 31, |    |   |
|-------------------|--------|------------------------------------------|---------|--------|
|              |   | 2010                                     |    |   | 2009 |   |   |
| Asset Category    |   |                                     |    |   |   |   |   |
| Equity securities |   |                                     | — | %      |   |   | 0.1 | % |   |
| Mutual funds      |   |                                     | 96.1    | %      |   |   | 73.3 | % |   |
| Money funds       |   |                                     | 3.9     | %      |   |   | 22.6 | % |   |
| Other assets      |   |                                     | — | %      |   |   | 4.0 | % |   |
| Total             |   |                                     | 100.0   | %      |   |   | 100.0 | % |   |

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Table of Contents

|                                           |   | December 31, |    |   |
|------------------------------------------------|--------|--------------|---------|--------|
|                                           |   | 2010         |    |   | 2009 |   |   |
|                                           |   |         |    |   |   |   |   |
| Allocated shares                               |   |         | 192,000 |   |   |   | 186,000 |   |   |
| Unreleased shares                              |   |         | 128,000 |   |   |   | 140,000 |   |   |
| Total ESOP shares                              |   |         | 320,000 |   |   |   | 326,000 |   |   |
| Fair value of unreleased shares (in thousands) |   | $            | 2,713   |   |   | $ | 2,531 |   |   |

|                             |   | 2010   |     | 2009      |
|----------------------------------|--------|--------|----------|-----------|
|                             |   |   |     | Weighted  |   |   |   | Weighted |
|                             |   |   |     | average   |   |   |   | average |
|                             |   | Number |     | exercise  |   | Number |   | exercise |
|                             |   | of     |     | price per |   | of |   | price per |
|                             |   | shares |     | share     |   | shares |   | share |
|                             |   |   |     |      |   |   |   |   |   |   |   |   |
| Outstanding at beginning of year |   |   | 285,228  |      | $ | 24.98 |   |   | 301,703 |   | $ | 24.45 |
| Options granted                  |   |   | —  |      |   | — |   |   | — |   |   | — |
| Options exercised                |   |   | (15,614  | )         | $ | 13.24 |   |   | (16,217 | ) | $ | 15.11 |
| Options forfeited                |   |   | (7,466   | )         | $ | 26.56 |   |   | (247 | ) | $ | 30.91 |
| Options expired                  |   |   | (135,891 | )         | $ | 27.11 |   |   | (11 | ) | $ | 14.10 |
| Outstanding at end of year       |   |   | 126,257  |      | $ | 24.04 |   |   | 285,228 |   | $ | 24.98 |
| Options exercisable              |   |   | 98,149   |      | $ | 25.19 |   |   | 243,655 |   | $ | 25.72 |

|       Options outstanding |              |   | Options exercisable |   |
|---------------------------------------------------------|-------------------|--------|---------------------|--------|
| Range of exercise prices                                |              |   | Number              |   |   | Weighted averageremainingcontractuallife (years) |   |   | Weightedaverageexerciseprice |   |   | Number |   |   | Weightedaverageexerciseprice |   |
| $                                                       | 19.33–28.42 |   |                |   | 108,598 |   |   |   | 3.35 |   |   | $ | 22.66 |   |   |   | 80,490 |   |   | $ | 23.58 |   |
| $                                                       | 28.43–32.51 |   |                |   | 17,659 |   |   |   | 2.96 |   |   | $ | 32.51 |   |   |   | 17,659 |   |   | $ | 32.51 |   |
|                                                    |              |   |                |   | 126,257 |   |   |   | 3.29 |   |   | $ | 24.04 |   |   |   | 98,149 |   |   | $ | 25.19 |   |

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Table of Contents

|                                 |   | December 31,   |   |   |
|--------------------------------------|--------|----------------|--------|--------|
|                                 |   | 2010           |   |   | 2009 |   |   |
|                                 |   | (in thousands) |   |   |
| Aggregate value of                   |   |           |   |   |   |   |   |   |   |
| Options outstanding                  |   | $              | 90     |   |   | $ | 76 |   |   |
| Options exercisable                  |   | $              | 49     |   |   | $ | 76 |   |   |
| Options exercised                    |   | $              | 88     |   |   | $ | 67 |   |   |
| Cash receipts from options exercised |   | $              | 207    |   |   | $ | 241 |   |   |

|                                                  |   | 2010   |    | 2009      |
|-------------------------------------------------------|--------|--------|---------|-----------|
|                                                  |   |   |    | Weighted  |   |   |   | Weighted |
|                                                  |   |   |    | average   |   |   |   | average |
|                                                  |   | Number |    | grant     |   | Number |   | grant |
|                                                  |   | of     |    | price per |   | of |   | price per |
|                                                  |   | shares |    | share     |   | shares |   | share |
|                                                  |   |   |    |      |   |   |   |   |   |   |   |   |
| Total non-vested restricted stock at December 31 |   |   | 1,401   |      | $ | 19.67 |   |   | 2,100 |   | $ | 19.67 |
| Restricted stock grant                                |   |   | — |      |   | — |   |   | — |   |   | — |
| Vesting of restricted stock                           |   |   | (701    | )         | $ | 19.67 |   |   | (699 | ) | $ | 19.67 |
| Forfeitures of restricted stock                       |   |   | — |      |   | — |   |   | — |   |   | — |
| Total non-vested restricted stock at December 31 |   |   | 700     |      | $ | 19.67 |   |   | 1,401 |   | $ | 19.67 |

|                                                        |   | Year ended December 31, |   |   |
|-------------------------------------------------------------|--------|-------------------------|--------|--------|
|                                                        |   | 2010                    |   |   | 2009 |   |   |
|                                                        |   | (in thousands)          |   |   |
| Federal                                                     |   |                    |   |   |   |   |   |   |   |
| Current                                                     |   | $                       | 1,424  |   |   | $ | $1,270 |   |   |
| Charge in lieu of income tax relating to stock compensation |   |                    | 6      |   |   |   | 23 |   |   |
| Deferred                                                    |   |                    | (642   | )      |   |   | 198 |   |   |
|                                                        |   |                    | 788    |   |   |   | 1,491 |   |   |
| State and local—current                               |   |                    | 261    |   |   |   | 6 |   |   |
| Income tax provision                                        |   | $                       | 1,049  |   |   | $ | 1,497 |   |   |

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Table of Contents

|                               |   | Year ended December 31, |   |   |
|------------------------------------|--------|-------------------------|--------|--------|
|                               |   | 2010                    |   |   | 2009 |   |   |
|                               |   |                    |   |   |
| Statutory federal income tax       |   |                    | 34.0   | %      |   |   | 34.0 | % |   |
| (Decrease) increase resulting from |   |                    |   |   |   |   |   |   |   |
| Tax-exempt income                  |   |                    | (14.3  | )      |   |   | (9.3 | ) |   |
| State tax, net of federal benefit  |   |                    | 3.9    |   |   |   | (0.1 | ) |   |
| Other                              |   |                    | 0.2    | %      |   |   | 0.3 |   |   |
|                               |   |                    | 23.8   | %      |   |   | 24.9 | % |   |

|                                               |   | December 31,   |   |   |
|----------------------------------------------------|--------|----------------|--------|--------|
|                                               |   | 2010           |   |   | 2009 |   |   |
|                                               |   | (in thousands) |   |   |
| Deferred tax assets                                |   |           |   |   |   |   |   |
| Deferred compensation                              |   | $              | 32     |   |   | $ | 147 |   |   |
| Allowance for loan losses, net                     |   |           | 2,831  |   |   |   | 1,773 |   |   |
| Stock compensation                                 |   |           | 106    |   |   |   | 350 |   |   |
| Adjustment to record funded status of pension plan |   |           | 796    |   |   |   | 836 |   |   |
| Non accrual interest                               |   |           | 294    |   |   |   | 114 |   |   |
| Other                                              |   |           | 35     |   |   |   | 13 |   |   |
|                                               |   |           | 4,094  |   |   |   | 3,233 |   |   |
| Deferred tax liabilities                           |   |           |   |   |   |   |   |   |   |
| Accrued pension expense                            |   |           | 1,444  |   |   |   | 1,447 |   |   |
| Unrealized gain on securities available for sale   |   |           | 1,110  |   |   |   | 1,157 |   |   |
| Prepaid expenses                                   |   |           | 185    |   |   |   | 155 |   |   |
| Deferred loan costs                                |   |           | 815    |   |   |   | 796 |   |   |
| Amortization of goodwill                           |   |           | 1,309  |   |   |   | 1,094 |   |   |
| Other                                              |   |           | 294    |   |   |   | 296 |   |   |
|                                               |   |           | 5,157  |   |   |   | 4,945 |   |   |
| Net deferred tax liability                         |   | $              | (1,063 | )      |   | $ | (1,712 | ) |   |

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Table of Contents

|                                                     |   | Regulatory capital |
|----------------------------------------------------------|--------|--------------------|
|                                                     |   | December 31, 2010  |
|                                                     |   | Tangible           |   | Core |   | Risk-Based |
|                                                     |   | Capital            |   | Percent |   | Capital |   | Percent |   | Capital |   | Percent |
|                                                     |   | (in thousands)     |
| Capital under generally accepted accounting principles   |   | $                  | 70,604 |   | 10.27 | % |   | $ | 70,604 |   | 10.27 | % |   | $ | 70,604 |   | 17.44 | % |
| Unrealized gain on certain available-for-sale securities |   |               | (2,156 | ) | (0.31 | )% |   |   | (2,156 | ) | (0.31 | )% |   |   | (2,156 | ) | (0.53 | )% |
| Adjustment to record funded status of pension            |   |               | 1,545 |   | 0.23 | % |   |   | 1,545 |   | 0.23 | % |   |   | 1,545 |   | 0.38 | % |
| Goodwill and other intangible assets                     |   |               | (4,324 | ) | (0.63 | )% |   |   | (4,324 | ) | (0.63 | )% |   |   | (4,324 | ) | (1.07 | )% |
| Additional capital items                                 |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General valuation allowances—limited               |   |               | — |   | — |   |   |   | — |   | — |   |   |   | 5,072 |   | 1.25 | % |
| Regulatory capital computed                              |   |               | 65,669 |   | 9.56 | % |   |   | 65,669 |   | 9.56 | % |   |   | 70,741 |   | 17.47 | % |
| Minimum capital requirement                              |   |               | 10,308 |   | 1.50 | % |   |   | 27,487 |   | 4.00 | % |   |   | 32,397 |   | 8.00 | % |
| Regulatory capital—excess                          |   | $                  | 55,361 |   | 8.06 | % |   | $ | 38,182 |   | 5.56 | % |   | $ | 38,344 |   | 9.47 | % |

|                                                     |   | Regulatory capital |
|----------------------------------------------------------|--------|--------------------|
|                                                     |   | December 31, 2009  |
|                                                     |   | Tangible           |   | Core |   | Risk-Based |
|                                                     |   | Capital            |   | Percent |   | Capital |   | Percent |   | Capital |   | Percent |
|                                                     |   | (in thousands)     |
| Capital under generally accepted accounting principles   |   | $                  | 68,368 |   | 9.64 | % |   | $ | 68,368 |   | 9.64 | % |   | $ | 68,368 |   | 16.35 | % |
| Unrealized gain on certain available-for-sale securities |   |               | (2,246 | ) | (0.32 | )% |   |   | (2,246 | ) | (0.32 | )% |   |   | (2,246 | ) | (0.54 | )% |
| Adjustment to record funded status of pension            |   |               | 1,622 |   | 0.23 | % |   |   | 1,622 |   | 0.23 | % |   |   | 1,622 |   | 0.39 | % |
| Goodwill and other intangible assets                     |   |               | (4,324 | ) | (0.61 | )% |   |   | (4,324 | ) | (0.61 | )% |   |   | (4,324 | ) | (1.04 | )% |
| Additional capital items                                 |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General valuation allowances—limited               |   |               | — |   | — |   |   |   | — |   | — |   |   |   | 4,676 |   | 1.12 | % |
| Regulatory capital computed                              |   |               | 63,420 |   | 8.94 | % |   |   | 63,420 |   | 8.94 | % |   |   | 68,096 |   | 16.28 | % |
| Minimum capital requirement                              |   |               | 10,639 |   | 1.50 | % |   |   | 28,372 |   | 4.00 | % |   |   | 33,454 |   | 8.00 | % |
| Regulatory capital—excess                          |   | $                  | 52,781 |   | 7.44 | % |   | $ | 35,048 |   | 4.94 | % |   | $ | 34,642 |   | 8.28 | % |

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Table of Contents

|                         |   | Year ended December 31, |   |   |
|------------------------------|--------|-------------------------|--------|--------|
|                         |   | 2010                    |   |   | 2009 |   |   |
|                         |   | (in thousands)          |   |   |
|                         |   |                    |   |   |   |   |   |   |   |
| Commitments to extend credit |   | $                       | 56,355 |   |   | $ | 63,017 |   |   |
| Standby letters of credit    |   |                    | 951    |   |   |   | 1,170 |   |   |
| Loans sold with recourse     |   |                    | 57     |   |   |   | 61 |   |   |
|                         |   | $                       | 57,363 |   |   | $ | 64,248 |   |   |

| Year ending December 31, |   |  (in thousands) |   |
|--------------------------|--------|----------------------|--------|
|                     |   |                 |   |
| 2011                     |   | $                    | 464    |   |
| 2012                     |   |                 | 444    |   |
| 2013                     |   |                 | 421    |   |
| 2014                     |   |                 | 356    |   |
| 2015                     |   |                 | 224    |   |
| Thereafter               |   |                 | 1,248  |   |
| Total                    |   | $                    | 3,157  |   |

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Table of Contents

| At December 31, 2010                                                         |   | Quotedprices inactivemarketsforidenticalassets(Level 1) |    |   | Significantotherobservableinputs(Level 2) |   |    | Significantunobservableinputs(Level 3) |   |   | Balance as ofDecember 31, 2010 |   |
|------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|---------|--------|------------------------------------------------|--------|---------|---------------------------------------------|--------|--------|------------------------------------------|--------|
|                                                                         |   | (in thousands)                                                    |    |
| Assets                                                                       |   |                                                              |    |   |                                           |   |    |                                        |   |   |                                     |   |
| Investment securities available for sale                                |   |                                                              |    |   |                                           |   |    |                                        |   |   |                                     |   |
| U.S. Government and federal agencies                                         |   | $                                                                 | — |   |                                           | $      | 6,059   |                                        |   | $      | —                                  |   |   | $ | 6,059 |   |
| Corporate debt securities                                                    |   |                                                              | — |   |                                           |   | 3,563   |                                        |   |   | —                                  |   |   |   | 3,563 |   |
| State and political subdivisions                                             |   |                                                              | — |   |                                           |   | 48,208  |                                        |   |   | —                                  |   |   |   | 48,208 |   |
| Total investment securities available for sale                               |   | $                                                                 | — |   |                                           | $      | 57,830  |                                        |   | $      | —                             |   |   | $ | 57,830 |   |
|                                                                         |   |                                                              |    |   |                                           |   |    |                                        |   |   |                                     |   |   |   |   |   |
| Residential mortgage-backed securities issued by quasi-governmental agencies |   | $                                                                 | — |   |                                           | $      | 52,886  |                                        |   | $      | —                                  |   |   | $ | 52,886 |   |
| Residential real estate mortgage-backed securities privately issued          |   |                                                              | — |   |                                           |   | 13,605  |                                        |   |   | —                                  |   |   |   | 13,605 |   |
| Total mortgage-backed securities available for sale                          |   | $                                                                 | — |   |                                           | $      | 66,491  |                                        |   | $      | —                                  |   |   | $ | 66,491 |   |
|                                                                         |   |                                                              |    |   |                                           |   |    |                                        |   |   |                                     |   |   |   |   |   |
| Forward loan sales                                                           |   | $                                                                 | — |   |                                           | $      | — |                                        |   | $      | 3                                        |   |   | $ | 3 |   |

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Table of Contents

| At December 31, 2009                                                         |   | Quotedprices inactivemarketsforidenticalassets(Level 1) |    |   | Significantotherobservableinputs(Level 2) |   |    | Significantunobservableinputs(Level 3) |   |   | Balance as of December  31, 2009 |   |
|------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|---------|--------|------------------------------------------------|--------|---------|---------------------------------------------|--------|--------|------------------------------------------------------|--------|
|                                                                         |   | (in thousands)                                                    |    |
| Assets                                                                       |   |                                                              |    |   |                                           |   |    |                                        |   |   |                                                 |   |
| Investment securities available for sale                                |   |                                                              |    |   |                                           |   |    |                                        |   |   |                                                 |   |
| U.S. Government and federal agencies                                         |   | $                                                                 | — |   |                                           | $      | 2,945   |                                        |   | $      | —                                              |   |   | $ | 2,945 |   |
| Corporate debt securities                                                    |   |                                                              | — |   |                                           |   | 3,517   |                                        |   |   | —                                              |   |   |   | 3,517 |   |
| State and political subdivision                                              |   |                                                              | — |   |                                           |   | 34,241  |                                        |   |   | —                                              |   |   |   | 34,241 |   |
| Equity securities                                                            |   |                                                              | 150     |   |                                           |   | — |                                        |   |   | —                                              |   |   |   | 150 |   |
| Total investment securities available for sale                               |   | $                                                                 | 150     |   |                                           | $      | 40,703  |                                        |   | $      | —                                              |   |   | $ | 40,853 |   |
|                                                                         |   |                                                              |    |   |                                           |   |    |                                        |   |   |                                                 |   |   |   |   |   |
| Residential mortgage-backed securities issued by quasi-governmental agencies |   | $                                                                 | — |   |                                           | $      | 71,151  |                                        |   | $      | —                                              |   |   | $ | 71,151 |   |
| Residential real estate mortgage-backed securities privately issued          |   |                                                              | — |   |                                           |   | 7,047   |                                        |   |   | —                                              |   |   |   | 7,047 |   |
| Total mortgage-backed securities available for sale                          |   | $                                                                 | — |   |                                           | $      | 78,198  |                                        |   | $      | —                                              |   |   | $ | 78,198 |   |
|                                                                         |   |                                                              |    |   |                                           |   |    |                                        |   |   |                                                 |   |   |   |   |   |
| Forward loan sales                                                           |   | $                                                                 | — |   |                                           | $      | — |                                        |   | $      | 21                                                   |   |   | $ | 21 |   |

|                                              | Forwardloan sales                           |   |
|---------------------------------------------------|---------------------------------------------|--------|
|                                              | (in thousands)                              |   |
|                                              |                                        |   |   |
| Beginning balance, January 1, 2010                | $                                           | 21     |   |
| Total gains (losses) — realized/unrealized: |                                        |   |   |
|                                              | Included in earnings                        |   | (18 | ) |
|                                              | Included in other comprehensive income |   | — |   |
|                                              | Purchases, issuances, and settlements       |   | — |   |
| Ending balance, December 31, 2010                 | $                                           | 3      |   |

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Table of Contents

| At December 31, 2010                     |   | Quotedprices inactivemarketsforidenticalassets(Level 1) |    |   | Significantotherobservableinputs(Level 2) |   |    | Significantunobservableinputs(Level 3) |   |   | Balance as ofDecember 31,2010 |   |
|------------------------------------------|--------|-------------------------------------------------------------------|---------|--------|------------------------------------------------|--------|---------|---------------------------------------------|--------|--------|-----------------------------------------|--------|
|                                     |   | (in thousands)                                                    |    |
| Assets                                   |   |                                                              |    |   |                                           |   |    |                                        |   |   |                                    |   |
| Impaired loans                           |   | $                                                                 | — |   |                                           | $      | — |                                        |   | $      | 11,375                                  |   |   | $ | 11,375 |   |
| Real estate acquired through foreclosure |   | $                                                                 | — |   |                                           | $      | — |                                        |   | $      | 7,482                                   |   |   | $ | 7,482 |   |
| Mortgage servicing rights                |   | $                                                                 | — |   |                                           | $      | 878     |                                        |   | $      | —                                 |   |   | $ | 878 |   |

| At December 31, 2009                     |   | Quotedprices inactivemarketsforidenticalassets(Level 1) |    |   | Significantotherobservableinputs(Level 2) |   |    | Significantunobservableinputs(Level 3) |   |   | Balance as ofDecember 31, 2009 |   |
|------------------------------------------|--------|--------------------------------------------------------------|---------|--------|------------------------------------------------|--------|---------|---------------------------------------------|--------|--------|-------------------------------------|--------|
|                                     |   | (in thousands)                                               |    |
| Assets                                   |   |                                                         |    |   |                                           |   |    |                                        |   |   |                                |   |
| Impaired loans                           |   | $                                                            | — |   |                                           | $      | — |                                        |   | $      | 7,744                               |   |   | $ | 7,744 |   |
| Real estate acquired through foreclosure |   | $                                                            | — |   |                                           | $      | — |                                        |   | $      | 1,279                               |   |   | $ | 1,279 |   |
| Mortgage servicing rights                |   | $                                                            | — |   |                                           | $      | 696     |                                        |   | $      | —                             |   |   | $ | 696 |   |

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Table of Contents

|                       |   | December 31, 2010 |   | December 31, 2009 |
|----------------------------|--------|-------------------|--------|-------------------|
|                       |   | Fair              |   | Carrying          |   | Fair |   | Carrying |
|                       |   | value             |   | value             |   | value |   | value |
|                       |   | (in thousands)    |
|                       |   |              |   |              |   |   |   |   |   |   |   |   |
| Cash and cash equivalents  |   | $                 | 7,437  |              | $ | 7,437 |   | $ | 12,801 |   | $ | 12,801 |
| Investment securities      |   |              | 57,830 |              |   | 57,830 |   |   | 40,853 |   |   | 40,853 |
| Mortgage-backed securities |   |              | 70,001 |              |   | 69,660 |   |   | 82,231 |   |   | 81,931 |

|                  |   | December 31, 2010 |    | December 31, 2009 |
|-----------------------|--------|-------------------|---------|-------------------|
|                  |   | Fair              |    | Carrying          |   | Fair |   | Carrying |
|                  |   | value             |    | value             |   | value |   | value |
|                  |   | (in thousands)    |
|                  |   |              |    |              |   |   |   |   |   |   |   |   |
| Loans receivable, net |   | $                 | 518,324 |              | $ | 501,658 |   | $ | 539,670 |   | $ | 530,734 |

|                              |   | December 31, 2010 |    | December 31, 2009 |
|-----------------------------------|--------|-------------------|---------|-------------------|
|                              |   | Fair              |    | Carrying          |   | Fair |   | Carrying |
|                              |   | value             |    | value             |   | value |   | value |
|                              |   | (in thousands)    |
|                              |   |              |    |              |   |   |   |   |   |   |   |   |
| Deposits with stated maturities   |   | $                 | 206,791 |              | $ | 204,159 |   | $ | 228,676 |   | $ | 225,093 |
| Borrowings with stated maturities |   |              | 63,811  |              |   | 61,987 |   |   | 82,947 |   |   | 80,241 |

|                               |   | December 31, 2010 |    | December 31, 2009 |
|------------------------------------|--------|-------------------|---------|-------------------|
|                               |   | Fair              |    | Carrying          |   | Fair |   | Carrying |
|                               |   | value             |    | value             |   | value |   | value |
|                               |   | (in thousands)    |
|                               |   |              |    |              |   |   |   |   |   |   |   |   |
| Deposits with no stated maturities |   | $                 | 345,976 |              | $ | 345,976 |   | $ | 327,623 |   | $ | 327,623 |

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Table of Contents

|                                             |   | Year ended December 31, |   |   |
|--------------------------------------------------|--------|-------------------------|--------|--------|
|                                             |   | 2010                    |   |   | 2009 |   |   |
|                                             |   | (in thousands)          |   |   |
| Service fees, charges and other operating income |   |                    |   |   |   |   |   |   |   |
| Loan servicing fees                              |   | $                       | 235    |   |   | $ | 119 |   |   |
| Late charge income                               |   |                    | 122    |   |   |   | 128 |   |   |
| Deposit service charges                          |   |                    | 777    |   |   |   | 937 |   |   |
| Debit card income                                |   |                    | 415    |   |   |   | 358 |   |   |
| Other income                                     |   |                    | 409    |   |   |   | 436 |   |   |
|                                             |   | $                       | 1,958  |   |   | $ | 1,978 |   |   |
| Other operating expense                          |   |                    |   |   |   |   |   |   |   |
| Insurance and surety bond                        |   | $                       | 190    |   |   | $ | 171 |   |   |
| Office supplies                                  |   |                    | 161    |   |   |   | 162 |   |   |
| Loan expense                                     |   |                    | 310    |   |   |   | 300 |   |   |
| Debit card and ATM expense                       |   |                    | 237    |   |   |   | 360 |   |   |
| Postage                                          |   |                    | 275    |   |   |   | 276 |   |   |
| Telephone                                        |   |                    | 265    |   |   |   | 274 |   |   |
| Supervisory examination fees                     |   |                    | 171    |   |   |   | 170 |   |   |
| Other expenses                                   |   |                    | 723    |   |   |   | 615 |   |   |
|                                             |   | $                       | 2,332  |   |   | $ | 2,328 |   |   |

|                                                                  |   | Year ended December 31, 2010                  |
|----------------------------------------------------------------------------|--------|-----------------------------------------------|
|                                                                       |   | Income(numerator)                             |   |   | Weightedaverage shares(denominator) |   |   | Per shareamount |
|                                                                       |   | (dollars in thousands, except per share data) |
|                                                                       |   |                                          |   |   |   |   |   |   |   |   |   |
| Basic earnings per share                                                   |   |                                          |   |   |   |   |   |   |   |   |   |
| Income available to common stockholders                                    |   | $                                             | 3,352 |   |   |   | 2,682,135 |   |   | $ | 1.25 |
| Effect of dilutive securities                                              |   |                                          |   |   |   |   |   |   |   |   |   |
| Stock compensation plans                                                   |   |                                          | — |   |   |   | — |   |   |   | — |
| Diluted earnings per share                                                 |   |                                          |   |   |   |   |   |   |   |   |   |
| Income available to common stockholders plus effect of dilutive securities |   | $                                             | 3,352 |   |   |   | 2,682,135 |   |   | $ | 1.25 |

|                                                                       |   | Year ended December 31, 2009                  |
|----------------------------------------------------------------------------|--------|-----------------------------------------------|
|                                                                       |   | Income(numerator)                             |   |   | Weightedaverage shares(denominator) |   |   | Per shareamount |
|                                                                       |   | (dollars in thousands, except per share data) |
|                                                                       |   |                                          |   |   |   |   |   |   |   |   |   |
| Basic earnings per share                                                   |   |                                          |   |   |   |   |   |   |   |   |   |
| Income available to common stockholders                                    |   | $                                             | 4,514 |   |   |   | 2,648,906 |   |   | $ | 1.70 |
| Effect of dilutive securities                                              |   |                                          |   |   |   |   |   |   |   |   |   |
| Stock compensation plans                                                   |   |                                          | — |   |   |   | — |   |   |   | — |
| Diluted earnings per share                                                 |   |                                          |   |   |   |   |   |   |   |   |   |
| Income available to common stockholders plus effect of dilutive securities |   | $                                             | 4,514 |   |   |   | 2,648,906 |   |   | $ | 1.70 |

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Table of Contents

|                                             |   | December 31, |    |
|--------------------------------------------------|--------|-------------------|---------|
|                                             |   | 2010              |    |   | 2009 |   |
|                                             |   | (in thousands)    |    |
| ASSETS                                           |   |              |    |
| Cash                                             |   | $                 | 997     |   |   | $ | 1,600 |   |
| Investment in Third Federal                      |   |              | 69,387  |   |   |   | 67,034 |   |
| Investment in TF Investments                     |   |              | 1,766   |   |   |   | 1,758 |   |
| Investment in Penns Trail Development            |   |              | 1,100   |   |   |   | 1,111 |   |
| Investment securities available for sale         |   |              | — |   |   |   | 150 |   |
| Other assets                                     |   |              | 208     |   |   |   | 281 |   |
| Total assets                                     |   | $                 | 73,458  |   |   | $ | 71,934 |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY       |   |              |    |   |   |   |   |   |
| Total liabilities                                |   | $                 | 42      |   |   | $ | 60 |   |
| Stockholders’ equity                       |   |              | 73,416  |   |   |   | 71,874 |   |
| Total liabilities and stockholders’ equity |   | $                 | 73,458  |   |   | $ | 71,934 |   |

|                               |   | Year ended December 31, |   |
|------------------------------------|--------|------------------------------|--------|
|                               |   | 2010                         |   |   | 2009 |   |
|                               |   | (in thousands)               |   |
|                               |   |                         |   |
| INCOME                             |   |                         |   |   |   |   |   |   |
| Equity in earnings of subsidiaries |   | $                            | 3,725  |   |   | $ | 4,896 |   |
| Interest and dividend income       |   |                         | 20     |   |   |   | 24 |   |
| Gain on sale of investment         |   |                         | 20     |   |   |   | — |   |
| Total income                       |   |                         | 3,765  |   |   |   | 4,920 |   |
| EXPENSES                           |   |                         |   |   |   |   |   |   |
| Other                              |   |                         | 413    |   |   |   | 406 |   |
| Total expenses                     |   |                         | 413    |   |   |   | 406 |   |
| NET INCOME                         |   | $                            | 3,352  |   |   | $ | 4,514 |   |

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|                                                                              |   | Year ended December 31, |    |
|-----------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                              |   | 2010                         |    |   | 2009 |   |
|                                                                              |   | (in thousands)               |    |
|                                                                              |   |                         |    |
| Cash flows from operating activities                                              |   |                         |    |   |   |   |   |   |
| Net income                                                                        |   | $                            | 3,352   |   |   | $ | 4,514 |   |
| Adjustments to reconcile net income to net cash used in operating activities |   |                         |    |   |   |   |   |   |
| Stock compensation plans                                                          |   |                         | 68      |   |   |   | 72 |   |
| Gain on sale of investment securities                                             |   |                         | (20     | ) |   |   | — |   |
| Equity in earnings of subsidiaries                                                |   |                         | (3,725  | ) |   |   | (4,896 | ) |
| Net change in assets and liabilities                                              |   |                         | (218    | ) |   |   | (55 | ) |
| Net cash used in operating activities                                             |   |                         | (543    | ) |   |   | (365 | ) |
|                                                                              |   |                         |    |   |   |   |   |   |
| Cash flows from investing activities                                              |   |                         |    |   |   |   |   |   |
| Capital distribution from subsidiaries                                            |   |                         | 1,600   |   |   |   | 2,700 |   |
| Proceeds from sale of investment securities                                       |   |                         | 170     |   |   |   | — |   |
| Net cash provided by investing activities                                         |   |                         | 1,770   |   |   |   | 2,700 |   |
|                                                                              |   |                         |    |   |   |   |   |   |
| Cash flows from financing activities                                              |   |                         |    |   |   |   |   |   |
| Cash dividends paid to stockholders                                               |   |                         | (2,037  | ) |   |   | (2,013 | ) |
| Treasury stock acquired                                                           |   |                         | — |   |   |   | (128 | ) |
| Exercise of stock options                                                         |   |                         | 207     |   |   |   | 242 |   |
| Net cash used in financing activities                                             |   |                         | (1,830  | ) |   |   | (1,899 | ) |
| NET (DECREASE) INCREASE IN CASH                                                   |   |                         | (603    | ) |   |   | 436 |   |
| Cash at the beginning of year                                                     |   |                         | 1,600   |   |   |   | 1,164 |   |
| Cash at end of year                                                               |   | $                            | 997     |   |   | $ | 1,600 |   |
| Supplemental disclosure of cash flow information                                  |   |                         |    |   |   |   |   |   |
| Cash paid during the year for income taxes                                        |   | $                            | — |   |   | $ | — |   |

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BOARD OF DIRECTORS AND EXECUTIVE OFFICERS

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